How to grow brands without slitting veins.

Melbourne Herald Sun, 24 July 2010.

Two hundred years ago your doctor's answer to most of your ailments would be to slit your vein and drain a few pints of blood out of you. The sicker you got the more blood he'd take. And if you died - well he said you were sick, didn't he?

A new book claims that most of our marketing professionals have been using the same approach to diagnose our businesses - with similarly erratic results. And he says that just like medicine, we must stop relying on myths, beliefs and assumptions. It's time to examine years of accumulated research into what really happens when a customer chooses your brand, and develop an evidence-based approach.

Byron Sharp is a professor at the University of South Australia and his new book, How brands grow (Oxford University Press), swings a hammer at some of the key beliefs and rules running our marketing operations for half a century.

For example, the belief that loyalty is the key to solid market growth, and that it is cheaper to hold an existing customer than hunt down a new one.

Not necessarily so, says Sharp. Through analysing years of research from the US, UK and Australia, he has set down principles - the Laws of Marketing he calls them - which have been overlooked or ignored by generations of marketing gurus.

Expensive, elaborate loyalty programmes are designed to prevent defections to the opposition. But he is able to show that each brand has its loyal base, and a percentage of defectors. This defection rate is remarkably constant between brands, with or without loyalty programmes.

His controversial advice is: rather than work so hard to retain a small percentage of your escaping customers, concentrate on catching part of the much larger group of customers defecting from your rivals.

Research also explains the weak or slow responsiveness of brands to advertising. Too often even large marketers do not spend enough - as a percentage of their market share - to make an immediate difference. Or they produce advertising that is just not good enough to be noticed.

Also when they stop advertising, the momentum carries on for some time and makes it hard for a marketing director to justify any increase in their budget. So the investment stays too low but eventually there is a visible decline.

He analyses the consumers who were exposed to regular advertising as opposed to those who were not. Even though they did not show immediate results, research revealed a definite decline in sales for the under-exposed.

Some of the book's revelations come as no surprise. The major factor in success is wide distribution and ready availability; people are more aware of ads that they like; and that clever, creative advertising is the way to attract attention. Most importantly - they are more likely to buy products with ads that they liked.

Of interest to me is what he says about memory structures. That you must be aware of your brand's image and produce ads that reinforce people's existing memory structure. In other words, that the ad should fit in with how they know the product, it should 'feel right'.

How brands grow will disappoint those looking for an academic text book. This is very lightly written for popular consumption.

It sets down ten laws of marketing. Most you know already under other names, but a few are genuinely surprising.

For someone who has read very little marketing literature, this would be a good primer. For everyone it is a reminder of the importance of continually researching your brand - and getting a realistic picture of who your customers are and what they are looking for in your product.