Consumer Behavior and Loyalty

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Thinking about Consumer Behavior classes I quite often remember heavy books and lots of abstract models. However, once I was lucky to have a very interesting Consumer Behavior course which was much more about critical thinking and how consumer models could be applied to solve important business issues.

Working in FMCG companies I always face the same type of question – how to drive consumers loyalty to our brands and products? So, I’ve decided to look at the basic consumer behavior approaches from this perspective.

The first one is called “behaviorist approach“. It states that many consumers’ purchase decisions are highly repetitive that leads to low consumers engagement. ATRN model introduced by Ehrenberg (1997) and that is shown below represents the key idea of the behaviorist approach.

ATRN Model

Overall, this model states that consumers making their repetitive purchases are not prone to do a lot for switching and in case of positive Second Moment of Truth continue shopping of their usual brands or products.

Speaking about the Second Moment of Truth it’s always nice to keep in mind the words of Charles Darwin about the survival not of the fittest, but of the fit enough. That means that consumers who have ‘fit enough’ product experience in many cases continue to stay in their ‘reinforcement’ stage.

However, at some point of time consumers move to the phase of ‘nudging’ and start looking for new products and brands. But when consumers are searching for something new is it only about their loyalty? Quite often it’s just about the required diversity and possibility to make a choice.

Therefore, in many product categories, especially in food we have so many tastes and flavors. It allows to keep consumers within our base of customers in case of nudging and search for variety.

Another scientific approach to consumer behavior is called “habit approach“. It highlights the importance of preestablished in consumer behavior.

This is linked with the importance to win in the Point of Market Entrance, when consumers just joining a category. Being the first, brands establish the habit and pattern in consumer behavior and set up a particular level of product expectations. As a result it enables brands to win their customers loyalty.

To sum up, in order to keep consumers loyal and minimize the level of switching companies should keep a constant high level of Second Moment of Truth and target to win in the Point of Market Entrance. However, thinking about many upcoming product innovations companies should be very conscious about their targets, as consumers who are in the ‘reinforcement’ stage have very low probability to mention the innovation.

Communication of some product innovations is worth to be highly focused on the increase in the brand variety and opportunity to have a selection.

Source: Ehrenberg, A. (1997). Justifying our advertising budgets. Marketing & Research Today, 25(1)

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