SD #4: rationality, double jeopardy law, and writing
February 6, 2022
Hi friends,
Welcome to the fourth edition of Seven Dawns, a weekly newsletter on marketing, psychology, copywriting, productivity and everything in between.
Our seven ideas this week:
1. (Business) ‘Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally’ (J. M. Keynes). The majority of marketers (and business) thinking is based on presumptions/logic, rather than evidence. What I mean by that is that majority of meetings happening today are stuck in the prism of rationality. If proposed ideas are logical, then that is accepted as the truth. If they’re not, then you better not even suggest them. So many opportunities are missed because they do not always follow logic. But who on earth would voluntarily agree that their idea is not following logic? |
2. (Marketing) Double jeopardy law within marketing – small companies get punished twice, they have fewer buyers and smaller loyalty. In other words, as market share declines, both penetration (awareness) and brand loyalty drop at the same time. It is one of the most important laws laid out by Byron Sharp in his book ‘How Brands Grow’. The implications of this law hold as brands both grow and decline and it showcases that brand growth comes primarily from penetration. |
3. (Psychology) I’ve been trying to get better at empathising with people that have different ideas. Something I keep reminding myself is that most of our experiences/ideas are influenced by two things: the surrounding context at the time and our past experiences. It doesn’t come easily, but you start to recognise the power in doing so. |
4. (Marketing) There is one metric within marketing that gets way more attention than it should. Brand loyalty. In every marketer’s career comes a life when they are either asked to or decide to work on customer loyalty (think loyalty cards, reward points etc.). The common misconception is that reducing the churn of your customers can be a cheap and efficient way to increase profitability. The reality (based on science from Byron Sharp’s ‘How Brands Grow) is that loyalty programmes are usually a waste of time and resources. 100% brand loyalty does not exist and trying to achieve it is fruitless. Instead, marketers should focus on market penetration. |
5. (Growth) At the start of this year, I was looking at what skills I want to work on this year. Then I started looking at how I could acquire those skills. Outside the usual online courses, mentorships, qualifications, one area that gets overlooked is identifying someone in your close surrounding who is good at that skill and learning from them. Near-peer learning solutions are popping up and scholarly articles are increasingly talking about the benefits of it for both students and teachers. |
6. (Writing) When I started writing my blog posts a couple of years ago, I’ve become a lot more receptive to how other writers engage the reader. I noticed one thing that good writers do – they describe the surrounding, the context in which things are taking place to a point where you can imagine being in the same room with them. Whether that comes in creative writing or professional, good storytelling goes a long way. |
7. (Marketing) Brands often look at the competition and think that if a customer does not choose their product today, they will choose a competitor’s one. The reality is that companies share a significant amount of buyers with other brands and those buyers are incredibly similar to buyers of others. You think Coca-cola buyers are very different from Pepsi? Or that a Pepsi buyer today won’t buy Coca-cola tomorrow? The biggest opportunity for brands is to target these ‘light’ buyers, to increase the likelihood of them choosing their brand today by a minuscule amount. |
Fun things to click on:
I am not a big fan of podcasts and I never listened to Tim Ferriss show before but I thoroughly enjoyed his conversation with Balaji Srinivasan on crypto, personal freedom, wealth and warfare (it is slightly outdated but still relevant). Here is a Twitter feed of people selling a mirror.
Thanks for reading! If you have any learnings you’d like to share with me, or disagree with any of the ones above then do drop me a message.
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Speak soon,
Tom