Anton Lipkanou, President / Partner at Delve Partners.
Are there consumers who make you money while genuinely loving your brand and who simply can’t get enough of your products? Are there other consumers who generate negative profit for you because you’re covering the shipping cost on their returns, hiring extra staff to answer their never-ending questions and only selling them loss-leaders?
I believe that every brand out there will answer “yes” to both questions. I call these two types of consumers “super-fans” and “anti-fans,” respectively.
Some brands appear to be built entirely around super-fans. For example, Disney’s super-fans travel across the globe to visit every Disneyland, buy merchandise and subscribe to Disney+. Harley-Davidson’s super-fans collect entire fleets of bikes. And, Kylie Jenner’s super-fans bought up every single $125 Kylie Skin set within six minutes of launch.
Anti-fans can make a very noticeable impact, too. For instance, in an earnings report published in May, ASOS said 6% of its active consumers were responsible for more than 100 million pounds in losses.
I also believe that every brand’s statistical distribution of anti-fans and super-fans more or less follows a bell curve.
• On the far right of the bell curve are your super-fans. This roughly 10% of your total customer base adds disproportionately high amounts to your bottom line. They have a genuine affinity for your brand and mission. They buy often and across your entire product line, rarely make returns or complain, and actively promote your business to friends and family.
• On the far left are your anti-fans. These customers also account for about 10% of your total customer base. Some orders from them cost you money. They have no strong attachment to your brand. They occasionally buy from you when they can’t find cheaper alternatives. They frequently make returns, hassle your support team with minor issues and badmouth you to others.
• And then there is your “core middle.” You make decent money with them. They’re worth keeping but are not particularly exciting. They like you and you like them, but there are no fireworks.
Good consumer-obsessed marketing requires an in-depth understanding of your super-fans and anti-fans.
That’s right: It is equally important to identify and get into the heads of consumers at both ends of your profitability bell curve. And, from my perspective, the core middle doesn’t really matter.
They’re the two sides of the consumer obsession coin. Assuming you can’t be obsessed with all your consumers—an idea I love to hate—deciding where to focus engagement efforts necessarily means deciding where not to focus them.
Knowledge of who your super-fans are and what they’re all about, as I suggested in my previous article, enables you to get properly obsessed with them and unlock that seemingly “unfair” advantage to grow faster than competitors despite shrinking resources.
And by identifying your anti-fans and what makes them tick, you’ll know who to get rid of early and often.
What about the core middle? They are not going to help you dominate your industry, so don’t bother with understanding them so deeply. Keeping the status quo will be enough here.
Filter out anti-fans and pull in super-fans with a marketing funnel optimized for profit.
With an understanding of your anti-fans and super-fans, you can optimize your marketing funnel to account for actual profit generated by customers as opposed to customer lifetime value or cost per acquisition. In my experience, the latter is not very helpful, considering that the cost to acquire an anti-fan can be the same as that to acquire a core middler or a super-fan.
Here’s what needs to be done:
1. Spend minimal or no budget on anti-fans so they organically fall off.
2. Spend the same budget as before on your core middle; you want to “benignly neglect” them.
3. Spend more budget on super-fans to create “surround sound” marketing that keeps them in the funnel. As anti-fans fall off and the super-fans conversion rate increases, the relative proportion of super-fans will increase at every stage, and the entire funnel will be more profitable.
Note that building such a funnel requires proper integration of analytics and media. This is one of those trendy ad industry catchphrases, so I’ll cut the fluff:
• The main purpose of the analytics function here is to describe both your super-fans and anti-fans in as much detail as possible. It supports the efficiency of the funnel by helping you determine who to target and who to avoid.
• The main purpose of the media function here is to create that “surround sound” that increases the conversion rate. It, therefore, supports the effectiveness of the funnel.
• Integration is important, as good analytics is possible only with good media data, and good media is possible only with good analytics. They are the Yin and Yang of efficiency and effectiveness that come together to create an “unfair” marketing advantage.
Bringing such a marketing funnel together requires a process for creating your “surround sound,” templating your anti-fan and super-fan descriptors and regularly optimizing your media channels.
But these tactical considerations are secondary to the strategic priority to obsess over your super-fans. It takes courage and vision to actively exclude a considerable number of potentially paying consumers even if they will not ultimately be profitable. And it takes conscious effort to regear a cost-per-acquisition-based performance marketing mindset—but the rewards are well worth it.
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