The Rouser Manifesto 2019
Rather than featuring a book in this post, I have selected a paper written by the team at the Swedish marketing firm Rouser. The Rouser Manifesto takes a big-picture perspective on marketing effectiveness, calling out the problematic trend of focusing solely on short-term return on marketing investment (ROMI) while eroding brand equity.
“Marketing effectiveness is down, short-termism is up and marketers fail their core task – to increase growth, profits, and sales for their brands or clients.”
The authors observe a “need for the discipline of marketing to understand the broader business context… Strategy… needs to be approached holistically, not in a vacuum. Its true strength is as much influenced by the interplays between the different levels of strategy within an organization and departments.”
The strategic process involves:
- “Research, analysis and, potentially, segmentation of the market in order to identify market attitudes, behaviours and the most basic meaningful differences between prospective buyers.
- Definition of brand positioning and distinctive assets to strengthen in the minds of prospective buyers.
- Based on financial factors, definition of limits to category reach [thus whom to target, whom to ignore].
- Identification of specific and actionable objectives, the potential value of which should be clearly established.
- Objective selection of tactics that most effectively and efficiently achieve the set objectives.
- Analysis and evaluation of performance.”
“The core of strategy, as professor Michael Porter once said, is deciding what not to do.”
“Phil Barden, expert in the field of consumer science, argues in Decoded that the ‘pain of price’ activates the same regions of the brain that are associated with physical pain… The (net value = reward – pain) model proposed by Barden is essential to understanding how consumers interpret price, which in turn can have a dramatic effect on a brand’s positioning, packaging, retail, overall customer experience and so forth.”
The authors observe two common tactical errors: “(1) underuse of multiple-media approaches at the cost of potential synergy effects and effectiveness, and (2) overinvestment in short-term activation at the expense of brand-building efforts to the detriment of the brand’s profitability.”
“Brands should identify the media that will best help them reach their objectives. They may well be digital, but they could also be traditional. More often than not though, they will be both… Ample data is available to show that multi-channel campaigns are more effective than single-channel ones.”
“Brands need to both create memories and activate them, or, to put it differently, both water the tree and pick the fruit. The optimum balance between the two, according to Les Binet and Peter Fields’ seminal The Long and the Short of It study, is around 60 % on brand and 40 % on activation. That’s 60 % long-term and 40 % short-term.”
“Long-term strategies always provide short-term results, short-term tactics practically never have long-term benefits. In fact, due to their nature, they tend to erode brand equity.”
“ROMI-focused activities often target consumers with established affiliations to the brand and imminent purchase intentions at the cost of brand growth, long-term base sales, and margins. Long-term activities, inversely, invest in attracting future customers at a cost to short-term ROMI. Consequently, ROMI often correlates negatively with penetration, which is key to market share gains.”
The authors explain how brands work on 3 dimensions:
- “On a psychological level, a brand is the sum total of interactions customers have with a product and service…
- On a perceptual level, brands are a collection of stimuli (distinctive assets – icons, colours, jingles, etc.) that are employed to make products easier to notice, understand and buy.
- On an risk-reduction level, a brand assists consumers in making decisions under conditions of uncertainty by ensuring certain characteristics of a product.”
“As professor Byron Sharp established in How Brands Grow, brands compete on mental and physical availability. Mental availability refers to the ease with which a consumer notices and/or remembers a brand in a purchase situation. Physical availability is about making the brand easy to find and buy. Without it, efforts to create mental availability will be ineffective, if not completely wasted.”
A brand needs to be clearly distinctive from its competitors. “Consequently, one should focus on qualities that distinguish the brand in the form of ‘distinctive elements’ that help consumers notice, recall, and recognize it in advertising and buying situations (i.e. mental availability).”
“Removing or changing important brand-activating elements carries obvious risks, as famous redesign failures illustrate.” When Tropicana orange juice redesigned its packaging “it lost its distinctive assets, something that cost the company an estimated $30 million in lost sales in just two months.”
“Building brands will, as Binet and Field have demonstrated, increase long-term profitability, margins, baseline sales, and decrease price sensitivity.”
Rouser Manifesto. Stockholm, Sweden: Rouser, 2019. Download 25-page PDF.