This article originally appeared in The Jakarta Post.
Consumer products companies throughout the world are waking up to a profound new finding: The best way brands can grow over the long term is to grow the number of buyers.
That may sound obvious or even like circular reasoning, but the reality is that it’s a big departure for consumer goods executives. Most brand plans call for tapping into a well-segmented group of shoppers, getting them to try the brand and converting them into avid consumers who buy larger and larger quantities over time. While this approach may appear attractive, evidence shows that it just doesn’t work.
Instead, there’s a simple rule that successful brands follow: It’s all about increasing household penetration. (Penetration is defined as the percentage of households in a market buying a particular brand in a given year.) This finding emerged from recent Bain & Company analyses of the buying habits of nearly 100,000 shoppers across brands and across the globe, based on data collected by Kantar Worldpanel, and our experience working on more than 600 brand growth projects.
Guy Brusselmans is a Bain & Company partner based in Brussels. Mike Booker is a partner based in Singapore and head of the firm's Consumer Products and Retail practices for Asia Pacific, and Nader Elkhweet is a partner based in Jakarta.