Black Friday, indeed.

Of the four Ps, pricing is usually the single most powerful marketing lever to make a company profitable. You could stop all innovation on product and distribution and cut your comms to barely a whisper…but increase pricing by 10-15% and there’s a substantial effect on margin and profit. 

While this statement is 100% true, it also contains at least three different traps.

1. Price increases are very difficult for weak brands. If potential customers don’t create value for your brand in their heads, then they won’t see why they should pay a premium.

2. Stopping innovation on product and distribution and cutting comms kills the very thing that creates brand equity in the first place.

3. Many clever people confuse revenue with profit. Or customer numbers with customer value. Or instances of pricing complaints with price elasticity. 

Increasing your pricing is a tall order for most businesses. It requires a strength of brand that most businesses don’t yet have. But there is another angle to help with margin. Instead of increasing pricing, stop decreasing your pricing. 

The effort and skill you’ve gone through to take someone through your funnel; getting them aware, positively associating, and arriving at your door, only to drop your prices at the first sign of interest is a mistake. It creates easy volume and revenue but eats your bottom line from the bottom up. It trains your customers to make cost-based choices so the next time they evaluate you, you’ll likely lose (while creating a race to the bottom amongst everyone in the category). It makes people wait for sales and cannibalise from periods when they would have paid full price. In subscription businesses, it creates a stand-out cohort of low-value subscribers who drop off and don’t come back. 

I’m certainly not the first to say such a numbingly repetitive piece of advice…but this week of all weeks it seems like it bears repeating. Black Friday sales are the mortal enemy of decent brand management. The astonishing amount of money left on the table in search of exceeding last year’s revenue figure (instead of an end of year profit figure) is tragic. 

There are very simple ways to reveal the upper and lower bounds of people’s expectations on your pricing. Once you know what they are, stick with the upper bounds and occasionally and spontaneously test and measure the profitability of the lower bounds (which are usually much higher than the sale prices you’re currently offering). If you do this, you’ll make more money, have a stronger brand, have better customers and get yourself on track to actually raise prices with little complaint in the future.

To celebrate Black Friday, I’ll be making absolutely no changes to my day rate for consulting. 

Now if you’ll excuse me, I’m off to buy things I would have purchased anyway for 80% off.

Who’s selling to whom?

As experts in market orientation, communication and persuasion, it’s a great irony that marketers have been played over the last 10 years, on an industrial scale.

We have weekly meetings with Google and fortnightly catch-ups with Meta. Calls with Salesforce, consultants for GA4, daily stand-ups with our social agency, advisors for Adwords, experts in video optimisation. We’re seeking guidance on search, landing page optimisation and a parade of SaaS solutions that give us better workflows, publishing and file sharing. Just about anything to distract us from spending time with customers and focusing on big objectives.

So who’s the marketer and who’s the consumer?

Of course, B2B is a broad sector of extremely useful stuff. But don’t forget there’s another marketer over in that other B. And that marketer’s job is to elevate their solution so that optimising its output is on par with customer behaviour.

So our high-level objectives start looking like smaller-order KPIs. Annual goals are aligned around engagement, clicks, video views, dwell time, open rates, channel-specific ROI, speed of X, volume of Y.

Somehow we got tricked into playing their game instead of ours. And when that happens, everything from our org structure, our focus, and our capacity to think beyond our job gets diminished.

Forces of attraction

An uncomfortable truth for many marketers is the realisation that demand generation is a bit of a myth. 

The role of marketing, brands and campaigns pales in comparison to things like moving house, having a baby, taking up a new hobby, going on holiday, aligning with a cause, getting a new job, the death of a loved one, or any other major life event. These are the moments that truly generate demand. The role that marketing plays is largely to be top of mind, available and frictionless once these events happen.

Some paraphrased quotes from three recent customer interviews:

“I got fed up with Twitter and decided to start using Duolingo to be more productive with my time”.

“My boyfriend and I broke up so I joined Bumble so that he’d see I was on there”.

“My best friend moved to Australia so I got her a coffee subscription so that she’d think of me every fortnight when it gets delivered”.

These forces of attraction are crucial. If you don’t know them, start asking. They not only give us context and empathy, they serve us better targeting, media selection, positioning and creative on a silver platter. Our job isn’t really to generate demand but to capitalise on demand that’s already there. Surf the wave, don’t try to generate a wave yourself.

It pays to be humble in this profession. The market rewards listeners, not talkers.

What’s your favourite brand?

What’s your favourite brand?
“Apple”
“Nike”
“Coca-Cola”

…Yawn.

If you ask someone what their favourite brand is, you’ll very likely get responses like the ones above. While these are undoubtedly great brands, they’re also sensationally boring answers. They’re also more likely to be answers to another question that has less to do with brand and more to do with creative and budgets.

So here are some more interesting answers…

Chaquita bananas. Because there’s no better demonstration of what a brand is, than adding value to the commodity version of something. 

Fender guitars. A very good product, but certainly not the best. Yet it’s insatiably desired by many guitarists for its ability to signal.

Maille dijon mustard. A masterclass in distinctive asset consistency. You probably have some in your fridge or cupboard and when you bought it, you likely reached for it with zero brain processing power. A pure system 1 purchase.

Guinness, Slack, The New York Yankees, Bodyform, HBO, Marmite…these are more interesting answers that say something about understanding segmentation, audiences, positioning, architecture and codes.

Let’s all commit to stop saying “Apple / Nike / Coca-Cola” when answering this fun question (and not accepting them as answers anymore). 

Consideration is a sh*t metric, but you should still ask the question. Here’s why…

Consideration feels like it should be a useful brand metric. After all, it seems active as opposed to awareness which is more passive. It indicates demand and is therefore closer to a commercial outcome, right?

But one of the problems with consideration is that we forget that it’s an intent and confuse it with a behaviour.

Consideration is a perception, no different than other perception metrics. It’s an opinion, a projection, and makes a flimsy forecast tool (which many people make the mistake of doing). If you’re looking for an early indicator of demand, go with something mid-funnel like search or visits which will tell you what you think consideration is telling you, but is based on behavioural data.

Consideration is also almost always the byproduct of two other drivers. The first is awareness. Awareness is a fact. People have either heard of you or they haven’t. I’m aware of The Trainline. I’m aware of Tilda Swinton. I’m aware of tres leches cake. When looking at correlations between awareness and consideration, I’ve always observed the relationship to be very high. Awareness brings with it some bonus legitimacy that puts you into a consideration set regardless of any further logic.

The second driver is perception of key attributes, which also has a very high correlation with consideration. So instead of trying to shift consideration - which is a wooly and imprecise objective - stay focused on awareness and perceptions, and consideration will follow.

But that’s not to say consideration isn’t useful. It can be extremely helpful when used as a relative measurement, not an absolute.

For example, you could look at consideration of your brand relative to demand of your category. Let’s say consideration for The Trainline is growing 10% year-on-year but demand for train tickets in general remains flat over the same period. This gives you a good indicator of brand health, especially if you’re in a category that’s growing or declining and your brand has a built-in tail or headwinds.

Or you could look at consideration as a qualifier of a target audience. Let’s say you have one audience (commuters) who represent 30% of the population with 30% consideration, and another audience (weekend getaway-ers) who represent 20% of the population with 50% consideration, that latter audience is a better target.

Or you could look at consideration correlated with key perceptions. Let's say you're looking at value, flexibility and convenience. Value and flexibility both have low to moderate correlations with consideration, but there’s a much higher correlation between convenience and consideration. That would tell me where to focus my energy.

Bottom line, think of consideration as measure that’s relative to something else and it will be helpful. But ditch it as an absolute evaluator.

Simplifying Share of Voice

As someone who’s worked his entire career in the post-internet era, I’ve always been slightly confused by the idea of Share of Voice.

Who exactly is getting a report telling them that their $20MM annual media investment represents exactly 36.7% SOV? Is it coming from one of their three media agencies? Is “money spent” the right measure of voice? Are we just pretending that things like PR and social don’t exist?

Here’s a better way to figure out what your real share of voice is: ask people. An unprompted, broad ad recall question in a brand tracker will do the trick nicely.

So instead of looking at the input (i.e. investment) we look at the output (i.e. impact). What percentage of your target audience remembers seeing a message from you lately? Call it “Perceived Share of Voice”. 

Yes, it’s prone to mis-attribution and respondent error. But that’s perfectly okay. Such false positives might actually be insightful. And what’s the point of media if not to ultimately lead to some sense of brand recall. 

Unlike traditional SOV, it prevents you from chasing a bar being set too high by a market leader with deep pockets. It also reflects the multiplying effect of good creative x good media rather than assuming media spend is the only thing that lands a voice.

Have a look at your PSOV and compare it with the same competitive set you use for market share. What do you want your PSOV to be next year? What media budget might you need to achieve that? All sensible questions to answer at the very beginning of an annual planning process.

Should a barber be running performance ads?

Perhaps the most tiresome debate in marketing is the apparent opposition of brand and performance marketing. Of course the two are complementary and the debate should have moved on with the empirical and well-articulated work of Binet and Field in The Long and the Short of It. But still we return to the conversation again and again…

So if you find yourself needing to be convinced (or need to convince others), let’s try coming at it from a different angle: in-market vs. out-of-market audiences.

Whatever your category, from haircuts to milk, B2B SaaS to digital news subscriptions, there will always be an audience who are ready to buy now and another audience who don’t need you today, but will need you in the future. It’s the basis of the funnel. A fundamental truth that hopefully everyone can agree on.

Here’s a simple formula for understanding the mix of your in-market vs. out-of-market audience. Let’s take men’s haircutting as an example. You’ve looked at the data and see that men who regularly get their hair cut, go to the barber on average every 7 weeks.

And your research reveals that there’s a 2-week period when a man looks at his hair and thinks "I need a haircut". So for every 7-week cycle, there’s a 2-week window where that guy is in-market. For the other 5 weeks, no amount of short term marketing is going to make a lick of difference.

2 weeks / 7 weeks = 28.6%

Therefore, a broad audience of “men who regularly go to the barber” are in-market roughly 30% of the time and out-of-market about 70% of the time. Not necessarily a hard analog to a brand/performance budget split, but you arrive at a similar data-driven and logical conclusion to what The Long and the Short of It might suggest. And it reinforces why you’d need different objectives. Build salience for the 70%. Convert the 30%. Don’t get yourself in a twist by doing anything else.

Now think of your category. Do you know the equivalent of the 7-week haircut cycle / the 2-week window? It applies to everyone, and a good mix of first-party data and research will let you discover it.

Your competitors probably aren’t who you think they are.

A few years ago, London (and just about every other major city) became infested with on-demand bikes. They were intriguing yet irritating. And it seemed to happen quickly, where pavements were suddenly cluttered with dozens of different bike brands vying to be noticed with increasingly garish colours.

In the midst of the melee, Uber entered with a massive fleet of bikes that were nice to look at, integrated into their existing app and priced somewhere north of a trip on the tube, but south of a taxi fare. It seemed like an unusual move for a brand competing in an increasingly competitive taxi category, but Uber (who are both a brilliant brand and a terrible business) were clever. Their customers weren’t trying to take a taxi…they’re trying to get home. A perfect application of Theodore Levitt’s quote, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole”.

This simple insight is the basis for Jobs To Be Done, a framework that uses customer interviews to tease out the “job” someone is trying to do, why they “hired” your brand to get the job done and who else they considered along the way. In other words, a much more accurate picture of your true competition. Brands can become over-fixated on their competitive set without acknowledging that true competitors are often found in adjacent categories, who also get the job done.

Next time you’re looking at your competitive set, ask yourself if it’s time to re-word the question. Try asking your customers your version of “how would you consider getting home?” and see what comes back.

Do you want to be number one? Or do you want to be profitable?

Would you rather be a Tesco or a Waitrose? A Visa or an Amex? A Netflix or a Mubi?

Most brands want to be premium. And they also want to be in first place. Rarely is there a moment of reflection to understand that these are often two different positions. There are tradeoffs needed for each.

Instead of sacrificing the very thing that makes customers choose you, consider the profitability, distinction and sustainability of your position in the market. There's a sweet spot for every brand and it's not necessarily the first place position.

An alternative to the sacrilege of not wanting to be number one: aim to maximise the perceived value of your brand vs. its generic commodity counterpart. Double down on what makes you special (and go ahead and charge a premium for it). Profitability is better than chasing after scale.

Recall vs. recognition

Which of these would you prioritise?

Services or digital brands may want to invest more in building recall, so that their name is the first brand that pops into customers' heads in a purchase situation.

Grocery or FMCG brands may invest more in recognition, so their distinctive assets are immediately noticed in-store before a competitor's.

You might be spending too much time building recognition when you really need to be investing in recall (or vice versa). These are two different paths to two different destinations.

Happily, there are ways to empirically know which route is most effective for you to build brand salience. Once you know, it may dramatically alter the way you structure your brand marketing efforts in the year ahead...

“Strategy is just empty academic thinking. Tactics are what drive results, right?”

Some people think the statement above is true. If you’re one of them, congratulations on having infinite resource, time and budget.

For the rest of us, consider the tactical effort of your team as a finite resource, and the opportunity cost of executing against a plan with no strategy behind it.

Imagine a team working hard over the course of a week. Maybe the audience, positioning and messaging, timing, pricing, budget investment and channel mix are producing a meaningful result about 25% of the time.

That means every week that goes by, you’re losing 75% of the value of your team. Not only are the tactics barely working: they’re a liability.

There’s a good reason why the brainstorm and “fail fast” approach never worked for Wile E. Coyote. Marketing teams need a brand strategy in order for their activities to make any real impact.