A lot of what we take for granted in the marketing of online commerce is based on assumptions we have. We see, however, often that the assumptions and the beases we have in marketing are wrong. It is therefore important that actions we do not only because “sensor” it is correct, but also using documented measures from marketing literature and data we have collected.
To give a little professional re-fill, we want to remind ourselves of seven concrete principles that are supported by a data base and insight from leading marketing literature. The principles you get in this article are based on literature from:
- How Brands Grow by Byron Sharp
- Alchemy of Rory Sutherland
- Positioning of Al Ries and Jack Trout
- Hooked by Nir Eyal
- Think Again of Adam Grant
1. Merks grow by going in the width - not just depth
Based on How Brands Grow by Byron Sharp
Byron Sharp demonstrates through extensive purchasing data that growth occurs by increasing customer base, not just by increasing the purchase frequency of existing customers. Large brands do not necessarily have more loyal customers, but more customers. In fact, light buyers often account for over half of the sales. This is contrary to the idea that one should "focus on the most profitable customers".
He refers to the Double Jeopardy Act, which says that smaller brands have both fewer buyers and lower loyalty and that this is normal, not necessarily a result of bad branding strategy. Trying to “repair” this with loyalty programs often gives little effect compared to reaching more.
What this means to you
In online commerce, you should not just focus on repurchase and mailing lists. Think rather of it as a broad brand: Building marketing that reaches new and random customers. Bets on wide visibility and continuous presence, not just campaigns directed at existing buyers.
2. Accessibility enables differentiation
Based on How Brands Grow by Byron Sharp
Sharp also asks questions about the idea that customers choose on the basis of unique value suggestions (free shipping, sustainable choice, etc.). His research shows that brands within the same category are often very similar in the eyes of the customer, and that most purchases are done routinely, not after careful consideration.
Therefore marketing must primarily be two things:
- Mental availability: about customers remembering you in relevant situations
- Physical availability: About being easy to get hold of when customers are ready to buy.
Sharp stresses that mental accessibility is built through known and consistent tag elements: colours, fonts, logos, sounds and visual expressions. When used systematically over time, it increases memory and increases the chance that the customer will choose you rather than the competitors.
What this means to you
Make it easy to shop with you. The web site must load quickly, checkout must be non-adhesion, you must be visible in all relevant channels, etc. Use your brand items consistently. Everything from ads and newsletters to package design and receipt emails. That's the sum of these little things that make people choose you.
Three. People buy with feelings and imitate others
Based on Alchemy by Rory Sutherland
Rory Sutherland challenges the idea that consumers are rational and logical. He shows that many effective marketing practices cannot be explained by classical economy or reason. What works is often what is “seen” correctly or socially accepted.
One example he brings forward is how Red Bull succeeds globally, despite the fact that through consumer tests people said that the very energy drink “power terrible”. What could be the reason? It seemed exclusive, different and came in a small and expensive box. This signaled effect. The product’s “notice” itself became a proof of quality.
He also refers to psychological triggers such as social evidence, reciprocity and aesthetic experience. A better paper choice in a collection letter increased the donations to a voluntary organisation, although it did not have a objective purpose to do so.
What this means to you
Tests and experiments with small and psychological grips in communication. Maybe a strange product name works better than a descriptive. Maybe you should write in "only 17 remaining" instead of "in stock". Maybe sales of a product increase if it costs more. You don't always have to understand why it works, as long as it just works (but, of course, it's good to have documentation where possible).
4. Do not underestimate ideas that don't make sense
Based on Alchemy by Rory Sutherland
Sutherlands perhaps the most important message in Alchemy is this:
- “We have become too dependent on logic and rationality. In the pursuit of measurable effects, we often ignore measures that cannot be justified in advance but have a significant practical impact.”
He draws out a call center that doubled the sales rate by adding four insignificant words to the script: ”How are you today?“ It did not give any logical reason for increased sales, but it did make the experience human and related.
Another example: A online store increased the sales of a product by increasing the price. Why? Higher price signaled higher value.
What this means to you
Provide space for experimentation. Set of parts of the market budget to test ideas that do not follow common models. It can be in advertising texts, product presentations or design choices. Often, the biggest gains are in what is not analytically obvious.
5. That's not what you say, but how people perceive you.
Based on Positioning of Al Ries and Jack Trout
Ries and Trout introduced the idea that brands live in the heads of people. You don't put yourself in your position by explaining what you're doing. You get the position based on what place you get in people's mental maps of alternatives.
They use the car industry as an example: When people think “safe car”, they think Volvo. Not because Volvo is necessarily the safest, but because they have consistently owned the message.
And if you can't be first, you'll have to find a blank. News became known for “We’re No. 2. We must harden." They did not get used to pride, but they won with self-esteem and commitment.
What this means to you
Ask yourself what customers actually think of you. Not what you want them to think. Find a word or idea you want to own and make sure that everything you do builds that position. It takes priority, because you can't own everything.
6. Rewards with variation - not predictable
Based on Hooked by Nir Eyal
The Eye is referring to how people are driven by the expectation of reward, not necessarily the reward itself. When a reward is variable, it creates a form of ‘dopamine-stimulated curiosity’ that makes the user want more. This is why we check out e-mails, social media and online stores so often. We don't know what's waiting, and that's keeping interest up.
This principle was first studied by B.F. Railing in the 1950s, and continues: Variable rewards (either social, information-driven or material) create habits far more effective than static and predictable rewards.
What this means to you
Use communication and reward variations. Examples include: Surprises in the shopping basket, exclusive offers that come unexpectedly, or recommendations that feel “strategy” and new each time. Instead of customers knowing exactly what they get, give them the urge to see what's new this time.
Seven. Be Comfortable With Mistakes
Based on Think Again by Adam Grant
Grant stresses that some of the world's best decision-makers and leaders are not necessarily the most confident, but those who are most comfortable with being wrong. The best "super-prompts" (people who track the future more precisely than experts) were not just right because they were smarter. They updated their opinions more often and were willing to admit wrongly faster than others.
He tells of how Nobel Prize winner Daniel Kahneman actually smiled when he was disproved: ”That’s wonderful, I was wrong.“ It was a sign of learning and progress.
What this means to you
In marketing, you should actively search for gaps in your own strategies. Make It a Use of Asking ”What must happen to me to be wrong?“ before you go on with new ideas. This creates a more adaptive team and reduces the risk of running blindly in the wrong direction.