Scientific Laws of Marketing with Professor Byron Sharp
Marketing has long been considered more of an art than a science.
Yet, some would argue, or rather prove otherwise…
Byron Sharp and his colleagues at the Ehrenberg-Bass Institute for Marketing Science have presented compelling evidence that challenges the notion of Marketing as (solely) an art.
In a recent Live discussion with our very own Steffen Hedebrandt, Professor Sharp outlined some of the key laws of marketing from his seminal book, “How Brands Grow: What Marketers Don't Know.”
This blog post cuts to the chase and explores the main insights from the Live session.
Contents:
What is Marketing Science?
The law of Double Jeopardy
Big and Small Brands - the difference that matters
Availability Theory
Do the Laws of Marketing change for B2Bs?
Translating Laws into Strategy
You can catch the full conversation here →
What is Marketing Science?
Marketing science seeks to understand and apply the laws of marketing, which, unlike market research, are generalizable and immutable.
While market research focuses on answering specific questions within a particular time and location, marketing science uncovers laws that are repeatable and applicable across different contexts. Or, as Prof. Sharp tells us, give us ‘generalizability’.
This distinction emphasizes the durability and universal applicability of marketing science principles, somewhat akin to the laws of physics. Which in turn provides a framework for us marketers to operate in.
Professor Sharp’s research advocates for taking into account these scientific tenets, emphasizing that much of what we assume about marketing is based on outdated or anecdotal evidence rather than hard data.
The law of Double Jeopardy
According to Prof. Sharp, one of the “most famous” concepts in his book “How Brands Grow” is the Double Jeopardy law.
The Double Jeopardy law consists of two primary components: how many customers you have and how loyal they are.
With few exceptions, the evidence suggests that smaller (lower-market-share) brands in a market have both far fewer buyers and lower brand loyalty.
Which dispels the myth that: you can have a lot of customers who give you a little business each, or a few customers who gave you a lot of business each.
“There’s no such thing as a small brand having a huge customer base, or a huge brand having a small customer base.”
If two brands are around the same size, they will have more or less the same number of customers and those customers will have the same amount of loyalty.
And this Double Jeopardy generalizes. That is, we see it everywhere, across markets, in B2B and B2C, anywhere people have to make a choice between competing things.
A word about niche brands
What about niche brands? you might ask?
Byron Sharp reminds us that ‘niche’ is not just another word for small. It means an unusually small customer base that is highly loyal, which, according to Double Jeopardy, means that there are very, very few of these. The evidence compiled by Sharp in fact suggests there are almost none.
How Brands Grow: What Marketers Don’t Know
Did you know?
In his book, Prof. Byron Sharp covers other laws of marketing, including the ‘Law of Buyer Moderation’ and the ‘Natural Monopoly Law.’
Availability Theory
So why do bigger brands see more loyalty?
Thanks to Double Jeopardy, we know that when there are competing brands and one is much bigger than the other, it is the bigger one that will succeed. This success can often be attributed to larger brands’ greater mental and physical availability.
“It’s more available and easier to buy for more people. And that means that it will have a lot more customers for a time period” explained Prof. Sharp. Even when customers buy the small brand they will still know the big brand.
Physical availability covers how easy it is to find and buy a product, while mental availability refers to the ease with which a brand comes to mind in buying situations. “We can very easily screen out the brands we don’t know.”
Byron suggests using a quick experiment to prove this. Quick fire the question: ‘How many toothpaste brands are there?’ to anyone, and overwhelmingly you’ll get responses that are way below the real number of those actually available.
Byron Sharp suggests that increasing a brand’s physical and mental availability is crucial for growth as dictated by Double Jeopardy.
Do the Laws of Marketing change for B2B?
A common assumption in the B2B realm has been that buyer habits might diverge significantly from those observed in B2C contexts, expecting B2B buyers to be less influenced by habitual purchasing patterns.
However, as Professor Sharp tells us, “If you read How Brands Grow, you really do get an impression that consumers are naturally loyal because they are habitual.” And that in “B2B that would be different. But it's not.”
When it was tested empirically, it turned out that buyers in B2B were just as habitual and so loyal. There is no difference, underscoring the universal applicability of these marketing laws, and how they need to be borne in mind when formulating your marketing strategies.
Using Digital Marketing
The same is true with digital marketing. The principles of marketing science still apply.
The conversation highlighted that while the mediums have changed, the core strategies of increasing brand visibility and making it easy for consumers to engage with and purchase from a brand remain unchanged.
Translating Laws into Strategy
So how do you translate these general laws into a marketing strategy?
The Double Jeopardy law tells us you can’t grow without increasing penetration and increasing your customer base.
As we’ve already learned (Availability Theory above), a key driver of brand expansion is increasing both mental and physical availability.
This means growing brand recognition, or as Prof. Sharp puts it, “Work on being famous all the time.” Achieving this requires not only having great brand recognition and recall, but also ensuring that your products or services are easily accessible to potential customers.
Sharp emphasizes the importance of avoiding customer retention or the upselling of existing customers as an avenue for growth.
Pointing at Double Jeopardy, he challenges the notion that a business can scale by focusing solely on its current customer base. “Instead, expanding the customer base is paramount,” highlighting the need for acquiring new customers to sustain and accelerate growth.
To navigate this path successfully, Prof. Sharp suggests leveraging “creativity and imagination to reach our qualified category buyers.”
This approach involves innovative thinking and strategic planning to not only captivate but also effectively engage and convert potential customers into loyal customers of your brand.
Check out what Paddle CMO, Andrew Davies had to say about memorable marketing here →
Targeting New Category Buyers
Professor Sharp also cautioned against the marketing industry’s fixation with targeting young audiences.
The focus on younger demographics is not due to their youth (bar youth brands), but because to these individuals are likely to be new to a category and so less loyal - allowing you to operate within Double Jeopardy.
Additionally capturing their attention can be crucial for brand growth, as they are more prone to share their experiences and spread word-of-mouth recommendations.
As Byron Sharp put it, “You’re new and interesting”
Nevertheless, Professor Sharp once again cautioned that while targeted focus on a segment, such as new buyers in a category can be effective, it should not be at the expense of reaching all category buyers.
According to Prof. Sharp, this broad-reach strategy is more likely to increase a brand’s customer base, adhering to the principle that brand growth is tied to acquiring more customers, not just focusing on specific segments.
A final word
The Live discussion with Prof. Byron Sharp challenged the notion of marketing as an art. Instead, he highlighted the scientific truths based on universal laws, as detailed in his book “How Brands Grow”.
We learned that marketing science, in contrast to market research, seeks to identify repeatable laws applicable across contexts. These include the law of Double Jeopardy and Availability Theory - which emphasizes the need to expand a brand's visibility and customer base for growth. And which, applies equally to B2B and B2C markets.
Professor Sharp urged marketers to bear in mind these evidence-based laws for sustained brand growth and to use innovation and creativity in overcoming the Double Jeopardy challenge when engaging potential customers.
Start putting together your science-based marketing strategy with accurate go-to-market data today 👇
