The 70/30 rule

Consumer decision-making today comprises, on average, 70% emotional and 30% rational factors. This broad split applies to customers in both consumer and business markets.

The relative proportion of emotional to rational will vary somewhat from one sector or category to the next, but the average of 70/30 applies. We call this the 70/30 rule.

The basis for this split is the aggregation of research data collected over the last ten years by Brand Keys Inc.

The 70/30 rule is important because both components must be measured correctly and fused together before real-life consumer behaviour can be modelled.

Traditional research methods are self-limited to accessing only the 30% rational component. This is because the direct questioning used always triggers a rational response – even when the question is about an emotionally-based issue.

The 70% emotional component, which is the lion’s share of consumer decision-making, is rarely accessed via traditional research methods, no matter what their proponents may claim. This limitation applies both to traditional quantitative surveys and to standard qualitative focus groups: neither captures the emotional factors at play.

Emotional Drivers

The major drivers of consumer behaviour today are therefore overwhelmingly emotional in nature, subordinating the minority rational component. Most brand experts agree on this.

The immense influence of these emotional drivers on consumer behaviour comes from the combination and interplay of two things: the human nature of consumers interacting with the product or service categories that interest them.

Accessing these emotional drivers via market research is not at all easy.

The problem is that most consumers find it next to impossible to articulate in emotional terms exactly what they feel about something. This is a universal difficulty. Even among those who try, they quickly default to responses expressed in rational terms, not emotional ones, which is not the same thing.

For example, everyone knows in their heart what love is, but a description or definition of love in 20 or 30 words will be a rational expression and does not remotely come near the essence or the reality of the thing itself; still less does it capture the motivational power of love. (Perhaps that’s why we need poetry and music.)

Brand Keys in the USA developed a proprietary method over several years to access and measure these emotional drivers, based on Jungian typology. The methodology has been extensively validated, and we use this same method in close association with Brand Keys.

Typically, one part of our questionnaire accesses the 70% emotional component using indirect questioning. Another part accesses the 30% rational component using direct questioning. The two sets of responses are then fused together using a proprietary three-stage statistical procedure.

This analysis produces a four-factor model, or four strategic drivers, which together account for 90% of consumer motivation and in-market behaviour for the category under study. These four strategic drivers constitute what we call the category Ideal.

Category Ideal

When consumers buy, they always do so against the backdrop of the category Ideal for whatever it is they’re looking.

For example, when looking for a new car, you first check out and compare the various makes and models you like, within your price range, on all the relevant features and benefits. When you have become familiar with what’s important in the category, you decide on the car you perceive best meets your expectations. In brief, you choose against what’s important to you and the package that best meets your Ideal.

It’s the same for any product or service, from a cup of coffee to a pack of biscuits, from a new mobile phone to a plumber or dentist. Anyone can readily observe this process at work in themselves and how it ultimately determines their own purchasing behaviour.

Each of the four drivers makes a percent contribution to the category Ideal. The higher the percent contribution, the more important is the driver to the category as a whole (chart 1).

This category Ideal is generated entirely by consumers who shop the category, providing them with a handy framework against which they compare competing offers or brands. Ultimately, the category Ideal governs what brands they like, what they buy, and what will win their loyalty.

The category Ideal comprehensively represents how consumers see the category. It differs for every product or service, because people don’t shop for breakfast cereal or butter in the same way they shop for furniture or a mobile phone.

Customer Expectations

The category Ideal represents not only how consumers see the category today, but also reveals where consumers want the category to go. This is expressed in terms of the expectations they hold for each of the category drivers (chart 1).

Consumer expectations can be measured and tracked to reveal where the category is heading, and how quickly it is getting there. These expectations are leading indicators* for brand owners.

Correctly measured, consumer expectations are indicative of where the category will be in 12 to 18 months time. Only then can traditional research tools pick them up, by which time they’ve become lagging indicators#.

The height of each driver represents the expectations of purchasers within the category, expressed as an index. For example, a driver with expectations at 134 signifies that consumer expectations are 34% above the benchmark (100) for the category (chart 1).

High driver expectations represent real strategic opportunities for brands to position and differentiate themselves within those drivers.

*A leading indicator changes before consumer behaviour or market metrics have changed: it leads an event, is a forward view, and has high predictive value.

#A lagging indicator reacts very slowly to behavioural or market changes: it lags an event, is a backward view, and has low predictive value.

Predicting with Certainty

Having early knowledge of consumer expectations gives brand owners tremendous advantage over competitors. Since expectations reveal where the category is heading, brand owners can plan strategically – ahead of the curve – to position their brands to capitalise.

This effectively empowers brand owners with the ability to predict consumer behaviour in-market, and does so with high reliability.

This does not mean that market shares can be predicted; it means knowing which brands are best placed to engage consumers, and therefore most likely to perform well.

These predictive metrics have 80% or more correlation with in-market consumer behaviour, which is close to certainty.

This model has proven itself in practice for many of the world’s best known brands.

It has been validated extensively and independently; and it is endorsed by the Advertising Research Foundation in the United States.

(For an independent review by the ARF of the Brand Keys’ methodology and model, see ARF First Opinion Review www.brandkeys.com/news/arf.cfm).

Inside the Drivers

Each driver can be opened up to reveal the specific attributes, benefits and values (ABVs) which comprise it. These ABVs reflect how consumers think about the category drivers in rational terms.

The ABVs encompass category and product attributes and values, specific benefits and functionalities, imagery, and consumer values. The ABVs include anything that enhances the perceived value to consumers of the category Ideal.

These ABVs are expressed in the consumer’s own language, not that of the brand owner. (Focus groups are very good for identifying ABVs, but they cannot rank or prioritise them.)

ABVs represent the tactical buttons a brand should press in its communications to position itself for best effect in the consumer mind. This is the best way to engage consumers directly with the brand. This should always start with the most important driver in the category – i.e. the driver making the highest percent contribution.

Each ABV also makes a percent contribution within its driver: the higher the percent contribution, the more significant is the ABV within the driver, and the more beneficial it will be to associate the brand with that ABV (chart 2).

For optimum in-market effect, this association should be brought about in a creative and engaging manner, which is the primary role of the advertising agency.

The marketer who understands the category Ideal and its ABVs, and who knows how shoppers view each of the main brands competing within the category, also knows:

• what drivers are most important and why
• what consumers want brand owners to do
  
• what brands are best placed to meet consumer needs
  
• what brands are potentially vulnerable, and why
  
• where profitable opportunities lie for one’s own brand
  
• how to capitalise on opportunities with certainty of success

Brand Equity & Engagement

The value of a brand resides ultimately in the hearts and minds of the customers who buy and use it. The strength of a brand is its brand equity, which is something quite different.

A brand is strong or weak only in the context of the category in which it competes, which includes competitor brands. BMR Brand Keys defines and measures brand equity as the strength of the brand compared to the category Ideal.

Another way of saying the same thing is that brand equity is the degree to which the brand is seen to meet or exceed the expectations that consumers hold for the category Ideal.

High brand equity means the brand is strongly valued by consumers who shop the category. Conversely, low brand equity indicates the brand is struggling for survival.

We measure brand equity as an index and report it as part of every study.

The purpose of any new marketing initiative should be to engage consumers positively with the brand. To the extent that this happens, the brand will be the beneficiary. This shows up first as an increase in brand equity, and later as uplift in positive consumer behaviour and sales.

If a new marketing initiative does not engage consumers positively with the brand, there will be no increase in brand equity, and the investment will have been wasted.

You don’t have to wait until the investment has taken place before finding out how successful the marketing effort will be. Our methodology enables the potential effect of any proposed marketing initiative to be measured and evaluated before spending the money.

Gains in brand equity are important because they represent growing consumer engagement with the brand, which is a leading indicator of growth in consumer purchasing. This sequence always holds good.

Category Dynamics

The category Ideal is not static, but changes and evolves over time; this is because consumer values are themselves evolving. How much and how quickly the category Ideal changes depends on the nature of the product or service.

The category Ideal can change in any of the following ways:

• Percent contribution each driver makes
• Order of importance of each driver
• Level of consumer expectations in any driver
• Percent contribution of ABVs
• Emergence of new ABVs

Marketers need to keep on top of these changes to see what it means for their category and brand; this allows effective corrective action to be taken in good time.

Failure to keep abreast of the dynamics governing your category means losing touch with the changing needs and wants of your consumers. This can easily lead to decisions and brand investments based on out-dated information, with wasteful and potentially harmful results for the brand.

Brand Tracking

The purpose of brand tracking is to keep abreast of changes in category dynamics, especially of changes that might reveal new opportunities or threats.

Specifically, the best trackers update understanding of consumer values and how they impact expectations, because only these provide relevant leading indicators for brand owners. This is, or should be, the primary role of all brand tracking.

For stable categories, an updated assessment once or twice a year is sufficient for most tracking purposes. But for categories where change is frequent (e.g. smart phones, broadband service providers etc) then more frequent updates may be required.

BMR Brand Keys provide updated category and brand assessments for tracking purposes as standard with our BrandWorks service.

Neither dipsticks nor continuous brand trackers using traditional techniques are suitable for this purpose, because they produce only lagging indicators. Such trackers cannot flag newly emerging factors until they’ve already become generally established. By then it’s much too late.

Users of traditional brand tracking often find that it yields very little of real strategic or tactical value for the category or brand, and their findings are often difficult to interpret or apply in practice. In addition, continuous trackers are usually very expensive.

Traditional Methods Limited

Traditional methods include standard quantitative surveys and qualitative focus groups. Both are fine as far as they go. But they rarely go beyond measuring or identifying in rational terms what has already happened or is already established as fact. Their perspective is always looking back to the past.

These methods cannot measure correctly the emotional factors which dominate consumer motivation and behaviour today. They miss the elephant in the room.

This means they cannot determine the category Ideal and its drivers, still less consumer expectations. Nor can they see ahead to where the category is heading, which means the predictive value of traditional methods is extremely low, which is well known.

For the same reason, these methods cannot reliably foresee how consumers will respond to different marketing initiatives before the spend takes place, nor which of several alternative marketing proposals will yield the best returns for the brand.

To use traditional research methods for brand tracking in the expectation of seeing what may happen down the road – and therefore as a guide for action – is a high risk business, and tantamount to gambling with the marketing budget and the future of your brand.

Why stake your brand’s prosperity on such uncertainty?

Uniquely Effective

Our methodology is uniquely effective in providing marketers with the clarity and certainty they need about what’s happening strategically in their competitive set, as well as where consumers are taking the category down the road.

It identifies emerging opportunities for the brand and how best to capitalise on them, including where to focus action to counter competitive threats most effectively.

That’s why brands large and small, across product and service categories of every kind, use and benefit from this powerful research system.

It puts marketers back in the driving seat, giving them the strategic insights and tactical means to win, and to win every time.

Talk with us to find out more.

Further reading (available from Amazon):

1. Predicting Market Success, by Robert Passikoff, founder & president of Brand Keys Inc.

2. The Certainty Principle, by Robert Passikoff & Amy Shea

3. Positioning: the Battle for Your Mind, by Al Ries & Jack Trout

4. Repositioning: Marketing in an Era of Competition, Change and Crisis, by Jack Trout & Steve Rivkin.

(see Contact to get in touch with us)


Back to top