Welcome To My Mental Sandbox

"Categories with high consumer involvement … attract a higher concentration of heavy spenders …."

--Boston Consulting Group

In their July 2005 BCG Perspectives article "Sizing Up the Heavy Spender," authors Joe Manget, Karen Sterling, and Garrick Tiplady drill down into the old 80/20 rule that says most of your revenues, and even more of your profits, come from a fraction of your customers. The size of that fraction varies, depending on factors like whether products are expensive and durable or inexpensive and consumable.

(To find the article, go to the publications page on the Boston Consulting Group site and type the title into the search box.)

The variable I found most intriguing was involvement. The authors measure involvement by how much time buyers spend in a store; whether they'll window shop even if they don't plan to buy right now; and the importance of features over price -- among other metrics. To increase sales and profits, the authors recommend improving the quality of the product experience throughout its lifecycle from initial sales contact through ongoing customer support. Such moves will help retain more of these big spenders while increasing share-of-wallet.

Involvement, I think, can also be a magnet that attracts more heavy spenders (not just retain the ones you already have) who look for opportunities to get involved with a particular kind of product. I also think that where things get particularly interesting is when you consider products of the knowledge economy like the intangibles discussed in the February 6th Business Week cover story "Why the Economy Is A Lot Stronger Than You Think." As intangibles comprise an ever bigger piece of product content, involvement gets to be more about giving customers opportunities to participate in and feed back into product ideas. In higher value, more customer-iinvolving products, one way to attract bigger spenders is to let them play in your mental sandbox. Think blogs, market research, user groups, conferences, white papers -- anything that lets them feel like they're players, not just bystanders.