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Consumers buy on autopilot. What does this mean for your brand? A New Marketing & Advertising Approach

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Consumers buy on autopilot. What does this mean for your brand? A New Marketing & Advertising Approach

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A year long investigation into the role of rituals, routines and habits and ways in which products and services, through an understanding of habit formation, can become part of the consumer habit

A year long investigation into the role of rituals, routines and habits and ways in which products and services, through an understanding of habit formation, can become part of the consumer habit

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Consumers buy on autopilot. What does this mean for your brand? A New Marketing & Advertising Approach

  1. 1. Discovering your brand hook Consumers buy on autopilot. What does this mean for your brand? Consumers, their habits and the BrandHook model to drive change. April 2013
  2. 2. This presentation is about how consumers lives are driven by habit, how they act on autopilot and what this means for brands.
  3. 3. There are four things to take out of this presentation: Our behaviour is ritualistic
  4. 4. Your consumers buy on habit
  5. 5. Consumer immersion = wisdom
  6. 6. A new framework for brand building
  7. 7. Let‟s start with daily rituals. 70% of us agree that we have morning rituals. 63% of men have a morning ritual and 43% agree they have a routine when it comes to toiletries.
  8. 8. 8 Discovering your brand hook 8 A year of observation Over the course of 2012, BrandHook has spoken with, observed and developed insights about a variety of people and a lot of women in in home sessions, accompanied shops, online communities and innovation sessions. • We observed a number of routines & habits from tea drinking, dieting, grocery shopping, clothes shopping and many more. • We heard about the impact that kids have on rituals and those that don‟t have children relax their routines on the weekend. • We experienced these routines as we spent time with our tribes watching as their auto-pilot kicked in to get jobs done. • Conversed with 1,000 women in an online forum across the UK, US and Australia about their habits. • All the qualitative insights are supported by a nationally representative study of 1005 Australians 18+. Quantitative Qualitative
  9. 9. There are four main parts to this keynote. The first thing to know is that repetition is central to everyday life. Imagine having to rethink everything every day. Life would be too hard.
  10. 10. of consumers daily lives is driven by rituals and routines.
  11. 11. Why do we have such strong daily patterns? 46% of people‟s behaviours are repeated almost daily and usually in the same context. Habits and routines are amplified by everyday demands, time pressures and distractions.
  12. 12. BrandHook Rituals Study December 2012
  13. 13. 75% of people agreed that routines exist to make life run as smoothly as it can. BrandHook Rituals Study December 2012
  14. 14. Actually our study has told us that 68% of mothers felt their life was in fact in control. BrandHook Rituals Study December 2012
  15. 15. 15 Discovering your brand hook 15 Mothers are the most ritualistic with 62% creating routines in life. Mornings 75% TV Programs 74% Meal Times 71% Work 70% Finances 68% Supermarket Shopping 66% Radio 65% Cooking 63% Cleaning 60% Tidying 59% Driving 58% Internet 57%
  16. 16. We actively create routines so we can move to autopilot. A part of the brain, the basal ganglia, is responsible for “chunking” series of activities into the brain‟s procedural memory, so we can carry out an action or series of actions without thinking about it. When we are in a habit, we are in an unconscious state.
  17. 17. Bob Cooper, the survival expert, sells survival kits that include a tea bag. Making a cup of tea puts people on autopilot and stops them thinking - which saves them from panicking and reacting badly.
  18. 18. The Power of Habit, by Charles Duhigg, talks about how habits are made up of Cue – Routine – Reward To change or reinforce habits, they can either be disrupted or strengthened by changing the cues or triggers.
  19. 19. Discovering your brand hook The Habit Loop Cue RewardRoutine Cue Routine The critical elements to PROMOTE in habit FORMATION or STRENGTHENING The critical elements to DISRUPT in habit BREAKING
  20. 20. Not only do we form habits to help us save time, make our lives easier ... we also think that these habits & routines are better than any possible alternative.
  21. 21. This video illustrates how a habit (taking the escalator) can be disrupted by changing the cue (making the stairs more fun).
  22. 22. Introducing a cue, such as the “out of date” stamp on Tontine pillows, forms a habit of replacing old pillows. Tontine‟s market share has increased 20% year on year since this cue‟s introduction in 2010
  23. 23. Febreze was originally targeted at smokers and pet owners – but as they could not smell their own odours, there was limited reward and no repeat purchase or habit formation. The trial bombed. Watching the immersion sessions helped the marketers identify a new reward (a final touch when cleaning a room changed Febreze‟s fortunes.
  24. 24. Buying Apple products is a habit for many. Originally, the reward was thinking creatively. Now, we just need the cue of knowing there is a new Apple product to buy and the routine of buying it kicks in. Apple may have disrupted this habit by changing the charging cord on the iPhone 5, so people are awakened back to consciousness and may reconsider their purchase.
  25. 25. Consumers‟ buying habits, especially for mundane products like soap and trash bags, are habitual and involve no complex decision making – making it hard for marketers to change behaviour. However, when going through a life event, such as moving house, getting married or having a child, shopping habits become more flexible and open to intervention from marketers.
  26. 26. Rituals vary as a result of life stage. Younger people may relax their routines on weekends. Mothers embrace rituals the most. Both men and women are at the height of habit formation between the ages of 45-54.
  27. 27. Even longer-term decisions tend to be routine for us – as seen in the 2008 and 2012 US election results.
  28. 28. Repetition is key for brand success. Repetition strengthens the habits we have with a particular brand.
  29. 29. 29 Discovering your brand hook Repetition is key for brand success ⑊ Repeated behaviours relating to purchases and consumption are linked with an increase in market share, customer lifetime value and share of wallet (Ehrenberg & Goodhardt, 2002; Wirtz, Mattila &Lwin 2007).
  30. 30. The old model of marketing is redundant When consumers are in a habit with a brand, they believe their choice is the best available choice; they do not pay attention to what other brands have to offer.
  31. 31. 31 Discovering your brand hook 31 The journey to habit formation and brand craving Category Measurement (Quantitative) Immersion Sessions (Qualitative) The BrandHook Habit Model™ (Quantitative) This is where we measure the strength of the category and how your brands compare to competitors. We segment customers on the basis of where they fit in our habit model and identify the opportunities to grow the market share by either reinforcing the reward or disrupting a habit. To truly understand the cues, triggers and the rewards relating to each brand within each category, we need to be in the environment of the customers. Immersion sessions will bring these insights and provide the consumer wisdom to drive the desired behaviours. We feed the consumer insight back into the BrandHook model and quantify the actions each brand and Brand Manager need to focus on in order to drive brand change.
  32. 32. The BrandHook Habit Model Some categories are more habitual than others. For example, supermarket shopping is a highly habitual activity.
  33. 33. The BrandHook Habit Model • Some categories are more habitual than others. • For example, supermarket shopping is a highly habitual activity.
  34. 34. The BrandHook Habit Model • We can then break the consumers into four quadrants which helps identify the business focus • Do the brand leaders concentrate on disrupting a competitive habit or strengthen its on habit?
  35. 35. The BrandHook Habit Model • We can then break the habit model down by brand to see where the differences exist and what nuances each brand holds.
  36. 36. • Consumer immersion or ethnography is the key when trying to understand habit formation. • By spending time in our people‟s lives watching, and being involved in their world changes the conversation. • As Hy says, „Moving from focus groups to ethnography is like going from black and white to colour‟.
  37. 37. The final stage is to drill into each segment and identifying where the opportunities exist to impact change. This is where we identify the demographic, attitudinal and psychographic information that sit within each segment and look for the best tribes to focus efforts on. For example, the 5% of ALDI customers that could be targeted to strengthen their relationship actually don‟t represent the greatest opportunity for ALDI. Their spend is low and they are the customers that are travelling far to get the one or two bargains at ALDI infrequently. Current Woolworths and especially Coles customers in a habit represent the real opportunity. What they value in their supermarket experience, what they are looking for whilst in store and where they live – represent a far greater opportunity for ALDI Example BrandHook Habit Model™ Measurement
  38. 38. Dr. David Neal, a psychologist specialising in consumer habits said: “This study is a powerful reminder that consumers are much less consciously engaged in many product purchase decisions than we typically assume. When brands and marketers ignore the role of ritual, they often miss the boat in terms of influencing actual behaviour.”
  39. 39. 1. How habitual is category and your consumers? 2. Where is your money best spent: strengthening or disrupting? 3. What are the triggers or rewards that will drive that habit?
  40. 40. Discovering your brand hook Contact BrandHook Level 4, 409 St Kilda Road, Melbourne, 3004 Phone: +61 3 9077 7887 www.brandhook.com

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