A large majority of customers buy many different brands of products and services. Drew Boyd, consultant and marketing professor, uses this video tutorial to discuss the specific opportunity for sales growth found in a multi-brand customer base by teaching how to spot multi-brand customers and what to do when you find them.
- For many categories of products and services, consumers buy from a number of brands. Take the clothing category. I'm willing to bet that every item of clothing you're wearing right now came from a different manufacturer. The same it true of most food categories and many others. It's just the nature of these fragmented industries that consumers will buy from many sources. We call these customers multibrand customers. They already buy products from you and they also buy from your competitors.
The good news is they understand the category, and they understand your products and brands. So they're a great source of new sales growth if you can increase your share. Like most of the opportunities discussed in this course, the key is how you spot multibrand customers and what you do once you find them. Let's dive into it. The first question you have to ask yourself is why are my customers also buying products from my competitors? There could be many reasons for that.
Perhaps customers want more variety than what you can offer. Do they like the competitor's pricing in certain situations? Maybe they just saw a new advertising campaign that made them stock up more on your competitor's products. There are too many reasons to list here, but you still have to ask and answer this very important question. In fact this question is so important, that you may want to consider investing in marketing research. It's probably best to find out the reasons right from the source.
For some insights on how to do marketing research, check out Marketing Research Fundamentals. It's taught by my good friend Cheryl Ladd. So let me give you some guidance on ways to tap into this important source of new sales growth. One of the most effective ways is to create new products. Think about clothes manufacturers like L.L. Bean. Once they have you hooked on their footwear products, they continue to grow in sales with you by offering outerwear and other clothing items. Another way to boost sales is to provide a new feature to an existing product or service.
Once your customers are familiar with your product, they really appreciate when you keep it updated and fresh. Especially with a new feature that meets one of their unmet needs. Think about online networks like LinkedIn. It continues to add new features and offerings, causing customers to stay satisfied and spend more time on the site. A third way to increase market share is to boost the performance of an exising product or service even if it's just a minor feature. For example, a grocery chain in a highly competitive market might focus on getting people through checkout lanes faster than the other grocery stores.
Just that small advantage could yield a big swing in share. If that advantage lasts for a short period of time, it's still worth the gain in revenue. And finally, you may want to target the multibrand customer by offering some new service around your existing product. For example, Best Buy, the electronics retailer, has their famous Geek Squad that comes to your home and fixes all of your tech products. They do it for any product even if you didn't buy it there. That makes customers more loyal.
So look at your customer base and think about why some of them buy from mulitple sources. They already like you and your products or they wouldn't be buying from you. Go in there and get them by creating new sources of value.