The one-sentence summary

The customers that your data says are your most satisfied may be the most likely to leave tomorrow, so are you asking the right questions and measuring the right dimensions?

WHAT THE BOOK SAYSCOMMITMENT LED MARKETING

  • The key to brand profits is in the customer’s mind
  • Some customers appear to be loyal because they habitually buy a product, but this does not mean they are committed to it
  • The Conversion Model allows you to segment users by commitment to stay, and non-users by openness to adopt your brand
  • By applying this to your brand, and competitors, you can identify the right strategy to defend share (if you are a large brand), or steal it (if small)
  • Customer satisfaction is a poor predictor of behaviour – commitment is better
  • Loyalty is what customers do. Commitment is what they feel
  • Customers can appear deceptively loyal but actually be uncommitted (they might only use the brand because everyone else does (Microsoft), through lack of choice, affordability, or distribution

WHAT’S GOOD ABOUT IT

  • There is a useful segmentation element: Users are entrenched or average (committed); shallow or convertible (uncommitted). Non-users are available or ambivalent (open); weakly or strongly (unavailable)
  • Few clients correctly measure these features for all the brands in their market – if they did, they could make better-informed decisions
  • The idea that “satisfied” customers may be very prepared to leave your brand is clever. Is your client measuring the wrong attribute? Can they identify a competitor’s Achilles heel?
  • A “last straw” can make a committed user snap and switch to another. The moment is hard to predict, the decision is usually irreversible, and to cap it all they tend to become a missionary against that brand. Clients beware!
  • There is a level-headed, unbiased review of how advertising works
  • There is an amusing example showing the correlation between the number of lamp-posts in the world and the number of babies born every year, which shows the danger of assuming causality between variables

WHAT YOU HAVE TO WATCH

  • There are quite a few examples from politics and religion whose relevance to conventional marketing are a bit tenuous
  • In order to benefit from the thinking in the book, your client would have to endorse it completely, invest heavily in implementing what it proposes, and both parties would have to be very patient whilst the data become apparent
  • The problem with most database models is that they only use hard data. Adding commitment significantly enhances their value
  • Integrating behavioural and commitment measures with lifetime value enables the best decisions. The technology now exists to do this
  • Wastage in direct marketing can now be reduced hugely because it is relatively easy to identify those who are not interested in your product
  • If a customer has a low value to the brand it does not mean they have a low value to the category. Do not make the mistake of automatically discarding all low-value customers
  • Using commitment in databases allows customised communication strategies, varying tone, content and weight to increase profitability

THE MOST COMMON MISTAKES MARKETERS MAKE

  • Unnecessary price-cutting

~ It erodes the total brand equity in the market and seldom results in long-term share increases

  • Unnecessary new product development

~ Ignoring commitment to existing brands overestimates the success of new ones

  • Too much advertising

~ Advertising for small brands is less effective than for large

  • Too little advertising

~ Brand leaders should behave like one

  • Inadequate management at point of purchase

~ Uncommitted users do not go out of their way to find brands

  • Believing that advertising can change perceptions

~ Advertising works best at reinforcing current beliefs

  • Spending according to value instead of commitment

~ Relationship managers are wrong to lavish attention just on high-value customers who are already very committed

  • Spending too much on customers who are unavailable

~ These people have to move from strongly to weakly unavailable to ambivalence to available. This road can be too long and unrealistic

  • Trying to have a relationship with customers who don’t want one

~ Lots of customers simply don’t want relationships with your brand, so they shouldn’t be forced