The Truth about 20% of buyers

Reaching viral status is a complex task with no secret sauce, though there are optimizing factors I'll explore in future articles.

A major mistake marketers often make is chasing reach just for the sake of reach. Karen Nelson-Field, a renowned viral scientist, captures it well: “Reach is important. But it needs to be quality reach to achieve maintenance and growth.”

Reflecting on my time working with a startup real-estate firm solely aiming for viral success on Instagram, I emphasized the mismatch between viral content aimed at a young, entertainment-seeking audience and the firm’s ideal customer base. Real estate investment involves a lengthy, mature decision-making process, ill-suited to a platform rife with scams, wannabes, and memes.

Quality reach, therefore, extends beyond mere customer personas.

Marketers are enamored with the concept of exclusively faithful consumers, harboring a flawed mindset: focus less on the less profitable and more on those who adore the brand and buy frequently. This overlooks a crucial insight: consumers are “unfaithful, lazy, and not really marriage material.” If their preferred toothpaste brand isn't immediately available, they're likely to switch to a convenient alternative or whatever is on promotion. Despite being usually creatures of habits, loyalty can be fleeting, with consumers sporadically trying and sticking with new choices.

This illustrates that total loyalty is rare, challenging the common notion that marketing should solely target presumed loyalists. Furthermore, the Pareto Law, suggesting that 20% of a brand’s buyers contribute to 80% of its revenue, is a half-truth. Sharp & Romaniuk (2007) demonstrated it's more around 50%. This has significant implications for marketing strategies.

The light buyers, as shown by the Negative Binomial Distribution, are crucial for a brand’s growth, not just because they represent a large segment of sales but because they significantly contribute to expanding the brand’s market presence. Unlike heavy buyers, whose purchasing habits might have plateaued, light buyers offer the potential to climb up the purchasing ladder, from light to medium, and eventually, heavy buyers.

To scale, a brand must broaden its consumer base, encouraging even casual customers to interact with the brand—whether through wear, recommendations, or incidental content creation. This requires reaching a vast array of light buyers, emphasizing the importance of quality reach over quantity. Thus, while customer personas are valuable, they should not exclusively focus on high-frequency buyers.

In essence, expanding the brand requires engaging the many who buy infrequently, ensuring growth through quality reach and thoughtful engagement of light buyers.