How Brands Grow

About the Author

Byron Sharp, a professor of marketing science at the University of South Australia, has significantly influenced modern marketing through his empirical research and contrarian views. His work challenges traditional marketing beliefs and practices that have long been considered gospel. As the director of the Ehrenberg-Bass Institute for Marketing Science, Sharp focuses on the application of scientific methods to understand what truly drives brand growth and success. His groundbreaking book, How Brands Grow, has become a cornerstone for marketers looking to align their strategies with real-world data rather than conventional wisdom.

Main Idea

The central thesis of Byron Sharp's How Brands Grow is a challenge to traditional marketing doctrines. Sharp posits that many widely-accepted marketing practices, such as the focus on customer loyalty, niche targeting, and the pursuit of brand uniqueness, are not supported by data. Instead, he advocates for a marketing approach centered on mass marketing, brand presence, and the continuous acquisition of new customers. According to Sharp, brands grow not by creating deep loyalty among a small group of customers but by expanding their market penetration—reaching as many potential customers as possible.

Table of Contents

1. Introduction: Debunking Marketing Myths
2. Rule #1: Market to New Customers, Never to Existing Customers
3. Rule #2: Market to Everyone, Never to a Specific Demographic
4. Rule #3: Market to Be Memorable, Not Unique
5. Strategies for Effective Marketing
6. Conclusion: The Future of Marketing

Introduction: Debunking Marketing Myths

Byron Sharp opens his book with a bold claim: much of what marketers believe to be true is based on myths rather than evidence. He argues that the traditional focus on building customer loyalty, targeting specific demographics, and differentiating brands through unique selling propositions does not align with the empirical data on how brands actually grow. According to Sharp, successful marketing requires a shift in mindset—from focusing on loyalty to acquisition, from niche targeting to mass appeal, and from differentiation to brand salience.

Rule #1: Market to New Customers, Never to Existing Customers

The first rule Sharp introduces is perhaps the most counterintuitive: brands should focus on acquiring new customers rather than retaining existing ones. Conventional marketing wisdom suggests that it is cheaper and more profitable to keep current customers than to acquire new ones. However, Sharp's analysis of market data reveals that this is not the case. He argues that customer retention strategies often result in diminishing returns because most customers do not significantly increase their purchase frequency over time.

Sharp explains that brands grow by increasing their market penetration, not by deepening their customer loyalty. This is because the biggest gains in market share come from acquiring new customers, not from squeezing more purchases out of existing ones. He cites the example of loyalty programs, which often fail to increase overall sales because they simply reward customers for purchases they would have made anyway.