The irrational marketer Nick Barthram Principal Digital Planner Bray Leino Yucca

The rational myth We often talk about the irrational consumer and how they make strange decisions, but what about the irrational marketer?

A recent study by Harvard Business Review looked into how senior management make decisions. It all starts promisingly, with only 10% of respondents making intuitive decisions and the remainder relying on data or, at the very least, collaboration. But things go awry when they are subsequently asked what they’d do if the data contradicted their gut-feeling. A miniscule 10% take the course of action suggested by the data; leaving the vast majority trying to manipulate the situation to fit their preconceived ideas.

We’re obviously subject to the same biases we apply to our poor, irrational customers:

• Confirmation bias – the tendency to look for evidence which supports preconceived notions.

• Availability bias – the tendency to make judgements on what most easily comes to mind.

• Outcome bias – the tendency to base opinions on small statistically insignificant events.

These mistakes can become hard to spot and increasingly institutionalised. We tend to repeat what our predecessors did.

Luckily, there are statistically significant studies providing strong data about how to approach marketing. They certainly don’t offer all the answers, but do go some way to demystifying key areas.

“ Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened.”

Winston Churchill

Emotion trumps rationality, so stop worrying about persuading peopleImagine you’re happily eating your breakfast on a Sunday morning. There’s a knock on the door: it’s your neighbour asking for help moving a couch. You do it, because you’re a nice person.

Now imagine the same situation, but at the end of their plea they add “I’ll give you a pound if you do.” Are you more or less likely to help? Most people now opt-out of helping their neighbour; your time is worth more than a measly pound right? Rationally, the second scenario is better for you so you should be more likely to help, but the perceived emotional insult overrides any rational decision making.

In our world of discounts, offers and incentives, this is what brands do every day. Repeatedly.

Binet and Field, in their seminal ‘The Long and Short of It’, as well as subsequent studies, have found that rational messaging is great for generating short term effects. But crucially, emotional messaging, not a combined approach, generates the best performance over time, especially when looked at in the long term.

RULE 1Emotional priming

50%

0%Rational Messaging Combined approach

Ver

y la

rge

d

irec

t eff

ect

Rational messages deliver short term responses

60%

40%

20%

0%P

rofi

t eff

ect

Especially over the long term

1 year 2 years 3 years

Emotional priming

40%

20%

0%

Ver

y la

rge

p

rofi

t eff

ects

But emotions are profitable

Rational Messaging Combined approach

THE LESSON? Stop trying to persuade people to use your product. Instead focus on making them feel an emotional response to your brand. It’s definitely worth thinking about next time you’re agonising over your reasons to believe.

Emotional Campaigns

Rational Campaigns

Aim for fame and stop trying to differentiate your brandTake a look at the image below. Can you complete the sentence? Do you know which brand created this?

Kit Kat’s are no more suitable for breaks than any other chocolate bar, so there’s no differentiation here. But there is distinction: the phrase, the pun, the logo and colour scheme, all immediately make you think of a Kit Kat. This is what Byron Sharp, in ‘How Brands Grow’ calls “meaningless distinction”. He shows data to prove that it’s much more important than creating meaningful differentiation, as most brands aren’t differentiated from each other.

Sharp goes on to argue that really only two things are important for brands:

1. Building physical (or digital) availability – e.g. allowing people easy access to your product.

2. Building mental availability – or artefacts in people’s memory associated with the brand. It doesn’t matter what they are (meaningless) just as long as they are memorable (distinction).

Binet and Field agree. Their research found that campaigns with a ‘very large salience effect’ generated the greatest profitability.

They also have a simple mantra: ‘aim for fame’. They define fame campaigns as those that make people feel differently about the brand, but do so “in a way that inspired them to share their enthusiasm on and offline”. In other words, you need to get people talking.

Most people like Kit Kats. But do you eat Kit Kat’s specifically when having a break? Probably not.

THE LESSON? Stop trying to differentiate (unless you are one of the very few brands who can) and focus on creating campaigns and content that get people talking about you – in any way. Banish the phrase “we want to own…” from your meetings.

RULE 2

How much you spend on media determines your market shareI remember arguing with a creative director about some concepts he was suggesting for a fashion client. He took to quoting the (at that time) recent Three ‘Pony’ ad to defend one of his ideas, arguing that it was a social media hit from creativity alone.

I eventually managed to ask the individual responsible for the social success of the ad, and asked him how he knew he was on to something when he first saw the idea.

His answer was “Because I knew it had a £5 million1 paid social budget.”

What was painfully obvious to him (but not to myself or my CD), was that the budget was almost as important as the creative idea itself.

Binet and Field have some data on this.

There is a direct correlation between your media budget and how many products you sell. Just to be clear, that means the quality of your campaign (assuming it meets a certain standard) has less of an effect than you might think. Your market-share tends to grow, or shrink, directly in line with whether you spend more or less than your competitors.

So, what should you spend your money on? Binet and Field talk about the marketing equivalent of the golden ratio: 60% of your budget on building brand or ‘saleability’, and 40% of your budget on activation or sales.

1I may have misremembered the exact number, but it was in the millions.

THE LESSON? Unless you have a one-in-a-million viral success on your hands, your media budget is as important as your creative. Get your marketing plan following the 60/40 rule and approach your board to get more investment to grow your share of market.

RULE 3

Share of market

12%

10%

8%

6%

4%

2%0%

0% 2% 4% 6% 8% 10% 12%

Sha

re o

f vo

ice

SOV < SOM: brands tend to shrink

SOV < SOM: brands tend to grow

Rational messages deliver short term responses

More new customers equals better loyaltyIt’s pretty much marketing law that you ‘start with your existing customers’ when planning a new campaign. But is this really the best approach?

These stats show it’s better to cast your net as wide as possible. But what about when you’re specifically trying to get more from your existing customers? Surely then it’s best to focus just on them?

Well, apparently not. Cue the ‘Double Jeopardy rule of marketing’ which Wikipedia explains:

Double jeopardy is an empirical law in marketing, where, with few exceptions, the lower market share brands in a market have both far fewer buyers in a time period and also lower brand loyalty... Double Jeopardy has been shown to apply across categories as diverse as laundry detergent to aviation fuel, across countries and time.”So, the amount of times your customers buy from you is directly linked to your market penetration. If you want your customers to purchase more, get more customers.

THE LESSON? Remember that your customer purchasing pattern is directly linked to the amount of customers you have compared to your category. Next time you get some CRM or loyalty budget, think about diverting it to getting more customers through the door.

RULE 4

Total number of very large effects8

7

6

5

4

3

2

1

0Target

existing customers

Target new customers

Target whole new

market

3.0

2.5

2.0

1.5

1.0

0.5

0.0

ESOV efficiency

Target existing

customers

Target new customers

Target whole new

market

“

THE LESSON? Your buyers are no different to your competitors, so stop trying to differentiate your brand and focus your insight generators on the overall category.

RULE 5Your brand’s customers are the same as your category buyers Yorkie have been running ‘It’s not for girls!’, or variations of it, for quite a while now. Let’s presume this distinctive line came from some insight or research somewhere. So… Yorkie bar eaters are more likely to be male than female, right?

They are. But only by a couple of percentage points, which in the grand scheme of things is pretty irrelevant. Yorkie’s buyers are pretty much identical to the rest of the chocolate category. It’s probably very similar for your category and brand.

Male Female

All chocolate

49% 51%

Yorkie 53% 47%

In two very comprehensive studies Ehrenberg surveyed a large number of top brands in 43 different industries, using over 100 attitudinal variables to distinguish between buyers of each brand. This is what he found:

Overall, the individual brands percentage profiles deviated from each other by an average of 2 or 3 percentage points which is in effect zero. Only around 8% of the individual deviations were more than 5 percentage points, and even these larger deviations averaged at only about 9. Just 2% of individual deviations were 10 points or more.”So your buyers are very likely to be attitudinal and demographically identical to your competitors. Sharp points out that this isn’t just limited to marketing brands, citing a recent BBC programme on Advanced Guitar Playing. According to Sharp the majority of the audience couldn’t play guitar, instead they were ‘heavy TV watchers’.

It’s worth noting that this doesn’t negate segmentation of your base. You probably have different groups of people who buy different things from you (assuming a large base and product range), but they’re the same groups as your competitors.

“

So, there you have our set of marketing ‘rules’, which go against current perceived knowledge. They’re certainly not meant to be comprehensive, but will hopefully help you spend your marketing budget a little more effectively.

1 Emotion trumps rationality… stop worrying about persuading people

2 Aim for fame… stop trying to differentiate your brand

3 Creativity trumps budget, just… but the ‘no media budget’ approach is a myth

4 More new customers = better loyalty… invest less in squeezing more from your customers

5 Your brand customers are the same as category buyers... stop tightening your targeting

And if you’re looking for a great return on your budget, you could do a lot worse than buying How Brands Grow by Byron Sharp, and The Long and Short of It by Binet and Field. Everything above is contained within their hallowed pages.

SUMMARY

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Alan Thorpe

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Twitter: @brayleinoyucca

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