Forget short and long-term, think about the buyer cycle instead

By Nigel Hollis

Take the chart from my article about how purchase decisions are made, wrap it into a circle, and you get the buyer cycle shown above. Profitable brand growth is the result of applying effective marketing pressure at each point of the buyer cycle. Brand building advertising is important to get people into the cycle and keep them in it, but it does not guarantee profitable growth on its own.

Last week, when I evinced some concern about Les Binet’s The Short of It video, Steve Keller egged me on to voice my thoughts. Before I do so, let me state for the record that I have huge respect for Les Binet and the work he has done with the IPA, and his reasoning in The Short of It is not only familiar, but it is also something I might say (if not as succinctly). So, what is it that is nagging me?

In the video, Les clearly states that sales activation and brand building work in different ways, and that they must work together for marketing to be effective, but somehow his exposition leaves me feeling that brand-building is far more important than sales activation. He states,

“In the short-term, most of the sales you see are driven by activation but in the long-term most of the profit you gain comes from brand building.”

Les asserts that brand building drives profit by building long-term memories that change long-term behavior. But would you get that behavior change if it were not for sales activation? And does the product or service not deserve a mention somewhere? I think the fundamental issue is that no matter how important brand building advertising is – and it is important for all the reasons Les states – it is just one element of an effective marketing mix.

I believe that marketers would be far better served to think in terms of the buyer cycle, rather than agonizing over short and long-term effects. When we say that brand building advertising has its effect over the long-term, are we really saying that it does not have any short-term effect? Might brand building advertising not remind an existing buyer to buy again this week? When we say that sales activation is short-term, are we really saying that it cannot build profit in the long-term? Might successful activation not open the opportunity for new buyers to buy again in future?

The important thing about the buyer cycle is that it represents how people interact with a brand over time. The same person who casually absorbs impressions of a brand later responds to sales activation, and, if that activation is successful in getting them to choose the brand, then that person judges that the experience against their expectations. A good experience should then lead them to be more likely to choose the brand again (provided their needs have not changed). The greater the volume of people entering the cycle, the more likely the brand is to grow.

Of course, there is always the risk that people will “spin out” at any one point on the cycle, so the job of marketing is not only to bring new people in, but also to minimize losses, thus ensuring that newly acquired customers are growing the customer base, not simply replacing lost customers. That way, penetration grows over time and the chances that someone will choose the brand again improves as the brand grows. And while we all know that few people are behaviorally loyal to any brand, encouraging an existing customer to choose again is likely to be less costly than acquiring a new one. Perhaps the biggest contribution that brand building advertising makes to profit growth is when it encourages people not to change their behavior and to stick with a brand they have chosen before.

Brand building and sales activation should be considered complementary not conflicting when it comes to building long-term profit. And they better be deployed against a good product, otherwise, as David Ogilvy is reputed to have said, good advertising is the fastest way to kill a bad product. High expectations combined with a lousy experience is not a recipe for profitable, long-term growth. Conversely, nothing encourages growth like creating a positive experience that people want to repeat. Yes, fame is good for growth, and nothing creates fame like meeting people’s needs in a radically different and better way.

All types of marketing – including customer experience – are trying to influence the same people, it is just that the task differs at different points in the buying process, in part depending on the individual’s prior experience. Increasing the weight and/or effectiveness of advertising should boost sales among those ready to buy now and carry forward into the future for those not yet ready to buy. The payoff from sales activation will be immediate because it targets people ready to buy the category, but the response to it will be governed in part by how well that activity leverages brand predisposition. Purchase then sets up the opportunity for experience and further exposure to continue building their long-term influence, encouraging people to choose again.

To boil my argument down to Les Binet pithiness,

1. Brand building advertising without effective sales activation will underperform because long-term brand memories need to be activated close to the point of purchase. Few brands are so salient that everyone thinks of them spontaneously; most people need an additional nudge or two.
2.  Sales activation without effective brand building will underperform because people are not primed to respond positively to the brand during search and shopping. Search and e-commerce may have made it easy to discover new purchase options, but people still place more trust in familiar brands.
3. Neither brand building advertising nor sales activation will lead to long-term, profitable growth unless the brand experience delivers on people’s expectations. And brand advertising does not just influence new buyers, it should also encourage existing users to choose the same brand again when the need arises.

Look, I get it. The purpose of The Short of It is to redress the balance between brand building advertising and sales activation. In my opinion, far too much money is being wasted on mindless sales activation, most of which would be much more effective if only people had been primed to choose the brand before they started searching or shopping. So, no argument there. None.

However, if profitable, long-term brand growth is your goal, you might be better off thinking about how best to influence people across the buyer cycle, not conflate brand building with long-term and sales activation with short-term. Think about a person’s changing relationship with both your product category and brand over time, not just the flow of sales over time, and adjust your marketing efforts accordingly.

OK, that is my 5-minute read, building on a 4-minute video. What do you think? Please share your thoughts.

About Author

Nigel Hollis – Analyst, author and “energetic speaker” regarding brands, media and marketing communications. Available for consulting, writing and speaking engagements.