What are the most common marketing myths that are easy to fall for? How are these misconceptions hurting businesses?
In How Brands Grow, Byron Sharp claims that modern marketing strategies are less likely to gain businesses profits. Instead, he says that traditional marketing is still the superior strategy, as it avoids dangerous marketing myths.
Keep reading to learn more about these marketing myths, and why you shouldn’t believe them.
1. Consumers Care About Branding
According to Sharp, the first marketing myth is that consumers don’t care enough about branding for it to impact their purchasing decisions. Customer surveys reveal that consumers typically perceive all brands in a category to be roughly interchangeable—when the differences between brands are slight, consumers fail to see differences at all. This is especially true for the intangible features of a brand: Only a small fraction of consumers ever think about a brand’s image or personality. Even if they do describe a brand as more “trendy“ or “wholesome“ than its competitors in surveys, they frequently change their opinions if interviewed later.
For this reason, any marketing that attempts to prove a brand is different or better than its competitors misses the point entirely. Most of the time, consumers buy without ever deliberately comparing various brands and determining which is best for them. Sharp explains that humans have adapted to a brand-saturated world by completely filtering out the vast majority of branded messaging they encounter. Even if you’ve crafted the most convincing value proposition possible for a target demographic, it’s more than likely that your message won’t get past your audience’s mental filter, and they’ll ignore it completely.
2. Targeting Specific Demographics Will Attract More Customers
According to Sharp, the second marketing myth is that marketers target specific demographics because they assume that markets are more divided than they really are. In other words, they assume that each product in a market appeals to a specific type of buyer, and marketers succeed by tailoring their marketing to that niche. For example, the marketers of a fruit smoothie bar may assume they’re selling to a young, health-conscious niche market while nearby ice cream stores sell to a separate market, one that’s more family-oriented and less health-conscious.
However, Sharp explains that marketing to a specific niche fails because most competing brands have demographically identical customer bases. In other words, the same kinds of people buy products that marketers think appeal to mostly separate audiences. Consumers enjoy buying a wide variety of different products depending on how they feel at a given time.
Sharp explains that marketers who suffer from this marketing myth are operating in a niche market that sets sales goals far too low. Falsely assuming that they’re “market leaders” of a specific niche, they don’t realize that they have the potential to convert customers from all the competitors in the mass market and become a top brand on a global scale. These marketers would earn more customers if they adjusted their marketing for a broader audience.
3. Retaining Existing Customers Will Increase Profits
Lastly, Sharp says the third marketing myth is that it costs less to keep your existing customers than to attract new customers. Sharp explains that they believe this because it makes intuitive sense: If someone bought from your brand already, they’re more likely to buy from you again—they’re “your customer.”
Following this logic, your marketing is supposedly more effective on existing customers who are predisposed to spend a lot of money on your brand. For example, marketers may assume that it takes only one advertisement to convince an existing customer to purchase again, but five advertisements to convince a new customer to make a purchase. This makes the new customer five times more expensive to acquire.
However, Sharp insists that the data tells a different story: Marketing to existing customers is much less profitable than marketing to new customers.
According to Sharp, the fixed pattern of brand growth implies that no matter what managers or marketers do, a brand can’t surpass its top competitors by seeking to make its customers more “loyal.” In other words, the idea of dominating a market by targeting the customers you already have is a big marketing myth. Ultimately, such marketing is a waste of money. In contrast, the data shows that acquiring new customers always results in brand growth.
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Like what you just read? Read the rest of the world's best book summary and analysis of Byron Sharp's "How Brands Grow" at Shortform .
Here's what you'll find in our full How Brands Grow summary :
- Why everything you know about marketing is wrong
- An unpacking of the unsubstantiated marketing myths that business schools teach
- The psychology behind consumers’ purchasing decisions