🏴☠️ How To Leverage Superconsumers For Growth & Category Creation: What Every Business Can Learn From Southwest Airlines
A Superconsumer of 1 category is a Superconsumer of 9 others.
Dear Friend, Subscriber, and fellow Category Pirate,
Do you know what a Superconsumer is?
A “Super” is the scrapbooking fanatic who owns not one, but a dozen different pairs of scissors—each one designed to cut different shapes from paper.
A “Super” is the online course enthusiast who buys not one, but a degree’s worth of online courses—each one providing slightly different information than the last.
A “Super” is the photographer who shoots with not one, but a backpack full of cameras, lenses, and filters—each one playing a crucial role in crafting the perfect photo.
A “Super” is the first to download a new category of app, email the founders with their feedback, and simultaneously invite their closest friends to try the beta version.
A “Super” is the kind of person who knows your category better than anyone else—oftentimes, even better than you do.
We all have friends who are Supers. We can spot them from a mile away.
They’re the winos who arrive to a casual night of drinks with seven different types of wine glasses. They’re the rave attendees who show up wearing lime green booty shorts, multicolored rainbow faux rhinestone fringe epaulettes, and a homemade iridescent sequin top (an outfit the average consumer wouldn’t know the first thing about assembling themselves). They’re the self-help readers who own every book in the genre, the sound engineers who collect studio amps and vintage microphones, the project managers who pay for software tools out of their own paychecks just because they want to try the newest organization platforms the moment they’re released, and the music fans who like to brag about how they were listening to rock band Greta Van Fleet before they won a Grammy.
In short, they’re the consumers pushing the category forward (whether they realize it or not). They are receptive to the new. They are looking for “different.”
They’re the first to spot breakthrough products and business model innovations, are quick to point out their frustrations with current category offerings, and with the rise of social media, are vocal about the future they believe is possible for the category they know and love so much. In fact, Supers leave so many digital breadcrumbs, that if you see anyone commenting extensively about a category on social media, an online review, or Reddit forum, they are 99% likely to be a Superconsumer.
And yet, when it comes to building companies, launching products, and creating new categories, Supers are almost always a forgotten piece of the puzzle.
They’re dismissed as being a small, weird bunch.
But in the discipline of category design, weird is good.
The Power of Superconsumers
In 2016, Pirate Eddie published a legendary book with Harvard Business Review Press called Superconsumers: A Simple, Speedy, and Sustainable Path to Superior Growth (coincidentally, the same year Pirate Christopher published Play Bigger). The insights in the book were generated from a data set of over 125 consumer-goods categories representing more than $400 billion in sales, with consumer purchasing behavior analyzed across multiple demographics.
The biggest benefit of Superconsumers comes down to simple math. Pound for pound, Supers generate the most power in a category—analogous to the power of Bruce Lee’s ‘one-inch punch.’
Although Supers are few in number—usually about 10% of consumers for a particular product or category (not 10% of your customers)—they can drive between 30% and 70% of sales, an even greater share of category profit, and 100% of the insights. What is often missed or misunderstood, however, is that Supers drive >100% of the ‘share of growth,’ which Pirate Eddie also wrote about in the Harvard Business Review. Note that the Superconsumer phenomenon is even more extreme in digital categories, where 6% of New York Times subscribers drive 67% of their revenue and 0.15% of casual gamers drive 50% of in-app purchases.
Emotional buyers who base their purchase decisions on their life aspirations (because the products they buy represent their love and identity attachment to the category)
NOT price-sensitive (because they have emotional and aspirational connections to the products they love, and are usually willing to spend more overall AND pay a higher average price per unit)
More predictable than other consumers (since the root cause of their behaviors is deep emotions and motivations rather than socioeconomics or demographics)
Willing to offer wisdom and new insights about product potential within the category (since they are the ones most intimately familiar with all the current product options out there)
Most likely to introduce potential Supers to your new category of product (potential Supers represent 20% of a category’s consumer base, and respond well to the same advertising, marketing, and product innovations that Supers do)
In essence, Supers are the key to category design, and the ones who make your company’s Data Flywheel spin. (And if you own the Supers in your category, you win.)
The reason is because Superconsumers of 1 category are also Supers of as many as 9 other categories. Sometimes, these category crossovers are obvious—if you are a Super of makeup, you’re probably also a Super of face lotions, fake eyelashes, and even Botox. But more often than not, these category crossovers are non-obvious—like how vitamin Supers tend to have 3-4x more life insurance than they realistically need. (And Category Designers are always looking for orthogonal, unpredictable connections.)
This is perhaps the most important insight to understand about Superconsumers when it comes to category creation.
Your ability to create and design a legendary business in a new and different category comes down to how effectively you can span multiple categories of the same Superconsumer.
Is Starbucks a coffee company? Or is it a dairy company, given that Starbucks sells 93 million gallons of milk per year? After all, Supers of coffee are also Supers of dairy.
Understanding why a Superconsumer of 1 category is a Super in 9 others is the highest form of category creation, enabling you to figure out how to lead or leverage Supers to a 10th category that is new and different from anything that currently exists (like how Amazon leveraged e-commerce Superconsumers to create AWS).
This is what we mean when we say legendary category creators have legendary data flywheels.
These types of companies don’t just collect “big data.” They collect “broad data” that spans the entire scope of categories their Supers know and love. And they create “data potlucks” with key partners to create scenarios where 1 + 1 = 11 (like anonymized credit card data normalized to a zip code), giving them super-geo insights into Superconsumers’ behaviors.
For example, how do you find wine Supers?
You look for zip codes that have extremely high-per-capita spending on dining out. Then you overlay that data with high-per-capita use of ride-sharing.
Because wine Supers who go out to eat love to try new wines, and shudder at the thought of someone missing out because they have to be the group’s designated driver.
Or, you look for patterns with day-trading accounts and spending at Las Vegas and Atlantic City.
Because one of the only 269 master sommeliers in the world told us that wine Supers love wine, but are burdened with the belief that regardless of the wine they are enjoying now, there is possibly an even-better wine for their palette yet to be discovered. So they hunt and search, knowing they may have to “kiss 100 frogs to find their prince.” And that behavior feels no different than gambling or day-trading, so the correlations are predictive.
This is how world-class businesses and legendary category designers use data.
Which means, if your data flywheel does NOT have category Supers at the center of it, and does NOT track data in up to 9 other categories they are likely to be Supers in, your data flywheel is mental masturbation in a bathtub of confirmation bias. It is myopic, and lacking the wide-angle lens required to see the true total addressable market (TAM)—which is why so many businesses fall into the trap of incrementally growing market share by trying to convert more new customers, opposed to exponentially growing the TAM by converting existing Supers in new and tangentially relevant categories.
Remember, traditional marketing is about capturing demand. Category design is about creating it.
Common sense suggests there would be little return on investment (ROI) in trying to sell an office-supply Super who already owns eight staplers a ninth or tenth one, but our analysis proves that selling those additional staplers to Supers is actually a smarter growth strategy than selling replacements for broken or lost staplers to normal consumers. Just ask someone who owns three Mustangs what they think Ford should do next, or the person who owns 47 Bobbleheads whether they’d like to own a 48th. Supers are far more likely to buy new variations of the things they already know and love than a person who owns none is likely to buy their first.
Supers believe everything should go to eleven.
(And remember: Supers buy more products at higher prices.)
More importantly, Supers are the gurus who can help you innovate, and are the ones who will spread the word about how amazing your products are to other consumers (and more specifically, other Supers). They love to talk, share, post, and educate others on the category. And no matter what new marketing tactic is the vanguard of the moment, nothing will ever beat word of mouth. (And your job is to put the right words in the right mouths!)
If you’ve ever been trapped by a talkative Super at a cocktail party, you know exactly what we mean.
The Magic Triangle + Superconsumers
In our last letter, we wrote about The Magic Triangle—product design, business model/company design, and category design—and why Category Kings & Queens need to prosecute all three, simultaneously.
Well, if you want to make sure you are innovating in the right direction, go talk to your Supers.
What you’ll find is clarity.
Supers offer clear insights into solutions to complex problems, and reduce much of the guesswork that is common with consumer-centric approaches to entrepreneurship & intrapreneurship. Instead of asking all of your customers what they think of your product or service (resulting in a mixed bag of contradictory feedback), focus on building relationships with the 10% who live and breathe your category of product (not just the top 10% of your customers). Since Supers are such a small segment of consumers, they tend to stand out sharply in your data sets—so you know exactly who they are.
Companies that use Superconsumers’ insights to refine their decision making grow sales and margins across all segments.
So, how do you find your Supers?
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