Often times when we think about demand and sales we will think first about acquiring new customers to sell more units. This is accomplished by first gaining awareness and then successfully guiding customers through the purchase funnel. Consumption-driven demand takes customers of either the brand or category and uses various strategies to increase their consumption or use. This type of demand generation is highly attractive because of its ability to expand the pie, meaning, with more consumption, there are more dollars to be made for both you and the category. This contrasts with consumer demand that is driven by tactics such as a percent-off offer. The use of a percent off will make the product less expensive, thus reducing the number of dollars available to capture in the category.
A quick fact that demonstrates how simply consumption may be influenced; In a review of 88 studies that manipulated [food] portion size and measured consumption. It was found that doubling a portion leads to an average 35% increase in consumption.1
A great way to increase consumption is by encouraging consumers to use the product more frequently. Procter & Gamble recently launched a clever campaign to encourage consumers to save water by using their dishwashers more and handwashing less. While consumers try to save water, the increased use of their dishwashers inadvertently increases the frequency in which they use P&G’s dish detergent.
Adding utility or features gives consumers more reasons to use a product so they use it more frequently. Adding utility doesn’t need to be an upgrade to a product, it may simply come from raising awareness of additional ways the product can be used. Arm & Hammer® baking soda is a perfect example. On its website the headline states: “The small box with endless possibilities”. They list dozens of uses for the product, giving people reasons to consume more of the product they had originally purchased for a different purpose.
Source: Arm & Hammer website
Cell phones are another example of adding utility, but in this case, it’s through the addition of new functionality. The first cell phones were used for calls only but now they can serve as a substitute for watches, video cameras, game consoles, and often computers. The enhanced utility of the phone means they can command high prices. In 2006 a BlackBerry cost $400, the current iPhone 13 starts at $999.2,3
Prompting a response is when the product or service indicates to consumers that it’s time to consume more. Think of the water filter on a fridge that counts down the days until it’s due to be replaced. Once someone is overdue to replace the filter it shames them with a red message for all their friends to see when they get a glass of water. Another great example is toothbrushes with colored bristles that fade over time. Once they’ve faded by a certain amount, consumers know it’s time to replace the toothbrush.
Source: Amazon Oral-B Manual Toothbrush
The size of the product package or the supply of the product can impact consumption. When people stockpile products and have a greater supply, they use more.4 It’s been found that when consumers have a diminished amount of something remaining, they will begin to reduce consumption.5 A larger package size may reduce the frequency of that effect. Additionally, larger packages of perishable items such as food provide an opportunity to increase consumption not only through use but also through waste.
How a product is dispensed can greatly impact consumption. Some salad dressing bottles have spouts that help users regulate the amount of dressing that is dispensed, while others without the spout make it easy to dump an excessive amount of dressing on their plate.
Laundry detergent bottles have caps that are used to measure the amount of detergent needed for each load. Over time the size of the caps has purposefully grown to make it easier to miss the fill line and overpour.
Bundling products or services may increase demand through consumption not only by stockpiling as previously mentioned, but also by making it more economical to immediately consume more. Someone may go to a laser hair removal salon for an eyebrow treatment and be offered a bundle that includes a mustache treatment for a small increase in price. To entice future consumption the salon may also offer a package deal that includes future treatments.
At a restaurant, a bucket of beers is another example. The table may only want four beers, but buying a bucket of five makes more sense because it would cost less per beer.
A final example. Below is a pricing table for business card printing. While the likelihood of using more than 250 business cards is slim, the small price difference between 250 and 500 can be effective in driving more consumption.
Increasing dependency on products is an interesting concept and one that may be applied to the SaaS industry. First, a simple example is products that fuel addiction, such as those with nicotine. A second example is a video streaming service such as Netflix. The more hooked and dependent consumers get on shows, the more value they perceive in the service. This can result in higher renewal rates as well as lower price elasticity.
A subscription can push and may even force consumption. By committing people to a cadence of purchases, subscriptions ensure consumers that supply is plentiful and increases the reliability of their consumption.
Using measurement to increase demand through consumption may happen by adding or removing forms of measurement. An example of removing measurement is the absence of clocks or windows in casinos.6 It’s less likely a gambler will notice how much time has paced without a clock or the sunrise to disrupt his play.
Conversely, adding measurement can increase demand through consumption. Gamification, keeping score to show increased levels of attainment drive further consumption. Gaming app designers are experts in this field as they use peoples’ desire to progress in the game as the reason they should buy more tokens or coins. Similarly rewards programs offer customers points as a measurement system to incentivize more consumption.
Consumption may also be driven by the amount of time a product lasts before it needs to be replaced. A product that is durable and doesn’t need to be replaced often reduces consumption, whereas products that are designed to fail after a certain period of time will increase the amount of consumption. Using this method to increase consumption requires a delicate balance. The product needs to meet customers’ expectations for longevity while failing at a pace that is desirable to the manufacturer.
Complimentary products or services may grow demand from an increase in the use of their counterpart product or from the way the counterpart product is designed. For instance car manufacturers that decided to implement daytime running lights in their cars increased the demand for complimentary car light bulbs. Hot dogs and the complementary bun purchase is another example. Hot dogs are traditionally sold in packages of ten whereas buns are sold in packages of eight. This leaves shoppers in the situation where they must buy two packs of buns.
Do you have any other great ways to increase demand through consumption? Please share them in the comments section.
Cover photo: Photo by Vijesh Datt on Unsplash
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