Column Ronald Jansen – Consulting Partner
A tradition nowadays; October is a very busy month for DVJ Insights. We have our international Brand Growth Event in the Netherlands and the UK, where we let marketers take the stage to reveal what works and what doesn’t work in practice, and where we present the results of the Brand Growth Study. The study which gives insight into what winning marketers do, and what marketers do in organisations that don’t grow, or deal with a decline in turnover. A lot happened this month, but what have we learned?
This month the Festival of Marketing and IPA’s Effweek also took place in the UK. A lot of presentations, often with an almost commercial-like story. Thankfully, we got to experience more and more stories of marketers daring to reveal their pitfalls or insecurities. And of course, the marketing guru’s; people like Les Binet, Peter Field and Mark Ritson. For a while now, Field and Binet have been showing us their zigzag graph, warning us to look out for the short-term sales activation strategy. It doesn’t lead to growth. Long term brand building, that’s where you need to be. We know to apply this strategy to the low frequency buyers. The familiar banana image by Snijders, or rather, by Sharp, showing the volume of light users being far greater than the volume of loyal buyers. If you want to grow, you have to be always on, fuel your brand, not by segmentation, but by targeting everyone through mass reach media. Sales activation is allowed, but only when combined with long term brand building.
A record loss
The fun part of these marketing congresses is that there’s always marketers making you think. Take the story of Dave Lewis for example, (former) CEO of Tesco. When he joined the company a couple of years ago, Tesco was a loss-making company. As a matter of fact, in 2015, Tesco led one of the biggest losses ever in the UK. A record you’re not likely to brag about. From the academic work of Ehrenberg, Lewis began to analyse what the problem was. It was definitely not physical distribution; Tesco is a supermarket chain with unbelievable high penetration in the UK. It wasn’t volume, the number of buyers, either. Almost every Brit buys at Tesco. The problem was the spends. People didn’t buy enough. The only way to tackle the problem in his category, was to find an answer to the ‘German newcomers’, as Lewis likes to call them. Price discounts, or a lowest price guarantee to keep people in the stores, and to not give them a reason to buy (a part of) their groceries elsewhere. A deadly sin according to Binet. Sooner or later, price discounts or ROI and efficiency as a KPI will lead to failure for your brand.
The point I’m trying to make with all these learnings: you must look at the situation your brand is in. External agencies can help with that. Our UK Brand Growth Study reveals that winning brands work with a lot more agencies. Better analyses are made, everything is pre-tested. They’re companies who look at the situation of a brand, which direction it should head in, and get advice from different agencies. During the Festival of Marketing, Lucas Hulsebos presented these results alongside Mark Ritson, who was clearly impressed by the findings.
It was an interesting month to say the least, jam-packed with lots of inspiring meetings and learnings, but thankfully with the knowledge that marketing is a profession where common sense in combination with science leads to brand growth. And where research has a prominent role to keep fuelling and optimising marketing by measuring and registering what consumers think, feel and do.