Heavy User

Heavy users are users of online media, websites, apps or other digital services that use these offers to a great extent. A regular user is called a light user. Heavy users, on the other hand, are characterized by usage patterns that go beyond a normal, average use of online media. Depending on the medium and usage pattern, the concept of heavy user can be negatively connoted - for example, in the field of gaming, social media or internet surfing. In e-commerce, on the other hand, heavy users are those users who do an above-average amount of online shopping and spend large sums of money. In this context, heavy users are also described as heavy consumers, heavy buyers, high rollers, or big donors. In e-commerce, they are financially strong customers who account for a large portion of their turnover, but also have a high willingness to change to other brands and services.

General information

The term “heavy user” is derived from heavy half. This is an idea that goes back to Dik Warren Twedt and describes the market segment that is responsible for the larger half of sales in a product category of a brand.[1] Heavy half is contrasted to light half to reflect the relationship between paying customers and total revenue. In comparing the numbers of generated orders, a ratio of one to eight or one to nine can be assumed, according to Twedt. This rough ratio can also be referred to as the 20/80 rule: 20% of the heavy users generate as much revenue as 80% of the light users. But such assumptions should be considered with caution.

The term “heavy user” comes from an analysis that examines general order volumes of households in different sectors and product categories. The analysis reveals that while heavy users buy more frequently and also place more orders, they also change the brand and provider more often. The data from the study does not reveal any characteristics of the customers or users. Neither demographic factors nor income situations or other user profiles are considered. For these reasons, the study cannot simply be utilized in e-commerce without involving modern KPIs.

How it works

Heavy users are often seen as profitable customers because they consume a relatively large number of goods and merchandise. Marketing activities are geared towards these users by attempting to precisely turn these user segments into loyal customers. Since heavy users are often characterized by an experienced handling of online media, it is difficult to permanently tie these users to a brand. It is not easy to convince these customers about a product. The problem of many marketers is that the group of paying customers is not always clearly distinguishable from other user groups. They have similar characteristics when, for example, user personas are created or the customer behavior is recorded statistically.

Therefore, marketers who want to target heavy users are faced with three central questions:

  • Which user segments can I encourage to purchase a particular product?
  • How much revenue can I earn with a certain user group?
  • And how much will it cost me?

If these questions are examined more closely, the following terms play an important role:

  • Sales potential: The order frequency and the shopping cart values ​​of individual customers or customer groups are examined.
  • Profit potential: The probability that a customer is bound to a brand in the long term and purchases in a particular product category is estimated (see customer lifetime value).
  • Return on investment: The cost of reaching a certain user group in a medium is compared to the profit potential and put into a ratio.

When a company analyzes its data from these points of view, the results can vary. The target group, which has the greatest potential for sales, profit and ROI, does not necessarily coincide with the user group of heavy users. This is particularly true of profits and ROI, as other user groups can also generate high profits for a company. It is therefore necessary to find out which user group represents the highest potential for a company, a brand or a product. However, the fact that this segment is always comprised of heavy users is not always a valid assumption.[2]

Examples

The characteristics of different user groups can vary widely, depending on the user devices, media, topics, wishes, and needs. For example, in the technology sector, the heavy users are often customers between 30 and 49 years of age, which is contrary to the common assumption that technology users are in most cases very young. In addition, many users have several devices in this area and they are well-informed about trends, developments, and offers thanks to the Internet. The better the customer is informed, the more difficult it is to address these target groups and convince them about a product.

Relevance to online marketing

In many cases, the dichotomy of heavy and light users is not a suitable means to address relevant target groups. This scheme, which dates back to the 1960s is too simple and cannot be transferred to e-commerce and online marketing anyway. Various data show that the equation, heavy user equals paying customer, does not always apply.[3] In individual cases, customer behavior can deviate significantly from the expected behavior of heavy users. Recent studies deal with this issue by adding further criteria that allow the most potentially profitable target groups to be identified. These target groups can be addressed specifically on the basis of brand management and positioning in order to engage in up- and cross-selling, customer loyalty programs or individualized services with these user groups, for example. There are also modern strategies such as mass customization, customer empowerment or direct customer feedback for the purpose of greater customer engagement and long-term customer loyalty.

References

  1. How Important to Marketing Strategy Is the “Heavy User”? archive.ama.org. Accessed on 10/27/2016
  2. Heavy buyers, (also known as “heavy users,” “high rollers,” “big spenders”) are the worst target for most marketing programs. thekevinclancy.com. Accessed on 10/27/2016
  3. Heavy versus Light Users: A Preliminary Study of Behavior Patterns in Retail Services questia.com. Accessed on 09/29/2017

Web Links

Category