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Predicting Profitability



How P&G and other dominant organizations use superior customer understanding to win big.



By B.J Bueno, The Cult Branding Company



Published May 4, 2012
Related Searches: strategic consumers personal international
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You only need the slightest acquaintance with the household and personal products industry to know that P&G is the dominant organization domestically.With a reported $64.6 billion in sales, P&G is outperforming its nearest competitor, Colgate-Palmolive, by over $ 51 billion.

How, exactly, are they doing that?


What P&G excels at -- and this is a trend that we see emerging across all industries -- in understanding and appealing to the unconscious psychological factors that motivate customer behavior.Marketers have long known that logic makes us shop, while emotion makes us buy.


We’ve become experts at appealing to the emotional response, to such a universal degree that we’re realizing diminishing returns from our efforts.To effectively differentiate yourself from the competition, captivate and capitalize on the public’s attention, and build meaningful, profitable customer relationships, we must take a more humanistic approach to customer understand -- a view that both incorporates and transcends the easy appeal to the emotional response. That’s what P&G does, and that’s what other dominant brands like Apple, Ikea, and Nike do every day.


Brand Modeling: The Art of Predicting Customer Response

Let’s examine P&G’s Febreze line. Initially introduced as an odor-eliminator, Febreze was not an immediate success. Customers didn’t embrace the brand, in large part because purchasing Febreze was a tacit admission that their house smelled bad.That type of admission provoked deep and negative feelings of shame and inadequacy.


90% of the motivation behind customer behavior is unconscious.This means that consumers aren’t even necessarily aware of why they opt for one brand rather than another. Dominant organizations need to be pro-active about delving into their customer base’s worldview.


By understanding the complex web of factors that guide and influence customer choice, it becomes possible to predict the response to a new initiative-- whether that’s a new product, a marketing campaign, or a change in organizational operations -- before it is implemented.This process, which we call Brand Modeling, streamlines the corporate decision-making process and introduces an element of organizational efficiency that provides a tremendous strategic advantage, particularly in highly competitive industries.


P&G knew the Febreze line was not performing nearly as well as it could. Realizing that untapped potential required shifting the marketing approach so it was more in alignment with what P&G customers expected and valued about the brand. These are customers who take a multi-faceted and profound pride in their housework, and derive deep satisfaction from a job well done. Shifting Febreze’s position to that of a celebratory reward, making a treat out of spraying the fresh-scented product after the hard work of housework was done made Febreze infinitely more appealing. This was a message P&G’s customers could identify with and feel good about. As a result, Febreze’s sales went up exponentially. Today, the odor eliminator plays a significant role in P&G’s revenue stream.


Enjoy Greater Organizational Efficiency By Knowing Your Customer

The ability to predict customer behavior is a serious competitive advantage. While there’s no crystal ball we can use to peek around the corner into the future, developing a comprehensive understanding of who your brand’s best customers are and what’s truly important to them makes it possible to predict with a high degree of certainty what messages they’ll respond to and what ones they’ll reject.
Can other household and personal products brands use the power of the unconscious to knock P&G out of their dominant position in the industry? They certainly can leverage the knowledge gained by a strategic, objective approach to understanding the customer unconscious to close the gap, increase market share, and enhance overall profitability.


From where we are, that sure smells like the sweet scent of success!


About the Author
B.J. Bueno is founder and managing partner of The Cult Branding Company, the premiere Brand Modeling and consumer insight research firm, and the author of Customers First: Dominate Your Market by Winning Them Over Where it Counts the Most. He is a board member of the Retail Advertising and Marketing Association and a member of the Chief Marketing Officers board for international retailers. Visit:
www.cultbranding.com
 
 


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