People who spread marketing lies are rarely intentionally deceptive. Rather, they’re simply misinformed.
This happens in every industry and discipline. When I self-published books, there were mountains of misinformation explaining what a book must be and how selling one works. But in reality, the way it worked was very different, and many of the assumed truths were no more than outdated myths.
I recently finished Byron Sharp’s book How Brands Grow and encountered a similar experience of unlearning what I thought I knew about marketing and advertising.
In this post, I want to share the major marketing lies he unravels and offer viable alternatives to growing a digital brand in today’s age.
Marketing lie #1: There’s such a thing as a niche brand
Sharp provides an unorthodox description of what niches are and how they work.
- Niches are rarely markets in themselves, but only very small parts of existing markets.
- Because of this, every niche brand still competes with the largest brand in its category.
- A true niche brand contains “an unusually small base of buyers who are unusually loyal.”
My interpretation of Sharp's advice, then, is to stop thinking about your brand as niche, and, instead, to think of your products as such.
For Sharp, a brand needs to be popular or salient to succeed (we’ll explain this in more detail below). You want customers to remember you at key times so that your products become their go-to solutions.
However, to do this, you should focus on providing niche products — incredibly specific solutions that come together under an umbrella of brand recognition. If your entire brand is a single, unevolving product, you’re setting yourself up for failure in the long run.
Marketing lie #2: Focusing on your “true fans” is the best growth strategy
True fans are sometimes called power users or heavy buyers, but they all mean the same thing: people who are highly loyal to the brand and are willing to put their money towards it.
Now, the assumptions are that these people provide the highest ROI for a business, and therefore are worth the investment of time, money, and energy to keep them around. Plus, we believe that since they are such huge fans of what we do, they will become our best mouthpieces for organic marketing.
Sharp’s findings suggest otherwise.
- First, buyers evolve and transition. True fans will become less interested over time, while less interested people will take their place. It's a constant cycle.
- Because of this, "light buyers" are immensely important because they make up a considerable portion of sales AND have the potential to upgrade their relationship with the business.
- Most importantly, new customers are the best advocates.
On this last point, Sharp writes:
“Capacity to spread positive brand messages by word of mouth is also limited by the degree of new information that is available. This is why research shows that new customers tend to tell more people about the brand than people who have been buying it for a long while; for established customers, the brand is no longer news.”
True fans do exist. But for the dominant majority of successful businesses, they are not the primary source of revenue — light customers are. There's an obsession around making sure everyone who encounters your product becomes a super fan of what you do and who you are; but more often than not, this is a waste of resources.
If anything, true fans are a happy byproduct of bringing a steady stream of regular purchasers aboard.
Marketing lie #3: It’s cheaper to keep a customer than it is to gain a new one
Even as a novice marketer who primarily worked on my own projects and products, I encountered this idea everywhere. It’s thrown around in every blog, webinar, book, and podcast as though it was written in stone by the marketing gods.
But the truth is: few companies have enough data to prove this. And for the ones who do their churn or defection rate is typically determined by the market they're in, NOT their individual processes.
“A brand’s defection rate is essentially a function of its market share, and the category it’s in. This defection level doesn’t vary significantly between competing brands.”
In the book How Brands Grow, the author explains that larger brands have an advantage in that they acquire customers more easily and lose them less frequently simply by being the most memorable entity in the category.
Therefore, the best thing a business can do to stop customer loss is increase customer gain.
“Growth is due to extraordinary acquisition.”
- Aside from an astronomical flaw in your product, your churn rates will be similar to that of your competitors.
- Because of this, you will never outgrow them by losing fewer customers than they do.
- The solution is to get better at acquiring new customers so that churned ones have an increasingly diminished impact on your total revenue.
Obviously, growth at all costs is not the answer here. But neither is pretending that growth will happen on its own.
Marketing lie #4: Mass marketing is a waste of money
Marketing evolution has gone hand-in-hand with new types of media.
Radio and television ushered in a whole new era of advertising styles and influencers. When the internet came around, there was a migration of money onto this new and exciting platform. Then, for the past decade or so, the same cycle has occurred on social media. New platforms equal new opportunities, new formats, and new personalities.
As a way to combat this FOMO-chasing, a different theory of growth arose. Maybe we didn’t need to be everywhere and reach everyone if we wanted to grow our business.
Mass marketing became a taboo term, associated with other outdated tactics like direct mail and cold calling. The problem is, just because we said it stopped working doesn’t mean it did.
Sharp argues that all of our new mediums simply altered how mass marketing works and what its goals should be.
- The goal of advertising and marketing is to “create and refresh” memory structures by continuously reaching customers with market-based assets.
- Therefore, mass marketing is successful when it teaches light buyers (see lie #2) that (A) we exist and (B) we are popular.
Sophisticated mass marketing is not about being everywhere all of the time. Rather, it’s about being where it matters in an extremely visual way. Choosing specific channels is a more efficient strategy than spreading one's efforts and budget thinly across several. BUT, the work must be done to dominate that channel.
The goal is salience (as mentioned in lie #1). It's not only that your brand should be recognizable; it should be difficult for customers to even consider alternatives because you come to mind so frequently and are so easy to access or purchase.
Mass marketing helps make this possible.
Marketing lie #5: Customers do research to choose the best option
By and large, we overestimate how much customers know about our brand, our competitors, and even about the category their purchasing.
Sharp writes that consumers often make choices “trivially.” They know “something about the brands they use, and very little about the ones they don’t.” For the most part, they simply purchase based on the information (i.e., advertising) they’ve been given and nothing more.
Most of the work we do to substantially differentiate ourselves from our competitors is lost on buyers. Except that which makes us more memorable. Being noticed is fundamentally more important than being different.
- Customers spend very little time and energy understanding their options before they buy.
- Therefore, we should work to make our messaging, visuals, and presence clear, recognizable, and easy to digest.
I didn’t understand the place slogans and colors really played in a brand’s presence before encountering this idea. But since customers go on such little information, we have to give them small things to hold onto. A color they recognize and a slogan they remember might seem trivial, but often that’s all they’re using when narrowing down their options.
If your brand isn't remembered when it counts, then it might as well not exist.
All this isn’t to say that customers are dumb or lazy. They’re simply over-stimulated. Each day thousands of advertisements push their way into their view, not to mention the hundreds of other items they actually need to give attention to, such as work and family responsibilities.
Most don't have the time to adequately compare the intricacies of one product to another. So, we should spend fewer resources pretending that they do.
Marketing lie #6: Discounts are a great growth tactic
Price promotions and discounts are assumed to be effective because everyone does them. There are even entire holidays built around them (e.g., Black Friday, Cyber Monday). And yet, the evidence is clear: they’re terrible for long-term profitability.
- First, discounts do not give new customers a reason to buy. They offer current customers a reason to buy again, sooner.
“Research found that almost everyone who bought a brand during a price promotion had bought the brand previously.”
- Second, they teach consumers to devalue your product so that they only buy it when it goes on sale. They offer short-term wins for long-term losses.
- Third, price is a psychological feature that effective brands use to their advantage: "brand leaders are almost never the cheapest."
Is it ever beneficial to offer a discount then? If you can build a promotion around a singular event (so that customers don't come to expect it), keep the discount to a minimum (no more than 10-20% off), and can convert a significant amount of customers (20-40% more than usual) — than yes, it could be a smart move for you.
But do you see how many items have to come together in order for it to work? Most promotions are run haphazardly, as a way to keep up with the competition, or worse, because it’s a holiday.
Price promotions should be a rare marketing weapon, used only within a larger strategy, and never as means of growth.
Final growth tips
Byron Sharp closes his book with a list of marketing rules that will help any brand in any market push its way towards growth. Some are repetitive or difficult to understand without the full context of his academic research.
For simplicity’s sake, I will provide my own summary here.
- Be recognizable. Brand assets like logos, colors, slogans, and ads are not a waste of time if you understand how they fit into a larger strategy.
- Get noticed. People must know you who are and what you do before they can ever purchase you. Also, they don’t need to know everything (or even a lot), just the basics.
- Make your product easy to buy. For physical products, this means being in as many stores as possible. For digital products, this means making the process and language super simple (like 1-click options).
- Refresh people’s memories with mass marketing. People purchase what they remember.
- Use novelty to your advantage. New customers make the best ambassadors. New features, new platforms, new success stories — all of these are opportunities waiting to be leveraged.
Some marketing lies are harmless, while others can be a death sentence to your business. If you haven’t already, I recommend picking up a copy of How Brands Grow. The book is a wealth of information on how to think differently about the discipline of marketing.
And if you’d like more insights like these on digital marketing and content strategy, subscribe using the box below.