Leading market research firm, ORG-MARG, which has been offering the Conversion Model in India for the last two years, has completed 75 studies spanning a wide range of categories and brands. Dr Jan Hofmeyr, the founder of Conversion Model, is in Mumbai on Thursday and Friday to address clients of ORG-MARG. Dr Hofmeyr, whose Conversion Model directs one to seriously ponder on how committed users are to a brand, spoke to The Financial Express in an e-interview. Excerpts:

What is a "Conversion Model"?
The Conversion Model is a model for working out how close or far away a consumer or customer is to converting from one brand to another. It is based on a theory of commitment and conversion. It also tells you what the deep dynamics of conversion are in each case.

Could you explain the fundamentals of a Conversion Model?
It is a psychological model based on a branch of mathematics called `catastrophe theory'. But I can summarise it simply: for a consumer/customer to be committed to a brand, three deep conditions have to be true. First. they must be satisfied with the brand. Secondly, they must care about the brand choice. Third, competitor brands must hold no appeal to them. Failure on any one of the three moves a consumer/customer towards conversion.

In short, how does a company measure the equity of a brand? How close does one get to measuring brand equity with the help of the Conversion Model?
Conversion Model fills in one part of brand equity. It fills in the `customer equity' (i.e. it measures that part of the brand's value that is due to what people think about the brand). Other parts of brand equity not measured by Conversion Model are `market equity' (i.e. the value the brand has because of its non-psychological strength in the market - distribution, etc.); and `factory equity' (i.e. the value that is added through superior production processes, and the example here is Dell). I would say that the Conversion Model is the world's best measure of customer equity. It is certainly the most widely used in the world.

When you say that it is `commitment' rather than `loyalty' that is the underlying foundation of the model, aren't commitment and loyalty the two sides of the same coin? Please explain.
Loyalty and commitment are not two sides of the same coin. That's one of the great confusions of marketing. I can be loyal (i.e. buy a brand again and again and again) and yet not be committed. For example, I may buy a cheap washing powder because I can't afford the expensive one. But that doesn't mean I'll be committed to it. You go to work every day. In that sense you are loyal. That does not mean that you are committed to your job. The fact is, you can have loyalty without commitment and commitment without loyalty.

Is it truly possible to retain consumers to a brand through the Conversion Model?
Yes.

Don't factors such as product quality and pricing play a key role?
Product quality and pricing are just matters of detail. When someone is committed, price becomes almost irrelevant. Committed people will pay significantly more for a brand than uncommitted people.

Has the Conversion Model been modified to suit the Indian companies catering to a different consumer here?
No. The Conversion Model is used exactly the same way universally.

With the number of brands in the marketplace increasing by the day, loyalty towards a single brand seems to be diminishing. What according to you should companies attempt to achieve in such a scenario?
I disagree. There is no country in the world that has as much choice as the US. Yet brand commitment and loyalty stay high. Why is that? It's because human beings want to simplify their lives. They don't want to have to think about what they're going to buy all the time. So even when new brands proliferate, it doesn't mean there will be less commitment.

What I think may be happening in India is that if loyalty is falling, then the main driver of that is the increasing sophistication of the market rather than its increasing number of choices. What really causes commitment to go down, is when a person becomes educated and more sophisticated in the market place.

Name some of the global and domestic brands which have become successful on this model? Define their success?
I know the global brands better: Seagram, Coca-Cola, Citibank, Exxon-Mobil, Microsoft. Some weeks ago, a company called InterBrand published a list of the world's most valuable brand e.g. Coca-Cola, Marlboro, Microsoft. The Conversion Model has been used by 20 of the top 25.

Why is the model billed as the most significant breakthrough in research technology?
The theory on which it is based was first published in 1985. In this fast- changing world, that theory still remains unchallenged. The Conversion Model was first used commercially in 1988. In spite of how old it is, it is still the market leader with nothing to touch it. It replaces most existing methods, for example, customer satisfaction, because it goes deeper. It unifies the whole field of brand loyalty: no matter what the product category, it measures commitment in the same way worldwide. No other method has the same universality.