Bookworm: How Brands Grow – What Marketers Don’t Know

There are many marketing myths that still need busting, argues Byron Sharp.

What’s the book about?

It’s basically a manifesto for evidence-based marketing written by Byron Sharp, a professor of marketing science, and his colleagues at the Ehrenberg-Bass Institute, University of South Australia, drawing on the work of seminal marketing scientists. The book busts a number of costly marketing myths that are still believed today.

Could you given an example?

One piece of received wisdom that Sharp wants to poo-poo is that companies ought to spend as much energy retaining their current customers as they do trying to attract new ones.

Retaining our current customers isn’t easy for a company to control, says Sharp, because the most effective way of doing so is simply by occupying a bigger chunk of the market. In other words, the bigger our company is, the more loyal our customers will be. We should therefore focus on trying to appeal to new customers, increasing the size of our market share in the process.

Ok, but we should focus on our heavy users, surely?

Not according to Sharp. Once believed to account for around 80% of products sold, ‘heavy users’ are in fact less dominant than once thought, he argues. Instead of accounting for the majority of a brand’s sales, heavy users may in fact account for around half, leaving ‘light users’ to make up around 20%.  

This means that brands could consider spending less time and money targeting their heaviest users and shift more of their attention to the light users, who are likely to be more statistically significant than believed. 

What other common mistakes do companies make?

They assume, wrongly, that customers are loyal to brands, rather than products. It’s the other way around: people don’t care about brands as much as the actual products the brands make. And they aren’t easily fooled into thinking that brands care about them.

What’s one of the most important things a brand can do?

Stand out. Being immediately recognisable means, for example, that, when customers are looking around for somewhere to eat or get coffee, the instant recognisability of your business will be like an oasis in the desert for them.

Byron adds that brands spend too much energy on the detail of how they differ from their competitors. This may be less important to customers than the immediate, reassuring feeling they get when they see your logo.

Targeting light users, brands should use advertising to create positive associations called memory structures.

How about pricing?

Well, slashes to regular prices can be effective at driving short-term sales but companies need to be careful, says Byron, because even if ‘non-frequent buyers’ are pulled in, there may in fact be a dangerous long-term effect. People may begin to associate this low price with the company, balking if they have to pay more than that. These risks need to be outweighed by the benefits to the company: namely the number of items they sell as a direct result of the sale.

But people will go to the ends of the earth for a bargain?

Not necessarily; ease of availability is important, Sharp argues – both mentally and physically.

In other words, if your brand pops immediately to the front of someone’s mind when they think of a particular industry, you’ve done phenomenally well. But then you also need to be physically available so that the consumer can find you. Most people won't expend huge amounts of effort in doing so.

What can I take and use from this book?

If you’re in marketing, look at ways to generate new customers rather than stressing too much about retaining your current ones.

Remember that people make mental shortcuts. We don’t think if we don’t have to. The brands that are easy to recall and physically available are more likely to succeed.

Use this last principle in life outside of marketing: if people don’t like to overthink, how can we use that to our advantage?

What am I most likely to say after reading this book?

“Let’s target the memory structures of those light users.”

What am I least likely to say after reading this book?

“Marketing’s an art, not a science.”