By Jason Green and Tim Joyce
When businesses and brands are successful in tapping into their consumer base’s passion, profits soon follow. Consumers who have sizeable emotional engagement and passion for a product or service are the most willing to pay a price for those products or services that meet their needs. Furthermore, these passionate consumers are the most adept at identifying new opportunities for innovation. No news here.
What is new is the fact that passionate consumers exist in every category. We recently have observed passionate consumers appearing in categories that traditionally have been more associated with “commodities” such as staplers, bottled water and even insurance.
Who are these passionate profit centers? We call them “Super Consumers.” We first observed this concept in consumer packaged goods, where we learned that the top 10 percent of highly engaged, heavier spenders in any category drove more than 30 percent of sales and more than 50 percent of profits. We originally suspected that Super Consumers were affluent consumers. Instead, we discovered that Super Consumers represent less than 20 percent of the affluent population. They are merely the passionate profit center with whom brand leaders in any category would do well to align. We’ve clearly established their existence (and importance) across more than $400 billion worth of consumer packaged group categories, and we are confident of their existence and value in the financial services industry.
Consider life insurance. This category might well be the antithesis of passion given consumers generally don’t like to think about this category. Yet we find Super Consumers in life insurance as well. Our research shows they represent the top 10 percent of life insurance consumers. They buy five times more death benefit and have three times more accumulated cash value than the typical life insurance consumer. They have untapped passion for the category and the means to expand their presence. They are 55 percent more likely to be shopping for life insurance. They also tend to have a higher risk/reward profile in their savings and investing, with 20-40 percent higher balances in their retirement and individual retirement accounts, and 30 percent higher balances in their brokerage accounts.
For those looking to expand insurance cross-sell opportunities, Super Consumers offer potential as well. Consider that a life insurance Super Consumer also is an insurance Super Consumer who spends more than 40 percent in additional annual premiums across all forms on insurance, such as auto, home and long-term care. In consumer packaged goods we find that a Super Consumer in one category is a Super Consumer in an average of nine other categories. Just imagine the cross-sell potential in financial services if you could activate against such potential. Could this be the cross-sell holy grail?
How To Find and Win Super Consumers? Super Geos
During our time working with insurance and financial institutions, as well as consumer packaged goods companies, we have discovered some clear insights into how to capitalize on Super Consumers. Consider this action plan to fast track your alignment with Super Consumers.
- Protect your current Super Consumers: How do you find Super Consumers? Rank your clients by the total number of policies held from high to low. As much as possible, augment your understanding of these clients with cross-category purchase information as well as key emotional engagement metrics (time spent researching the topic, attendance at seminars, inquiries, etc.) and determine the top 10-15 percent of clients who meet key sales and emotional engagement metrics. Once determined, re-double your efforts to treat them well and encourage consolidation of their policies with you. If you treat them well, they will reward your efforts themselves and spread the word to others.
- Prioritize potential Super Consumers: Once you have mined your database for emotional engagement, look for clients with similar levels of emotional engagement but average spending levels. Determine why consumers with the same demographics and lifestage metrics diverge and one becomes a Super Consumer while the other does not. Identify, learn from and act on this knowledge.
- Win in Super Geos and potential Super Geos: All consumers are not the same in all locations. Your marketing efforts should not be the same in all locations either. One of the fascinating things we’ve found is the existence of what we call Super Geos — local markets where many Super Consumers live near each other. This creates a network effect, where Super Consumers actually influence other regular consumers to spend more. In some cases, heavy regional spending can yield more return on investment than spreading your marketing investment across the board. When you place a priority on engaging Super Consumers as part of your marketing effort, you will discover there is no ambassador like a Super Consumer.
In an industry looking for meaningful ways to drive profitable growth, Super Consumers represents a much needed growth driver. We have seen this time and again across a broader number of industries. There has never been a place where first mover advantage will be more impact than acting on Super Consumers in insurance and financial services.
Jason Green is CEO of The Cambridge Group. Jason may be contacted at [email protected].
Tim Joyce is a project director with The Cambridge Group’s Chicago office. Most recently, Tim has focused on developing growth strategies grounded in Super Consumer and Super Geo insights. Tim may be contacted at [email protected].