Crisis Diverted: How Smart PR is Just the Beginning for Velveeta

Back in January, while America was still ringing in the New Year, a sobering report started appearing in media outlets across the country: we were facing a Velveeta shortage. No joke.

A quick Google search of the phrase, “Velveeta shortage” provides links to articles from The Boston Globe, The Los Angeles Times, USA Today, NPR, CNN, ABC News and AdAge to name just a few.

It turns out that a temporary production issue combined with peak demand during the NFL playoffs and college football bowl season created a shortage in some grocery stores on the East coast.

Not bad buzz for a brand that many critics had written off, especially as sales had started to slump with consumers buying more and more organic and locally grown food.

Fortunately for Kraft, Velveeta’s parent company, there is much more to their brand strategy than clever and opportunistic PR.

In a recent HBR article, Eddie Yoon and Steve Carlotti from the Cambridge Group as well as Dennis Moore from Nielsen discuss a passionate group of Velveeta fans who represent just 10% of the customers, but drive 50% of the profits. These Superconsumers (see End Result October 2013) believe that Velveeta is actually superior cheese, especially how it melts.

This group which is estimated at just 2.4 million consumers nationwide is now the cornerstone of Velveeta’s growth strategy. However, according to the marketing team at Kraft, this was not the target group they originally planned to focus on.

“The previous thinking was that the quickest, easiest path to growth was to identify light users or lapsed users,” Greg Gallagher, the marketing director at Kraft Foods, recalls. “But when we talked to superconsumers, we learned that in fact they wanted to use Velveeta more – they were starving for it.”

The insights and passion of this group have helped drive more than $100 million in product sales and many retailers are now putting Velveeta in refrigerated dairy aisle, where products sell more quickly.

In addition, by looking at Velveeta, in the Harvard Business Review article, the Cambridge Group is able to illustrate 5 myths normally associated with superconsumers.

Myths About Superconsumers

1. Just a New Name for Heavy Users – Superconsumers are heavy users, but in addition they have high engagement and are interested in new uses of the product.

2. They Don’t Exist in My Business (Format or Market) – As Velveeta demonstrates, passionate fans exist for every brand including yours.

3. They Aren’t Normal, They Are Wealthy or Weird – Almost everyone is a superconsumer of something and in talking with superconsumers, they have logical reasons for their behavior.

4. They Are Impossible to Find – Big data and social media provide tools not available just a few short years ago. Like anything else, it’s easier to find something when you know who you are looking for.

5. They Already Buy (Listen) So Much, They Can’t Possibly Do (Listen) More – The biggest myth of all. Your superconsumers are looking for reasons and opportunities to consume even more of your brand. In fact, rather than taking them for granted or setting them aside in the pursuit of new cume, the opportunity is to focus on them as part of your growth strategy.

Not only do we know that local radio has passionate fans, we also know that they drive our ratings. As PPM was rolling out in Houston and Philly, we coined the phrase Heavy Deep, which means someone is Heavy in their consumption and Deep in their loyalty. Today we might call that person a superconsumer.

Whether you are in a PPM or diary market, we help you focus on engaging and recruiting those who matter most, while empowering them to amplify your message.

For more information on how Superconsumers/Heavy Deeps can transform your marketing and ratings, please contact Andrew Curran, COO at DMR/Interactive.

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