Are Customer Habits What Really Matter?
If I were to ask you why you buy a certain brand, what would you say?
Would it be based on price? Ease of use? Good customer service?
Most people, when asked, will give some variation of those answers. Generally, they don’t say they buy something because that’s just what they’ve always bought.
The truth is that’s because many people don’t know exactly why they buy something, or at the very least they certainly don’t think about it in depth. And when they are asked to explain why they do, they generally repeat the features or benefits they’ve been told by the advertisers themselves.
See the potential feedback loop issue here?
It’s no secret that brands and marketers are constantly trying to delve into the mind of the consumer to see what makes them tick.
But, ironically, asking a consumer why they buy a product or service might actually be one of the least effective ways to find out that information.
Instead, researchers argue, the best way to find out how consumers behave is to monitor their habits. Move out of the focus group and into the numbers.
The Power of Habits
A study from Duke University highlights just how ingrained our habits our. They found that up to 45% of every choice we make on a daily basis is actually done out of habit rather than a conscious decision.
Adobe site CMO took it a step further.
The graph below shows that the majority of respondents think a minimum of 45% of decision-making is on autopilot (tying in nicely with the Duke Study). But the number that is a bit more interesting than that is 37.5%, the number of respondents who thought that 70% of consumer decision making was on autopilot!
Those are some pretty incredible stats when you think about it.
Charles Duhigg is a reporter for the New York Times and the author of the book The Power of Habit. In the book, he takes a deep dive into habit formation. Why they happen (typically because our brains will start to divert focus somewhere else after we repeat a task a few times), and how to change them and form new habits.
This non-scientific reason for why your brain can seem to go on autopilot when it comes to doing things is called “chunking.” It just means that your brain has “chunked” together series of actions into one routine.
This helps explain why you never think about brushing your teeth in the morning, and it can also help explain why you always grab a box of Cheerios when you walk down the cereal aisle at the Supermarket. These actions have just become automatic.
Habits cover everything we tackle in our daily lives: from shopping behavior, to why some people smoke and others go to the gym, to how brands are looking at habits as a new frontier in marketing.
The bad news is that once someone has formed a habit around a brand, or extreme brand loyalty, it’s actually really difficult to break them from it.
The good news is that tracking the actual purchasing habits and behavior is now easier than ever thanks to the data that advanced technology is giving us. Now, you can not only track, but use that information to predict the future purchase of your customer.
Disrupting Habits: The Target Pregnancy Score
In both his book, and in a well-known New York Times article Duhigg wrote a few years ago called How Companies Learn Your Secrets, he highlights Target as the example of a brand that was taking the power of habit to a new level.
Target highlighted one specific moment in life where a consumer is incredibly vulnerable to habit disruption and decided to capitalize on it.
Having a baby.
With a very advanced Guest Marketing Analytics department, Target tracks every single customer they have, and unsurprisingly, found that their shopping habits were very predictable.
But, when a customer is having a baby, their habits around this event aren’t formed yet, it’s one of the few times in the life of a consumer where habit disruption can actually take place. And that means it’s a potential goldmine for brands and marketers who can jump in and direct consumers to new buying habits, which ideally will become ingrained and last for years to come.
This quote from the Times article highlights it:
As Pole’s computers crawled through the data, he was able to identify about 25 products that, when analyzed together, allowed him to assign each shopper a “pregnancy prediction” score. More important, he could also estimate her due date to within a small window, so Target could send coupons timed to very specific stages of her pregnancy.
Target used this period of habit disruption to guide their consumers towards new brands or products, thus potentially shifting their allegiances over the long term.
The brands that were sending out the coupons were far more likely to become the preferred brand of these new parents, creating an entirely new habit that would be very difficult to break.
So did the score work? Looks like yes:
Unsurprisingly, when the news broke on this story, Target got it a bit of hot water. But, the concept of using the data around habits as the main predictor of consumer buying behavior has only gained more steam since then.
Disrupting Habits: Dollar Shave Club Shakes Up an Industry
Now, not every brand or marketer needs to have Target levels of prediction analysis in order to disrupt habits and change the course of consumer behavior.
Advances in technology coupled with new marketing approaches have also been not only able to actively change the habits of consumers for their own brand, but also influence the users of other brands as well. This is something that can’t always be answered by the traditional views of positioning and market share.
Dr. Art Markman of the University of Texas argues this exact point in a recent article in The Guardian and highlights Dollar Shave Club as a brand that has been able to massively disrupt an industry that is about as habitual as they come: shaving.
Before Dollar Shave Club came along the vast majority of men (as well as women) had to go the store and by usually very expensive packs of razor blades. Men would typically stick with the same blades for most of their lives, as the handle they bought would only fit one type of blade, so the buying process of blades was “chunked” so to speak.
When Dollar Shave Club came onto the scene in 2012 it was as a major disruptor. Not only were they selling quality blades at a very reasonable price, but the blades would be delivered to their customers home on a monthly basis. The ease, price, and convince of the product was enough to disrupt the habits of what is now an approximately 10 million customers.
However, a comparison of site traffic is the clearest display of the threat these new companies pose. Gillette.com traffic has declined 65% year on year, while traffic to dollarshaveclub.com is up 59%.
Check out the graph that illustrates the above statement.
The $3 billion dollar shaving industry saw the massive disruption of habit and have now jumped on board as well with shaving giant Gillette now also offering monthly home delivery of blades.
Though, now that Dollar Shave Club has changed the habits of former big brand customers, it will be interesting to see if these customers are lost to DSC forever.
Keeping Habits in Mind
You can see just how important habits are in the consumer buying process. With the data available to even the smallest of brands today, there is no reason why you can’t be consistently tracking the habits of your own customers.
After all, the purchases they have already made are often the best predictor of how they will continue to act in the future. That’s not something you want to miss out on.