How brands grow: a real-life view from the frontline
It was interesting to read Premier Foods Marketing Controller Evgeny Bik’s take on “How Brands Grow” (HBG) by Byron Sharp, in response to the dismissive and highly critical comments of VCCP Media’s Maire Oldham, that I posted on here. I found his article on Linked In insightful and practical, based on real-world experience ‘in the trenches’ of brand building. Below I share some of his key points and my take on them.
1. Penetration drives growth, not frequency
There is loads of data in the HBG book to show how penetration, not loyalty, drives brand growth. But its nice to get some real-word, unbiased confirmation that the ‘laws’ seem to work. Evgeny quotes his own work using extensive panel data on multiples categories (Personal Care, Confectionary, Fast Food, Ambient Grocery). “I can testify that in all these categories brands grew by expanding penetration. As expected, frequency moved in the same direction, albeit at a smaller percentage period on period. As far as I am concerned, this conclusion is beyond challenge,” he states unequivocally.
2. ‘Loyalty programs’ drives growth by increasing penetration
Evgeny shares experience of at least two cases where “penetration-driven brand growth was achieved by brand teams trying to move the needle on frequency or loyalty.” Even when what look like loyalty-focused programs seem to work, dig deeper and they seem to work because of an unintended consequence: attracting new users. An example of this is O2’s Rewards program, that I wrote about in the Grow the Core book. The O2 Rewards scheme was intended to say thank you to existing customers. However, what it really did was communicate customer care that attracted new users who thought, “O2 seems to care about its customers, I’ll give them a go”.
3. Brands grow by winning across segments
Evgeny also has some interesting things to say about segmentation. “I write off as quackery is how these segmentation studies are often used by us Marketers,” is his take on this topic. He highlights the difference between the theory and the reality of using segmentation:
- Theory: growing brands by marketing to everyone is not achievable. Segmentation allows us to “carve out audiences (Teenagers, Millenials, Young Adults, Families, Poor Families, Rich Families, Grooming Addicts) with whom we should plan to win disproportionately”
- Reality: growth, or decline, typically happens across all consumer segments that don’t have obvious physical or financial obstacles to buying the category. Evgeny is “yet to see an evidence-based case for brand growth caused by a concentrated movement of consumption within one-two nominated ‘core consumer segments'”, after 10+ years of looking at the data
There are a few specific points here worth highlighting. First, Evgeny rightly points out that even if you could win within a narrow segment, overall growth will be minimal. For example, increase your share of a segment that is 10% of category consumption by a whopping 50%, from say 20% to 30%, and your total growth is only +1%.
Second, a common-sense approach will focus marketing on the “available market”, and try to avoid spending money on people who have “category barriers”; there’s no point trying to sell mortgages to teenagers, Always to blokes or pet food to non pet owners.
Finally, there are growth opportunities by targeting more based on category usage, and specifically using a needs-based approach to drive category penetration, such as Quorn using athletics superstar Mo Farah to market to everyone who’s concerned about their health, not just vegetarians who want a meat substitute.
4. Find a big insight with broad appeal
Evgeny rightly recommends you should “build a brand with a relatively wide target definition, a specific insight that applies to a huge chunk of category buyers, and distinctive products and ads that appeal to a fairly wide target”. He goes on to say, “There are far more things that unite human beings than take us apart. There are enough universal human truths to build brands with mass relevance in any sector. Look for connection points – habits, attitudes and, ultimately, insights – that cut across segment.”
I also like Evgeny’s challenge regarding youth-targeted initiatives like the Pepsi Max one trumpeted by Maire Oldham. He recommends a smart and business-focused approach before ultra-narrowing the marketing investment: “Evaluate the commercial viability of reaching Millenials using a more universal human insight, a set of creative assets with wider appeal, and a wider-reaching, more scalable and efficient media mix”.
5. Core target portraits: inspiring or irrelevant?
The one point I disagree on is the value of a tight Core Target Portrait to inspire marketing with broad appeal. “There is no need whatsoever to have Powerpoint slides describing a day in life of Dave or Susie, the imaginary representatives of the core target audience,” he suggests. “The sticking point is the belief that there has to be a pen portrait of the target consumer to make our products and ads distinctive, relevant and engaging.”
In my experience, bringing to life a Core Target Portrait can in fact be inspiring. Talking to creative people, thinking of a specific person often makes it easier to “get under the skin” of consumers and tap into the universal human truths Evgeny describes. I posted here on different types of target (Core Positioning, Portrayed, User).
In conclusion, this hard business data from the trenches shows how brand growth means creating a compelling brand idea based on a human truth with broad appeal, to inspire and guide creation of a distinctive mix that drives penetration.