Whilst most of us are familiar with theory of Participation Inequality, the much spouted rule (but rarely alongside any type of empirical data) that states 90% of users are lurkers who never contribute, 9% passively contribute (i.e. comment) and only 1% account for almost all of the activity within an online community. Thankfully, the bods at Forrester Research were kind enough to add more meat to the bones of this theory, providing us with the following results:
But how does this tie in with buying behaviour? Another ill-documented factoid often spouted by marketers is that, and I quote, “for most brands the 80-20 rule applies; most sales come from 20% of the buyers”. On this basis it would be safe to say that given that the more ‘involved’ a consumer is with your brands communications, the more likely the crossover between the 24% of creators and 20% of buyers would be significant. A concentration of your communications efforts on this top 24% would therefore be the most efficient use of your time and budget, because after all, these are most likely to be the ones who buy the product.
What’s not often mentioned?
As much as any brand or marketing manager would wish to believe, the fact is that people very infrequently buy any one brand and the concept of consumer loyalty is a rather loose one. Whilst common sense tells us that the loyalty of common social situations somehow translates into one of commercial trade is not only ignorant but proven wrong on many occasions.
For example, the buying frequency per year of Pantene products:
From this graph it’s obvious that the vast majority of sales come from people whom will only purchase 1 to 2 times per year. Any more than 6 and we’re looking at a demographic so insignificant it’s hardly worth noting. How about Fructis?
We witness the same thing again – the non-loyal customers make up the vast majority of buyers. Interestingly, Pantene, who have the highest market share, also have the highest rate of loyalty with an average 1.8 purchases per year compared to Fructis’ 1.6.
How does this tie back to communities?
To witness a linear growth in loyalty requires an exponential growth in market share, and eat my hat if this wasn’t the case with online communities. Whilst pushing the benefits of creating loyal customers without much reference to any sort of research, as seen in this quote from AdAge –
Do consider VIP treatment or special access. These are your best and most-loyal consumers. They are the 20% of the Pareto principle (roughly 80% of the effects come from 20% of the causes.)
From our research it’s simple to conclude that loyalty just isn’t where the dollar is.