Better Marketing Through Planning: A Framework for Growth
Milk’s Better Marketing Through Planning series is deep dive into the core elements that go into making the right planning decisions. These practical guides provide the frameworks, rubrics, and resources marketers need to build art/science-based recommendations. Over the course of this series, we will look at how to find sources of growth (presented here), allocate your messaging based on audience, which touchpoints to activate based on the consumer decision journey, and how to determine the optimal channel allocation.
As a guide, these frameworks are built to be part of your day-to-day planning process. They are also a roadmap to most effectively use the MilkOS platform. MilkOS was designed to operationalize these frameworks to build consistency and transparency when approaching your planning. Let’s start with Part 1, Determining your Sources of Growth.
You Can’t Know Where To Go If You Don’t Know Where You Are.
There may be no more critical decision regarding whom to go after when determining your Target. Different than your audience or personas, your target, otherwise known as your sources of growth, looks at a broader yet no less specific cohort of consumers based on their propensity to be interested in your product or services. While there could be a nearly infinite amount of audiences or personas you can go after and will need to when you build your messaging and connection plan, there are only four sources where growth can come from: Loyalists, Vulnerable Repurchasers, Switchers, and New Category Entrants.
The key questions you need to answer are Which buyer type will deliver the most incremental value? What are the cost, size, and receptivity of the target versus their contribution? As with any decision, the ultimate factor to be considered is – What is your business objective?
· Launch New Product/Sub-Brand
· Grow Category
· Grow Share
· Maintain Share
Before You Get Started, Have You Thought About…
There are four empirical observations to consider when determining your target/source of growth:
1. Feeding the Funnel: Growth does not come from simply skimming from the top but also from building a market from the bottom up. The most effective way to grow a brand is through market penetration, reaching as many people in the category and bringing in new ones.
2. Building Memory Structures: Growth brands lead; they don't follow. The key to successfully breaking through with consumers is salience, getting them to think of the brand before making a purchase decision.
3. The Impermanent Heavy Buyer: There is a simple fact that a heavy buyer this year may not be a heavy buyer next year. This is the much-reported regression to the mean phenomenon working within marketing.1
4. Rethinking Pareto’s Law: Pareto’s Law which, in a marketing context, is the law that a significant percentage of sales come from a small number of buyers [80/20 rule]; is often cited as the rationale for focusing effort against Heavy Purchasers.2
Factors to Consider
No decision is made in a vacuum, and the best decisions are based on market conditions and context. But where to begin? Below is a rubric to help you out based on different potential factors that will help define your business objective. Determining where your brand stands today will help identify where your most viable growth will come in the future and where to focus your communication planning efforts.
Defining Your Sources of Growth
Once you understand the different conditions and their importance in selecting your target/source of growth, it is critical to know how to apply that decision in where and how to focus your communication strategy. Below is a simple rubric to get you started.
Selected Readings & Footnotes
Across 139 brands in 15 categories, Ehrenberg Bass Institute found that, on average, only about half of a brand's heavy buyers will remain heavy buyers in the next year.
Meta-analysis of Nielsen BrandScan data confirms that the true Pareto Law is closer to 50/20 in that the heaviest 20% account for 49% of sales (based on multi-market data). The flip side is that over half of the total revenue comes from people who buy infrequently (and likely buy all of the brand's competitors).