• A car company was proud to have the highest Facebook following and engagement in the country, but saw no increase in sales or market share. It turns out its social media audience did not come in for test drives, which was necessary to get them to purchase.
• An airline used to measure and reward for on time departure, but its customers wanted on time arrival. Employees learned to game the system as closing the doors was the measure of on time departure, and passengers waited on the runway
• A bank was surprised customers did not like a branch where managers often worked overtime after a new directive from HQ to improve customer service. Turns out managers were not discussing ways how to best implement it, but instead devised clever schemes to circumvent it, and blame it on tech system failure.

From products to services, these examples demonstrate the 3 marketing metric mistakes:

1. Tracking metrics that only marketing cares about
2. Failing to link metrics to market outcomes, such as sales or profits,
3. Failing to link metrics to productive actions employees can take to increase them.

How do you avoid these mistakes? By starting from the vision. We discuss how to uncover the strategic vision for your organization and explicitly link it to your marketing measurement system. Too often, managers start from the metrics they have instead of the metrics they need. Starting with the vision helps to avoid that trap.

5 ‘Metrics You Have’ That May Not Be The ‘Metrics You Need’:

Marketing Activity: your customers do not care how many tweets or direct mails you sent out this year. What was the response of (prospective) customer to them? If nothing, did your marketing activity help feed your brand, allowing you to attract better talent and/or better deals with other market players?

Marketing activity metrics can complement customer response metrics to diagnose whether a lack of success is likely due to a lack of effort vs a lack of resonance, but do not tell the full story. You need to link your activity to the chain of marketing productivity.

• Paid Search Clicks: How many of those clicks end up being paying customers? Why is this % so low and how can we improve it?

Research shows that paid search works best for lesser known brands with products of high ‘situational importance’, e.g. refrigerators and office furniture. Customers only need such products once in a blue moon and do not keep track of changes when they are not in the market for the product. However, once in the market, customers need to efficiently search for lots of information, and search engines shine for this job. In contrast, paid search is often superfluous for well-known brands of products or services customers use often, such as eBay.

• Social Media Engagement: Is it positive or negative for your brand? Which topics do engagers talk about? Is there any possibility to gain new customers?

Research shows that the vast majority of people following your brand on social media are already customers. And usually they are a tiny component of your user base – well under 1/10 of one percent. Following a brand on social media is unlikely to improve purchases by the follower – the real benefit may come from her friends being exposed to the brand and the follower’s endorsement. Moreover, user-generated discussions – even mudslinging by your rival brand’s customers, increases the buzz for your brand and shows prospective customers how much your current customers care for you.

• Website Visits: How many visitors are actually in the market for your product? What do they look for when on the website? Do they leave happy or frustrated?

Research shows that most website visitors already bought your product and want specific use information. Therefore, you need different landing pages and/or different ads to pull them in. Moreover, changes to website visits show little correlation with mindset metrics (such as awareness, consideration and preference) and should thus be complemented with such mindset metrics to predict changes to brand fortunes.

• Word-Of-Mouth: Which reasons do recommenders give for your brand? Which topics do detractors complain about? Do you only measure online WOM or also offline WOM? 

Research shows that online WOM sentiment is often NOT predictive of brand outcomes and that online WOM and offline WOM may lead to different conclusions about which brands are hot vs not.

What Do I Recommend? Work backwards from your customer goals to metrics to helps your organization assess the ultimate value of these metrics. This vision serves as a compass in the overwhelming ocean of available ‘solutions’ offered as an easy fix.

Contributed to Branding Strategy Insider by Dr. Koen Pauwels, Distinguished Professor of Marketing at Northeastern University and BI Oslo and Author of: It’s Not the Size of the Data — It’s How You Use It: Smarter Marketing with Analytics and Dashboards

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The key manager questions though are:

(1) how to grow your brand, and

(2) how to maintain your brand once it has grown.

In contrast to my disappointment in the first, ‘How Brands Grow’, this version answers these questions, and is full of practical advice as to how to grow and maintain your brand. I especially liked the extensions to online markets, services, durables and business-to-business. Below are five of my takeaways, including awesome one-liners from the book:

1. Appeal To The Full Market: Focus On Light Versus Heavy Category Buyers
A key lesson from HBG is that you should appeal to the full market, which requires a focus on light category buyers. Ensure they see and understand your brand and its advertising. HBG holds that heavy category buyers will notice you anyway: they are more involved into the category and thus much more likely to attend to advertising and try a new brand. Moreover, there are few heavy buyers and they have a repertoire of brands, so the potential for brand growth is limited. In contrast, light category buyers don’t pay much attention to the category. You need to make it as easy as possible for them to observe, find and buy your brand. In other words, ‘we need many people to buy the brand once, and a few to buy it over and over again’

‘Niche brands should be pitied because of their lack of potential, rather than celebrated. Small brands are in a better position than niche brands—they can become big.‘

2. Aim For Reach In Media
The double jeopardy law also applies to media: the media with the highest penetration (eg online, then TV) also tends to be the most frequented (over e.g. magazines and cinema). Aim for the biggest reach medium first, and only add if you can get more unduplicated reach than duplicated reach. Look at media in different families, so online + in store instead of both offline, as we showed for brands across categories. A media plan with half the reach requires double the behavioral impact to achieve the same sales change. If your budget is small, get as much reach as your money will buy.

‘The real challenge for small brands is not the small ad budget, it is the limited physical ability so high reach does not translate to sales as category consumers can’t buy them.’

3. Focus On Mental Availability, Not ROI Of Your Marketing Actions
Because heavy buyers are more likely to respond to your marketing, the ROI of your actions there may be high (depending on how well you measure incrementality). However, maximizing Return On Advertising Spend should NOT be your objective – instead reach as many (potential) category buyers for a ROAS you can live with. Your ads should be easy enough to understand and identify your brand for the light and new to category buyers.

‘Advertise where you sell: plan for reach where you have, or want, physical availability. Ads should not require work by new to category buyers to understand it or identify the brand.’

4. Anyone Anytime Sales Approach Instead Of Advertising Bursts
Look for mass ways of reaching consumers both physically and mentally. Category Entry Points (CEPs) are mostly (70%) similar across the world, allowing you to develop global campaigns around them. A good test is whether your brand is associated with more CEPs than its size implies.

‘The strength of any positioning is a function of how well these advertising messages have cut through and become linked to the brand in buyer memory, particularly among the brands’ very light or non-buyers.’

5. Ensure Physical Availability
Both physically and online, your brand should be easy to find. For presence, you need 2 views:

1) transaction view: will the buyer search and purchase online or a physical store

2) category buyer view: how they shop across locations

The goal is to minimize the chance that someone buying in the category can’t find your brand.

Online shopping has 3 differences which make it easier for consumers to be loyal to a brand online 1) searchable list of all brands 2) saved past purchases, 3) delivery makes it easier to stockpile favorite brands (e.g. when on deal).

Contributed to Branding Strategy Insider By: Dr. Koen Pauwels, Distinguished Professor of Marketing at Northeastern University and BI Oslo and Author of: It’s Not the Size of the Data — It’s How You Use It: Smarter Marketing with Analytics and Dashboards

The Blake Project Can Help Your Brand Grow: The Brand Growth Strategy Workshop

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‘Buying a brand for the first time does not require a major conversion, just a bit of mental availability’

A new brand has to build ‘essential memories’, which are not about the brand superiority or differentiation, but simply what it is (eg a soft drink) and what is looks like (so it can be found). Therefore, it is key to define the category you are in, and that you are a plausible option in it. “People aren’t looking for the difference, they are looking to understand the brand and whether it is worthwhile to commit to long-term memory”.

1. Start With Point Of Parity Instead Of Point Of Difference

This reminds me of the Point of Parity versus Point of Difference distinction. Back when I was teaching with Kevin Keller, we delved deep in the necessity for new brands to first show they are a legitimate player in the category, before consumers would be open to learning any point of difference. The impetus was the internet bubble Superbowl ads of new brands, but it also applies when your brand is over a century old but relatively unfamiliar to an audience. That year, I was asked to entertain European business journalists, brought to campus to learn about the Tuck School of Business and spread the word in Europe. I was horrified by our brochure, which focused on all the ways we were better than Harvard Business School. I turned that around, suggesting first all the ways we were similar to HBS. Once the journalists were convinced Tuck was worthwhile to understand, we could then talk about how we were different and better than HBS.

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2. Change Your Message Over Time Instead Of Keeping It To The Same Positioning

Once you have established at least one Category Entry Point (CEP) with your brand (e.g. a great afternoon pick-up), you want to increase that number to grow your brand (e.g. great to wake up in the morning). Therefore, your message and thus the ‘positioning’ attribute should change over time. This reflects what we found for vehicles on message consistency vs change, although we measured market’s changing willingness to pay for attributes instead of category entry points (e.g. cost of ownership, performance, convenience, safety). In our research, younger brands should stay on message, but older brands should vary it with the times. Thus:

‘If your advertising is working, as the campaigns change, so should what the brand is known for’

3. Continue To Advertise To Build Distinctive Assets That Can Be Widely Used

Partly explaining that younger brands ‘stay on message’ longer is that they have to build their distinctive assets. To make it usable, your distinctive asset has to be consistent, reach all category buyers (fame), and prominently link to your brand (uniqueness). For this purpose, you need to continue advertising, so ‘start as you mean to go on’

HGB recommends launching in 2 stages:

Stage 1: Get enough initial sales to safeguard distribution. Minimize frequency to keep funds for Stage 2: Be continually on air to convince light and medium category buyers

Targeting heavy users is not necessary, as they are more likely to buy the new brand anyway and are thus over-represented in your initial customer base. However, they are rare, and they will simply put your new brand in their repertoire without much loyalty. So you need to reach light category buyers by continuing to advertise past the launch period. Given examples include the Apple Ipod, which increased advertising in each quarter, and Tiktok, which aggressively advertised on TV.

4. Don’t Rely On Word-Of-Mouth

While WOM is perceived as very valuable to buyers, it is often not much for marketers as they can’t control it. It is the WOM giver who decides, based on the personal relationship with the receiver. The trigger is either the receiver specifically asking about the category, or the brand having a newsworthy story independent on whether the receiver is in the market. So positive WOM is least likely to reach consumers with lowest prior propensity to buy the brand, even though it is most likely to have an incremental impact! Taking this prior propensity to buy into account in modeling the effects of WOM, its ROI may be lower than that of advertising, as shown for new season TV programs. Cem Bahadir and I find the same in our longitudinal study of the effects of marketing (price and advertising) versus word-of-mouth in several Asian markets. Received WOM is more important for (highly involved) female than for male consumers. However, the marketing mix has a greater impact on WOM transmission than does Received WOM across countries, and especially for growing brands and for male consumers, who are typically less involved in the studied personal care category.

For negative WOM, the effect reverses (East and Romaniuk 2021). Negative WOM has a big impact for those with high prior propensity to buy the brand, but is most likely to reach consumers with medium propensity. Moreover, negative WOM is mostly given by past users, but also by consumers who never used your product! This is a key limitation of e.g. calculating Net Promotor Score only for current users instead of surveying all category buyers. Likewise, Prof. Bahadir and I find that negative WOM does not significantly hurt the studied emerging market brands over time (as displayed in the above picture). Instead, positive WOM is useful as a brand reminder to both givers and receivers. In sum,

‘Both positive and negative WOM can have a big impact, but both tend to fail to reach the right people to do this’

5. Focus On Trial Instead Of Loyalty  

New brands do have lower loyalty than existing brands, but HBG holds that is because support for launch (buying mental and physical availability, price discounts, etc) disappears too quickly.

Many companies believe that brand growth comes from reducing defection, thus increasing loyalty. While this may be the case, HBG holds that potential is limited, as defection reasons are mostly NOT under company control. The cited research shows that 60% was not related to brands, 40% got a lower priced competitive offer and only 4% noted a service issue. Moreover, your defected customers still have better memories of you than the never-customers, and may come back to you in the future. So don’t fret about defection (unless related to a major change or product reformulation) – instead aim to maintain the natural loyalty levels.

“Loyalty will be a natural consequence of effective marketing that grows the customer base and increases penetration”

After reviewing evidence for double jeopardy in emerging, business-to-business, and luxury markets, HBG concludes ‘Tactics may change, but the fundamental need to build up mental and physical availability does not’.

Contributed to Branding Strategy Insider By: Dr. Koen Pauwels Author of: It’s Not the Size of the Data — It’s How You Use It: Smarter Marketing with Analytics and Dashboards

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We analyzed such retail price war in “Winners and Losers in a Major Price War,” which showed the market effects of such extreme price competition. Now, in “Fanning the Flames? How Media Coverage of a Price War Affects Retailers, Consumers, and Investors”, we discuss the role of the media in these effects.

Consumers first react to retail price wars by shopping around and spending more. However, as the war goes on, their spending per visit drops, and they become more sensitive to price itself and the price image of each retailer. First mover advantage is applicable as the conflict initiator improved its price image without sacrificing service or quality image, and gained on similar competitors. At the same time though, hard discounters were not stopped but actually benefited from the increased price sensitivity. The graph below shows the consumer perception of each retailer’s price level with Price Image represented on the left. European retail initiator Albert Heijn is seen as a solid line below, and hard discounters Aldi and Lidl on top.

What role did the media play in this story? First, they covered the aggressive price cuts and retailer announcements, such as the initiator’s desire to drop its prices down to the market’s average. Next, they extensively covered how competitors followed suit within days, and how these lower prices benefit consumers, at least in the short run. Especially media articles about multiple chains at once, drove reactions by consumers (in store visits), investors (in the retailer’s stock prices) and the retailers themselves (in intensifying the price war).

The sentiment of this media coverage mattered mostly to consumers, while other stakeholders such as investors and retailers were only affected by the volume of such messaging. Media fuels the fire of price wars as it urges new price cuts over the ones already happening. Only months into the price war did the media start covering the negative impact on retail margin and their squeezing of suppliers, leading to a loss of over $1B and more than 30,000 employees in the grocery industry losing their jobs. As the price war progresses, media coverage becomes less frequent and less favorable, which slows down the downward price spiral.

Contributed to Branding Strategy Insider By: Dr. Koen Pauwels Author of: It’s Not the Size of the Data — It’s How You Use It: Smarter Marketing with Analytics and Dashboards

The Blake Project Can Help Your Brand Grow: The Brand Growth Strategy Workshop

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education

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1. Focus On The Heavy Users And Existing Customers

Back in 1964, Dik Warren Twedt coined the term “heavy-half” to describe the market segment that accounts for the lion share of a product’s sales. Moreover, the Pareto 80-20 rule suggests that a large proportion of business is derived from the heavy users in relation to the remainder of purchasers, emphasizing the importance of the heavy-light user research for companies in general. Finally, large investments in Customer Relationship Management (CRM) were driven by the 1990s idea that it costs much less to keep and grow an existing customer than to acquire new customers. Coming from research in services, where customer profitability is highly variable, the transfer of this thinking to products and their market communication efforts was unfortunately rushed and often inappropriate. Very well-known brands, such as Coca-Cola, may indeed mostly focus on reminding existing customer to buy them more often. For the rest of us though, targeting existing customers does little to incrementally grow our brand – which is why ‘negative targeting’ of such customers is highly recommended and feasible in digital marketing. The customers most likely to respond to your digital ads are often those most likely to have bought without your ad, and this self-selection needs to be accounted for when calculating the incremental benefit of your marketing communications. As to heavy users in the category, they are bombarded with your competitors’ ads as well, and are often more price sensitive than light users, making them problematic from an incremental margin perspective. Striving for 100% loyalty is both infeasible and unprofitable. In other words, a focus on heavy users and/or existing customers to grow your brand is not supported by empirical evidence.

If you want to grow your brand, it is in general not a good idea to only focus on existing customers or on heavy users in your marketing.

2. Focus On Light Users And Increasing Availability And Salience

As a wonderful contrast to the focus on heavy users and loyalty, professors Andrew Ehrenberg and coauthors Mark Uncles and Kathy Hammond, showed regular patterns of shopper behavior for every-day (low involvement) products. The vast majority of shoppers practice polygamy (they are not 100% loyal to any brand) and customers of small, niche brands, also often buy large brands (double jeopardy). This could be because large brands are more available in the store (physical availability) or easier come to mind when e.g. shopping for family members or visitors (mental availability). As detailed in ‘How Brands Grow’ (Prof. Byron Sharp, 2010) and How Brands Grow-Part 2 (Prof. Jenni Romaniuk and Sharp 2015), physical and mental availability thus become the dominant drivers for consumer acquisition and brand growth. If anything, brands should focus on distinctive assets that can reinforce mental availability, that is, brand salience. In Sharp’s (2010) example of lemonade stands, the one that advertised achieved higher sales simply by the salience benefit—the specific aspects advertised are not supposed to matter. In other words, any advertising would work, as long as it consistently repeats the brand logo. These books, and the ongoing support by the Ehrenberg-Bass (EB) Institute, have helped many companies step out of hyper-targeting a small group of supposedly ideal consumers. Moreover, the importance of brand salience to brand growth comes up in many publications, including my own on how the often-measured ‘advertising awareness’ (‘have you seen this brand advertised in the last X months’) is a key driver of sales even though the brand has not advertised for said X months. The brand is simply top-of-mind to the consumer, who mentions it when asked in a survey to remember seeing advertising for it. The EB approach is very skeptical of survey-measured attitudes, especially if they involve showing brand differentiation or that improving consumer attitudes leads to brand growth.

However, plenty of empirical evidence shows that improved attitudes drive behavioral change, whether it is brand consideration in emerging markets or brand liking in mature markets. Think of how a high-priced and peculiar tasting soft-drink (Red Bull) created a different proposition, which was able to gain share from an always “at arm’s reach” salient Coke. Think how a mainstream brand such as Dove managed to maintain growth in the very mature and competitive personal care market, by pioneering a self-esteem trend years ahead of its full acknowledgment in public opinion. Or how relevant non-sensory perceptions are in driving taste preference for beers. Winning consumers’ hearts and minds has been a growth driver for many brands, and also opens up distribution (physical availability), as retailers prefer to stock brands that consumers ask for. Moreover, different consumer segments may prioritize different benefits the brand can over them, so it still makes sense to target your communication strategies if you can demonstrate such differences.

If you want to grow your brand, it is in general not a good idea to only focus on availability and one-size-fits-all marketing communication to achieve it.

3. A Broader View: Drive Attitudes, Innovate And Target A Broad Portfolio Of Segments

So what are we proposing? First of all, use a dynamic perspective to take care of both your brand’s availability and how consumers and channel partners think and feel about it in the market. At specific times, it is more important to focus on one versus the other (and understanding your current and desired situation helps you decide), but it is their combined effects that makes your brand grow. Consumer attitudes, retail penetration and brand sales show dynamic causality over time: growing them creates a positive spiral, while declines create a negative spiral: consumers stop thinking about your brand, which allows retailers to give it less physical shelf space and/or online prominence, and the resulting sales drop justifies these positions. The good news is that, even for a mundane product such as toilet paper, brands can re-invigorate such consumer attention and reverse the path of decline. Instead of the equilibrium thinking that underpins much of economics, strategic marketers know they benefit from change. For instance, strategist Richard D’Aveni and I show how the “fair value” line (price/quality relationship) form, evolves, and gets replaced in markets, and that company actions can help mold these perceptions to their benefit.

Second, innovate to stay relevant. Balance the management of your existing franchise with the introduction of new products. The EB’s mass-marketing recommendation does not offer detailed explanation on the role of innovation in brand growth, as it favors salience and reinforces existing mental structures. By failing to innovate and stay relevant, brands such as MySpace, AltaVista, Blockbuster, Barnes & Noble, and Nokia have seen their market leadership disappear because of new propositions offered by Facebook, Google, Netflix, Amazon, and Apple, respectively. This happened despite the fact that they maintained their brand salience and consistent branding. In their June 2019 report, BrandZ shows that the brands that dropped most in the global brand value rankings maintained their salience, but lost being “meaningful” and being “different.” “Building Meaning in a Volatile World” and “Meaningful disruption and Scalable Relevance” are key chapter titles, and “Be purposeful” and “Change the Mindset” are the first two action points of the report. Legacy brands such as Gillette, Luxottica, and Serta are challenged by new business models such as Dollar Shave Club, Warby Parker, and Casper, respectively, despite no evident loss in their salience or ease of buying. Several studies have shown that key to defending against such entrants, including private labels, are advertising and innovation.

Third, broaden your portfolio to encompass two competing dimensions: leadership in a subsection of the market and growth in adjacent sections or even entirely new markets. Great recent examples include Amazon, CVS and UnitedHealth Group, which grew the most in non-stationary environments, such as markets with low penetration.

Brand salience must not overshadow meaningful product differentiation. Large businesses manage a portfolio of multiple products and brands, needing to avoid cannibalization as well as technological or cultural obsolescence. Ben & Jerry’s, Pukka Tea, Neurobion and This is L. are four brands that have grown through meaningful differentiation and not merely salience. They are also part of a much larger portfolio; the first two in Unilever, the next two in P&G.

As to market research, A combined view on attitudinal and behavioral data is key to understanding brand growth. Knowing when to innovate strategically (Change the Game) rather than tactically optimize (Play the Game) requires understanding multiple consumers’ needs through engaging each section of a brand’s portfolio. A brand must be visible and make it easy for consumer to buy the ‘Brand Right Now’. However, it should also strive to be the ‘Brand Right’ for today and tomorrow.

So do the hard work of getting to the consumer insights (the why) behind the observed behavior (the what) and to craft a relevant marketing mix (so what) to serve the demand (how) better than others. This is the way.

Contributed to Branding Strategy Insider By: Dr. Koen Pauwels Author of: It’s Not the Size of the Data — It’s How You Use It: Smarter Marketing with Analytics and Dashboards

The Blake Project Can Help Your Brand Grow: The Brand Growth Strategy Workshop

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education

FREE Publications And Resources For Marketers