In How Brands Grow Byron Sharp examines the evidence behind good marketing strategy. The book is in effect a meta-analysis of how marketing affects behaviour. This sounds rather dry – single source panel data on buying habits and brand spend and sales figures – but it reveals compelling truths about us as consumers and the intuitive and counter-intuitive ways we behave. Accepted marketing truisms are examined and rejected along the way.
The most important one relates to differentiation theory of marketing 101: segment your customer base, position your offering to appeal to the segments and then target them with marketing communications.
Sharp rejects the need for differentiation. When you ask regular brand buyers about their feelings towards a brand, across categories, only around 10% see their brand as different or unique: the majority of customers across even cult consumer brands like apple (77%) do not see the brand they have bought into as being different. Sharp sees differentiation theory being founded on the classical economic model of human beings – making rational decisions with perfect information in a market with perfect distribution – which behavioural economics so eloquently skewers.
He argues the billions spent on marketing succeeds by making brands distinctive: me-too products are fine as long as you are memorable, consumers can easily recognise your communications and find you in store. Branding builds this “mental availability” and twinned with “physical availability” (distribution) it makes you easy to buy – and is the key to success. There’s no shortcut to this mental availability – just considerable investment building memory associations (e.g. Coke + red, Pimms+ summer) and reinforcing of simple, consistent messages over years. Once achieved, this mental availability means people notice the brand and recall it across buying situations. And as meta-data on purchasing shows infrequent buyers account for a large proportion of sales it is best achieved through mass marketing, not niche targeting. This is a conservative argument: brand custodianship means keeping a steady ship rather than lurching from one initiative to another.
Less controversial is the truth that marketers tend to forget: people spend little time thinking about most purchase decisions, which are trivial in comparison to their daily lives. Many purchases are about reducing complexity, reducing choice, reducing possibilities to make deciding possible. The examples behavioural economists have given us about jam or pasta sauce are relevant here – having 6 varieties on display means more sales than having 24 varieties on display – choice overwhelms us.
In this worldview brands are a necessary evil allowing us to make purchase decisions once then follow a routine, saving our mental resources. He describes humans as “cognitive misers.” We’ll spend enough time to make a good enough decision (satisficing) rather than the perfect decision (optimising). In this analysis loyalty is a characteristic of all human decision making rather than something ‘inspired’ by a brand – itreduces saves time and reduces risk.
When market data for loyalty is examined, the norm is polygamous loyalty i.e. having a brand repertoire and switching within it. Across FMCG categories few consumers (13%) are brand loyal over a typical year. Even for big-ticket cult brands like Apple (55%) or Harley Davison (33%) loyalty rates are far lower than you would be lead to expect from marketing textbooks. Buyers restrict their purchases to a limited consideration set. Sharp cites the repeat purchase rate for cars, which tends to be high (about 50%) because people on average only consider two brands, one of which is the brand they bought last time. From this perspective the real marketing challenge is to make it onto this consideration set in the first place. This is where mental availability comes in.
Another compelling observation is that our behaviour drives our attitudes. Once we’ve made a buying decision, we subconsciously bring attitudes in line e.g. I buy it, therefore I like it. He writes “…since brands aren’t very important to us, brand buying tends to have a strong effect on our rather weak attitudes.” This is counter-intuitive at first. But it ties neatly with what we know about cognitive dissonance. In support Sharp cites evidence that brand image scores reflect the law of prototypicality i.e. attributes that describe the category score well. He also makes the point that attitudes about anything aren’t absolute, but relative, an often situation specific.
Sharp also puts the boot into segmentation, which he sees as exaggerating negligible differences. As an example he cites data on coffee purchasing which reveals the majority of those defined as premium buyers also bought from the budget range that year. The notion of a fixed “healthy” segment in convenience food is dismissed: we buy based on the needs of that situation e.g. it’s on offer, I’m buying this to share, I noticed this, I fancy trying something new, she’ll be impressed by this etc. This amounts to recommendation for marketers to move towards need states. It also resonates with learnings about personality from social psychology, which shows little evidence for stable personality traits: people behave in different ways at different times and in different contexts.
Sharp presents his argument in a refreshingly honest manner, and draws on evidence across disciplines rather than being myopically marketing-centric. It’s packed with laws and rules but they are not what stayed with me. What did was his portrait of the consumer – the mythical figure I speak to week after week: disinterested, in a busy world with limited mental resources available for what our industry throws at him. We can’t change the way his brain works, so that means we need to change how we appeal to him. Be simple, consistent and memorable: a compelling argument for branding.