13 January 2015
When my good friend Jannie Hofmeyr and I launched the Conversion Model in the United States in 1990, our pitch was embarrassingly simple, and went like this: What people do is not necessarily what they feel. Our approach is to focus on measuring what people feel, and to then compare it to what they do. We don’t just look at what people buy, we look at how committed they are to the brands they buy. Because commitment is a better predictor of future behaviour than anything else, and hence the most important marketing metric. That’s it. That was our pitch, in essence. I remember embarking on my first exhausting sales tour of the US, making presentations to 39 potential clients across the country. As a result of these initial sales pitches, we were rewarded with 13 confirmed projects, unheard of for a new methodology with very little track record. We were out of the starting blocks, in a very competitive international market. Even when faced by international sanctions imposed on South Africa at the time ( which meant that I had to masquerade as an Australian at times ), we knew we had a potential winner on our hands.
The theory of commitment arose as a result of a study of the process of religious conversion. For some people the process of conversion is a slow and gradual one, for others converting to a new religion is a sudden ” born again ” experience. The mathematics of catastrophe theory, more specifically the butterfly cusp, were utilised for providing a framework which would explain how people could cross a psychological threshold in very different ways. For some, a sliding into the new state, for others a jagged discontinuity. From religion, the model moved into the realm of political affiliation, and then, finally, was applied to marketing, after ensuring that the measures were stable and valid, in terms of correlating with both current and future behaviour, when it came to the measuring the strength of commitment consumers had towards the brands they used.
Hard to believe as it may be, Jannie and I were the first to introduce to the international marketing world the concept of commitment. Up until then, the preoccupation of researchers had been with customer loyalty, which is, of course, behavioural. The debate of the time was about how exactly to define and measure customer loyalty. We’ve come a long way since then, as an industry. The measurement of commitment to brands is now a common marketing metric, executed in different ways by different research suppliers, with the Conversion Model remaining a world leader.
The philosophy of commitment has its foundation in two insights. Firstly, all choices we make as human beings are based on comparisons, and not on absolutes. As an example, you might hate your bank, but if you reckon that all banks suck, you won’t change. What’s the point? You won’t gain anything, just swopping one set of problems for another. This means that research respondents should never be asked to only rate a single brand, but always to rate all banks in their consideration sets, to see how each performs relative to the others.
The second insight was the importance of involvement in the category. If brand choice doesn’t matter, a consumer will never be committed to any brand. On the other hand, the more committed they are to the brands they use, the less likely they will be to switch. Involvement is defined as the importance of brand choice in the category, compared to other decisions in the consumer’s life.
There it is. The inner secrets of the underlying algorithm of the Conversion Model laid bare. As it has been since its inception, in numerous papers, and in the book Jannie and I co-authored some years ago. Originally based on a theory of religious conversion, it is one of the few marketing models that began by outlining a philosophy of human behaviour, and then constructing an algorithm to allow for practical implementation.
We have now constructed our own Panda model of commitment, based on the principles outlined above. By measuring the ratings that a consumer gives to brands in the consideration set, we can immediately see whether the brands they use beat, tie, or are beaten by other brands they would consider buying. All we then need to do is to determine how important brand choice is to individual respondents, and we can then construct our model.
When we construct our segments, it is easiest to begin by identifying those respondents who are uninvolved. If somebody is uninvolved in the category, we know that they will be vulnerable to switching from their current repertoire, as brand choice doesn’t matter. They are capable of making brand choices on impulse, and can be swayed by price and availability. Easy to identify and label.
However, if somebody rates their brand as being superior to others, and brand choice matters, they will be classified as being ‘secure’ in terms of commitment (we term it ’secure’ in our model).
And then there are those who rate their brand as being the same as others. No better, but no worse. But brand choice does matter to them. We label them as comfortable in their relationship with the brand.
Lastly, if somebody thinks there are other brands superior to theirs, and brand choice does matter, they will be vulnerable to being wooed away from their current brand repertoire, and hence convertible.
Voila! A simple and effective measurement of brand strength, easily constructed. How big are your brand’s biceps? Does it have a six-pack? Our measure is known as the Brand Muscle Index. When measuring the size of your brand’s muscles, the higher the score, the stronger your brand’s muscles. Simple. Effective. Easy to do.
When last did you put a tape measure around your brand’s biceps? Fit and strong, or weak and flabby? How does your brand strength compare to that of your competitors? Easy to find out just where your brand fits in. Bring it in for a Brand Muscle Index measurement, and we’ll tell you. And it won’t hurt a bit…