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Habit – the advertising industry’s ultimate loyalty programme

Press Release - South Africa, 15 April 2018

A little-considered consumer practice that is frequently ignored in the advertising business should properly be known as the industry's ultimate loyalty programme: Habit. This was one of the key messages from Chicago-based FBC Red Retail Strategy Director, Curt Munk, to FCB Africa staff during a recent visit to Johannesburg and Cape Town.

Although commonly disregarded in research, this is exactly where Munk's curiosity about habit began.

"I often did consumer research in which I started to hear things that didn’t match actual consumer behavior; I would be in store telling participants to do their normal shopping and then I’d follow them home to take a look in their fridges and what I saw didn't match what they told me at all."

Munk believes people mostly just don't have the tools they need to express why they make the decisions they do. This is because habit has a hand in many decisions. It is possible that many marketers overestimate the power of brands and underestimate the importance of consumers’ habits.

“Our purchase decisions are mostly unconscious - we simply don’t think too much about them. Consider food, most of which we were exposed to by the age of five.  There isn’t much truly ‘new’ in most of our lives today. The driving force in our lives, more than anything else, is our past,” he said.

According to Munk, data suggests that 45% of shoppers are not paying attention, because they typically do the same thing at the same time every day, while thinking about something else.  This is a difficult environment to insert a new product idea. This is particularly hard for new products - what chance do we have to make an impression?

In addition, people are known to choose the easiest path as opposed to the best choice because we are busy, distracted and lazy and our brains don’t want to work that hard for decisions that we’ve made many times before.

“If the typical grocery store in the United States of America has 38 000 SKUs on its shelves (Walmart typically has 155 000), to navigate all these options, rationally, it would take the average person between 11 and 43 hours to shop spending only one second's consideration on each SKU. No one can make conscious decisions in a store like this,” he said.

Munk believes what is happening is we are using purchase habits based upon mental models call heuristics to make purchasing decisions. So how do we break old habits and create new ones?

“Marketers need to look for incredibly rare ‘delta moments’, which hold the potential to dislodge habitual behaviour from the unconscious mind and leave shoppers open to new choices and behaviors,” he said.

“Delta Moments are the forerunners of change in product purchase habits. This is what we're chasing; how do you break a habit?

“The best example is a personal one: My store was out of Tide (a detergent), so I was forced to buy something else. I really like the new product and since then (more than three years ago) I have not gone back to the more expensive Tide.

“What can a brand do not to lose me? Don't run out of stock. In the detergent category, an out-of-stock situation is my Delta Moment. For a new product to succeed, it must either create a new habit or replace an old one.”

Munk offered a few key times to spot delta moments: These occur most often during truly new product innovation, a change in the retail landscape and at various life stages of the consumer.

“There are several lifetime events when radical changes in buying behavior are made - pregnancy and birth, retirement, home purchases, graduation from school and even death. It is during these lifestage changes that brands need to understand and offer solutions for shoppers' lives if they want to create new habits.

“Further, a massive behavioural shift is occurring around e-commerce because nearly everything is a new habit. The new subscription model for habitual e-commerce purchases means if you buy paper towels every two weeks as part of a subscription, the retailer will take 15% off your cost if you sign up for six months.

“Given there are 936 million consumer products on Amazon.com, the opportunity for new habits to be formed – at least in markets where Amazon trades – are nearly endless!”

Munk stressed is important to remember that satisfaction is a lousy key performance indicator. “Because we live in an age of abundance, and most products are not that bad in 2018, 85% of brand defectors were satisfied with the brand they left. It's a little like dating - something better came along and I decided to try it.”

Also valid is that emotions are shortcuts to habits and habit change, but it better to make new habits easy to do. Zune, for example, was proven to be the better product than the MP3 player 13 years ago, offering far more benefits, but the Apple iPod was just so easy to operate because of the power of iTunes - it won and no one remembers Zune.

In addition, innovation and ease are key to creating new habits. There are new Amazon dash buttons in the USA, small magnetic buttons that connect to wifi. You simply press the button and it sends a signal to Amazon.com to ship out more of whatever the dash button is programmed to order. So, an OMO button on your washing machine means you press it when you run out of detergent and voila, more will arrive tomorrow. A convenient, easy, innovative habit.

“In conclusion, brands must focus on behavior, not just attitudes or beliefs because the habitual mind learns through cause and effect, reward and repetition. We know some challenger local brands that may be facing a potential delta moment around the listeriosis crisis. So, are you part of a consumer habit?”