At SunGard, CX leadership is about modeling and reinforcing customer focus everywhere

Growing versus sustaining a brand

New research by Professor Byron Sharp, which is valid, shows that the bulk of purchases do not come from "loyal" customers. His marketing theory is that business growth must be based on attracting the attention of non-loyal customers and non-customers. He also spends quite a lot of time making fun of marketers who promote brand loyalty as the path to success. 

So I feel compelled to respond. If you share my fascination, do watch this 15-minute video from Professor Sharp. 

 

You'll notice that his criticism is that marketers become focused on creating and catering to "brand fanatics." But also notice that he recommends marketers focus on the "light buyers." So he isn't really saying "don't market to customers." At the point of purchase, most people are influenced by "top of mind" awareness. In the Financial Times, Ian Leslie points out that it comes down to support for traditional mass advertising, away from highly targeted (digital) campaigns. 

As a marketer, I'm amazed at how Sharp and his supporters have taken well-known facts about the economics of marketing and turned them into a platform for ridiculing marketers for trying to make marketing more effective. 

There's not a marketer in the world that wouldn't place a commercial on the SuperBowl if she could afford it. Higher brand awareness is wonderful, solving so MANY of our growth problems. 

Sustaining a brand is not a simple procedure of building brand awareness and availability among the potential users. Using the resources we have, we have to find leverage which will allow us to grow profitably. Converting light users to heavy users is a strategy even Professor Sharp can endorse. The most cost-effective way to do it is to find out exactly who those light users are and target the marketing to them. Oh wait, that's customer marketing. Hmm...

Financial Times: How the Mad Men lost the plot, 2015-Nov-6 by Ian Leslie

Sharp’s first law is that brands can’t get bigger on the back of loyal customers. Applying a statistical analysis to sales data, he demonstrates that the majority of any successful brand’s sales comes from “light buyers”: people who buy it relatively infrequently. Coca-Cola’s business is not built on a hardcore of Coke lovers who drink it daily, but on the millions of people who buy it once or twice a year. You, for instance, may not think of yourself as a Coke buyer, but if you’ve bought it once in the last 12 months, you’re actually a typical Coke consumer. This pattern recurs across brands, categories, countries and time. ...

Brands are not the rich sources of differentiation marketers like to think of them as, but short cuts through the complexity of decision-making. Most consumers aren’t aware of, or interested in, the difference between Nescafé and Kenco and don’t want to spend longer than they need to thinking about which they prefer. They just want to get coffee and get home. Marketers are usually surprised to hear this and find it hard to accept — they like to imagine that people who buy their brand are deeply attached to it. But the data show that even people who regularly favour one brand over others will pick a competitor if it happens to be more easily available or cheaper that day. In the words of Sharp’s mentor, Professor Andrew Ehrenberg: “Your customers are customers of other brands who occasionally buy you.”

Comments

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name is required. Email address will not be displayed with the comment.)