Your Fans Will Get You Through Any Recession

Loyalty, defined as exclusive brand usage, may be a mirage in most categories (and in many premium segments within them). But this does not mean you can not retain fans for 2-3 years before the next modern thing catches their eye. 

Retention is different from loyalty in a religious sense.

All premium consumer brands need to learn from pure-play DTC brands who have the luxury of measuring monthly cohort retention with great accuracy on hundreds of thousands of orders each year as they grow. 

Most of you probably can not measure retention directly, but you can rely on one fact: your heavier-using fans are producing most of your annual profits if they represent at least 10-20% of your customers. Often it is only 10%. But, think about how cases of Spindrift a Spindrift fan in the 10% buys each year. Dozens and dozens of cases. Yup. 

In this 1970s-style period we’re entering, you will find it much harder to garner middle-class trade up to heavy usage. You should be there skewing your e-mail/social work towards your existing fans but also to out-of-store awareness-building work in the upmarket zip codes where you have the highest density of price-insensitive CPG buyers

Finally, this is the time to refine your positioning and messaging to reinforce the key attribute-outcome signal driving your existing fans to buy you repeatedly (if not exclusively). 

It’s NOT a time to buy silly, weak trial from anyone as you react to unit sales declines from the middle class. This is very tempting if you have cash on hand. But it is generally only worth it strategically when you are a nine-figure, slow-growth business.

Dr. James Richardson

[email protected]