Byron Sharp shows us How Brands Grow in his myth-busting book of the same name. Sharp introduces us to “evidence-based marketing” and identifies a number of law-like reoccurring patterns that govern how brands grow. These laws span frequency of purchase, loyalty, duplication, attitudes and more, but perhaps the most important is one of the simplest: growth comes by gaining more buyers.
In How Brands Grow Part 2, Sharp re-states the laws of growth and introduces us to the concepts of mental and physical availability, distinctive assets and category entry points. Whilst Sharp’s interpretation of how marketers should respond to these laws often clashes with conventional marketing wisdom, more and more brands are adopting the ideas contained in the books and are focusing on penetration and gaining buyers.
How Brands Grow Part 3 may or may not be in the pipeline, but maybe it’s time for a spin-off? Is it time to answer where brands grow?
Let me explain. If growth – be it for a category, segment, brand or channel - is mainly about getting more buyers than before, then we can effectively isolate the purchases that drive growth. We can call these purchases First Purchases – these are the occasions when a shopper changes behaviour and buys something for the first time. We can think of First Purchases as when brands grow.
If we isolate First Purchases from all other purchases – we can call the other purchases Second Purchases – then we can begin to understand the characteristics and drivers of a First Purchase for a brand, segment or category, and where and how we can most effectively influence these purchases.
First Purchases are very much in the minority but hunting for them is not quite the needle in a haystack search you might imagine. Sharp shows that most category and brand buyers are light buyers, and our research shows that it is not unusual for First Purchases to account for 10%-20% of a brand or category segments’ purchases. What our research also shows is that First Purchases are very different to other purchases in terms of the behaviours, motivations and needs of shoppers.
One of the most startling differences concerns where purchase decisions are made: we find that First Purchase decisions are nearly always made in store, whereas Second Purchases are often planned in advance. In addition, for First Purchases we find in many instances that the product that is bought is discovered by the shopper at shelf – i.e. the product was unknown to the shopper before he or she entered the store!
First Purchases happen for a number of reasons both ‘proactive’ and ‘reactive’. On occasions First Purchases mark a proactive decision by a shopper to experiment and try something new. This may be a new product or a category innovation with a quality benefit or a price advantage, but it can also be an established product that the shopper hasn’t tried, or even noticed, before. It’s not unusual for a shopper to think that their First Purchase is a new product when in fact it has been on shelf for years. Just like beauty, novelty would appear to be in the eye of the beholder.
On other occasions shoppers are reacting to adversity when they make a First Purchase; their preferred brand or product may be unavailable and they need to search for a substitution, or they may be looking for an alternative to a previous choice that has proven unsatisfactory.
Whatever the trigger for the First Purchase the decision to buy is being made in store, as is the discovery of the product, more often than not. We rarely see a shopper going to store having already decided to make a First Purchase of a particular brand or category.
The answer to How Brands Grow was remarkably straightforward, yet with profound implications. The answer to Where Brands Grow is equally straightforward, and when appreciated the implications may be just as profound.
Barry Lemmon
Founder, First Purchase Research