Marketing and Research Consulting for a Brave New World
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In the early 1990s at the NPD Group, working with David Meer now at Booz and Company, I researched shopping styles and found one called system beaters.  Such shoppers have brand preferences but are trained by the marketing environment to expect deals.  They time their purchases accordingly on their favorite brand or load up on an acceptable brand that is on sale that day.  R&D I conducted for Synovate in 2007 confirmed this and also reaffirmed that the same person might be a system beater for one type of product but not others.  Now, I wonder if we’re all going to become system beaters all the time thanks to smart mobile marketing.

I just bought a digital camera and here was my path to purchase.

  1. On December 30th, I realized I needed one for New Year’s Eve.
  2. While in the car, I checked for deals on my foursquare and shopsavvy apps for electronics retailers near my location.
  3. I chose a retailer to call and made sure they had cameras in the price range I was considering
  4. I went to the store, chose a camera from an acceptable brand and got a memory card.
  5. I then used Red Laser to image the UPC code of each and found lower prices at nearby stores
  6. Rather than go to another store, I showed the results to the salesman who got manager approval to match both prices for a total savings of about $35.
  7. I left the store feeling smart and successful and more likely to shop there again the next time as I know I will always get the best price there with the same shopping steps.

Marketers are training us to become system beaters. We all see a continuous flood of e-mails offering deep discounts and free shipping. Increasingly, marketers are making it easy for us by going paperless as we download the offers into our smart phones and loyalty cards.  Remember when we had to wait until Dec 26th for big sales?  Now they start at midnight of Thanksgiving. And social media is a dream come true for system beaters; not only do we find the deals we want for ourselves but now we get to share them with all of our fans, friends, and followers.  We retweet the deals we find, and we like them via Facebook so all our friends see them too.  And by the way, looking for deals is a main motivator to like a brand page in Facebook in the first place.  Also, digital and mobile have compressed the timeline.  I now know I can wait until the last minute to start my research.

So, is this the end of branding? What should marketers and retailers do if shoppers are forever transformed into system beaters?  All is not lost as System beater behavior is itself habitual and selective in how a particular shopper goes about finding deals, just like we only use about 10% of the apps on our smart phones, and watch only 10% of the channels on our TV.  Study how consumers are seeking out deals…their system beating behavior…and then make sure you are ahead of competition at knowing how to use those promotional touchpoints to build habits.

Here are six marketing ideas to get loyalty lift from system beaters in return for hot deals:

  1. Like-gate your promotion offers on Facebook
  2. Use paid search to drive traffic to your owned media, where the landing page offers a relevant discount in exchange for some lasting marketing benefit;  people sign up for your e-mails, become members, download your app, or at the least, receive a cookie for subsequent promotional ad targeting
  3. Make all of your offers shareable by including a sharing widget in the offer.  Reward the fan who shares the most.
  4. For retailers, price matching should include matching Amazon online prices (as long as the item is new) so your store doesn’t become a showroom and you convert the trip into a sale.
  5. Retailers should attach promotions to check-ins (like $5 off your purchase of $50 or more) to win the trip and build loyalty. (Check out Levelup which David Berkowitz from 360i made me aware of.)
  6. Mastery of mobile is a must. Build apps that offer useful information as well as discounts so they turn your brand into a mobile portal. Also, please optimize your website for mobile.

Shopper behavior has forever changed and is forever changing and with it, the rules for branding.

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5 Responses to “Six ideas for building brand loyalty when all shoppers are becoming system beaters”

  1. Dr. Mike Patrick

    Nice translation of early analytic finding into social media methodology.

    • Thanks Joel. That’s a nice cogent piece of writing. Playing to the savvy shopper is a sound strategy. Because it won’t hurt your efforts to connect with the larger group of less savvy shoppers. In 2010 Tracy VanBibber, while at Dial, shared some very compelling data that proved to me that regardless of gender or age, income or ethnicity shoppers fall into three groups: Shoptimizers, those who constantly and look for the best deals; Mainstreeters, typical mainstream shoppers; and Carefrees, who are the most impulsive. These findings would suggest that, at most, a third to half of shoppers will have the savvy or desire to shop the way you did. The balance will be continue to be positively influenced by solid, insight based integrated, path to purchase marketing.

  2. Joel Rubinson

    at Synovate, we measured system beaters across 19 CPG categories and it varied wildly. I bet the upper end is much higher than anyone thinks because of digital efforts but researching this would be fun and important

  3. [...] read a great post about ‘System Beaters’, on Joel Rubinson’s market research blog. The post highlights how deals are increasingly guiding our path to purchase, especially in the [...]

  4. Jim SImon

    Look closely at what you just told us in step 4. Those with branding face stiff price competition, while those without branding can expect no sales at all.