In theory, there are four ways to grow your brand.
- Get more people to buy it
- Charge more for it
- Get existing buyers to buy it more often
- Retain more customers than previously
In practice, long-term growth almost always comes from getting more people to buy your brand (Ehrenberg 1969). In How Brands Grow, Byron Sharp describes the extensive scientific evidence that supports this. A brand’s market share is closely related to its penetration (e.g. the number of people who buy it in 12 months). Brand loyalty (e.g. the average number of times buyers buy the brand in 12 months) doesn’t vary much between brands and can be predicted accurately based on brand penetration. Ehrenberg and Sharp refer to the strong connection between penetration and loyalty as ‘Double Jeopardy.’
The Double Jeopardy law applies to business-to-consumer and business-to-business brands across all categories.
So, growing penetration is essential for brand growth. Marketers, therefore, need to:
- Focus on continually bringing in new customers
- Deliver a good product to avoid excessive customer defection
- Produce advertising that’s relevant to potential future buyers as well as current ones
- Choose media that will reach a broad cross-section of category buyers rather than a niche
It also means that marketing activities designed mainly for existing customers are unlikely to help grow your brand. Examples include advertising seen only by existing customers and loyalty programs. These marketing activities may play a role in the mix, but only if they do not absorb significant time and resources.
So the goal is to get more and more people to buy the brand. The role of marketing is to marshal the company’s resources to maximize the number of people who start buying the brand while ensuring existing customers continue to buy. This is achieved through brand-building. Here’s a visual summary of how it works.
The three central sentences describe what Byron Sharp calls ‘mental availability,’ which is created and maintained through brand-building. Brands grow if they are mentally available and physically available – i.e. quick and easy to buy where and when consumers want to buy the category.
Done right, brand-building is worth every penny.
At The Blake Project we are helping clients from around the world, in all stages of development, redefine and articulate what makes them competitive at critical moments of change through strategy workshops and extended engagements. Please email us to learn how we can help you compete differently.
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