Posted by Martin Collings under Airlines
Comments Off on How Brands Grow
A few months ago I was given a book by Frank Grasso, CEO of e-channel search, and the subject really hit home with a topic I am always interested in; debunking old wives tales in marketing and replacing them with real science. Long time readers here will know that this is especially true when it comes to questioning insights gained from marketing driven customer survey data from some of the dubious press releases masquerading as market revelations. I finished the book in question this week on my flight to Brazil – it is by Byron Sharp and is called How Brands Grow: What marketers don’t know.
Firstly, any marketing book that cites Karl Popper is immediately going to get at least one star from me. Popper was potentially the greatest philosopher of the 20th century, but how does his advancement of the scientific method or this book from Byron Sharp have any applicability to airlines? Popper held that every scientific hypothesis must be testable, and the way to test it is to search for circumstances in which it does not hold. Sharp’s book picks apart many so-called marketing theories and in the process goes head to head with marketing gurus like Kotler and Aaker. The end result is a thought provoking book that takes a very different view on brand loyalty and loyalty programs in general – a topic of interest to any airline these days.
Loyalty certainty exists, but it is tempered by opportunity. People who buy from a category less often have less opportunity to be disloyal. Similarly people who shop from stores that stock fewer brands also appear more loyal (e.g. people who live in smaller towns).
The second sentence above is interesting as airlines always perceive top tier frequent fliers to be more loyal than non program members or those in the lower tiers. But one of the things that differentiates airlines from the supermarket loyalty program Sharp despises so much is, in my mind, the fact that for one of these the most active members are typically not spending their own money. Similar to what I wrote recently about the IBM booking duration data, it is much easier to be loyal when you are spending someone else’s money.
Back at the Phocuswright conference in November last year (where I first met Frank Grasso), one of the most profound on-stage comments that I recall came from Rich Barton when he said something like:
Don’t spend money on advertising because it lets companies get lazy about product
It definitely hit a note with me, as too often the lack of science in marketing leads to so much money being wasted, money that would have been much better spent on enhancing the product. If an airline website has enough compelling functionality and a UI layer that stands out from its peers, then maybe this is like the quote from the book about people buying from stores that stock fewer brands appearing more loyal – maybe spending less on generic airline branding and more on website (ie. store) functionality is a much better use of scarce resources.
Most of a brand’s customers think and care little about the brand, but the brand manager should care about these people because they represent most of the brands sales; the brand needs these people if it is to increase sales.
I’ve put another contentious quote from the book above, but in the video below, the author Byron Sharp uses a great example to debunk the often claimed story about how much Harley owners love the brand. Even more compelling, he illustrates how little profit these so called “loyal” customers actually represent.
Maybe it is a tenuous link to discuss this book on a blog site dedicated to the airline direct channel, but I would challenge anyone to show me an industry where so much is spent on advertising aimed at influencing our perception of brand attributes and product differentiation with so little apparent impact. A little more science in marketing would do the airline industry a world of good.