How Brands Grow - Part 2, by Jenni Romaniuk and Byron Sharp

Book review by Tim Downing, Senior Insight Consultant

Does your organisation practice Sharp thinking or blunt marketing?

The IMA is currently researching the ways in which Insight teams generate new insights, and in particular how they can best 'nail the issue' at the start of new research and analysis projects. We believe that one aspect of best practice, is to develop a series of mental constructs, models of how consumers behave in the category in which your organisation operates, and that has led us to look at the lastest book co-authored by Byron Sharp.

Sharp's 2010 book - How Brands Grow - caused a stir in marketing circles when it was first published, and we believe that this sequel is also a very important publication for anyone involved in marketing strategy. It's also a lively and stimulating read.

How Brands Grow - Part 2

For many years the Ehrenberg-Bass Institute for Marketing Science based at the University of South Australia has shared evidence-based stimulus on brand performance dynamics with the wider world. However, the profile of the institute's work was dramatically raised in 2010 when Byron Sharp, the institute’s director, published ‘How Brands Grow – What Marketers Don’t Know’.

The original book challenged some firmly held convictions. Strategic marketing ‘sacred cows’ such as the imperative of brand differentiation, and the belief that customer retention is cheaper than acquisition, were put to the sword by Sharp’s rigorous analysis of multiple categories across multiple markets.

There have, of course, been opposing views on certain key ‘laws’ (Dunnhumby, as an example, is still challenging some of Sharp’s conclusions), but Sharp’s publication provoked long overdue debate. In the following years I remember certain marketing agencies starting a pitch by asking whether we (the client) had already been ‘Byron Sharped?'

And now Sharp and his team have resurfaced with fresh data and some provocative lessons for effective brand management. His latest book, ‘How Brands Grow - Part 2’, is an easy read and packed full of punchy, unequivocal advice. 

Building on the established principle of double jeopardy, Sharp has consolidated some key rules for achieving growth, including the central principle that brand growth comes through building user penetration, and that ‘loyalty’ only ever follows penetration.

To a large extent, Sharp’s sequel is designed to consolidate key principles and to close gaps in the original analysis. Emerging markets, services, e-commerce operators and luxury markets get close attention, but there is also fresh evidence from mainstream categories and markets.

Why should Insight managers, market researchers, and customer analysts read it?

We’ve spent a lot of time at the IMA considering the key messages from the book and we are keen to explore two particular angles with our member organisations. 

  1. The implications of Sharp's work for organisations
    • How aware of the key messages is your organisation?
    • How relevant are those messages to your category(s)? NB. Sharp would argue strongly that very few, if any, categories defy the basic ‘rules’ described
    • What impact, if any, has the evidence had on strategic marketing decisions within your organisation (e.g. breadth of activity targeting, focus on penetration vs. loyalty)
  2. The role of Insight teams in challenging marketing assumptions within their organisations
    • Our belief is that a high performing Insight team will use Sharp’s work to provoke important debate within its organisation. There is a great opportunity here to demonstrate your team’s thought leadership credentials by lobbying senior leaders on the strategic messages and their implications.
    • Some of the implications may be viewed suspiciously – or ignored completely – by colleagues whose role demands a very single-minded brand or activity focus. By contrast, Insight teams are very well placed to take a broader, objective, and more trusted position within their organisation.   

This book may not introduce a lot of fundamentally new thinking, but it certainly re-enforces some of the ground-breaking evidence and lessons from Sharp’s first publication. Our view is that this is essential reading for anyone involved in setting or influencing marketing strategy.

How can I learn more?

Byron Sharp’s work and its implications for Insight teams will be one of the topics covered at the next IMA Insight Forum on 14th March 2018 in London. If your organisation is already a member of the Insight Forum, then your Insight leader will have been invited to this all day event.

If your organisation is not yet a member, but you would be interested in joining us, or if you would like to receive a copy of the Insight Generation report when it is published in a few months, then please contact us to register your interest.

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