How to do a Beauty Product Loyalty Analysis in 5 steps

How many brands or products are you loyal to? Would you believe it’s in the hundreds? While you may only name a handful of brands that you feel loyal to, your buying behavior is at least as important as your feelings.

This article outlines how to analyze the competitive loyalty landscape before launching a new consumer product. The results indicate a strategy to win trial adoption and consumer loyalty.

Attitudinal Loyalty

If you like Starbucks, Ikea, and BMW, you have some degree of attitudinal loyalty towards those brands. You prefer them over alternatives for reasons other than cost or convenience. Brands work hard to build attitudinal loyalty for obvious reasons: it’s a powerful way to build repeat business, and a competitive advantage.

Behavioral Loyalty

So why do you actually visit Dunkin’ Donuts, shop at Walmart, and drive a Toyota? Behavioral loyalty describes what people actually buy, which often involves cost and convenience considerations. While you may enjoy shopping at Ikea, they sadly don’t sell bread and milk, yet.

You can dislike a brand and still exhibit behavioral loyalty: you may not love your telecom provider, but you still pay the bills. You can also have attitudinal loyalty without buying anything: you like Tesla, but won’t buy one until the price drops to meet your budget.

How Loyalty Matters to New Brands and Products

Introducing a new product into a competitive category requires breaking, and then winning the loyalty of customers. To create a loyalty-winning plan, it’s important to understand what kind of loyalty customers have, why they have it, and exactly what it would take to break it and win it.

How to Assess Loyalty in Your Target Market

The best way to assess loyalty is by asking consumers using surveys. That’s because buying behavior can be seen in standard market research reports, but the reasons driving that behavior and how consumers might react to a new product can only be estimated by asking them. The techniques below were developed by HIT Laboratories to assess competition and loyalty for new health, beauty, and cosmetics products.

Step 1: Similar Product Usage

Loyalty is only an issue if your target market thinks your product competes with what they currently use. In the below example, 43 percent of respondents don’t use a product similar to the one tested. That reduces the marketer’s challenge for that large segment to conveying the product’s value, rather than breaking existing loyalty.

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Step 2: Product Comparison

For the remaining 57 percent who already use a similar product, how does the new product compare? If it doesn’t appear to be at least slightly better, it has a slim chance at replacing it. In this example, a combined 57 percent thought the new product was better overall than what they already use.

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Step 3: Know your Competition

What exactly is the target market currently buying? Below is an excerpt from hundreds of actual responses. Sometimes respondents will cite a product that doesn’t appear to be competition. But what we think is irrelevant; it’s competition if your market thinks it is.

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Step 4: Competition-Loyalty

Now that the competition is known, how loyal is your target market to those competing products? Behavioral and Attitudinal loyalty can be separately assessed by asking respondents questions about their feelings and purchasing history.
new_product_market_loyalty_research_behavioral_attitudinal_loyalty

Step 5: Loyalty Quadrant

Possible marketing strategies become apparent by plotting the attitudinal vs. behavioral loyalty. While this is a complex topic, we can generally say that if there is low behavioral loyalty, consumers are frequently trying alternatives, possibly swayed by new product offerings, discounts and coupons, or variety-seeking behavior. This suggests it may be easy to acquire trial purchases, and focus should be put on programs or features that drive loyalty to retain customers.

If there is low attitudinal loyalty for competing products, there may be an opportunity to create a brand with more personality or other likable attributes. This strategy has been clearly visible among North American telecom providers over the past decade, as they’ve attempted to infuse their brands with distinct personalities.

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Other Product Marketing Considerations

After assessing the nature of loyalty among the target market, examine the specific ways a new product could gain and hold customers. This is beyond the scope of this article, so these considerations will only be summarized below.

Competition-Loyalty Reasons

Respondents who use a similar product are asked why they buy it rather than any other product. These reasons can help in designing a strategy to gain market share.

Switching Potential

Respondents are assessed for how likely they are to switch to a new competing product for a trial duration. Even very loyal customers may be open to a free product trial, depending on the product type.

Switching Incentives

Respondents indicate what specific incentives would cause them to buy the new product over their current one on a long-term basis. This can indicate the best basis of competition.

The above Loyalty Analysis is a standard component of the Cosmetics Assessment Standard (CAS) study, which assesses the appeal of new health and beauty products and provides actionable product improvement and marketing insights.

Health and Beauty Ingredient Selection: Familiarity-Desire Analysis

Understanding consumer desire for product ingredients is important, but ingredient familiarity is also important to consider. Consumers may have low desire for an ingredient because they are not familiar with it, despite the ingredient providing excellent benefits.

Hit Laboratories developed the “Familiarity-Desire” (F-D) ingredient analysis to help health and beauty product developers with their ingredient selection and marketing.

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Ingredient desire results. Results based on a target market survey.

 

Familiarity and desire scores are calculated from several survey responses. The results are different for each product tested, since ingredient desirability depends on the specific application.

The chart below shows familiarity and desire scores plotted across four quadrants. For this product, Aloe vera is both highly desirable and familiar to consumer respondents. Corn oil is the least desirable ingredient, and it’s familiarity in this application is also poor.

health-beauth-product-ingredient-fd-analysis-results

F-D Analysis results determine which ingredients to feature in the tested beauty product

 

Which quadrant an ingredient falls into determines how it can be treated for marketing purposes. This helps answer the question of which ingredient should be positioned as the “hero ingredient”, which ingredients should be featured, and which may hurt a product’s marketability.

health-beauth-product-ingredient-fd-analysis-interpretation

The F-D Ingredient Analysis is a standard component of the Cosmetics Assessment Standard (CAS) study, which assesses the appeal of new health and beauty products and provides actionable product improvement and marketing insights.

Pebble E-Watch Scores highly on Consumer Testing

Seattle, Washington

July 7, 2013

 

If you haven’t yet heard of the Pebble, you soon will. The Pebble may be the first stone thrown on what’s shaping up to be a new digital product battleground.

Last month the Pebble “E-Paper Watch” became the most successful project to-date on popular crowdfunding site kickstarter.com. Achieving its $100,000 goal in just two hours, the project ultimately raised $10,266,844. Partly based on this success, Pebble next raised an additional $15M in venture capital funding.

In early May, Seattle-based research company Hit Laboratories performed a product viability test on the Pebble watch. It scored 9.1 out of 10 on the InstaHit test, indicating strong market potential and mass market appeal. Of those who wanted to buy it, the average price they would pay was $91.87. The demand was found to be very elastic: 48% of respondents indicated strong interest in buying at a price of $99. Among a separate group of respondents the response dropped to 20% at a price of $150.

The InstaHit test employs a representative sample of US consumers who learn about the product from images and a brief description, then record their perceptions and interest in buying it. Their responses are used to calculate the product’s score and viability metrics, which include usefulness, uniqueness, effectiveness, and shareability.

The research suggests the Pebble is ready to become a mainstream product, addressing concerns that the market isn’t yet ready to support the “smartwatch” category.

Today Pebble enters retail at BestBuy stores at $149.99. It’s expected that competition will follow soon; Apple recently applied for “iWatch” trademarks in several countries, and Samsung, Microsoft, and Dell are also rumored to be developing smartwatch devices.

There is no question that Kickstarter was instrumental in Pebble’s early success. The campaign earned significant attention, proving the Pebble concept was at least interesting to the 68,928 backers. Investors and retailers undoubtedly gained confidence by watching the Kickstarter community “vote with their wallets”.

However not all products on Kickstarter reach their funding goals. Do failed campaigns indicate bad consumer product? Not according to Hit Laboratories CEO Alex Frakking:

[blockquote width=’100′]“I don’t believe Kickstarter can reliably predict a product’s retail viability. That’s mainly because Kickstarter community members are very different from your average consumer, and they have different motives. I’ve also seen good Kickstarter products that didn’t gain traction simply because they weren’t promoted properly. There’s a strong popularity contest element there.”[/blockquote]

The problem of market validation is not unique to Kickstarter products. The major consumer product companies use established and often elaborate systems for testing new product concepts before committing to their full development. Not all marketers however have the knowledge or resources for extensive testing. On this issue, Frakking comments, “The main challenge for product developers is knowing if a concept warrants the significant investment required to bring it to market. Many product failures can be avoided by listening to consumers early on – either by modifying the design, or by pursuing other opportunities.”

 

Recent Successes

We try to make research simple, but the easiest way to explain our services is with examples. Read on for brief examples of how our services have helped clients.

InstaHit

Does your product have “hit” potential? Rapidly test your idea with US consumers and compare its performance against other successful products. The results include how much consumers might pay, which offers are better, what their objections are, how they would improve it, and more.

Client story: A small team of inventors used InstaHit to test their product idea as a DRTV item. It scored low on the Usefulness metric, leading them to realize that while the produce was great for some consumers, it didn’t address a need for most. Through additional research they better identified their real target market and optimized their feature set and value proposition.

Conceptualyzer

Optimize your product and marketing. Conceptualyzer provides a comprehensive analysis of consumer perception, what they would change to make it more appealing, and giving you specific ideas on how to craft your presentation.

Client story: A cosmetic distributor used Conceptualyzer to create an upcoming DRTV campaign. The results helped them make crucial decisions on product packaging, key features, and the offer. They also learned what demonstrations and testimonials they should focus on to appeal to their target market. In subsequent campaigns they’ve looked back to the report when making key decisions.

Pitchalyzer

Optimize your video presentation. Learn what consumers think of your presenter, your demonstrations, testimonials, and offer. You’ll also get feedback on the product itself, and what consumers really want to see.

Client story: A cosmetic brand tested their under-performing long-form (“infomercial”) and learned that some testimonials were alienating consumers and damaging credibility. They also discovered a simple way to increase appeal, and found the best of four new continuity offers. They are preparing a new campaign based on the results.

 

More Information with the New InstaHit

The InstaHit™ has always been our standard for assessing new direct response products. Now we’ve added more features to help marketers launch better campaigns. We believe the more information you have about your product and your market, the more prepared you will be to find your audience, focus your message, and counter objections.

New features include:

  • Compare offers. Test two different offers to find the better one.
  • More powerful segmentation. See who likes your product the most — by age, gender, marital status, education, income, children, US region, and ethnicity. This helps you identify your target market and plan ways to reach them.
  • Name suggestions. Learn what consumers think of your product’s name, and see their unique name ideas.
  • Improvement suggestions. See what changes would make your product more appealing to consumers.
  • More consumers. We doubled the InstaHit sample size to 400 US consumers, giving you more detailed responses and greater statistical confidence.
  • Safety metric. In other research we’ve found that safety is a common objection for consumer products that interface with existing property (for example, cleaning products), or that are used by people (for example, beauty products). Now you can see how concerned consumers are about your product, compared with other successful products.

Our InstaHit reports still include the market research essentials: Our InstaHit Score, viability metrics, preferred purchasing methods, main objections, and price perception.

Google Glass Tested for Consumer Appeal

(Press Release)

Seattle, Washington
May 1, 2012

Hit Laboratories Inc., provider of consumer product testing services, tested Google’s Glass concept and found it to have very good market potential in the USA at a price of $132.60. The test was conducted on the InstaHit platform.

On April 4 Google announced their “Google Glass” project, which is developing a way to overlay graphics from a mobile device onto the user’s normal vision. Looking similar to normal glasses, features include graphics overlay, stereo speakers for music and calling, a microphone, and a camera to take still photos and video of where the user is looking. News and blog sites across the internet buzzed with speculation on the market potential of such a device. As an entirely new product, it’s unclear to many technology pundits how consumers will react.

Two days after the Google Glass announcement Hit Laboratories conducted an InstaHit test – the standard pre-market test of product performance based on consumer feedback. The Google Glass product scored an 8.9 out of 10; a score just short of “excellent” but still indicating very good potential with American consumers. The target demographic was identified as single males age 30-49, and a price of $132.60 was found most agreeable. The market size is good with nearly 50% of consumers expressing immediate interest in purchasing.

The glasses earned the highest score to-date on InstaHit’s Shareability metric, owing to consumers finding it very “remarkable”, being excited to use it, and it being a very visible product which would be noticed by many and a good topic of conversation for users. It scored poorly on the Usefulness metric because consumers do not feel the Google Glass solves an important problem in their lives.

InstaHit is the leading test of new direct response products. It predicts performance using a propriety statistical model which correlates new products with the success of previously marketed products. InstaHit reveals to marketers and inventors what price consumers are willing to pay, what the potential market size is, who the target market should be, and how their product compares with other products on five key Viability Metrics.

Hit Laboratories provides scientific product optimization, market research, as well as brand and consumer monitoring services. It serves retail, DRTV, and ecommerce clients.

 

Company Contact:

Hit Laboratories Inc.

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Celebrating a Year of Successes

Is your product the next hit? How does it compare to other products? What exactly is holding consumers back?

Hit Laboratories was born from the need to address those questions in a more scientific way, helping marketers who can’t afford to simply guess.

The research used by billion-dollar brands us effective but prohibitively expensive. Our goal was to not only make that same technology accessible, but to apply it specifically to the direct response industry. I’m happy to say we’ve remained true to our core principles of rapid testing, reliable results, and continuous innovation.

Thanks to our clients, partners, and advisors we’ve had a fantastic year. In the coming year we look forward to offering you entirely new services for improving your product transition to retail and web.

Wishing you continued success,

Alex Frakking,

CEO –  Hit Laboratories