Busting the myths of loyalty, engagement and influencers

I read a fab article in AdMap magazine (needs subscription) by Les Benet and Sarah Carter about the importance of REACH – i.e. reaching as many consumers as possible. As they rightly say, the idea of growing through finely targeted, more interactive and more engaging communication is "just a pipe dream".

They bust 3 myths of modern marketing to do with loyalty, engagement and influencers.

Myth 1 – focus on consumer loyalty

The idea here is to narrow your focus to a small group of consumers and extract as much value as possible by making them more loyal e.g. By buying your brand more often. However, as Les and Sarah point out, the main driver of brand growth is penetration. The importance of penetration is the central thrust of Byron Sharp's seminal book "How Brands Grow" that I've posted on here in detail.

See the example below on coffee. You see how market share goes up in line with penetration. However, there is hardly any difference in buying frequency between big and small brands. The only difference, called "double jeopardy", is that bigger brands tend to have slightly higher loyalty.

So, the only way to grow is by increasing penetration, broadening your user base and extending reach. In doing so, you should also get a slight increase in loyalty rates.

Myth 2 – social media engagement

The idea here is that we should focus not on old fashioned marketing, but on engaging with consumers via social media. Les and Sarah refer to Coca Cola, saying "Coca Cola has around 35 million Facebook fans worldwide. That's a hell of lot of engagement isn't it?"

Well no, not really. As the authors point out, Coca Cola has around FOUR BILLION users worldwide. So only 1% of its users are Facebook fans. And to go further, less than 1% of Facebook fans interact with brand pages they like, as we saw here. That would mean that c. 0.1% of Coke's global users are engaging with the brand on Facebook.

Myth 3: target influencers

The final strategy is to target a small group of influential "opinion leaders", who will then drive purchase amongst a much wider group. The authors give the example of playground crazes (e.g. Moshi Monsters) and fashion. However, Les and Sarah bust this myth. First, this works with highly "infectious" categories like games and fashion, less so with more mundane everyday products. Second, the effects are hard to predict. Duncan Watts of Yahoo! Is quoted as saying "It is impossible to reliable generated age effects by targeting a few key influencers ."

Famous ad campaigns have and still do get people talking. But as I've posted on recently, you need good reach in the first place to "ignite" this. That's why "share-of-voice correlates more closely with market share than online buzz", as the authors say. They go on to explain that the effect of share of voice has not changed much in 30 years.

In conclusion, the key to brand growth is the same today as it always has been – make your brand as popular as possible by reaching as many people as you can. Mass marketing is not dead, it's still very much alive and kicking.