We debunk myths about burst advertising, branding, and customer retention with Dr Margaret Faulkner, Senior Research Associate, Ehrenberg-Bass Institute for Marketing Science at the business school, in the University of South Australia. Margaret’s primary areas of expertise and research are in measuring consumer-based brand equity and advertising effectiveness, with a focus on tracking brand health and the effectiveness of marketing efforts. Her research in the not-for-profit sector shows the importance of the laws of growth for all brands.
Resources
Marketing Concepts Covered
- Mental Availability: How can nonprofits build memory links to strengthen recall. How to create “Category entry points” how do we come up when people come up in a support scenario.
- Mental decay: The fact that brand memory fades over time.
- Physical Availability: The idea of making it easy to give – how close is the donate action to the moment.
- Is it easier to keep an existing customer vs attract a new one?
- Should nonprofits focus on renewing or capturing new supporters?
- Should we focus on burst promotions or continuous reach?
- Double Jeopardy Theory: Fewer people/stakeholders/market share means less penetration means reduced proportional loyalty. More on double jeopardy
More about Dr. Margaret Faulkner
Margaret has worked extensively with the Institute’s international clients on a range of projects in both established and emerging markets. Projects include examining the usability of distinctive assets for global brands and helping organizations to take a strategic marketing approach. She is an experienced and engaging presenter.
Margaret’s research has been published in the International Journal of Market Research, Technological Forecasting & Social Change, Nonprofit & Voluntary Sector Quarterly and the Journal of Product & Brand Management.
Transcript
George: Is it really cheaper to keep an existing donor rather than get a new one? Today on the podcast we are exploring a lot of the myths around marketing in the nonprofit sector. This is Using The Whole Whale, stories of data and technology in the social impact world. My name is George Weiner, your host and the Chief Whaler of WholeWhale.com.
Thanks for joining us. Welcome to episode 67.
Today on the podcast we are doing a lot of nonprofit marketing myth busting. Which is awesome because I read this book called How Brands Grow by Professor Byron Sharp and I tracked him down because the book was so contrary to so many of the things that I think we are sort of taught out of hand without any data backing them up.
Such as, is it cheaper to keep an existing customer than a new one?
We’re are often automatically assuming that it is easier and cheaper to keep an existing one, but, they actually use data to explore many myths, that included, that I think a lot of the non-profit sector buys into all too quickly, like, should we spend all of our money in a focused burst or should we spread it out over time? They have the numbers and they are kind enough to sit down with me.
So, today I am speaking with Dr. Margaret Faulkner who is a Senior Research Associate at the University of South Australia, the business school there. And, we are going to get so geeky, you may have to listen to this twice or three times. So, let’s get into it.
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George: I am here with Dr. Margaret Faulkner, the Senior Research Associate, Ehrenberg-Bass Institute Of Marketing Science at the business school in the University of South Australia. How is it going, Margaret?
Margaret: It’s going well, thanks, George.
George: Well brilliant. I know it’s early in the morning, so I appreciate you joining us. Can you fill in a bit more detail about what you do in this field?
Margaret: Okay, I’m at the Ehrenberg-Bass Institute. We’re the largest research institute into marketing science in the world. We are based in Adelaide, for most people who don’t know about Australia, Adelaide is in South Australia.
And what I do there, is I work with our corporate sponsors. But, my specific research area is looking at taking the same rules of marketing and apply them to charities in the non-profit sector. That’s the area where I’m most interested in. But, obviously, I work across big international brands as well. Looking at brand management and effectiveness of their marketing and things like that.
George: So this is really fun for me because I came across the work of one of your colleagues, professor Byron Sharp, inside of How Brands Grow. And it seems like your work actually sort of unmasks a lot of myths about marketing.
Margaret: Yeah. You would think that marketing has been going for a while and it is quite younger science, but Andrew Ehrenberg and Frank Bass, who are named after our institute, they were like the forefathers in taking the scientific evidence-based approach to marketing. And it’s not new. A lot of the laws that we mentioned and worked with, have been around for decades, you know, 40, 50 years going on and knowing that these patterns occurred.
But it’s still a revelation. Not just for charities, or for-profit, but just in many marketers out there and it is turning their worlds upside down still. And that’s what we do at the Institute. Trying to get people to challenge some of the assumptions that they’re not even aware that they operate under and that sets their strategies and their marketing agendas.
George: So we’re talking about assumptions, do you have any classic assumptions that you yourself or just like, I wish every not-for-profit just knew this was an absolute shot in the dark, that you should know the truth about this because it is such a misnomer.
Margaret: Yeah. I mean the Double Jeopardy Law and just understanding the importance of your brand size in the market is one that I think everyone doesn’t appreciate.
And also, I suppose, how important splitting things by user and non-user, or supporters and non-supporters, anything we look at marketing data wise, you can interpret it in a way that makes more sense in terms of competition, and you know, who you’re sharing customers with. Once you understand you need to order by market size.
But, I suppose my biggest thing from a charity, non-profit thing is the branding, and understanding that branding is an asset you’re building up and it takes time to build up these market-based assets. And I think people just come in with good intentions, get rid of a lot of memory structures that are being built up on years upon years that help trigger a response to say that they will help support a charity.
So really understanding how important branding is, and it’s not just your brand name, it’s not just your logo, it can be many more things than that. Just don’t throw those things away without a challenge about how long it is actually helping people know we exist, is it helping us to think- people to think about us, or is it making it easier for them to find us when they do want to give us support.
George: So Margaret, I need you to explain the concept of Double Jeopardy because most Americans look at it as a delightful show on television that we watch.
Margaret: Yes.
George: And the second-round lead by Alex Trebek, and I need you to describe this to me as though I were a 12-year-old.
Margaret: Okay. Well, eventually first noticed by William McPhee who is an American from Columbia University. He is a sociologist in the early 1960s. He noticed that there was this pattern, and he was actually looking at radio announcers and their popularity. And he also looked at other things such as comic strips. So he thought it was unfair that the really unpopular items or presenters or announcers, suffered twice, hence the double jeopardy.
So the first jeopardy is they have less people, that’s why they’re less popular, less people listen to them or read the comic strip, or whatever the thing is, there is just less popular. So there are less people who know about them or experience whatever they had to offer.
And the second jeopardy is the people who do use them, do it less often than they do other things. So they might listen to this…this popular announcer, but there is actually another more popular announcer, they’re listening to more. So that’s the second jeopardy. Not only do they have less people, but whatever the loyalty metric they’re looking at, will be slightly less for the less popular item. And much more people for the popular and slightly higher loyalty.
So, there is a variance in two things, two variables. What we call the “penetration,” which is the number of people who are supporting you in that time frame, or buying from you if its a product based item.
And the frequency of purchase or frequency of giving support will be a behavior loyalty metric. And you would see a variance there. If you order everything by the size, the size of the customer base or supporter base, you will see there will be a slight trend going down. So people might give to you twice in that time period on average across all the brands, probably say 2.2, 2.3 for the biggest charity and maybe it’s 1.7, 1.6 for the smallest. So loyalty will vary, but it doesn’t vary by as much. As we see, it might be 20 times bigger than the biggest charity than the smaller one that we are looking at.
This double jeopardy but it is the penetration of the size of your customer base or supporter base that is going to vary the most to explain why one brand is bigger than the other if it’s a charity or whether it is anything else than you’re in the market for.
George: I like the way that you sort of talk about loyalty. So with the for-profit sector loyalty is like alright, somebody is going to buy this product “loyally” they’re going to keep coming back. Though obviously in your research you show that 100% loyalty is a myth, and the not-for-profit sector is pretty clear to us that we don’t have 100% loyalty. So how…and it’s not possible because people going to give to the things they care about and it might just not be your organization. How does this shift for not-for-profits? How should they be thinking about it?
Margaret: Yes. So we find, I mean, we can’t have 100% loyalty in a repertoire market. So there are two different types of markets generally. You can say you either subscribe to something like an insurance company or you might sign up and it’s an electrician, electricity being presented to your home, you can’t just go changing providers without a lot of hassle. So that’s a subscription market.
Versus a repertoire market where they might be 3 or 4 more or less different types of organizations that could meet your needs depending on the occasion.
So with charities, it’s interesting to say, it’s a repertoire market or subscription market because some people will sign up like for World Vision and Sponsor A Child for years and years and years, but do they do other things as well? Yes. They might also sign up to do an animal organization or welfare organization, but then they might see somebody in the street and give them an adhoc thing. But what we see different in loyalty is that in the subscription market, such as insurance or banking, we would have a high number of people solely going to one provider, not always, anything close to 100% because they might be multiple credit cards or having bank loans or things like that.
But, in the repertoire markets, we see maybe 10% or you know, less of people only giving to that one brand. And it doesn’t vary too much in terms of, there is no one we see out there that will have 100%, and that’s all that they give and people who will give them 100%.
The reason why this I suppose is a different way of thinking about loyalties. We’ve had text books tell us we should be trying to get people to only be loyal beyond reason to you, and then you have this view of if you’re giving to somebody else, they can’t be loyal, can they? That’s normal, the normal thing is, we will have people giving to multiple charities, don’t get upset. If you run your statistics and if you do have information which a lot of the people don’t about who else you’ve been giving to, you’ll see you are just one of many charities that you’ve been giving to. And that’s fine, if you’re a big charity, you obviously have the better part, more people giving to you, and giving to you a bit more regularly. If you’re a medium size charity, you know that you’ll be sharing more of your supporters with the bigger charities than if you are with the smaller charity. This gives you an idea once you know the laws about what to expect, who you would be competing with closely to, and generally, it’s based on the size of the charity that gives you an indication of who your competitors are not their position in the market or other things.
Georg: So another way also that you talk about loyalty is with regard to sort of keeping an existing customer. And in the US, sadly or not so sadly, we’ve shown based on the US giving trends that we only retain about 20% of first-time givers to our organizations year over year. How does that strike you and then how do I think about that as a fundraiser for a midsize not-for-profit?
Margaret: Yeah I think, first of all, that is the statistic, so that’s the reality. And then you have to understand why is that happening. So is it that they are only going to give once a year or once every second year or every third year? It might be that’s their normal pattern for your charity of re-engaging with you. And knowing that this idea of having the right people and the right customers, and the right volunteers, donors, whoever, that are going to be the people that give to you three, four, five times a year, maybe that’s just you know unrealistic to have.
So, understanding that you will have a lot of people sort of coming in and out over a time frame. It might be different people. So some people who are really heavily supportive in one year, you would want to retain those as the assumption is they will be the heaviest supporters next year. Well our research and research in other markets will show that we can’t tag somebody and say they’re going to be the heavy supporter and expect that they will continue to be your heaviest supporter. It might be 40% or 60% of those who were classified as the biggest donors will stay that maybe next year. So, you will still have about the same percentage being heavy versus medium, we call it say a light or less frequent donor or supporter, but the number of people in each bucket who those individuals are will change.
George: Alright, so let me push this a bit further. I am, I’m a fund raiser, I’m listening to this and I’m looking at my year’s activities and I know this and it’s driving me nuts that people that have already opened their wallet to us last year, they literally give to us last year, and I know that in the business world that keeping an existing customer is much cheaper than acquiring a new because that’s what everyone says. Do I focus my energy on renewing these people, or do I go out there fishing for new people?
Margaret: Yeah. And I know where that’s coming from because we had that sent to us quite often. Of course, it will be five times more expensive, or whatever the statistics people call that. And a lot of it when you follow it and you go, where do you get that idea from? Is it coming from your own data or is it just an assumption and a gentleman called Reichheld claimed in the Harvard Business Review some years back, that if only you could retain those existing customers, and you could reduce the amount of decline you have out of your numbers every year, that defection rate by 5%, which sounds like a small number, that 5%. So his claims were not empirical, as in there wasn’t evidence that you could drop it by 5%, but it was just a thought. If you could do it, reduce the defection from 15% to 10%, that would give you this huge improvement, so that’s where you should focus all your energy but that reduction isn’t so small.
In How Brands Grow by Byron Sharp in 2010 talked about this and said it’s actually 33, a third reduction in the number of customers that will be leaving you to actually achieve what he was setting out. We don’t see that happen, it costs a lot of money to be able to get any closer to doing that. And the cost of actually retaining the people, the energy and time, wasn’t looked at compared to if you put that energy and time to other things, such as acquiring.
And the other thing I suppose to bring is a lot of people leave us through no fault of our own. But as marketers, you could be doing the best job at servicing and rewarding and thanking people, but they’ll just stop donating and supporting you for reasons such as, they’ve moved away from where your charities are operating, they’ve died, changed lifestyles, they don’t have the disposable income or they’ve moved on to another state of their life, they are supporting a child, maybe modeling for their own family to support others, it’s unfortunate and now they’ve moved out of homes and they’re focusing on other things. So, you can’t…there is actually a small percentage of things that the marketer could actually do in terms of changing that defection rate and that’s why it was a conceptual idea rather than one that’s driven by evidence.
So we make all our decisions looking at the evidence about what’s realistic, what’s possible. And if you only focused on your existing customers and you only focused on those who were more supportive, you’re going to slowly shrink your supporter base and then just decline as an organization, making it less effective, less useful for society because you have less support to be able to do the things that are needed.
George: I love this and this is one of the things that sort of hit me like a truck. That keeping an existing customer was so ingrained into the sort of lore of business and marketing for me that when it came up that basically, this all came about from a theoretical approach to an article written you know, a decade ago, and instead it’s leading me towards fighting against something like gravity. So you know I’m a runner and it’s as though someone said, you can run a lot faster if you reduced gravity by 10% and you’re like, but there’s a natural order of things. The law of double jeopardy literally states, you’re not going to achieve these absolutes in terms of loyalty, in terms of penetration, and it’s really driven…coming back to it, it’s really driven by how many new people you’re bringing in, how many new folks that you’re continuing to sort of touch. Am I getting this right?
Margaret: Yes. So looking at, we looked obviously more at not charities, but we got from data from how people can do brand tracking and things like that, which unfortunately, we don’t have access to the same type of things the charity, not-for-profit field, but a lot of other sectors by looking at the brands and highlighting those that have grown as well as those who have declined, and tracking what’s going on, you can see that it’s not the number of people that are leaving them that’s the difference, the difference about whether you grow, whether you decline, is looking at yeah, acquisition rates.
So you are, if you stop focusing on acquisition and only focused on the reduction of defection, you know that’s not going to give you the outcome you need. I don’t want anyone listening to take away okay let’s stop doing it. We’re just saying re-balance it, I think it’s the out of balance to this, it’s all about our existing people, and when had someone gone, they haven’t done anything for 6 months are they gone, 12 months are they gone, you set a figure in your own heads about when they’re active or a supporter or not a supporter. But from their perspective, they might still be thinking they’re supporting you, they just haven’t had that opportunity come around again for them to feel like this is the time to do it, they haven’t been asked. So really thinking about what are you doing to make it easy for them to give you support, and maybe not bombarding them all the time expecting and making them feel guilty that they’re not giving you such frequent support because that might not be realistic for them. Their pattern of being a supporter might be once a year or once every two years, and that’s fine because you need everybody, the whole range. Some people will give it to you infrequently, some people will do it you know, whatever you say is regular and then some people be very active. But those people at that end who are the most active supporters, they’re the rarest and the smallest group, and we don’t see any charity doing a fantastic job of only getting those people which are where I think a lot of the strategies, we just want to recruit those people. We just want to focus on them but you look at your profile across all the different charities, they all look the same in terms of everyone has the same distribution, you know, most people give to you once and then the next most frequent one might be twice a year, you know, whatever the time frame is. But majority people giving to you zero times, they might be supporters of charities but not getting around to your brand.
So what can you do to actually get more people who support charities, to even know you exist, so next time they’re ready…
George: So let’s talk about…yeah, let’s talk about this awareness because another big thing in the not-for-profit sector is the focus on the seasonality and especially around holidays. However, another statistic that is put out by Blackbaud’s the other year in charitable givings showed that about 17% of overall giving happened in December, which you know, 17% is not 90%. I’m willing to bet if we look at a lot of people’s budgets and marketing efforts, 90% of that effort went into December though it’s not there. So my question to you is how do we think about this sort of burst versus continuity you know, even spread of ads spend and effort?
Margaret: Well you know again our general finding with the institute is, if you’re doing this first strategy whether it’s in marketing, it might be a new product launch that has come out, put all this effort into charities, let’s refresh the brand it’s old and I see an increase in support come after they rebrand, not because they rebrand it, because they reminded people they exist. So they could say my thing would be if you got branding elements that people already know and they’re useful for you, take that money and spend it in reminding them that you exist, and don’t wait for it to be once every 5 years or 3 years or once a year in December.
You need to… people will give as you’re saying, all over the 12 month period, it’s not just a Christmas time thing, and if you’re only reminding them you exist and need support in Christmas time, all those other months, you’re losing that opportunity. So you need to…and people’s memory decay over time. So even if you give them a nice, fantastic, you reached everybody and people will be trying to do multiple times all that once for a period, you’re much better off to reach everybody you know, once at that time, and then take that money and resources and keep reminding the market you know at different points of the year. Refreshing that yet that this is a charity that needs our support, this is an easy one, it works for me in terms of there is no barriers or few barriers to giving support as well as volunteering, money, whatever they’re looking for.
George: So you said the term there, “memory decay,” which means humans forget stuff and they forget it mighty quickly, and so we need to remind them. Which leads me to my next question I guess about advertising and outreach, you know how do you think about the frequency versus reach? That is, do I want to spend money reminding people in their words, reminding them that we exist and the same people, or do I want to spend those dollars on finding fresh new minds to introduce myself to as a not-for-profit?
Margaret: Yes. We obviously will say first of all you know, is your…define your market and our thing is target the whole market. So rather than just narrowly focusing on the younger people or the older people, you probably look at your donor base, have a look at who is currently giving to you and I would say chances are unless you’ve been very narrow in your execution and only reaching a certain target. You will have everybody giving you support.
So it’s important for you to remind all those potential people, not just your existing people that you need their support. And so to do that, think about, have you reached everybody at least once who is a potential supporter before you go and reach the same people again a second or a third or a fourth or fifth time. Once everyone has been reached, then you go
George: Yeah. We’re talking about memory decay and it’s kind of funny because I get this real sense that the way you and your colleagues have looked at the humans as though we’re like little walking probability machines where 1 out of 300 times I’m going to buy a Coke, 1 out of 400 times I’m going to donate to the Red Cross, and in this you talk about a concept called “mental availability.” How can…first off, can you describe what the heck mental availability means and then how do nonprofits build these types of memory links?
Margaret: Yeah, so mental availability is just simply making it easy to be thought of. What’s your probability or propensity of someone to think of us? So when they’re next in a situation where they can give us support, whether it’s donating clothes, or loose change at the airport, or whatever, the idea of my brand being one that they’re considering, so are you in the right spot? One way we can think of mental availability, there is so many in charities, Australia, America, there are thousands of different worthy charities, so if you are inclined to give support to somebody, people will screen out the majority of those as only a few they are thinking of. So if you’re not in that select few, you’re not even in the race even if you may have the best you know, need, requirement out there, they’re not even thinking of you, they’re not getting down to why you’re going to make more impact than another one.
So this is why the big charities are able to have a benefit over the smaller ones, because we naturally notice, there are more in the market, we’re more likely someone’s very light supporter of charities, meaning they infrequently giving support, chances are, it’s going to be the bigger ones that they’re going to think of. If it’s a disaster then its Red Cross. So that helps obviously an organization such as Red Cross because they’re not having to do anything. It’s always hard to work when there is a disaster, people might naturally go onto their website or see that people in the Red Cross are very good at using a distinctive assets in terms of their branding to know okay, they’re out there helping other people I need to go and support as well.
So there are different ways you can work as a brand to make sure you’re doing everything to be in that race and to be thought of. And some of that is another concept called Category Entry Points.
So rather than thinking of I’m a charity, I’m an animal charity, help charity, take it back to what are the occasions that the supporter might be thinking about giving support and are you one of those brands that might be thought of.
George: Yeah, so let’s say more here you know, we’re all walking probabilities running around and if we have like no mental availability, if I don’t even have…it’s zero to zero chances, I’m not going to find your organization. How do you think about the relationship of building a brand as a concept in people’s minds, and then how do I associate that brand with other memory links, other Category Entry Points for you know, a mid-size non-profit?
Margaret: Yeah. So the brand needs to be anchored to something. So I’m going back into associated network theories and needs of being around thousands of views in terms of, there are different ways that people have always thought about memory and going back to understanding how. When you are somebody to sort of think out loud, you’ll find that one thought leads to another thought. So it’s early in the morning if I want caffeine, I want to feel more awake, I will be thinking about can I get a coffee or a cup of tea, or whatever your caffeine thing is for the day. And that leads you onto different, where should I go get it, what brands might eventually come out. But you don’t get to it the way as we as marketers might often be thinking about our brand. We might ask them in a battery of survey questions when you’re thinking about animal charities you know, which charity do you think of? And that’s the way we report, we do really well there. But how often is someone walking around going, “I’m thinking about animal charities now?” They’re not, they’re thinking about I want to…it might be something like, “I’m looking to adopt a pet,” so that might be closer to that one. The other might just be, “I’ve got some loose change and I see a collection tin and it’s going to go to whoever has that collection tin.
So it’s a different way of thinking, it’s needed to be able to interpret some of the other things we have at the Institute.
George: Yeah, it’s very interesting. I mean you’re just bringing it up, Oh I’m also just going to give to whoever has the tin, right, however, happens to be asking right in front of me, which kinds of brings us to physical availability. Can you speak to how not-for-profit should be making it easier to give and how that relates to how we’re trying to drive our organizations forward?
Margaret: Yeah, so I said memory is really important, because to be thought of as the charity in multiple different occasions that people might evoke to say this is what I want to support. It’s one side of the coin.
Physical availability is the other one because there is no point thinking about I want to support somebody if it then becomes too much of a hassle. I give up before I actually gone and become a donor.
So the physical availability of the things about making it easy to give support and we break this up into three different areas.
So your presence which is the collection tin and it just happens to be at the end of the checkout or when I’m buying stuff and I don’t want the loose change back into my wallet or wherever, I can just drop it in there, that makes it easy for me to give.
There are other things about online. Am I easy to find, or however that some one decided to do the searching to find the charity they will be able to have a URL that will remember and go direct, whatever that is. Even when you’re on there, how easy is it to find on the website how to give a donation, how many steps and clicks does it take. So that’s an area you could be looking at.
The relevance is another area, and that is to be thinking about, is it in the form that I want? So from a marketing product perspective, it might be when I’m traveling and I’m going on an airplane flight, I’ve got the new regulations, will not that new now, but you know people that came out with their travel size packs that were allowed on the plane, probably did quite well especially if they were sitting at the airport ready to go. But for a charity it might be looking about what’s pattern I want to give support? Do we force them to only do the regular giving, whereas I don’t want to sign up for things, I just want to give some money away today and not be the regular person that they would like. But of course, I want them to be regular because over the 12 months, I give more than if I just give in an adhoc basis. Strategically I can see why the charity wants to do that but you got to think about is it actually stopping some other people who potentially would give to your cause and had you managed that.
So are you providing an opportunity for them to give the support how they would like to give it, not just the way you want the set up to do it.
And the last thing is prominence. So this is for charities for somebody out there, you might be able to get an ad campaign supported, some pro-bono supported or you be an organization that can actually fund it yourself but there are so many charities that you might think you’re very different, but from the supporter side of it, how do they take away that it was you that’s asking for support and time? They should give it to you and not one of the other charities that is big or known in the area.
So that’s where the branding part is really important to make sure they can easily spot you in the physical location, where it’s online or physically shops, or what you are looking for.
George: So something that you know, midsize, small not-for-profit’s deal with after they get started, maybe they have spent a while, we’ll call it 5 years or so, building up their brand name and then they realized, you know this doesn’t really fit what we’re doing, should people switch their brands along the way? What do you think about when you hear someone say, “you know, we’re going to update our brand logo or even our brand name?”
Margaret: Yeah, I mean I think the first thing is, does anyone know you and I’m a researcher, so we would say, you need to go out to the market. So is not just a matter of what you and your executive think, you should always go out to your supporter base, and not just your current supporters but those who may be supporting you in the past for those who don’t know you exist but potentially. So you need to go wider than just that you might think are valuable supporters.
And check, does anybody else knows your brand name, does anybody else know the logo? It’s not just the logo, it could be other elements, it could be a tag line you’ve been using or a jingle or music you play. It might be left for a little while, but a lot of people in the population if you kept using it, it would help you signal as the brand.
The other thing is, there was an interesting thing online at the end of last year. Grey London I don’t know if you know is a creative agency, based in London. They had put out an offer pro-bono to change the logo of WWF. So I’m sure most people if you see the logo of the giant panda, you think of WWF. And it’s worked well in the past obviously because it was endangered animal, and that’s what they were supporting. And so their premise was the numbers of pandas has grown, they have done a fabulous job, they’ve come off the endangered species list, therefore they need to change their logo to something that does need more support and we will do it for you pro-bono, and they even came out with images and it was a polar bear vanishing. And so it was just its little nose and you know head featured left.
And so you sit there and go okay, why would you do that? Their premise is, they need a refresh, it’s being there for close unto 50 years, but it’s no longer endangered, we have to change it to keep it relevant. And what they have missed is the job of the branding element is not to give meaning, the job is to identify quickly, to do that hard work, mental availability needs more than just knowing it’s this brand, there might be messages and relevance and things like that that you do in your campaigns, that’s different to your branding elements. The branding elements, all their role is to identify you as quickly as possible, and then the rest of your communication does the work of building the association that’s anchored to that brand.
So I just thought it was crazy that they would even be putting it out there saying that you would change something. It’s just such an iconic logo, why would you give that away. That’s their market base asset they are throwing away, so obviously you can talk about polar bear numbers and still have a giant panda there, it’s two different notions.
George: It’s interesting because in the book you know, Professor Sharp speaks about in How Brand Grows, speak about the difference between Coke and Pepsi, at least from a logo perspective and how you can visualize right now the Coke logo, stop and visualize it for me, visualize the Pepsi logo because sadly that changes every some odd years as you go through. Can you talk to me a little bit about you know, as we talk about mental availability, the idea of the availability heuristic and what familiarity means when we’re making a choice to buy?
Margaret: Yes, so it just sort of helps. We have so much information, and if something is familiar, we’re just more drawn to it in terms of it, it’s easier for us. We call out, not say we’re probability people, we also call it as we see it, and the evidence shows us that people are these cognitive misers in terms of our bodies are built to actually not do a lot of thinking, to be able to make decisions quickly and have this heuristic cues that just help us along the way. If we actually stopped and look at everything that we’re exposed to and if we looked at everything, we should put it in our shopping baskets or trolleys or you know, any other decision we make in our lives, we never get anything done, there is only 24-hours in the day. So we are actually hardwired to actually use some of these cues.
One of them is if something familiar and this is why we see this usage that we need to split. If someone actually had the experience with the brand; they’re going to be more likely to say anything about the brand, they have some knowledge and memory structures built in that they can retrieve. Whereas if you’re a non-user, your only experience that you have for exposure is through avatars and through communication campaigns, so it’s going to be much less.
And the big brands have more past and current users in their field of potential categories are advised, so if you don’t take those usage bias into consideration, you can again misinterpret things from the bigger brands to the smaller brands. Things that we need to do in analysis. Back to the charity perspective, it’s understanding again why bigger charities sort of have the benefits, because they are familiar, they are going to be more easily thought of and that helps us just quickly to choose them and move on.
George: Yes, so basically you know when we’re in that type one thinking. You know we’re cognitive misers and we’re looking inside and sizing things up in the matter of seconds. Is it safe to say that we use familiarity as a proxy for trust and sort of quality?
Margaret: Yeah, I don’t know if we can probably get to the trusting qualities, just you know, you probably made that decision before. It’s definitely and we called it “the new people entering the category.” So those people might spend a bit more time, even if you look at the amount of times some people using decisions, they might use what my family has done and not as you go through the whole evaluation process themselves.
So you’re just using… you’re probably not thinking too much of it at all. We might say it’s trust and quality, we know that it will do the job, or had the outcome I need and under that we have probably come up with trust and quality as the explanation. But it’s just you know, it’s easy, pick it up, it works. It’s really not these vast differences for consumer or supporters perspectives, they are all pretty much the same.
So you’re competing pretty much head on with every other brand, and the only difference is some will be going somewhere smaller, therefore you know, some benefits they’ve had from their past marketing efforts and bigger reach.
George: Okay, I can continue to geek out on these topics, I think we’ve covered a lot some of the misnomers and topics. So with your permission, I would like to move onto the rapid fire round.
Margaret: Okay.
George: A tentative okay. You’re very brave, alright, ready. What is one tech tool or website that you and your organization has started using in the last year?
Margaret: Well, I don’t know if the last year, probably Slack. We use it, I don’t know, whether that’s a tech tool or just an app for us to communicate with each other. Just easy to setup groups. We do lots of different projects works in groups, so you can just have channels for yourself or just go wider across the whole institute.
George: Can you talk about a mistake that you’ve made in your career that have shaped the way you do your work?
Margaret: I think it’s probably a mistake most marketers or researchers always makes. You probably assume everybody is interested in the topic as you are. Assuming that everyone is as passionate. So thinking I need to step back a bit more and explain the reasons why. So, we are so familiar with these laws of marketing. I’ve done an undergrad, a masters, and a PhD, so remembering that it’s still new to some people and it takes a while and given people the time it takes to go back, look at their own data, doing it themselves and when they’re ready, have a next conversation, rather than giving too much all at once which is probably done today.
George: What is something coming in the next year either in your field or in your organization that is getting you excited?
Margaret: I think I’m seeing a momentum in terms of our corporate sponsors and the institute’s reach. So we talk about trying to disseminate this knowledge, I mean this is where research institute, our role, I suppose our passions see that people can actually take the laws of marketing, which many are not new, it’s just what’s becoming more new, is more people understanding what does it mean strategically and actually starting to see you know, less wastage and that’s probably what drives me. Because I love to work with more people and actually see how can we take the precious money that people have for marketing and charities and not-for-profits and use it wisely and as effectively as possible. And thinking about what they’re doing in terms of how can they grow and be more effective.
George: Okay. Do you believe that not-for-profits can successfully go out of business?
Margaret: Well make Polio history. I would like that one to go out of business you know so they can find a cure, or they have the vaccinations, those types of things, yes I can.
George: What is something that you think either you or your organization should stop doing?
Margaret: Stop doing? Meetings.
George: Cool, alright. Next stop, if you had a Harry Potter magical wand and you could wave it across the not-for-profit industry, what would it do?
Margaret: It would make people stop and think about their actions, especially about branding. Don’t change the brand without checking first, you’re not trying out an asset.
George: And finally, if you could jump in a hot tub time machine and go back to earlier in your career, what advice would you give yourself? Say you were just graduating from your undergrad, what advice would you give yourself?
Margaret: Follow your passion I would say. Surround yourself with people who are passionate and excited as you in whatever endeavor you are trying to do.
George: Well Margaret, thank you for joining us and our final question for you, doesn’t need to be that rapid, how can people find you and how do people help you?
Margaret: I am based at the business school at the University of South Australia. And the institute has a website www.marketingsites.info and our Twitter account @EhrenbergBass. I am personally very happy to connect with via LinkedIn, probably the easiest way /MargaretFaulkner is my LinkedIn account. I also got a website at the South Australia on the profile page, so lots of different ways they can connect with us. Very interested to build our network of people that know what we do.
George: Well, thank you so much for sharing all of these topics. I am sure people will be listening and re-listening to it and have a great day.
Margaret: Thank you very much George, I will do.
George: I know we covered a lot of topics here such as mental availability, physical availability, double jeopardy, and a number of other topics.
Take a step back though and obviously you can re-listen to this but some of the fundamental elements are they are treating people and looking at people as little probability engines. You are running around and making tons of decisions based on what we talked about being cognitive misers, limited information by choice sometimes. And so, when we are making these choices on the fly when we are running down the supermarket of life and online, sometimes the fact that we’ve seen somebody’s logo 20 times is enough to say you know what that is a reputable charity, that’s a reputable brand that I am going to choose to buy from.
My friends ask me I don’t need to go to charity navigator and do this research. In our ideal world people switch to system two thinking, they are going to spend a bit more time evaluating. That’s the perfect world we sort of designed for and imagine for the people who donate to our organization when in fact the truth may be frustrating if we think about it because of their giving because their friend just referred them. They are getting because happen to be the right, at the right place, and they knew your brand and logo and press donate.
So take a step back and really think differently about how you are spending your money. Think about which of these myths maybe its, let’s spend all of our money in December when people give myth or it’s easier to keep an existing customer and keep spending our money there than get a new one. Think about which myths you want to test because I think Margaret was also very careful not to say that they are absolute truths out there. Be careful of the recommendations that are absolute truths and be careful of the myths that get repeated simply because they are easier to remember. Think about how you are going to test this. And I have seen a lot of the ways that they have gone about breaking down the for-profit industry and dispelled a lot of these myths.
Gosh, they are so much to think about and I hope it wasn’t too overwhelming and that you tackle some of these things even if it is scary or goes against some of the prevailing wisdom that maybe guides your own organization.
As always, tons of resources which are always available at our site wholewhale.com/podcast. This was episode #67. Thanks as always for joining us.
This has been Using The Whole Whale, stories of data and technology in a social impact world.
Resources as always may be found at wholewhale.com/podcast.
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As always our music GregThomasMusic.org. It is good because you heard it a lot of times and as we just learned familiarity can help breed trust. So again, GregThomasMusic.org.
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