E X E R C I S E S F O R

G R O W T HA short handbook

for making decisions about brand growth

How do brands grow?‘Double Jeopardy’

When brands capture a sizeable market share, their sales revenue comes from both gains in buying frequencies and gains in size of their customer base. In order to grow further, they often face a decision (often known as ‘Double Jeopardy’) about whether to get ‘loyals’ buying more (or paying higher prices) versus getting new or infrequent buyers to purchase.

The frequency vs. penetration debate

Since the mid-Eighties, a great deal of research* has gone into proving that the biggest growth driver is one or the other (i.e. frequency vs. penetration). Via the work of Ehrenberg and Goodhardt, Allsop and Sharp, Binet and Field (must they always come in twos?), the evidence shows that the strategy for increasing your customer base comes out on top.

Keep it simple, stay available

The conclusion – best articulated by Byron Sharp in How Brands Grow – is that brands need to create positive associations that are loosely remembered amongst large groups of people. The very best brands keep it simple (making themselves easy to recall and choose) and focus on being available – both physically and mentally.

*See our reading list at the back of this book, but if you only read one thing, make it How Brands Grow8 9

The exercisesThese exercises should feel worryingly simple

We’ve designed five exercises to help you make some either/or decisions – to close down doors to things that aren’t central to your growth strategy. For each exercise, we’ve provided a couple case studies – robust examples of marketing campaigns and initiatives, which demonstrate the power of making a clear choices.

Five areas that can drive growth

1.What’s going on

in your category?

Exercise 1: Be best in category or transcend category?

4.

Who has the biggest influence on new customers?

Exercise 4: Use current customers to a!ract

new ones or access new customers via a fresh association?

5. How will you reach

new customers?

Exercise 5: Create and respond to

peaks of interest or design for specific behaviours?

2.Which customers will drive growth?

Exercise 2: Steal share or bring new customers into

the category?

3.

What perceptions do you need to promote?

Exercise 3: Neutralise negative perceptions or drive positive differentiation?

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1An exercise to determine whether your brand will grow by improving on category norms - or by looking beyond them.

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1. Be best in category...Do you just need to do a much be!er job in your category (e.g. delight people with unexpected product or service quality)?

...or transcend category?Do you need to find something adjacent or new

in popular culture to connect with?

This is most likely to be you if...

! You have a genuinely di"erentiating USP in your category! Your category is relatively high interest amongst current customers! Competitors in your category all adopt a very similar approach to marketing! Overall customer satisfaction/loylaty in your category is low

This is most likely to be you if...

! Innovation in your category is tired or quickly copied! Your category is adjacent to topics of high interest! Your product is inherently low engagement! Your competiton have tried and failed to reinvent category conventions

DYSON! CHALLENGEHaving designed and patented a superior bagless and upright vacuum cleaner, Dyson needed to persuade a still uncertain audience that a £400 cleaner was be!er than a £50 one and in order to take innovation to a global audience.

! SOLUTIONDyson’s campaigns set out to show how cleaning can be a be!er experience by emphasising all the shortfalls of other products. It showed that a bagless design can’t and won’t clog and gives the best suction power; that the ball technology helps it reach places other cleaners can’t; and that buying a Dyson wasn’t just buying vacuum cleaner, it was evolution in action.

! RESULTSThe company has sold over 15 million vacuum cleaners since 2010, exported its technology and advertising across the world and had a record turnover of £1.05bn, with earnings up 30% in 2011 to £306.3m worldwide.

LURPAK! CHALLENGELurpak is a classic bu!er brand in a familiar, low-interest category that needed to drive growth by reinvigorating consumer interest.

! SOLUTIONLurpak’s ‘Food tastes be!er with Lurpak’ was built on the premise that good food is a simple pleasure that is made even be!er with Lurpak. The ads were delivered in a confident, discerning style, championing the food Lurpak could be enjoyed with rather than the product itself, in an e"ort to demonstrate that the brand shared its target audience’s deep passion for food.

! RESULTSThe campaign contributed a 3.76% year-on-year upli# to the brand’s total sales volume and helped Lurpak become the most valuable brand in its category - gaining ownership of the idea that is a “champion of good food”.

METHOD! CHALLENGEIn a category where people stayed ‘loyal’ to brands out of inertia rather than a$nity, Method had to overcome scepticism and prove its leadership credentials in environmentally-conscious household cleaning products.

! SOLUTIONDesigned for ‘People against dirty’, Method launched its ‘Clean Happy’ campaign, suggesting that cleaning doesn’t need to be a chore nor should products be harmful to people and the environment. It showed that the best cleaning products are those people enjoy using and that cleaning can be fun using Method’s products which were full of vivid color and fragrance, cleaning power and safe formulas.

! RESULTSFrom its first appearance in 2000, its revenue shot from $11.7m in 2003 to $71m in 2010, later allowing it to partner with Ecover to deliver its proposition on a global scale.

PATAGONIA! CHALLENGEFounded by climbing enthusiast Yvon Chouinard in 1973, Patagonia became more than just an outdoor equipment company when it realised some of its products damaged rocks. It wanted to start a conversation about the things it cared about over and above hi-tech equipment and performance.

! SOLUTION‘Commi!ed to the core’ set Patagonia on a path to becoming known for pu!ing the Earth and its climate before all else. Campaigns talked about the e"ect of consumerism on the environment, encouraged people to buy only what they needed and even told customers ‘Don’t buy this jacket’ during Black Friday.

! RESULTSPatagonia established a strong and passionate community of people who appreciate the brand’s values and commitment to sustainable growth and frugal consumption - with this approach, the company is now worth $600m and has opened over 50 stores around the world.

2An exercise in identifying the customers with

the most growth potential for your brand.

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...or bring new customers into the category?Do you need to find something adjacent or new

in popular culture to connect with?

2. Steal share from rivals...Are there competitors in your category you have the credibility to take on?

VIRGIN ATLANTIC! CHALLENGERichard Branson placed a bet against BA to show that he was capable of creating a highly successful, high quality and value for money airline. With a budget less than a third the size of BA, it took on its rival by conveying a sense of scale and competing on service di"erentiation.

! SOLUTIONIts ‘Still red hot’ and ‘Flying in the face of the ordinary’ campaigns directly took a swipe at BA’s old-fashioned o"ering for business travellers. Defining ‘Virginness’ by six a!ributes (stylish, helpful, up-to-date, dynamic, innovative, fun), it introduced and communicated premium services that show Virgin has all the things BA lacks, particularly luxury departure lounges and a new business ‘Upper Class’.

! RESULTSSince 1993, all ‘Virginness’ a!ributes increased significantly relative to BA and Virgin managed to achieve an unaided brand awareness at the same level as its arch rival British Airways: 73%.

GILLETTE! CHALLENGEGille!e believed they had li!le room to grow if they continued to compete for share of the conventional everyday shaving market.

! SOLUTIONGille!e brought women into the conversation of men’s shaving habits through its ‘What women want’ campaign. Paired with the launch of the Fusion ProGlide Styler in 2012, it encouraged men to use the trimmer-razor hybrid on other body parts, not just their face. By creating new female interest in a male pursuit and focusing on innovation in-store Gile!e began to make it normal for twenty-somethings to ‘shave below the neck’.

! RESULTSAccording to a study conducted on behalf of Gille!e, 68% of men aged 18 to 24 and 64% of men aged 25 to 34 shave or trim hair below the neck; body hair styling is a huge and (ironically) growing category that’s becoming an area of interest for both men and women.

BING! CHALLENGEMicroso#’s new search engine needed to establish a foothold in a crowded market, almost monopolised by Google.

! SOLUTIONBing’s targeted dissatisfaction with Google search results. Google Search was associated with information overload as Bing used TV, cinema and radio to poke fun at the side e"ects: people babbling uncontrollably and nonsensically to “keywords” they hear around them. Two campaigns positioned Bing as a “decision engine” and showed how using it lead to decidedly be!er outcomes, alongside a digital campaign that invited users to start exploring Bing for themselves - in other words to “stop searching and start deciding.”

! RESULTSWhen Bing launched in 2011, it achieved 10% market share in a year. As of April 2013, Bing has steadily earned 17.8% share, particularly at the expense of Google.

NIKE TRAINING CLUB! CHALLENGENike noticed there was an underserved female audience with a untapped desire to feel be!er about their bodies, but who had li!le time for gyms and even less assistance from mainstream brands in achieving their aims.

! SOLUTIONInspired by elite athletes and Nike expertise, the company created Nike Training Club, an app that women through a series of daily exercises and new training techniques that get gradually harder. O"ering professional mentoring, progress measures, support and exclusive rewards, it unlocked a community of women that would become an audience for Nike Women products.

! RESULTSOnly weeks a#er launch, Nike Training Club became iTunes App of the Week in both the US and the UK, rising to No.1 position in Health & Fitness in 21 countries. To date, the app has already generated more than 40 million minutes of training.

This is most likely to be you if...

! The market leader in your category has clear weaknesses you could take advantage of! There is a large amount of switching in your category! There are smaller brands in your category you could easily absorb market share from! You are in a market with tough marketing restrictions

This is most likely to be you if...

! You are in a saturated market! You have an ageing (or dying) target audience! There are big demographic changes occuring in your market! Your rival’s customers are fiercely loyal

3An exercise in understanding whether current perceptions are

potential growth inhibitors or accelerators.

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This is most likely to be you if...

! Your company and brand reputation is poor! Your product is socially unacceptable! There is a commonly held misconception around your product or category

This is most likely to be you if...

! Your audience are using your brand in a way other than which it was intended! There is a neglected product/category/consumer truth that has yet to be communicated! Your brand could benefit from excluding certain audiences

...or drive positive di"erentiation?Could celebrating your di"erences and making your brand more distinctive

(actively discouraging certain customers) increase your brand’s appeal?

3. Neutralise negative perceptions...Are there negative perceptions surrounding your brand that - if neutralised - could remove significant barriers to consideration?

STARBUCKS! CHALLENGEAll around the world, the Starbucks had been su"ering from being seen as big, corporate, impersonal, serving overpriced weak co"ee and damaged by tax scandals.

! SOLUTIONStarbucks decided to address these issues head-on and make the store experience friendlier: it introduced sta" name badges, o"ered double espresso shots as standard and launched a ‘Your name on the cup’ initiative. Its campaigns lamented how impersonal things had become and outlined Starbucks’ desire to change all that. All this culminated in a generous o"er of free la!es for a day, encouraging customers to give it another go and introduce themselves by name.

! RESULTSAlthough Starbucks hadn’t been making a profit in the UK as part of its expansion strategy, its e"orts managed to address the -44 negative sentiment measured by YouGov and pushed it on the road to recovery all within the space of six months to April 2013.

WHOLE FOODS! CHALLENGEWhole Foods stood for the highest quality natural and organic products, even if it meant its products were more expensive and popular brands were excluded from stores. In time, people started calling it ‘Whole Paycheck’ and made fun of those who shopped there.

! SOLUTIONInstead of giving in to pressure, it celebrated its di"erences and went a step further: becoming the first retailer to force the labelling of genetically modified products, claiming that “Food labels should inform, not confess.” They hit back at critics through the ‘Shop like you deserve it’ campaign, emphasising the virtues of looking a#er yourself and making fun of supermarkets where the sta" are ‘fresher’ than the products.

! RESULTSThey showed that it doesn’t ma!er if some people felt excluded from its stores because of product range or price, achieving year on year sales growth of 12% and adding 32 new stores worldwide in 2012.

HEINEKEN! CHALLENGEFaced with a perception that its product was diminishing in quality and already seen as generic watered-down lager, Heineken needed to justify the product’s price premium across the world.

! SOLUTIONHeineken turned globalism into a positive a!ribute by launching its ‘Man of the World’ campaign. Based on the idea that no man wants to be a provincial amateur (small minded, inexperienced and unskilled in the ways of the world), it used its global reach to make the beer a symbol and enabler of the worldliness craved by young men - the brand would signal that the man in question is, indeed, a man of the world.

! RESULTSHeineken reported strong post-campaign performance with volumes growing 5.4% in the international premium segment and double growth in Asia-Pacific. The work also received critical acclaim in the form of over 30 communication awards, including five Cannes Lions.

HENDRICKS! CHALLENGELaunch and di"erentiate a premium gin brand across the world in a market with a growing set of independent, cra# gin manufacturers and a discerning audience.

! SOLUTIONHendricks created a brand for the ‘odd fellow’ - that celebrated and embraced long-lost Victorian quirks and people who preferred a drink with character. Se!ing itself apart, it pulled a number of stunts to embody the brand: a bathtub with gin flowing from one tap and tonic from the other; a classic British vintage Rover turned into a ‘Cucumber mobile’; and they transformed a Victorian train carriage into a mobile home.

! RESULTSIts unique style and ultra-premium pricing have pushed the category’s boundaries. A#er earning an Impact “Hot Prospect” award following a 36.5% jump to 101,000 cases in the U.S. market in 2010, Hendrick’s helped its parent company achieve a 33.3% increase in 2011 sales.

4An exercise in identifying whether growth can be influenced inside-

out, or outside-in.

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This is most likely to be you if...

! You have a robust database of loyal customers! You have direct relationships with a large number of your regular customers! Your brand is social currency - i.e. people enjoy talking about and displaying it publicly

This is most likely to be you if...

! Your current customers are not representative of the audience you wish to target! Your have li#le direct, owned interaction with your customer base ! Your brand saliency is low or your brand personality is very weak

...or access new customers via a fresh associationCould you reach a new audience via a fresh partnership, association or network?

4. Use current customers to a!ract new ones...Can you get people who know your brand talking about it to new people? Or can you leverage their network?

O2 PRIORITY MOMENTS! CHALLENGEIn an oversaturated mobile market where switching is easy and customer satisfaction low, O2 knew it had to o"er more than just its basic service by making network membership a!ractive enough to keep its customers for longer - in order to a!ract new ones.

! SOLUTIONO2 knew that fans were three times more likely to stay with the network and recommend it to others as well as spend an average of £500 over a lifetime rather than just £200. It launched O2 Priority Moments in 2011, a perk that would make all of its 22 million customers feel like exclusive VIPs through experiences beyond simple discounts, like free gi#s and early access to sales.

! RESULTSBy partnering with venues and celebrities like Beyonce, it served over 20 million o"ers in entertainment alone and grew its total customer base 3% year on year, hi!ing nearly 23 million users in 2012.

CIROC AND DIDDY! CHALLENGEVodka is popular in the US, especially in Vegas, but has a limited racial profile amongst customers. Diageo wanted to target people outside vodka’s core customer group.

! SOLUTIONIn 2007, Ciroc partnered with hip-hop mogul Sean “Diddy” Combs in order to a!ract new customers from the African-American community. Having branded himself as the king of celebration, Diddy featured in all communications for the brand, with Ciroc positioning itself as the “O$cial Vodka of New Year’s Eve”. It sponsored red-carpet telecasts at award shows and ran ads on a handful of networks including Bravo and E!, plus publications such as Vibe and Hip Hop Weekly.

! RESULTSThe brand grew 552% from 2007 to 2010 and has replaced Belvedere as the second-ranked vodka in the “ultra-premium” category.

BEATS BY DRE! CHALLENGELaunch a range of noise-cancelling headphones aimed at young people and grow its audience through word of mouth.

! SOLUTIONUsing hip hop’s global popularity, Beats used headphones in music videos and put them in the hands of young people destined for stardom. Its #showyourcolour campaign championed self-expression as the brand focused on an audience passionate about music and keen to showcase their individuality, while those who’d bought their first pair weren’t just proud owners, they were the #beatsarmy, championing their style on Instagram, Facebook and Twi!er.

! RESULTSBeats spread to 180 countries, accounting or 50% of all headphone sales during the 2012 holiday season in the US (and 80% of all premium headphone sales), became the USA’s #1 audio brand. and the UK’s most loved brand, with 67% of its users saying they have a strong emotional connection to it.

H&M AND DAVID BECKHAM! CHALLENGEMost of H&M’s collaborations focused on womenswear ranges, with men long neglected as an audience. H&M needed to build its credentials with 18-35-year-old who didn’t shop in H&M or didn’t consider it as a credible source of undergarments.

! SOLUTIONH&M hired David Beckham to create Bodywear, a new underwear range, and launched a campaign that saw Guy Ritchie direct a global TV ad. H&M launched the spot globally with a pop-up gentlemen’s club, placement in high profile men’s magazines (GQ, Esquire) and a heavy social media push.

! RESULTSIn its annual report, H&M stated that the menswear collaboration was well received, with January 2013 group total sales increasing by 5 percent compared to the same month the previous year.

5An exercise in understanding if

growth should be built in rapid bursts or gradually

over time.

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This is most likely to be you if...

! You need to rapidly achieve awareness at scale! Your customer buying cycles are particularly time/season-sensitive! The usage of your brand is relatively easy to understand

This is most likely to be you if...

! Your company has strong levels of awareness but struggles to convert to purchase! Your target customers experience your brand at very di"erent times and occasions! Your product/service is a complex proposition

...or design for specific behaviours?Do you need to find ongoing, relevant moments in the lives of your consumers

where they have time and space to interact with your brand?

5. Create and respond to peaks of interest...Do you want to create and respond to a topical/live moment that people will ‘swarm’ around?

RED BULL STRATOS! CHALLENGEKeep Red Bull top of mind for adrenaline-loving fans and build and sustain excitement for Felix Baumgartner’s eagerly anticipated ‘Jump from the Edge of Space.’

! SOLUTIONThe campaign took years to plan with content gradually teased out: a series of videos documented the history of the records Felix was a!empting to break and a website provided information on the technology he would use. Red Bull’s main blog and social profiles shared captivating messages, photos, and updates, with Twi!er pumping out updates including Instagram shots from test flights, preparations and briefings.

! RESULTSThe event was seen live by more than 8,000,000 people, while on social media the picture of the jump generated nearly 216,000 likes, 10,000 comments, and 29,000 shares within 40 minutes of being posted, with 82% of the conversations about Red Bull showing overwhelmingly positive sentiment.

NETFLIX! CHALLENGENetflix decided to evolve its business into producing original content and needed to launch ‘House of Cards’ in a way that would justify the investment and resonate with its most loyal audience.

! SOLUTIONNetflix surveyed data from over 30 million plays a day, 4 million ratings and the time of day when shows were watched across multiple devices. It decided to launch House of Cards all at once a#er noticing its loyal users would marathon-watch instead of phase their viewing. The launch campaign encouraged fans to #watchresponsibly, but cleverly kept baiting people by asking “What episode are you up to?” or saying “It’s OK if you called in sick today.”

! RESULTSWithin 2 weeks, 10% of its viewers had watched an average of 6 episodes, with 90% viewing the release plan positively as they consumed multiple episodes per viewing session. The approach made Netflix the best-performing stock in the S&P 500 in 2012 and subscribers surpassed the 36 million mark.

PROMETHEUS! CHALLENGELaunch of the long-awaited fi#h instalment of the Alien franchise directed by Ridley Sco! by teasing the opening online to its fans without ruining the movie experience and giving fans extra talking points a#er its opening weekend.

! SOLUTIONPrometheus became more than just a 2-hour film; it became an immersive entertainment experience in the run-up to box o$ce launch. It started teasing the film with a ‘TED in 2023’ presentation by entrepreneur Peter Weyland that invited visitors to the TED blog to enrol in the mission. Weyland Industries business cards appeared at conventions, leading people to a piece of in-story content titled ‘Big Things Have Small Beginnings’ which fuelled a storm of online discussion.

! RESULTSPrometheus grossed $51m dollars in its opening weekend at number 2, acquiring 40% of its US earnings in two days, adding $276m abroad, bringing its total earnings to $403m.

GOV.UK! CHALLENGEThe Government Digital Service team needed to bring over 2,000 government websites into a single, consistent source for all Central Government services that could suit the needs of the entire UK population.

! SOLUTIONThe team started by being user-centric and focused on the needs of people rather than the needs of government: simpler, clearer, faster. They explored what people were looking for and where they spent their time to decide where to focus e"orts and make the most e"ective improvements, removed confusing elements and emphasied legibility and usage over visual flair.

! RESULTSgov.uk was built at a fraction of projected costs, in a fraction of the time and saved taxpayers millions. By monitoring usage, it succeeded in reducing the time people spend on the website, making it easier for people to cope with everyday chores like ge!ing a passport or renewing taxes and in the process collected the prestigious Design of the Year award.

What knowledge gaps and barriers to growth have you identified - and what decisions have you made?

Barriers

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Knowledge Gaps

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Decisions

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3. 3. 3.

What’s at the heart of your growth strategy?

What could drive the biggest shi! in performance?

e.g. Compete for a new customer - stop competing with rivals for the same customers and start a#racting new people to your category

What’s the easiest strategic shi! you could make?

e.g. Realign your media strategy - shi$ from focusing on crowded seasonal peaks to everyday customer behaviours

What’s the one growth driver you are going to put at the heart of your strategy?

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