How To Leverage Superconsumers For Growth & Category Creation: What Every Business Can Learn From Southwest Airlines

A Superconsumer of 1 category is a Superconsumer of 9 others.

Arrrrr! 🏴‍☠️ Welcome to the free edition of Category Pirates. Each month, we publish mini-books that share radically different ideas to help you design and dominate new categories.

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Dear Friend, Subscriber, and Category Pirate,

Do you know what a Superconsumer is?

A “Super” is the scrapbooking fanatic who owns not one, but a dozen different pairs of scissors—each one designed to cut different shapes from paper.

A “Super” is the online course enthusiast who buys not one, but a degree’s worth of online courses—each one providing slightly different information than the last.

A “Super” is the photographer who shoots with not one, but a backpack full of cameras, lenses, and filters—each one playing a crucial role in creating the perfect photo.

A “Super” is the first to download a new category of app, email the founders with their feedback, and simultaneously invite their closest friends to try the beta version. 

A “Super” is the kind of person who knows your category better than anyone else—oftentimes, even better than you do. 

We all have friends who are Supers. We can spot them from a mile away. 

They’re the winos who arrive for a casual night of drinks with seven different types of wine glasses. They’re the rave attendees who show up wearing lime green booty shorts, multicolored rainbow faux rhinestone fringe epaulets, and a homemade iridescent sequin top (an outfit the average consumer wouldn’t know the first thing about assembling themselves). They’re the self-help readers who own every book in the genre, the sound engineers who collect studio amps and vintage microphones, the project managers who pay for software tools out of their own paychecks just because they want to try the newest organization platforms the moment they’re released, and the music fans who like to brag about how they were listening to rock band Greta Van Fleet before they won a Grammy.

In short, they’re the consumers pushing the category forward (whether they realize it or not). They are receptive to the new. They are looking for “different.”

They’re the first to spot breakthrough products and business model innovations, are quick to point out their frustrations with current category offerings, and with the rise of social media, are vocal about the future they believe is possible for the category they know and love so much. In fact, Supers leave so many digital breadcrumbs, that if you see anyone commenting extensively about a category on social media, an online review, or Reddit forum, they are 99% likely to be a Superconsumer.

And yet, when it comes to building companies, launching products, and creating new categories, Supers are almost always a forgotten piece of the puzzle.

They’re dismissed as being a small, weird bunch.

But in the discipline of category design, weird is good.

The Power of Superconsumers

In 2016, Pirate Eddie published a legendary book with Harvard Business Review Press called Superconsumers: A Simple, Speedy, and Sustainable Path to Superior Growth (coincidentally, the same year Pirate Christopher published Play Bigger). The insights in the book were generated from a data set of over 125 consumer-goods categories representing more than $400 billion in sales, with consumer purchasing behavior analyzed across multiple demographics.

The biggest benefit of Superconsumers comes down to simple math. Pound for pound, Supers generate the most power in a category—analogous to the power of Bruce Lee’s ‘one-inch punch.’

Although Supers are few in number—usually about 10% of consumers for a particular product or category (not 10% of your customers)—they can drive between 30% and 70% of sales, an even greater share of category profit, and 100% of the insights. What is often missed or misunderstood, however, is that Supers drive >100% of the ‘share of growth,’ which Pirate Eddie also wrote about in the Harvard Business Review. Note that the Superconsumer phenomenon is even more extreme in digital categories, where 6% of New York Times subscribers drive 67% of their revenue and 0.15% of casual gamers drive 50% of in-app purchases.

Superconsumers are:

• Emotional buyers who base their purchase decisions on their life aspirations (because the products they buy represent their love and identity attachment to the category)

• NOT price-sensitive (because they have emotional and aspirational connections to the products they love, and are usually willing to spend more overall AND pay a higher average price per unit)

• More predictable than other consumers (since the root cause of their behaviors is deep emotions and motivations rather than socioeconomics or demographics)

• Willing to offer wisdom and new insights about product potential within the category (since they are the ones most intimately familiar with all the current product options out there)

• Most likely to introduce potential Supers to your new category of product (potential Supers represent 20% of a category’s consumer base, and respond well to the same advertising, marketing, and product innovations that Supers do)

In essence, Supers are the key to category design, and the ones who make your company’s Data Flywheel spin. (And if you own the Supers in your category, you win.)

The reason is because Superconsumers of 1 category are also Supers of as many as 9 other categories. Sometimes, these category crossovers are obvious—if you are a Super of makeup, you’re probably also a Super of face lotions, fake eyelashes, and even Botox. But more often than not, these category crossovers are non-obvious—like how vitamin Supers tend to have 3-4x more life insurance than they realistically need. (And Category Designers are always looking for orthogonal, unpredictable connections.)

This is perhaps the most important insight to understand about Superconsumers when it comes to category creation. 

Your ability to create and design a legendary business in a new and different category comes down to how effectively you can span multiple categories of the same Superconsumer. 

Is Starbucks a coffee company? Or is it a dairy company, given that Starbucks sells 93 million gallons of milk per year? After all, Supers of coffee are also Supers of dairy. 

Understanding why a Superconsumer of 1 category is a Super in 9 others is the highest form of category creation, enabling you to figure out how to lead or leverage Supers to a 10th category that is new and different from anything that currently exists (like how Amazon leveraged e-commerce Superconsumers to create AWS).  

This is what we mean when we say legendary category creators have legendary data flywheels.

These types of companies don’t just collect “big data.” They collect “broad data” that spans the entire scope of categories their Supers know and love. And they create “data potlucks” with key partners to create scenarios where 1 + 1 = 11 (like anonymized credit card data normalized to a zip code), giving them super-geo insights into Superconsumers’ behaviors. 

For example, how do you find wine Supers? 

You look for zip codes that have extremely high-per-capita spending on dining out. Then you overlay that data with high-per-capita use of ride-sharing. 

Why? 

Because wine Supers who go out to eat love to try new wines, and shudder at the thought of someone missing out because they have to be the group’s designated driver. 

Or, you look for patterns with day-trading accounts and spending at Las Vegas and Atlantic City. 

Why? 

Because one of the only 269 master sommeliers in the world told us that wine Supers love wine, but are burdened with the belief that regardless of the wine they are enjoying now, there is possibly an even-better wine for their palate yet to be discovered. So they hunt and search, knowing they may have to “kiss 100 frogs to find their prince.” And that behavior feels no different than gambling or day-trading, so the correlations are predictive.

This is how world-class businesses and legendary category designers use data. 

This means if your data flywheel does NOT have category Supers at the center of it, and does NOT track data in up to 9 other categories they are likely to be Supers in, your data flywheel is mental masturbation in a bathtub of confirmation bias. It is myopic, and lacking the wide-angle lens required to see the true total addressable market (TAM)—which is why so many businesses fall into the trap of incrementally growing market share by trying to convert more new customers, opposed to exponentially growing the TAM by converting existing Supers in new and tangentially relevant categories. 

Remember, traditional marketing is about capturing demand. Category design is about creating it.

Common sense suggests there would be little return on investment (ROI) in trying to sell an office-supply Super who already owns eight staplers a ninth or tenth one, but our analysis proves that selling those additional staplers to Supers is actually a smarter growth strategy than selling replacements for broken or lost staplers to normal consumers. Just ask someone who owns three Mustangs what they think Ford should do next, or the person who owns 47 Bobbleheads whether they’d like to own a 48th. Supers are far more likely to buy new variations of the things they already know and love than a person who owns none is likely to buy their first.

Supers believe everything should go to eleven.

(And remember: Supers buy more products at higher prices.)

More importantly, Supers are the gurus who can help you innovate, and are the ones who will spread the word about how amazing your products are to other consumers (and more specifically, other Supers). They love to talk, share, post, and educate others on the category. And no matter what new marketing tactic is the vanguard of the moment, nothing will ever beat word of mouth.  (And your job is to put the right words in the right mouths!)

If you’ve ever been trapped by a talkative Super at a cocktail party, you know exactly what we mean.

The Magic Triangle + Superconsumers

In our last letter, we wrote about The Magic Triangle—product design, business model/company design, and category design—and why Category Kings & Queens need to prosecute all three, simultaneously.

Well, if you want to make sure you are innovating in the right direction, go talk to your Supers.

What you’ll find is clarity. 

Supers offer clear insights into solutions to complex problems, and reduce much of the guesswork that is common with consumer-centric approaches to entrepreneurship & intrapreneurship. Instead of asking all of your customers what they think of your product or service (resulting in a mixed bag of contradictory feedback), focus on building relationships with the 10% who live and breathe your category of product (not just the top 10% of your customers). Since Supers are such a small segment of consumers, they tend to stand out sharply in your data sets—so you know exactly who they are.

Companies that use Superconsumers’ insights to refine their decision making grow sales and margins across all segments. 

So, how do you find your Supers?

Follow the money, and follow the time.

Whenever you see a consumer spending a disproportionate amount of time or money within a given category, that’s usually a sign you’ve found a group of unnamed Supers faced with a problem they aren’t sure how to solve. “National averages'' are a poor place to start when it comes to looking for growth opportunities. Supers are anomalies. They are different—which is why so many companies dismiss them as being inconsequential and unlike the rest.

“They’re not the majority of consumers,” they say.

Which is correct: they’re the minority who also drive 30-70% of the revenue of the category.

Whenever you see people behaving in a way that is so far from the norm, that’s a signal you are staring at a group of category Supers. And what you have to remember is: they are rational. They are intelligent. They have very logical reasons for why they do what they do. All you have to do is ask them—and what you’re going to discover is the unnamed reason why they do what they do is usually a tremendous growth opportunity. (For example, if you ask a geek why she built her own computer servers for her house, she’ll have a very good reason why none of the standard computer servers were sufficient.)

Supers are who you should be listening to when testing breakthrough category ideas. That’s not to say their opinions will always be predictors of how all consumers will react. But category designers should put much higher weighting on the opinions of Supers because they are the avatar for whom can move your category from the way it is to the way you want it to be. 

Now, grab yourself a rum and meet us in the hull of the ship. 

We’ve got a pirate tale for you.

Southwest Airlines

Southwest is the world’s largest low-cost carrier airline—a category they designed.

The company was started by one of our favorite category pirates of all time—Herb Kelleher. At first, his focus was narrow. In 1967, Southwest started as an intrastate airline solely within the state of Texas. Planes would fly between Dallas, Houston, and San Antonio—and that was it. This was at a time when airlines were positioned as luxury experiences offering everything from onboard dining to in-flight entertainment, making air travel an expense few could afford.

So, to keep costs low, Southwest did the opposite of its highfalutin competitors. 

• The company kept maintenance costs down by flying one plane, and one plane only: the Boeing 737

• Instead of serving hot meals, flight staff gave out peanuts

• No assigned seating

• And most of all, the company operated out of secondary airports that were less congested and less expensive

As a result, Southwest started turning a profit in 1973 and “hasn’t suffered a money-losing year since—a streak unmatched in the U.S. airline business,” according to Kera News. This is noteworthy considering the airline category has historically been an unprofitable business.

In hindsight, the idea of a low-cost airline category seems obvious.

But in 1967, it was far from conventional wisdom.

So how did Herb Kelleher arrive at such a breakthrough idea all those years ago? 

He found underserved, ignored Supers by looking in places other airlines failed to look.

Southwest Supers weren’t “airline supers” because, as we know, airline consumers in the ‘60s, ‘70s, and ‘80s were a very different group of travelers. They had the means to fly across the country. They expected comfort in the sky. Most importantly, they were not the type of person looking to fly from one area of Texas to another.

Had Southwest Airlines surveyed the consumers of Pan Am (one of the most luxurious airlines at the time), flyers would have said, “Are you kidding me? Short, local flights only? No hot meals? No assigned seating? I would never fly on an airline like that.” 

But those weren’t the flyers Southwest was focused on serving. Instead, they were thinking about how to give people in Texas—who otherwise would have to drive four and a half hours from Dallas to San Antonio—the ability to get there in a quarter of the time for a fraction of the cost. Their Supers weren’t actually in the “airline” category. Their Supers were in the “road trip” category, regularly making the long drive from city to city and simultaneously aware of all the existing problems they faced as a result (road trips take up too much time, make their back hurt, etc.).

Southwest figured out that a bus or ‘road trip’ Superconsumer might become an airline Superconsumer if the flight experience was as easy and constraint-free as hopping in your car and getting on route 66. 

Southwest wasn’t really in the airline business.

Southwest was in the “you are now free to move about the country” business.

Superconsumers of...what?

When surveying consumers, you cannot survey just your own (or someone else’s) customer set. You have to pay attention to the top 10% of Supers in your chosen category.

This is what we like to call “a Clinton.”

“It depends upon what the meaning of the word is, is.”

If you’re Herb Kelleher in the early 1970s, and you think you’re an airline company, you are going to survey “airline consumers” (which is going to give you a set of answers pegged to the current definition of the category). But if you open the aperture and think you’re a “travel for less time and money” company, you are going to survey other, very different types of consumers—namely Greyhound bus riders, truck drivers, and middle-class families who can’t afford to fly Pan Am but regularly make the four and a half hour drive to San Antonio to see their family.

Whenever you set out to research Superconsumers with the hopes of discovering new category potential, this is the question you must ask yourself.

“Supers of...what?”

50 years later, Southwest Airlines remains the Category Queen of low-cost air travel. 

While other airlines beat-up customers with hidden fees and bag charges that rival the price of the ticket itself, Southwest continues to market the category of low-cost airfare to its Supers. 

As a result, and because of the clarity Southwest has about who its true “target customers” are, the company is able to move quickly with marketing campaigns, promotions, and viral moments that evangelize its POV of the category.

For example, when a grumbly Southwest airline worker prohibited a “scantily-dressed woman” from boarding her flight because of the way she was dressed, the situation sparked a frenzy of national media coverage—to which Southwest immediately issued an apology, AND turned its sudden headwind into a tailwind by running a “skimpy fares” campaign to go make light of its mistake. 

The reason Southwest has always been able to move so quickly in moments like this is because the company has a tremendous amount of clarity around who they are, who their Supers are, and what category they stand for: low-cost airfare that has the ability to replace other less efficient forms of travel. 

Furthermore, Southwest is able to crush their perceived competition with marketing that educates customers as to why the airline (and the airline’s category) is so different. They don’t compete, in any traditional sense of the word, with other airlines. They make fun of them. Southwest points out the flaws entrenched in the legacy airline category, further positioning them as the leader in the “discount” airline category.

Meanwhile, United and American are two companies dead-locked in a competitive battle for who can piss off customers less. Neither brand has any differentiation or real loyalty. According to a study global brand strategy and market growth firm, Brandigo, almost 60% of airline consumers surveyed said they don’t feel loyal to any airline, and have strong negative feelings toward airlines like United and American Airlines—both of which “Only care about the money,” and win business primarily based on a race to bottom for route availability and ticket price.

Meanwhile, Southwest continues to have one of the strongest loyalty programs in America, and is a case study in exemplary customer service.

Supers can’t do your job (as a Category Designer) for you.

All of this said, if you want to design a new and different category, you can’t expect Superconsumers to just give you the answer.

They know a lot about where they are (in the context of their category). 

And they have a pretty good idea of where they’d like to be, or what they’d like more of (and would be willing to pay a premium for as a result).

But they usually can’t fill in the middle.

Consumers cannot design a breakthrough category on their own.

That’s your job.

However, we believe that lurking inside most Supers is an entrepreneurial spirit, an innovator and a creator. It’s the reason why Supers within so many categories end up building their own solutions to problems the incumbents haven’t gotten around to solving—or have minimized as being “too small” to worry about. 

We feel strongly about not just talking to your category Supers, but treating them as collaborators. These are the best deck hands you could have aboard your pirate ship because they are likely to be familiar with the problems you’re just now realizing are more common than any of your “competitors” might think. More importantly, when you give Supers the experience to help you build the category (and the company as a result), they become even more bought in, even more passionate, and all the more excited to get other Supers onboard with your new and different vision of the category.

And if you can get even 1% of the Supers in the top 10% of consumers in the category connected to your new and different future, the fight is over.

Your Supers will tell other Supers. And so on, and so on…

Talking to your Supers will give you the clarity and insight needed to prosecute all three sides of The Magic Triangle.

“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” - Archimedes

Supers are the lever.

Now, go move the world.

Arrrrrrr,

Category Pirates

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P.S. - If you found this mini-book valuable, we encourage you to check out some of our other free favorites:

• The Big Brand Lie

• How To Create A Category As A Small “e” Entrepreneur

• The Marketing Funnel Funeral

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