What can radio programmers learn from Starbucks? The Nielsen Audio Programming Team teach us that in this week’s Programming To Win column. Bill Rose and Tony Hereau break down listeners beyond the P1s into three categories, the same ones used by Starbucks to delineate their own customer base.
Bill Rose and Tony Hereau
By the Nielsen Audio Programming Team
(Bill Rose and Tony Hereau)
In today’s constantly changing media world, where consumers have more ways to listen, view and read content than ever before, cultivating loyal and impactful audiences is of the highest importance for broadcasters in every medium. In radio, much time and effort has been spent analyzing and super-serving listeners who spend the most time tuning to radio (P1s), to maximize station ratings
This is a sound strategy, and it has paid dividends for many decades in radio. It goes without saying that you want to cultivate as many P1s as you can and then keep them as happy as possible for as long as possible. However, we believe that the heaviest users of radio are ruled by the law of diminishing returns: there are only so many of them available in a given market which has implications for your audience growth strategies.
In other words, while heavy listeners are always going to be important to the ratings, it’s also worthwhile to work on cultivating the listener that is already tuning in substantial amounts – and can be engaged more.
Another way to think about this is to view the radio landscape the way Starbucks views their consumers. Not all listeners are created equal, and the same thing applies to coffee-drinkers.
At Starbucks they focus on three segments, but assign different value to each one; Super Regulars, Coffee House Enthusiasts and Basic Occasionals.
Super regulars/Heavy-Deeps: when translating for radio, think of the Super Regulars as our Heavy-Deep audience. Those who spend a lot of time with radio in general (heavy users) and then most of their time when listening tuned to your station (deep users of your station). Starbucks takes these people very seriously because they are great customers who drink a lot of coffee. However, they are already fans and the ability to generate even more spending from an already highly committed consumer is limited. They have only so much wallet left to give. The same thing goes for radio. Our heaviest listeners are our biggest fans so we want to take their care and feeding very seriously. However, they only have a small amount of incremental time left to give us more occasions (come in more often), and in terms of sheer numbers they are simply harder to find than the next group down the curve.
Coffee House Enthusiasts/Almost Heavies: At Starbucks the Coffee House Enthusiast are consumers who go often for their caffeine fix but they don’t necessarily live there like the Super Regulars do. These are the folks that Starbucks spends a lot of time courting because they represent growth opportunities. They are big coffee drinkers and they have more wallet to give Starbucks because they aren’t saturated yet. This group is the target Starbucks aims at when they give coupons to spark returns later in the day. In radio, we would call these ‘Almost Heavies’. They may be heavy radio users but not a deep user of your station. Programmers have learned to focus almost exclusively on the Heavy-Deeps, and by all means it’s crucial to keep your super listeners happy. However, if you want to generate GROWTH the Almost Heavies may represent a richer opportunity. They are still big radio users but they haven’t maxed out their time spent on the station and they may be swayable. Most importantly, there are simply more of them.
Basic Occasionals/Lights: In Starbucks-speak these are the Basic Occasionals. These consumers visit only on occasion and spend less when they visit. As programmers it’s nice to have their ear and we are happy to have them, but in many ways their usage of the station tends to be incidental and not a regular habit. Since they tend to listen to less radio overall and have little contribution to the station they represent little growth opportunity.
To get an idea of the impact of the Heavy-Deeps and Almost Heavies in the ratings, we looked at the listening contribution these groups account for in 10 different PPM markets during August. The chart below summarizes the percent the total panel that each group represents as well as what percent of total listening hours they account for.
The Heavy-Deeps in this example represent consumers using four or more hours of radio each day, while the Almost Heavies use between two and four hours a day.
Source: Nielsen Audio PPM Metro Data. August 2014. New York, Los Angeles, Chicago, Detroit, Baltimore, Miami, San Diego, Austin, Riverside and Norfolk. Persons 6+ total radio listening. |
The Almost Heavies represent a critical group for programmers to consider. Not only do they account for a third of all listening, there are three times as many of them available in the market compared to the Heavy Deeps. So, even though the Heavy-Deeps use more radio, they are limited by the law of diminishing returns. Programmers must cater to them to maintain their current levels of consumption, but the real growth opportunities lie with the Almost Heavies.
Lastly, to get an idea of how Almost Heavies and Heavy Deeps impact your station, PDs can use the threshold features available in PD Advantage Web on Nielsen Answers. Available in more than a half-dozen reports, including ‘Vital Signs’, you’ll find the ability to set both a ‘P1 Threshold’ and ‘Minimum Listening’ level. Use these features to determine which levels are the most impactful for your audience (because different formats will have different kinds of heavy listeners) and then track your Almost Heavies and Heavy Deeps over time to gauge what part they play in your station’s success.
Reach the Nielsen Programming Services Team at ProgrammingServicesTeam@nielsen.com and follow the latest insights on Nielsen Wire at http://www.nielsen.com/us/en/insights.html
