What Would Google Do? #1: What we can learn from the zero-advertising-investment thought experiment

Jeff-jarvis What Would Google Do?  Jeff Jarvis is the man asking…

what does zero media budget look like?  what if the ambition of every brand was a media investment of nothing?

it's a question posed by Jeff Jarvis (pictured) towards the start of
his marvelous What Would Google Do? – a reverse-engineering of the
brand upon which the fastest growing company in the world is built.  he
observes that:

"For more than a century,  the public face of
companies has been their advertising, slogans, brands and logos.  How
much better it would be if a company's public face were that of its
public, its satisfied customers who are willing to share their
satisfaction, and its employees who have direct relationships with
customers.  Brands are people.

If that's the ideal, then here's the goal: Eliminate advertising
… every time a customer recommends you and your product to a friend
is a time when you don't have to market to that friend.  It is possible
today to think that one good word can spread as far as an ad would."

it may be a deeply unreachable goal for many brands and businesses;
whose products are less differentiated and in which interest in lower
and usage less frequent.  but some interesting and important measurement
principles emerge from the thought experiment…

  • how do you currently measure – and benchmark – not just customer engagement, but customer ownership of your brand?
  • how are you measuring the conversations – in the myriad of forms –
    that those customers are engaged in about your brand's products and
  • how are you benchmarking the value of those conversations against
    not just each other but against other marketing communications
    outputs?  how many TVRs maketh the influential (and not so influential)
    blog post or status update?
  • if, as Jarvis asserts (and I agree), "your customers have always
    owned your brand"; how do you measure, value, and encourage responsible
    ownership of the biggest intangible asset on which your business
  • and above all -  if you're not asking these questions?  who is?
IPA|ED:final - existing customers

The role of brands in the early 21st Century: Reasons to be loyal

…because I believe brands should only invest in marketing
communications through existing users of their brand


this last post from my IPA essay reaffirms what I have come to firmly believe: that we're too wasteful.  we're investing pound after pound in inefficient aqcuistion-based advertising that – at best – does nothing for exsiting customers, and at worst actively alienates them.

enough already.  conversations about our brands are happenning right now.  the tools exist to join that conversation and respond accordingly: by creating and deploying collatoral that adds value to the lives of our existing customers, and then thru using media to tell everyone what we're doing.  I do not believe that this is an add-on; but rather something that should lie at the heart of how any early 21st Century brand behaves…

The role of brands in the early 21st Century

Brands are stubborn things to pin down.  They have been described as metaphors, as
intangible assets, or as codes of conduct and rituals; as the ties that bind us
and the ideas that inspire us.

I believe the role for brands in the early twenty first century
is twofold; that brands give people reasons to be loyal to a product and
service, and that brands provide an affirmation of our purchase decisions.

I believe

I believe brands should only invest in marketing
communications through existing users of their brand.

I believe we will come to look back at our marketing efforts
at the turn of the twenty first century as excessively wasteful; where
marketing was divorced from the products and services to which it pertained.

But most of all I believe we will look back at how we
embraced change.  Not because consumer
behaviour forced us to, but because we collectively saw a better way to nurture
and grow the brands we held so temporarily in our care.

a pdf of my essay can be downloaded here:
Download I believe in existing customers – Chris Stephenson
please note that it is subject to creative commons.  thanks.

IPA|ED:final - existing customers

Putting theory into practice: How Relentless can grow by talking to its existing drinkers

…because I believe brands should only invest in marketing
communications through existing users of their brand


Case Study – Relentless

Over the last two weeks Mediation has been outlining why it
thinks brands should only talk to existing customers.  This post takes this theory and applies it to
one particular brand. 

Dual challenges in a growing and competitive sector

Relentless, with its "Give and you shall receive. No
half measures." positioning, was developed by the Coca-Coca Company in
2006 to compete within the highly profitable and expanding energy drinks
market.  The sector has experienced rapid
growth over the last decade and is dominated by Lucozade and Redbull with 50%
and 30% market shares respectively (see note 1).


Competition for consumers is most fierce in the 500ml can
offering, in which Relentless operates. 
In November of 2007 Barr Soft Drinks signed a deal to distribute US
energy drink Rockstar in the UK (see note 2). 
Competition was further ramped up by the US-based Hansen Beverage
Company’s launch of Monster in early 2008 (see note 3).  Relentless faces the dual challenges of
stealing share from market-dominant brands whilst defending its share against
recent newcomers.

For a brand with relatively low penetration in a fast-growing
and competitive sector, the obvious route to growth is to advertise at
potential customers to create awareness and by doing so generate intention to

If however we adopt the principles outlined in this essay,
Relentless should instead focus on the share of market it already has.  It should concentrate on identifying the most
relevant consumer touch points.  It
should then create and deploy at those touch points collateral for its existing

Making it happen (I): Creating collateral

As we identified previously, for a product consumed in the
short-term the four principal touch points are the creation of experiences,
branded retail environments, co-creation, and use of packaging.  Relentless should therefore aim to add value
for existing customers at these touch points.

The opportunity to add value through experiences is in the
creation of exclusive events and secret gigs; experiences that you can only
find out about by signing up to Relentless’ website (see note 4).  At these events Relentless could create
branded retail experiences with pop-up Relentless ‘Recharge Bars’.  Co-creation could take the form of customised
drinks available at the Recharge Bars, developed in association with
mixologists or sports and music artists.

Finally – in keeping with the brand’s ‘No half measures’ positioning
that emerged from the idea that true artists go further and sacrifice more for
their art – Relentless could commission exclusive pack designs by cutting-edge
and emerging artists, collateral that would only be available to existing
customers at events.


Much of this thinking has already been adopted by the
brand.  Relentless has a presence at
action and motor sports events, as well as music events – even hosting its own
‘Wakestock’ event last summer (see note 5). 
But adoption of the principles outlined in this essay would see
Relentless take a crucial step further.

Making it happen (II): Communicating the existence of collateral

It is not enough just to create collateral, Relentless must
communicate the existence of that collateral in broadcast channels to existing
drinkers.  Whilst this could be in the
form of ad space, it would be much more interesting to co-create content that
showcased the events, in the form of a TV show, YouTube channel, or magazine

The desired response from existing customers is “yeah I was
at that gig – it was awesome”.  But
crucially – because of the broadcast nature of the communications – there is an
inherent take out for non-drinkers: “hey that looks awesome – I want me some of

The perceived inefficiencies of broadcast communications are
eliminated.  Every impact is
relevant.  To existing Relentless
drinkers advertising becomes an extension of the brand – a tool to mitigate
defections and engender loyalty. 
Furthermore brand communications become a validation of existing customers’
decision to purchase.  Attitude follows
purchase behaviour; as opposed to (costly)
change-attitude-with-the-hope-of-funnelling-down-purchase-corridor approach.

Relentless is already investing heavily in the creation of a
broad range of collateral.  It next needs
to plan for Transactions – maximising the potential for word of mouth to both
grow share and defend against aggressive entrants into their market.


Relentless metrics

Relentless must measure the results of its efforts by
tracking the four metrics identified previously.

Firstly, development of customer database (through use of
the website in conjunction with panel data); and secondly, analysis of the
database to identify consumer touch points; marrying purchase patterns with
Relentless drinkers’ passion points (gigs, events, bars etc).

Thirdly, fusion of the customer database to a media
consumption survey (such as TGI or Touchpoints); identifying where the
existence of collateral is best broadcast.  Finally, tracking the advocacy and word of
mouth of Relentless drinkers – who are the most likely to grow the brand via
word of mouth and who within the database wield the most influence?


1. The Energy drinks sector has seen +85% per capita growth
between 2002-2007.  Source: Canadean,

2. Source:

3. Source:

4. Indeed Relentless should start with its approach to its
website.  Rather than being a
business-orientated source of information it should instead be a
customer-orientated hub for existing drinkers. 
Energy drink consumers are generally late teen and twenty-somethings
with an active lifestyle and passion for sports and music – the site should
reflect this.

5. For details of Relentless’ Wakestock visit

in Monday's final installment: what talking to existing customers means for the
role of brands, and why we all need to embrace change

IPA|ED:final - existing customers

Joining up the dots: because we need a more holistic view of brand metrics

…because I believe brands should only invest in marketing
communications through existing users of their brand


Barriers to Scientific Measurement

Tim Ambler categorises five stages of sophistication in the
assessment of marketing; from Unaware to Scientific (see note 1).  Different corporations regard themselves as
being at different stages of this evolution (see note 2).  The ideal – based on a database of past and
current metrics, derivatives and diagnostics – is ‘Scientific’ (see note 3)
measurement, barriers to which are twofold.

Firstly, few companies have access to sufficient data, both
in terms of number of metrics but moreover in the consistency of any data over
time.  Secondly, the priorities of
organisations – and especially marketing departments – change over time, mitigating
consistent collection of metrics (see note 4).

The result of which is a further feeding for our collective
addiction for short-term acquisition gains as the primary metric of the result
of marketing effort.  Brands are
measuring and reporting acquisitions as a short-term proxy for longer-term
metrics that should be measured instead.

The right metrics

The creation and deployment of branded collateral to
existing customers and its subsequent communication to existing and potential
customers, requires a set of metrics to ensure success at several stages.

One, we need not just a database of current customers, but a
database capable of being cross-referenced across Ambler’s database of past and
current metrics, derivatives and diagnostics. 
This at its most basic permits us to know the value of our existing
customers; what’s the annual profit pattern and how long before they are likely
to defect? (They always will) (see note 5).

Understanding this is fundamental to addressing one of the
evaluation challenges necessitated by the adoption of the methods proposed in
this essay.  Most evaluation is centred
on acquisition.  To monitor retention you
have to gain an understanding of defection, but customers defect because of a
much broader and comparatively unpredictable set of reasons.

Two, we need to know which consumer touch points are most
relevant for and pertinent to existing customers; a playground for data
strategists with sufficient customer data. 
It is also important to understand the frequency of communication
required.  Every moment is an opportunity
for a customer to defect.  How
consistently or frequently should collateral be deployed?  This informs the brief for the creation of

Three, understanding of media consumption; specifically how
it’s consumed by both existing and potential customers.  Cross-referencing of existing and potential
customer data with media consumption panels – both proprietary (see note 6) and
industry standard (namely Touchpoints) – informs the Transaction planning
component of the process.

Four; metrics for advocacy and more specifically for word of
mouth – the most oft cited is the Net Promoter Score (NPS) (see note 7).  Despite initially being widely embraced by
the business community as a simple and comparable measure of loyalty and word
of mouth – which also handily correlated to business growth (see note 8) – its
importance has since been challenged (see note 9).  The debate revolves not however around
whether or not the NPS is a useful metric per se, but rather whether or not it
is the absolute metric for Loyalty. 
Consensus remains more than comfortable with the former; “The NPS has
been added to successful brand trackers … certainly a good use of the metric,
especially if it is presented alongside other word of mouth-related scores,
such as brand reputation or online buzz” (see note 10).

The online conversation is now large enough to significantly
indicate the levels of conversation within the wider population.  Tools for measuring this ‘buzz’ track not
only the extent of the conversations but also their polarity (positive versus
negative) and the relative influence of the conversation points (see note 11).

Difficult is worth doing

Even the best and most appropriate metrics if used
disparately will fail to give as complete an understanding as possible of our
activities and – more crucially – their adherence to any model (see note 12)
against which we base our hypotheses and actions.

Our ambition must be for a new and more holistic model based
on integration of the three data sets of CRM, advocacy (through word of mouth)
and media metrics.  There’s a perception
that our existing – acquisition-based – models of understanding are getting
better.  They’re not.  It’s the data we put into them that has
become consistently better over the last twenty years.

James Northway comments that “moving to this type of model
is going to require people to be a lot braver, because the measurement and
evaluation models don’t yet fully exist. 
‘Let’s put 80% on TV’ has an established formula … measuring
‘Transactions’ necessitates a much more holistic model” (see note 13).

Metrics shouldn’t be an add-on to attribute numbers to what
we produce for the brands upon which we work. 
Rather they should be an ongoing measurement to aid better understanding
of the contribution our efforts and activities make to the brand equity at the
bottom line of the businesses with which we work.

It may sound like a not-insignificant mountain to climb, but
we have a key advantage.  One of the most
important data sets is the one brands are closest to – their existing
customers.  We know – or should know –
more about them than any conceptual demographically-defined group of potential
‘consumers’.  The world is moving in our
direction; as the digital paradigm takes hold, it is facilitating not only the
accumulation but the understanding of that customer data.  It is our choice whether or not we take
advantage of it.


1. The five stages outline the generalised process through
which most companies develop thinking about assessment of marketing, and are 1.
Unaware, 2. Financial, 3. Many Measures, 4. Market focus and 5. Scientific

2. Nestle regarded them selves as being at the ‘Financial’
stage.  In this stage marketing
assessment is made purely on financial grounds, as opposed to the next ‘Many
Measures’ stage, in which a diversity of additional measures – such as
customer-based metrics – are used. 
Centrica described their organisation as being at this ‘Many Measures’
stage.  Duracell claimed to be moving
from the ‘Many Measures’ stage to the fourth stage; ‘Market Focus’.  In this stage the range of financial and
non-financial measures are consolidated into fewer more meaningful metrics,
which are presented to and assessed by the board.

3. At Ambler’s ‘Scientific’ stage; a “database of past and
current metrics, derivatives and diagnostics is mathematically analysed to
provide the shortest list of sensitive and predictive metrics.  Source: Marketing and the Bottom Line – Tim
Ambler, p79

4. Both of which are suggested by Tim Ambler in Marketing
and the Bottom Line

5. Method for calculating value of existing customers as
outlined by Frederick F Reichheld.  The
Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value.

6. ævolve’s CCS Study routinely asks it’s panel if they have
given or sought advice across twenty eight product and service categories.

7. Justin Kirby & Alain Samson.  Customer advocacy metrics: the NPS theory in
practice.  Admap Magazine, February 2008,
Issue 491.  “The Net Promoter Score is
based on the question 'Would you recommend [Brand/Company X] to afriend or
colleague', answered on a scale between 0 (not at all likely) and 10 (extremely
likely).  The score is computed by
subtracting the percentage of detractors (those giving 0–6 answers) from
promoters (9–10s).  The middle section,
between 7 and 8, is so called passives.”

8. Dr Paul Marsden, Alain Samson, Neville Upton, all London
School of Economics.  Advocacy Drives
Growth: Customer Advocacy Drives UK Business Growth.  05 September 2005.  Research by Marsden et al replicated work by
Bain/Satmetrix (F Reichheld: The one number you need to grow. Harvard Business
Review, December 2003) that demonstrated a correlation between the NPS and
business growth.

9. Tim Keiningham. 
The Net Promoter debate.  Admap
Magazine.  May 2007, Issue 483.  Simply put, we found no support for the
assertions attributed to Net Promoter. 
Our research clearly shows that claims of its superiority in predicting
firm growth, or in predicting customers’ future loyalty behaviours, are false”.

10. Justin Kirby and Alain Samson.  Customer advocacy metrics: the NPS theory in
practice.  Admap Magazine, February 2008,
Issue 491.  They go on to comment that “it
also represents the compromise many companies seem to have reached about the
NPS, namely to consider it one important dimension of a more complex mix of
customer satisfaction or brand health indicators”.

11. For example ævolve’s propriatory ‘onalytica’ tool tracks
online buzz

12. Kuhn – The Structure of Scientific Revolutions.  “There is no such thing as research in the
absence of any paradigm”.

13. Interview with James Northway, Joint Managing Director
of ævolve, part of Aegis Media.

Tomorrow: making it happen… Relentless Case Study

IPA|ED:final - existing customers

Building the Loyalty Agency: Why communications need a new force for planning

…because I believe brands should only invest in marketing
communications through existing users of their brand


Fragmented thinking: fragmented implementation

Planning for Transactions requires the alignment of three
distinct disciplines – CRM (including where appropriate DM channels), word of
mouth marketing and broadcast media – into one holistic channel plan.  And that requires a whole new force of

The last decade has seen the emergence of a whole new ball
game.  Media fragmentation; consumers
with less time, little attention and no patience; an infinite amount of
broadcast and on-demand content; digitisation rendering channels irrelevant
(see note 1); technology to control and filter demanded content (see note 2)…

The collective response of the communications industry has
been to diversify into a multitude of different and varied operations (see note
3).  It is this diversification that is
partly behind the lack of cohesion between word of mouth marketing and mass (or
broadcast) advertising (see note 4).

Agency silos generate silos of implementation.  In an interview for this essay a data planner
(see note 5) highlighted the current difficulty he was having aligning CRM and
broadcast timings (let alone the strategic development) for a campaign on which
he was working.  The planning of retention
(loyalty) and mass media are in concept as well as in implementation operating
in different worlds.

This division isn’t however limited to agencies.  Marketing departments within clients operate
in the vast majority of instances separately from their CRM counterparts.  The opinion of Andrew Wythes at Eurostar is
that “in theory, a lot of companies are bringing the two together, with CRM
becoming more aligned with marketing”. 
But he also observed that – for Eurostar – this is predominantly around
specific projects, for example Eurostar’s transfer in 2007 of international
rail operations from Waterloo to St Pancras. 
In that instance “marketing and CRM worked really well together … it is
the day to day where it’s less aligned; CRM needs to break out and do its own
thing over and above the loyalty scheme, and in doing so focus on what our
customers really want” (see note 6).

The Loyalty Agency

Transaction planning – as a solution to our new paradigm –
requires alignment of the three distinct disciplines of CRM, word of mouth and
broadcast media into one holistic channel plan. 
Developing such a plan necessitates the creation of a single agency
offering; an agency whose positioning isn’t articulated around
solution-orientated concepts such as Different, Pioneering, Ideas, or ROI – but
that is instead positioned around a business-orientated concept; the concept of
customer loyalty.  To do so, such an
agency would integrate three key functions.

The Loyalty Agency - structure

Figure 4: the three core roles within the Loyalty Agency

  • Function one: CRM and data strategists, working with brand
    CRM teams to mine customer databases for information on who customers are, as
    well as the identification of who’s leaving and who’s hanging around.  They’d develop customer retention (loyalty)
  • Function two: word of mouth planners, identifying relevant
    consumer touch points and developing, as a result, appropriate collateral with
    which to deploy with the aim of mitigating defections ie, engendering loyalty.
  • Function three: Channel neutral planning.  Working closely with the former two
    functions, their role is to develop strategies that use channels and
    specifically mass communication to convey the existence of collateral to
    existing consumers in such a way that it’s overheard by potential customers.

An important point to make on our proposed Loyalty agency is
that their output is first and foremost the creation and deployment of relevant
and equity-generating collateral for a business.  In doing
so it creates an extension of that business’ product or service.  For clients, working with such an agency
would mean working with an agency partner that encouraged marketing effort to be
a part of the business; rather than a signpost to it (see note 7).

Integration with other agencies

Despite the assertion that “Integrated Communications are
like weapons of mass destruction; everyone knows they exist but no one has ever
seen it done” (see note 8), coordination with other agencies will be key.  In particular the role of creative agencies
(see note 9) is fundamental to planning Transactions in two key ways (see
figure 5).  Firstly, along with PR and
other agencies, they’d work with word of mouth planners to help shape the
collateral that is developed.

The Loyalty Agency - integration

Figure 5: Loyalty agency integration with clients and other

Some of the most forward thinking creative agencies are
already operating in this capacity; I’ve already mentioned Mother’s musical for
Pot Noodle.  Last August Bank Holiday
also saw Eurostar’s Ebbsfleet station host a drive-in movie for existing and
potential Eurostar customers (see note 10). 
The creative concept – as well as much of the infrastructure for the
event – was created by Fallon, working alongside experiential agency Space.

Secondly, creative agencies would continue to work to the
more conventional creative brief, but with a key difference.  Rather than communicate a branded product or
service proposition with the intention of recruiting – through awareness et al
– potential customers to that brand; they would instead work with a brief to
communicate the collateral developed earlier in the process.  Their communications would be developed with
the sole aim of communicating to existing customers (but overheard by potential
customers) the existence, use, or consequence of that loyalty-generating


1. Once content is digitised, not only it can exist in any
digital channel, but move seamlessly across channels.  It is this intrinsic that led William Gibson
to first comment that “The remix is the very nature of digital” – ie
digitisation of data and content facilitates transformation – remixing – of
that content.

2. Example of on demand include RSS (Really Simple
Syndication) which automatically relays content deemed relevant to the
consumer, and IPTV (Internet Protocol Television) – TV via broadband, which is
currently seeing substantial investment by UK TV companies.  To quote Rob Norman in his speech Do
Different “In the final analysis the world has gone on demand.  That puts it beyond our control”.

3. And a lot of specialists there now are; WPP Group has 247
companies globally and 194 offices in the UK alone.  All companies relate to communications
services “Through our companies, WPP offers a comprehensive and, when
appropriate, integrated range of communications services”.  Source:

4. The many and varied agency operations are also behind
failure to join up the dots across a range of other disciplines – but this lies
beyond the scope of this essay.

5. Interview with Tim Noblett, Data Strategist at ævolve,
part of Aegis Media.

6. Interview with Andrew Wythes, Customer Relationship
Management, Eurostar.

7. In 2006 BBH launched Zag. 
Fully funded by the agency it aims to create and develop new brands,
which it will license or sell to third parties in return for a share of ongoing
sales revenue.  More recently New York
agency Anomaly is to open its doors for business in London.  The agency will be run on a model that
divides the agency’s revenue streams into part fees, part IP share.

8. David Jones writing in Contagious Magazine.  Is Your Work Spongeworthty?

9. It is the deliberate intention that creative agencies sit
outside the proposed Loyalty agency, for a very specific reason.  Given the close proximity in which the
Loyalty and Creative agency would work, it would seem logical to align the
operations into one agency.  This is the
move DraftFCB made when it aligned content creators with data analysis in its
2006 merger.  But uniting the silos into
one operation within the Loyalty agency would be a flawed move.

At the time of writing, Endemol is eyeing up a possible
takeover of ITV (Source: Financial Times. 
John de Mol commenting on ITV: “This one is an example of a combination
that could make sense, depending on the numbers.” Full story at:

Commenting in MediaWeek (19th August 2008; “Being the best
at what you’re best at is surely the best advice”) Richard Eyre observes that
“it’s a trap. … Successful content owners diversify their routes to
market.  Successful distributors source
the best content wherever it can be found. 
Both need a diversity of relationships to stay at the top of their

Similarly it would be a trap to align our Loyalty agency and
a Creative function into one operation; the former must be able to work with
any and every creative agency that appreciated the value of existing
customers.  Ultimately brands would be in
a better position to benefit from the diversity those creative agencies would
bring to the loyalty table.

10. For more information about Eurostar’s Ebbsfleet drive in

Tomorrow: a holistic approach to metrics
Friday: Making it happen… Relentless case study

broadcasting, cinema, content creating, viewing

The danger of applying old models to new technologies: why brands need to make the most of cinema’s platinum future

Monsters-vs-aliens Monsters vs Aliens; Hollywood's latest digital offering

Pearl & Dean are hosting their first annual Film Festival today… think presentations interrupted by movies (or vice versa depending on your attitude).  Mediation popped along this morning and heard a couple of cracking presentations.

the first – Peter Buckingham from the UK Film Council – outlined the Council's view of cinema's future.  he observed that whilst "cinema has stubbornly maintained its analogue status", digital technologies would herald a new "platinum age" for the industry.  its predicted (by Charlotte Jones of Screen Digest) that there will be 250 x 3D cinemas in the UK by 2010, up from the 172 on which Monsters vs Aliens (above) launched earlier this month.  a good job too, considering Jerry Katzenberg – who knows a thing or two – has apparently predicted that within 5-7 years all movies will be 3D.

but 3D is only one aspect of cinema's revolution in the making: archive films are proving popular, as are "more obscure films" such as Man on Wire, indeed as Buckingham noted, "the big alternative content success [in cinema] is live Opera".  add to this live sport in 3D (as being trialled by Sky) and the concept as cinema-as-studio (broadcasting the Shine a Light premiere to other cinemas for example) and you get an idea of where cinema could be heading.

at the heart of the UK Film Council's digital cinema vision is community; cinema "in the hands of local audiences", with cinema as "facilitator as well as curator".  Buckingham cited locally produced UGC from schools and collages, Nollywood movies making it big in East London, and broadcasting of events such as Royal Society lectures as further evidence of this "democratisation of culture".

unfortunately talk moved on to brands, where the vision is apparently a little more limited in its scope.  producer Phil Streather observed that brands had the opportunity to make ads that made full use of the 3D 'punch'.  why is it that we can't attach some of the "platinum age" thinking to brands?

why settle for ads?  if the vision and hope is that cinemas become locally-centric centres of culture and content, why are we slapping the outdated and outmoded format of an ad on the front of them.  cinema's opportunity is the same for brands…  how can we use these screens as platforms for our points of view on the world?  what could we create and curate for these screens that say more about us than 30" of stuff with an awareness aim.

we're better than this, and if the promise that digital cinema offers is realised, audiences will expect better; platinum brand work for a platinum channel.

IPA|ED:final - existing customers

A New Way Of Approaching Communications Planning Part Two: Transaction Planning

…because I believe brands should only invest in marketing
communications through existing users of their brand


Collateral: Why building it is no guarantee they will come

One response to media abundance has been the creation and
deployment of a whole range of collateral designed to add value to
customers.  In their own right the
examples of collateral described above are largely designed to, and therefore
may very well function as, opportunities to mitigate defections (ie increase
loyalty).  In some instances they may
also function as pre-cursors for word of mouth. 
The creation of such collateral however is not enough.

Let me say that again. 
Creating the collateral is not enough.

Advocacy – through word of mouth – works when one individual
has knowledge or information about a branded product or service that someone
else doesn’t.  Even in the case of two
individuals being aware of the same brand or branded collateral, there is
increased incentive to discuss it if one person knows more about it than the

For example two individuals may both be aware of Orange
Wednesdays; but only one knowing about a recent movie release creates the
incentive to discuss.  Or whilst both may
be aware of Orange Wednesdays, one may think that the number of tickets is
limited.  They are not.  The other would have the opportunity to
correct them.  Word of mouth is sparked
by a knowledge differential.

Currently brands largely and unwisely rely on the individual
with that knowledge or information to volunteer it to another individual.  By themselves.  With everything they’ve got going on in their
content-abundant time-poor lives.  Brands
at best encourage word of mouth on an individual basis and at worst just pray
that the positive experiences they create for their customers will be

We’re relying solely on Gladwell’s law of the few; the
connectors, Mavens and Salespeople “with a particular and rare set of social
skills” (see note 1), to instigate word of mouth.  Instead, we should be creating the potential
for every existing customer to become an instigator.  Rather than limiting ourselves to Pareto’s
twenty percent (see note 2) we should be encouraging advocacy through word of
mouth amongst all one hundred percent of existing customers at our disposal.

And that is only addressing one side of the equation.  The other side of the equation are the
potential customers who aren’t given reasons to specifically ask their peers –
their influencers (see note 3) – about a brand, because brands and their
agencies don’t give them reasons to do so. 
Collateral, when it is deployed, is only delivered to existing
customers.  Potential customers remain
unaware of its existence.

Planning for Transactions

This is the final and most crucial element of the holistic
planning process being proposed in this paper. 
That it’s not enough to create and deploy collateral to existing
customers.  In addition to broadcasting
the existence of collateral to existing consumers, we must also deliberately
expose potential consumers to the existence of that same collateral.

I call it Transaction Planning; communicating to existing
customers – via mass media – the existence of collateral with the deliberate
intention that its existence is overheard by potential customers.  The result being that we create the conditions
within which existing customers are best placed to ‘transact’ with potential

Transaction_planning Figure 3: Transaction Planning; communicating to existing
customers – via mass media – the existence of collateral with the deliberate
intention that its existence is overheard by potential customers

We turn the (perceived) inefficiency of broadcast media to
our advantage by using the same communication to publicise customer collateral
to existing customers (thereby reinforcing its existence and credibility) as
well as to potential customers (thereby communicating its existence).  Every impact we plan and buy becomes
valuable; as Sameer Modha put it when I discussed this theory with him “you’re
releasing media planners from the tyranny of CPTs” (see note 4).

In planning for Transactions; not only are existing
customers encouraged to discuss and advocate a brand, and not only are
potential customers encouraged to enquire about said brand; but communications
provide them with a common precursor and language to do so (see note 5).

Launching a brand

The principles outlined in this essay also support creation
of a brand from scratch.  Franzen
established that smaller brands are largely dependent on increasing their
penetration to drive growth (see note 6). 
The Loyalty approach would see creation of a small critical mass of
consumers – either via sampling or by partnering with a distributor – to which
we apply the collateral / communication paradigm.

In Microtrends Mark Penn argues that once you have one
percent you have enough of a base to “create new markets for a business, spark
a social movement, or produce political change” (see note 7).  It is possible, and I believe preferable, to
establish then grow a small audience; you just need to understand how.


1. Malcolm Gladwell. 
The Tipping Point. 

2. The Pareto principle (also known as the 80-20 rule, the
law of the vital few and the principle of factor sparsity) states that, for
many events, 80% of the effects come from 20% of the causes.  Source:

3. The term given by Blades and Phillips to the individuals
to whom information about a branded product or service is sought.  Fiona Blades and Stephen Phillips.  Decision Watch UK.  MRS Conferences 2005

4. Sameer Modha, planner at Partners Andrews Aldridge – as
quoted in an interview for this essay.

5. In addition a significant leap we have to make is in how
as planners we categorise consumers. 
With Transaction Planning they are not an undifferentiated mass to which
we broadcast branded messages, but nor are they distinct segments of
like-minded individuals who will be most responsive to our message.  With Transaction Planning, people are a
channel in their own right.

6. Giep Franzen.  Brands
and Advertising: How advertising effectiveness influences brand equity.

7. Mark
(Author), E.
Kinney Zalesne
.  Microtrends: The
Small Forces Behind Tomorrow's Big Changes. 
Penn and Zalesne argue that the biggest trends in America are the
microtrends — the smaller trends that go unnoticed.

Tomorrow: the Transaction Planning agency
Thursday: A holistic approach to metrics

IPA|ED:final - existing customers

A New Way Of Approaching Communications Planning Part One: Creating Collateral

…because I believe brands should only invest in marketing
communications through existing users of their brand



From media scarcity to abundance

People don’t consume advertising.  They really don’t.  Sometimes an ad is great enough to attain the
position of demandable content; YouTube fame then beckons.  For a while. 
But all in all we don’t consume advertising.  We consume content; and to get to that
content, we consume media.

The most significant trend in our industry – a trend
discussed by Rory Sutherland during a presentation to an IPA Outdoor conference
in 2007 (see note 1) – is a shift from media (and therefore content) scarcity
to media (and therefore content) abundance. 
Media channel fragmentation, in conjunction with technology-driven
control over content creation, distribution and consumption has created a new

In his Excellence Diploma submission in 2007 Faris Yakob
described how this new paradigm is already here, “it’s just not evenly
distributed … young people today [as opposed to the ‘passive massive’] have
grown up with digital media, and so they have an intrinsically participatory
relationship with ideas” (see note 2); and by implication with brands.  Brands are, or should be, participatory.






The business of creating collateral that adds value to
brands, from top; Pot Noodle the Musical, Innocent Bobble Hats, Honda Live Ad,
Eurostar’s Somerstown and Nike’s Human Race

The importance of collateral

Creating a participatory relationship with brands is
encouraging brands to go play (see left). 
It’s why the BBC built the iPlayer. 
It’s why Mother created a musical for Pot Noodle (see note 3).  It’s why Innocent put bobble hats made by the
WI on their bottles.  It’s why Honda made
a live ad.  It’s why O2 branded a
dome.  It’s why Walkers are asking for
help creating a new flavour of crisp. 
It’s why Eurostar funded Somerstown (see note 4).  It’s why Ben and Jerry’s had a party on
Clapham Common.  It’s why Nike encouraged
to us run against the clock, then each other, then the world.  It’s why Contagious Magazine exists.

It’s also why clients demand big ideas and brand platforms;
and why agencies went media-neutral and 360 degree.  It’s why all of us look for new, interesting,
engaging and involving ways for the brands upon which we work to communicate.  We’re in the business of creating collateral
that adds value to brands; investing today to generate cash flows tomorrow
through the creation of brand equity (see note 5).

Ultimately we’re responding to a climate of media abundance
by encouraging consumers to participate in our brands’ ideas.  The incentive to do so comes in the form of
added value for customers; value which – as the examples above demonstrate –
comes in the form of ‘collateral’: ancillary items or experiences created
through the marketing function that add value to our consumption or
appreciation of a brand.


Distribution of brand categories across product vs service
axis and short vs long term consumption cycle axis.  Not all categories shown. 

A framework for collateral creation

Let’s return to our model of retention as a starting point;
with the aim of making existing customers not want to defect, but rather
generate word of mouth which in turn drives acquisition of new customers and
ultimately profits and growth.

How can we go about systematically creating collateral which
we can deploy to existing customers with the ultimate aim of growth?  We first need to appreciate that not all
products and therefore brands are created equal.  Where a brand is best placed to deploy
content – and therefore the most appropriate collateral to create – depends, I
believe, on two factors (see above and note 6). 
Firstly, whether you offer a product (generally tangible) or a service
(generally intangible), and secondly how often your brand is consumed (see note

Short-term products

Products consumed in the short term (eg FMCG) typically have
less opportunity to create and maintain relationships through tangible customer
databases.  They rely instead on panel
data to monitor penetration rates and share of customer.

Collateral created for products consumed in the short-term (is
primarily deployed through consumer touch points such as packaging (eg
Radiohead’s packaging for it’s ‘In Rainbows’ album (see note 8), co-creation
(eg Nokia’s Concept Lounge – see note 9), branded retail environments (eg
Niketown or Glaceau vitamin water’s pop-up shop) as well as through experiences
(eg Innocent’s Fruitstock).

Short_term_products Short-term product collateral: From top; Innocent
Fruitstock, Radiohead’s ‘In Rainbows’ album, Nokia’s Concept Lounge and

Long-term products

Products purchased and consumed over the longer term (eg
motors) have the double dilemma of being purchased infrequently and – because
no ongoing financial relationship exists – of not necessarily having sustained
contact with a customer once they do purchase. 
It’s for this reason that customer identification processes such as
product registration (eg in the case of many technology products) are often

The collateral primarily created for long-term products are
deployed therefore through consumer touch points such as clubs (especially in
high-interest categories eg – see note 10), branded retail
experiences (eg the Apple store), and product customisation (eg the Electrolux
DesignLab (see note 11).

Long_term_products Long-term product collateral: From top; The Apple Store and
Electrolux’s DesignLab

Short-term services

Short-term service-orientated brands (eg airlines) are, by
virtue of being in the service sector, often in the position to collect
substantial information about their customers. 
Online retailers know the purchase history and online behaviour of
customers and can make recommendations for future purchases accordingly.  Amazon’s accuracy in knowing what I may wish
to read next never ceases to amaze me. 
Google knows more about me than my mother does.

Collateral created for short-term services are primarily
therefore often in the form of ongoing transaction-based consumer touch points
of clubs (eg Tesco’s Clubcard), and rewards (eg British Airways’ Gold and other

Short_term_services Short-term service collateral: From top; Tesco Clubcard and
British Airways’ Executive Club

Long-term services

Long-term service brands which include – amongst many others
– mobile phone network operators (see note 12) and utilities have the duel
virtues of being a service with an ongoing financial relationship.  These brands are arguably the most
experienced in the creation and deployment of collateral for their customers
(see left).

Rewards (eg the previously mentioned O2 ‘World that revolves
around you’ campaign) and experiences (the mobile networks are all over this
with the O2 and Orange Wednesdays) are both opportunities keenly deployed to
minimise defections (increase loyalty) and ideally increase ARPU.

It is brands in this quadrant which are most likely to
benefit from shift-inertia.  We (half)
joke that it is more common to get divorced than change your bank account, but
its essence reinforces the central belief of this essay – that it makes no
logical sense to invest marketing time and money in a group who not only
generate zero profit for a brand now, but who are unlikely to switch to doing
so in the near future.

Long_term_services Long-term service collateral: From top; The O2 and Orange

creating collatoral however isn't enough – once you have it you have to tell people about it…  more on that tomorrow…


1. Rory Sutherland. 
Adapted from notes taken at Delivering the Landmark Creative Campaign –
a speech to the IPA Outdoor’s Seeing Digital Conference.

2. Faris Yakob.  I
believe the children are the future. 
Essay submission for IPA Excellence Diploma class of 2007.

3. There’s a great report which includes interviews of some
of the people behind the development of musical at

4. Interestingly the film was made without any overt
Eurostar branding, something Marketing Director Greg Nugent refers to as
‘Unbranded Content’ – for more see:—Mother-Eurostar-abandoned-branding-embrace-feature-film/

5. Peter Fisk in his book Marketing Genius defines Brand
Equity as “the sum of future cash flows driven by the investments of today”.

6. I find these two axes the best way to map consumer touch
points with the aim of identifying where the most appropriate points of for the
deployment of collateral.  Other axis
were explored – specifically an axis that differentiated between contractual
versus one-off transactions with a brand versus regular and occasional
consumption.  However being able to
separate regular versus occasional contractual relationships proved to be less
useful to me that a clean split of tangible products versus intangible
services.  This isn’t to say that there
are alternative ways to map the touch points, indeed many planners will wish to
play with alternatives depending on their own, or their agency’s, specific
point of view.

7. Note that aggregator brands (such as moneysupermarket or
uswitch) are ‘trending’ many brands left and down; left towards the
shorter-term – ie changing supplier more often (especially in the utilities
sector) and downwards through the commoditisation of historically service
brands (for example in the telecoms sector.

8. The addition of packaging (as opposed to download only)
increased the retail value of Radiohead’s recent ‘In Rainbows’ album more than
nine-fold…  When originally released in
October 2007 as download only – unpackaged – the value was determined by
consumers; they could choose their own purchase price – the average price
chosen to pay was £3.88 (source:  At the start of December 2007 the same
content was released in the form of a three-format discbox (source:  The asking price for a product valued at
£3.88 with packaging?  …£40.00.  Value goes both ways.

9. For more on Nokia’s concept lounge see:

10. Mini2 is an online hub for all things Mini maintained by
its online members.  For more visit:

11. The Electrolux Design Lab is an annual global design
competition open to design students who are invited to present ideas for home
appliances.  For more visit:

12. Note that I’m referring to contract only in this
instance, PAYG would be significantly shorter term and more product-focussed

tomorrow: transaction planning – because creating collatoral isn't enough
Wednesday: why we need a new force of agency

IPA|ED:final - existing customers

Harnessing Advocacy and the Power of Word of mouth: because thats how advertising works

…because I believe brands should only invest in marketing
communications through existing users of their brand


increasing importance of word of mouth (so I’m told)

takes many forms.  The principal form
with which we’re interested for the purposes of this essay is word of mouth,
the power of which is increasing.  A
relevant word in the right ear can in a moment override all our accumulated
knowledge and opinion on a planned purchase (see note 1).  Intergration’s Market Contact Audit (MCA)
declared word of mouth to be “the form of consumer contact with the highest
capacity to create consumer engagement” (see note 2).  McKinsey estimate that word of mouth
influences two-thirds of US industries (see note 3).

of mouth isn’t a modern phenomenon.  It
is, in many ways, the oldest form of communication.  What is very modern is the increased power
word of mouth has in a digital age. 
Technologies such as the internet, email, mobile phones, text messaging,
PDAs, instant messaging, and blogs have made sharing information and opinion
easier than ever before.  The combination
of these digital technologies and the fragmentation of media channels that has
instigated the waning of the disruption advertising model, mean that “in a
networked society … personal recommendations, and recriminations, have more
weight” (see note 4).  We make our
purchase decisions based on what people tell us.

as Paul Revere’s ride through New England to warn of the approaching English –
as recounted by Gladwell (see note 5) reminds us; not all word of mouth is
created equal.  Some individuals are more
powerful carriers of a message, some messages more contagious, and some advice
is more likely to come from one person rather than the next.  ævolve research demonstrates for example the
extent to which men are more likely to give advice about new technologies than
women (see note 6).

and tribes

is the effect of word of mouth limited to affecting changes in individual
behaviour, it also works at a group level. 
Our opinions and behaviours (and brand preferences) are very susceptible
to the opinions and behaviours of those around us.  “Most of us are only likely to change our
behaviour if there is evidence of a larger movement emerging” (see note 7);
evidence for which we increasingly gather in the form of word of mouth.

Earls goes further, and suggests that “when we in organisations think about
affecting mass behaviour in customers or staff, we tend to think … that it is
what we do that affects the way that our audience behaves … but this is misleading
… what really matters is what each of the individuals in the mass does to the
others” (see note 8).

his studies into the emergence of society’s modern tribes, Bernard Cova
proposed that people are less interested in objects of consumption than in the
social links and identities that come with them.  Demographically disparate but connected
individuals now have control over the brands they collectively choose to
consume; choices determined not by product or service intrinsics, but by a
shared and agreed understanding of what that brand represents and stands for
(see note 9)  Similarly Brownlie and
Elliott asserted that such tribes hold greater influencing power than the mass
audience (see note 10).

of mouth is – in the majority of instances – the single most important
determinant that influences our individual and collective behaviour.  When we form opinions and make decisions it
is as part of an ongoing series of conversations with other people.

and word of mouth

matters most then is what we communicate to each other about brands.  Yet our objectives and measurement remain
largely bound by proximal metrics – such as awareness, or ultimate metrics –
such as customer acquisition. 
Furthermore when brands attempt to engage consumers through word of
mouth programmes, efforts remain largely isolated into specific silos of

not joining up the dots.  “There is often
a mistaken notion that word of mouth needs to stand in stark contrast to
traditional forms of advertising. But this is not the case … in many cases
traditional forms of media serve as conversation starters and are the basis for
people talking about a product or a service” (see note 11).  The sentiment is echoed by James Harrison;
“the reason why advertising works has always been because of word of mouth”
(see note 12).

and word of mouth are inextricably linked. 
Those most likely to give advice about a product or service are proven
to be those most likely to seek out advertising in their given categories of
interest (see note 13).

we divorce advertising and word of mouth programmes into different silos.  We ignore not only the combined effect of
these disciplines but the opportunity it presents to engage our existing
customers – mitigating defections and stimulating positive word of mouth on
behalf of our brands – thereby generating acquisition of new customers.

New_model_for_comms_planning a new engine brand growth places retention as the starting point for
marketing strategy

new model, as outlined in figure 1, presents itself:

  • Place
    retention as a starting rather than an end point
  • With
    the aim of making existing customers not want to   defect (ie be loyal)
  • At
    the same time generating word of mouth
  • Which
    subsequently drives acquisition of new customers

this model demands is a new way of thinking about marketing and communications
planning.  We need an approach that
combines customer relationship marketing (CRM), advertising and word of mouth
in a way that not only engages and empowers the existing consumers of our
brands, but communicates to potential customers just what they’re missing.  but more of that on Monday, have good weekends…



Blades & Phillip.  Decision Watch
UK.  MRS Conferences 2005.  “The extraordinary power of word of mouth
became obvious, this unscientific sample of one vague acquaintance, whose
knowledge of cars Gary couldn’t even assess, put him off purchasing a car for
six months”.

Laborie, Jean-Louis. "The Theory Behind Engagement and Integration's Early
Experience Across Media." Paper presented at ReThink: 52nd Annual
Advertising Research Foundation Annual Conference and Expo, March 20–22, 2006:].

Dye, Renee. "The Buzz on Buzz." Harvard Business Review, November
2000.  McKinsey & Company estimates
for the 1994 US Economy (note this is prior to the emergence of the mainstream
internet paradigm so likely to be conservative) – total equals $6 trillion.  Slightly more than two-thirds of the U.S.
economy has been influenced by buzz: 13% Largely Driven by Buzz (Toys, sporting
goods, motion pictures, broadcasting, amusement and recreation services,
fashion); 54% Partially Driven by Buzz (Finance (investment products), hotels
and lodging, electronics, printing and publishing, tobacco, automotive,
pharmaceuticals and health care, transportation, agriculture, food and drink);
33% Largely Immune to Buzz (Oil, gas, chemicals, railroads, insurance,

Wilmot & Nelson.  Complicated Lives:
sophisticated consumers, intricate lifestyles, simple solutions

Malcolm Gladwell.  The Tipping Point

Data from ævolve’s CCS study.  The survey
regularly asks its panel about advice given about various categories in last 3

Caroline Whitehall.  Inertia is good

Mark Earls.  Herd

Cova, B. (1999), "From Marketing to Societing: When the Link is More
Important than the Thing", in Brownlie, D., Saren, M., Wensley, R. and
Whittington, R. (Eds) Rethinking Marketing, Towards Critical Marketing

Elliott, R. (1999), "Symbolic Meaning and Postmodern Consumer
Culture", in Brownlie, D., Saren, M., Wensley, R. and Whittington, R.
(Eds) Rethinking Marketing, Towards Critical Marketing Accountings

Ed Keller and Simon Chadwick.  Is word of
mouth Just a Buzz?  MRS Annual Conference,

James Harrison, Managing Partner at Fuel, Engine Group – as quoted in an
interview for this essay

Data from ævolve’s CCS study.  The survey
quantifies the proves the propensity for people who give advice to be
‘ad-seekers’ within that category

on Monday and Tuesday: A new way of approaching communications

IPA|ED:final - existing customers

Loyalty is dead, long live loyalty; a very contemporary case for the existence of brand loyalty

…because I believe brands should only invest in marketing
communications through existing users of their brand


Loyalty is dead

Ehrenberg showed us that loyalty has never existed.  In a retrospective of his research in
marketing he notes that within all the categories he has examined, brand-buying
is polygamous; consumers have “several steady partners (brands), some [of which
are] consumed more often than others … Very few buyers are 100% loyal.  Nor do they do it often.  They therefore have few opportunities for
being disloyal.  Marketing’s common
target of more loyal buyers is deeply unreachable” (see note 1).

Ehrenberg’s position is reinforced by the very nature of
loyalty in the context of free market economics.  Adam Smith writing in the 18th Century
commented that “It is not from the benevolence of the butcher, the brewer, or
the baker that we expect our dinner, but from their regard to their own interest”
(see note 2).

In other words, corporations don’t work in the interests of
consumers.  “For the market to function
well it is not necessary to be altruistic; indeed, it is even counterproductive
to be so.  Altruists ruin the functioning
of the market … What is needed is competition, non-violent rivalry between
producers and consumers” (see note 3).

In this context it’s hardly surprising that consumer brand
loyalty isn’t observed by Ehrenberg.  It
is simply not in the best interest of consumers to be loyal to a brand;
something that has been reinforced by the paradigm shifts in consumer
behaviours that have emerged as a result of the internet.

One example of this shift in behaviour is the extent to
which consumers are increasingly researching brands and purchases online.  A shift highlighted by the observation that
car showroom footfall has significantly decreased whilst conversions have
significantly increased; consumers increasingly enter already armed with a
plethora of research, information and opinions (see note 4).

Not only can empowered consumers now investigate and
challenge the motivations, behaviours and offerings of brands, but our
marketing investment encourages them to do so. 
Any loyalties that did exist are increasingly tested in a market where
moneysupermarket and Uswitch empower consumers to be price rather than brand
sensitive (see note 5).  The irony is
that the brands being undermined are the very same brands that are funding
their own demise.

The ‘myth’ of loyalty has most recently by highlighted in
analysis of the IPA’s databank (see note 6). 
The dataMINE analysis (see note 7) showed that whilst campaigns in the
dataBANK more often sought to increase loyalty than increase penetration, the
success rate in doing so was a mere 24% (see note 8).


Long live loyalty

Loyalty is alive and well. 
Read Adam Smith carefully and you’ll see that two of his major
provisions have been severely undermined; one, that information will be local
and complete, and two, that foreign investment will never happen.  Our world is quite different from the one
that Smith and his counterparts explained.

Findings of game theory such as the prisoner’s dilemma
demonstrate that cooperation is required to promote self-interest.  In fact evidence points to the emergence of
increasingly co-operative behaviour.  In
Wikinomics, Tapscott and Williams observe that “billions of connected
individuals can now actively participate in innovation, wealth creation, and
social development in ways we once only dreamed of.  And when these masses of people collaborate
they collectively can advance … the economy in surprising but ultimately
profitable ways” (see note 9).

People co-operate when they have a shared goal or
belief.  It is this observation that
points to a very contemporary case for the emergence of loyalty to brands.  In John Grant’s ‘after image’ world, the goal
for marketers is to create ideas with which their brands can be associated (see
note 10).  Jon Alexander comments that “I
would rather argue that loyalty never existed before, but is starting to now,
as brands for the first time develop values in a meaningful – as opposed to
superficial, advertising-related – way. 
Howies is a brand I am able to be loyal to, because I know everything
they stand for” (see note 11).

Of course we are repertoire consumers.  Of course we can defect.  But a brand imbued with an ethic to which we
can relate gives us a stronger emotional reason to be loyal than any comprehensively-developed
rational benefit.  The logical extreme of
this is seen in crowd-managed (see note 12) brands such as MyFootballClub’s
purchase of Ebbsfleet FC (see note 13). 
How long before we all have a couple of side-interests in brands?  These brands will not only occupy a small –
very engaged – part of our mind, but a considerable share of our wallet too
(see note 14).


The success in building loyalty isn’t reflected in the IPA’s
dataMINE study because you can’t examine loyalty in isolation.  The concept of brand loyalty can only be
understood in the context of other factors. 
In another analysis of the IPA dataBANK, Peter Field identified that
what was so remarkable about O2’s ‘World that revolves around you’ campaign
(see note 15) was not just that it increased loyalty by reducing defections –
or churn – “from 35% to 29% at a time when competitors' churn rates were rising
… Rather the real achievement of this remarkable piece of marketing was to
double recruitment rates, in part by turning existing customers into advocates
for the brand … Twice as much share gain resulted from recruitment as retention
… to characterise the success of O2 as loyalty growth is like describing Dom
Pérignon as a fizzy drink” (see note 16).


This is the key to understanding brand Loyalty; we must
place it in the context of the inter-related factors with which it sits.  Loyalty is inextricably linked to encouraging
customer retention through combating defections.  Loyalty is in effect the opposite of
defections – if you have a 10% defection rate you have, by definition a 90%
loyalty rate.  Not only does loyalty
exist, but it has for each and every brand, a number.

More crucially, the case study demonstrates the extent to
which both loyalty and retention are themselves intrinsically bound to advocacy
– the active support (see note 17) for a brand by a customer; but more of that tomorrow…


1. Andrew Ehrenberg. 
My Research In Marketing.  Admap –
May 2005, Issue 461

2. Adam Smith.  The
Wealth of Nations (1776).

3. A.A.M. Kinneging.  Loyalty in the modern world.  Modern Age; 
Wntr-Spring, 2004;col1

4. Observation made by Dennis Woodside, Vice President of
Google Region One, in a recent talk entitled ‘Chasing the Consumer’

5. At the time of writing, consumer price-sensitivity is
being further instigated by rising inflation and an economic slowdown in part
as a result of the global credit crunch

6. The IPA case study dataBANK is comprised of papers
submitted to the IPA Effectiveness Awards competitions since 1980

7. The IPA dataMINE project aims to use the dataBANK to
produce general learnings about how marketing works.  For more information visit:

8. Only 24% of campaigns succeeded in increasing loyalty
compared to 73% success rate for those campaigns which sought to increase
penetration and 88% success rate for those campaigns which sought to increase
both loyalty and penetration.

9. Don
(Author), Anthony
D. Williams
.  Wikinomics: How Mass
Collaboration Changes Everything

10. John Grant.  After
Image.  Grant observes that ownership of
ideas is far more valuable than the ‘personalities’ from which brands were
previously carefully constructed using insights and aspirations of brand users

11. Jon Alexander, Planner at Fallon – as quoted in an
conversation for this essay

12. Crowd-managed refers to consumers tangibly owning a
share in a brand.  For more see:

13. MyFootballClub consists of 30,000 members who own
Ebbsfleet United and vote on all key decisions from team selection to financial
budgets.  See more at:

14. After all, if the brand was so good that you bought and
continue to buy into it, why – when you get to the shelf – would you buy
anything else?!

15. O2 – The best way to win new customers? Talk to the ones
you already have: the story of O2.  IPA,

16. Peter Field.  The
quest for loyalty.  Admap MagazineMarch
2008, Issue 492

17. Advocacy: n active support of a cause or course of
action – Collins English Dictionary

Friday: Advocacy and the power of word of mouth
Monday: A new way of approaching comms planning