Run with Foxes. Paul Dervan

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      We might hypothesise that more people prefer Costa and we need to do something about it. Maybe because it is British? If so, perhaps we might decide to increase local brand advertising to drive up preference scores. Fear not – there is a less worrying explanation. Costa Coffee have about twice the number of coffee shops than Starbucks. The very fact that they have more stores means that more people drink Costa coffee. And when people are asked in surveys what coffee they like, most will name the coffee they buy and drink. Since more buy Costa, more say Costa. And so… more prefer it.

      We tend to assume that preference drives sales. This feels right. We like something more, so we buy that product. In that sequential order. Preference first – then sales. But for Starbucks, according to them,9 it was the other way round. Sales – then preference. Their brand tracking data showed that the size of the business correlates with both usage and preference. If they open more stores, their preference scores will go up.

      The unchallenged assumption we make is that advertising changes attitudes – which then leads to sales. It can. But it might not. The causation might be the other way around. The Starbucks team know this, of course. They understand that metrics such as preference, trust and brand consideration simply reflect that the brand has grown in a previous period, rather than the effect of communications.

      Identifying cause and effect can be difficult. About a decade ago, when I was working for O2, we saw that our Google advertising was more effective than other advertising channels for driving our online store sales. We moved budget from our daily newspaper press ads to Google. But, when speaking to customers, we realised that the press ads were often what got them first interested. They would stumble across O2 ads for new phones while commuting to work on buses and trains. These days, we’d whip out our phones and search for more information or even buy immediately. But this was ten years ago. So, what they did was go online when in work or back home that evening. They’d search Google, and click. The press ads were creating the sales. Google was capturing them. We needed both.

      You may have heard of something called the Rosser Reeves Fallacy.10 In research, we often find that people who notice our ads are more likely to buy from us. This may lead us to conclude that higher advertising recall will lead to more sales. However, the causation is probably the other way round. If you buy a brand, you’re two-to-three times more likely to remember its advertising than non-customers would.

      Last year, when doing some work in the pet food category, I noticed that one brand had the fastest growing consideration and penetration measures. I assumed that pet owners must like this food more. And that this was the reason more people were considering it and buying it. But, after about 30 hours of in-depth interviews with pet owners, and some store visits, another possibility emerged. This brand had been very successful in increasing its distribution. It was possible that, because it was available in more stores, more people were finding and trying it. And this trialling was leading to higher consideration.

      It so happens that I was introduced to the differences between causation and correlation quite young. I was about 12. Perhaps my dad thought I’d find this interesting. I didn’t. I do now.

      Fox lesson: Whenever you see relationships, hold off on concluding what is driving what. It could be either. It might be neither. Look for a third variable that might be driving both.

7

“Only a desperate, insecure idiot would buy a Vespa these days.” (I own two)

      I love Vespa scooters. Adore them. Have done since I was 18, when my neighbour first suggested that I might want to buy his Vespa PK50. Truth be told, I’m partly sharing this on the off-chance that the CEO of Piaggio reads this book and asks for some marketing help in return for a 1977 vintage PX model.

      Piaggio Vespa scooters cost about €4,000. I could pick up a replica scooter from a brand called LML for just under €3,000. Exactly the same. Same chassis. Same engine. Everything. Except the badge. Even up close, you wouldn’t notice the difference. At 25% cheaper, LML scooters are selling just fine, according to a local scooter dealer. “Honestly, only a desperate, insecure idiot would buy a Vespa these days”, he tells me. I own two.

      I won’t even try to defend why I continue to pay a price premium for a Vespa. I’m too busy defending the fact that I’m in my mid-40s and am still driving a scooter at all. But make no mistake, I am a devoted, loyal customer of the Vespa brand. The words ‘brand loyalty’ cause mass confusion inside the walls of companies. A meeting to discuss loyalty makes for puzzling, unproductive, but potentially quite entertaining meetings. If you’re having a tough week, and need a pick-up, put yourself down for the next cross-departmental loyalty session.

      Many non-marketers assume loyalty is about feelings. Feelings of loyalty. How loyal are our customers? How strongly do they feel about us? An emotional attachment of some sort. And in fairness, there is something in this. Agencies do measure things like ‘attitudinal loyalty’.

      So when we talk about loyalty strategies, do we mean strategies to get people to become more attached to us emotionally?

      Well, not exactly. We might have an emotional attachment. Like me and my gorgeous scooters. But we might not. I’m guessing the evidence will show I’m an outlier for Vespa. Part of a minority. More than a handful, but still a minority. Most Vespa drivers are not that attached to the brand. If they were, they would stop driving those new, automatic bikes and get hold of a proper vintage, PX model instead.

      It appears that most customers of most brands are not that emotionally attached to them. When we talk about loyalty, we’re generally not talking about feelings of loyalty. We mean sales. Purchases. Yep – money. Feelings may well have a role in this, but, when measuring loyalty, we are referring to how much of a brand we buy. So, the starting point for measuring loyalty is not in feelings or attitudes, but in repeat business.

      All is not lost though. Because, while we might not be emotionally attached to most brands that we buy, we are loyal. We’re loyal in the sense that we repeat buy. Yes, customer loyalty is alive and well. There’s buckets of evidence on this.11

      Repeat buying is critical for most brands. We don’t expend much of our brain-processing energy when picking up a product from the shelf, but it is not a random decision either. When we’re buying, we have in our minds a handful of brands that we feel can do the job.

      Fox lesson: We are loyal to brands, even if not emotionally attached to them.

8

I’m breaking up with Tesco

      I don’t have any emotional attachment to Tesco, the retail chain. But I think even Tesco would admit that I have been a pretty loyal customer. It has been getting a good chunk of my family’s weekly food shopping for the past three years. We must be in the place two or three times a week. And we use their online delivery service too.

      Now that I think about it, though, it is entirely plausible that my twin boys do have an emotional attachment to the place. Tesco was one of the first words they learned. Tesco and Apple. Not the fruit – the trillion-dollar brand. They genuinely appreciate all that Sir Jony Ive has done.

      So, we are a very Tesco-loyal household. But this is all going to end. I’m breaking up with Tesco in a few weeks. I’m sure the marketing folks in Tesco headquarters would rather we stay together. Everybody knows that it is far cheaper to keep a customer than to acquire a new one. Right? Well maybe. But hold that thought.

      Advertising is expensive. Surely the better strategy for Tesco and others would be to move its advertising budget into customer experience and loyalty initiatives. Improve the customer experience. Really look after them. Contact them more often. Make them happy. In a nutshell СКАЧАТЬ