Do Loyalty Programs Work?

Get ready for another insightful episode of Brandwidth – ‘Big Ideas on Small Business Marketing’! In this episode, we delve into the topic of brand loyalty and loyalty programs with our knowledgeable hosts, Sam McEwin and Dean Millson. They initiate an engaging conversation by discussing the significance of providing superior service to customers in order to retain their loyalty.

Throughout the episode, we refer to various studies that describe how loyalty programs may not inevitably lead to increased growth or profitability for brands. Nevertheless, these programs do contribute to physical availability and convenience for customers. We also explore the four different types of buyers, and understand why heavy but low-loyalty buyers are the most coveted for loyalty programs.

Additionally, we discuss the importance of randomness in rewards and examine how businesses can transcend the typical predictable rewards to maintain customer engagement. From VIP events, occasional free products to upsell opportunities, we gain valuable insights into building robust customer relationships.

Come along for a thought-provoking ride in this episode, as we learn more about the intricacies of loyalty programs and how to effectively utilise them for driving growth. 

Show Description

“Customers are loyal right up until someone else offers them a better service.” These words from Jeff Bezos, the king of online shopping himself, sets the stage perfectly for a deep dive into the world of brand loyalty and loyalty programs, in this episode of the Brandwidth Podcast, guided by our hosts Sam McEwin and Dean Millson.

The Hosts ponder whether loyalty programs truly work. According to research, loyalty programs do increase loyalty, but only slightly. The hosts kick off the discussion on loyalty programs by sharing their personal experiences with these schemes. As they swap stories, the question arises: are loyalty programs truly effective at building brand loyalty, or are they simply a clever marketing tactic? As the hosts delve deeper into the world of customer loyalty, knowledge is put to the test with a quiz – and much to everyone’s surprise, Dean proves to be a master of all things loyalty, nailing both questions like a pro. This prompts the hosts to ponder: what other secrets lie behind the allure of loyalty programs? Is there more to the equation than just points and rewards? It becomes clear that there’s more to the story than just earning points and scoring discounts…

We uncover some drawbacks of loyalty programs, such as not significantly increasing profitability for organisations and even decreasing profitability for existing, loyal buyers. We explore why organisations keep persisting with loyalty programs despite these drawbacks. One reason is that measuring loyalty is easier, but market share or growth should be the focus.

Our conversation leads us to discover that people are wired to get more excited by randomness and unpredictability than by predictable outcomes. Successful programs are not just about loyalty but increasing purchase value or other factors. So, instead of launching a loyalty program, we consider building deeper relationships with B2B customers through thoughtful action, making the shopping experience memorable, and offering amazing value to frequent buyers.

In this episode, we cover loyalty programs and how we can make better decisions to ultimately serve our customers better. If you’re loyal to the podcast, the best way to support it is by sharing it, talking about it, and leaving reviews. So, let’s tune in together to this captivating episode of the Brandwidth Podcast!
Episode Timestamps

00:00 – Introduction
02:45 – The role of superior service in retaining customer loyalty
06:30 – Studies on loyalty programs and their effect on growth and profitability
11:20 – The four different types of buyers and the importance of low-loyalty buyers
19:00 – The concept of randomness in rewards
24:45 – Transcending predictable rewards to maintain customer engagement
32:10 – Exploring VIP events, occasional free products, and upsell opportunities
41:00 – Conclusion & wrap-up

Resources Mentioned

Prof. Byron Sharp – How Brands Grow –

Marketer and Consumer agree to marriage counselling Video –


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Episode Title: Do Loyalty Programs Work?

Host(s): Dean Millson, Sam McEwin 


Sam McEwin  – 0:0:27
Yes. Welcome back to another episode of Brandwidth Podcast. My name’s Sam McEwinand joining me againas alwaysDean Nelson. How are you today? Dean

Dean Millson – 0:0:36
Thank youSammy. Good to see you again.

Sam McEwin  – 0:0:39
Good to see you too. And could you hear that you’re 

Dean Millson – 0:0:41
Splendid? Yes. Thank you very much. How are you? 

Sam McEwin  – 0:0:43
<laugh>? Doing very well. Doing very well. So, uh, yeah, as we, as we do, this is a, a podcast where each of us or one of us comes to the, uh, the recording with a topic, topic without notice and, uh, see where it takes us. And today it’s my turn to 

Dean Millson – 0:1:4
Where will we go today? 

Sam McEwin  – 0:1:7
<laugh>? Mm. The suspense. So, uh, I wanted to start today with a quote. I, I recently or somewhat recently, uh, completed a book called Invent and Wander, which was a collection of shareholder letters mostly, um, but other writings by, uh, Jeff Bezos of Amazon Fame, obviously, I assume, obviously I think everybody knows that. Yep. <laugh>. Um, and it contained this quote about customers, which I, I liked. Uh, I’ve paraphrased it slightly, but the quote is, 

Dean Millson – 0:1:41
Goes like this, 

Sam McEwin  – 0:1:42
Like this, <laugh> our customers have made our business what it is, and we consider them to be loyal to us right up until the second that someone else offers them a better service. Which I think is pretty much spot on. Spot on. If we’re talking about brand loyalty, which we are, because the topic I wanted to talk about today is brand loyalty. Ooh. And more specifically loyalty programs. 

Dean Millson – 0:2:14
Oh, good. Cuz I’ve got some thoughts on these 

Sam McEwin  – 0:2:16
<laugh>. I thought you might. Yeah. Um, and this would be one of, uh, or although this is a topic without notice, I think this might be one area that, uh, both of us have, have done a little bit of 

Dean Millson – 0:2:26
Reading research. I may reveal to too much about myself in this conversation, though. <laugh>, I may overshare here. But anyway, 

Sam McEwin  – 0:2:34
<laugh>, I’m, look, I’m looking forward to that. Uh, I, I love, I’d love nothing more. So, <laugh>, uh, look, I, I thought the Jeff Bassis quotes a, an interesting one. And my, uh, consumer example of, of that is, uh, I’ve long been very, very brand loyal to a particular brand of, of yogurt that I refer to as <unk>. But it could be 

Dean Millson – 0:2:56
<unk> Ah, yeah, I know Yk, I think, 

Sam McEwin  – 0:3:0
I think Yana feels 

Dean Millson – 0:3:1
Go with that. Feels right. Feels yoy 

Sam McEwin  – 0:3:3
Yoy. Um, they’re, they’re vanilla yogurt forever in a day. That’s been my staple choice, uh, until such time as Tamar Valley yogurt showed up. And I haven’t thought about Yma until now, ever since, 

Dean Millson – 0:3:17
And been seeing other people. I have been very happy. 

Sam McEwin  – 0:3:20
Have you seen that same video I watched yesterday? 

Dean Millson – 0:3:22
No. <laugh> <laugh>. 

Sam McEwin  – 0:3:24
There’s a, there’s a bit of a satirical, uh, video going, doing the rounds at the moment. Uh, this will be one for the show notes of, uh, a marketing. Yeah. Uh, what is it? A, a brand and a consumer, uh, receiving counseling, marriage counseling. 

Dean Millson – 0:3:40
<laugh>. Did written share that I’ve I saw it. I haven’t watched it. I think I’ve said it. 

Sam McEwin  – 0:3:44
It’s, it’s, uh, it’s, um, interesting. Anyway. Okay. What, what was it? Uh, I thought that might’ve been a reference. 

Dean Millson – 0:3:49
No, no. It wasn 

Sam McEwin  – 0:3:50
<laugh>. Um, so yeah. Anyway, I thought, I thought as, you know, that was, that was, uh, I, I instantly sort of thought of that, yo, and I thought it’s, it’s true. That is loyalty. I was, you know, couldn’t be more brand loyal until I find a better service and, you know. Yep. Right. We’ll switch instantly. And Yes, there was no heartbreak. No, I didn’t feel any guilt. Uh, I don’t, 

Dean Millson – 0:4:7
There was no program there, 

Sam McEwin  – 0:4:8
<laugh>. Ja. And maybe they needed a loyalty program. 

Dean Millson – 0:4:10
Yeah, they did. 

Sam McEwin  – 0:4:11
So, yeah. So that’s, um, you know, leads us to the que question, do loyalty programs work? And, um, I answer that, but I’m gonna throw some questions at you, so, 

Dean Millson – 0:4:22
Yep. Okay. I think, do want me, do you want me to answer? 

Sam McEwin  – 0:4:25
Not, not yet. I’ll tell you when. I’ll, I’ll, I’ll give you a knot, actually. Yep. You know what, this is the time. Let’s have a quiz, Dean. 

Dean Millson – 0:4:30
Okay. In your opinion, it’s a music. Yeah. <laugh>, 

Sam McEwin  – 0:4:33
Welcome to another episode of 

Dean Millson – 0:4:36
Brand Loyalty Quiz. 

Sam McEwin  – 0:4:37
Loyalty Prices. Right? Um, hmm. I might edit that out later. Uh, so in your opinion, in your well-researched Oh, <laugh> and, uh, experienced opinion Yep. Through loyalty programs, improve loyalty. 

Dean Millson – 0:4:55
Well, I can only go off my, no, see, I haven’t done research on that, but I’ve got myself. Yep. For me. Yes, yes, yes. And I have a interesting, but I, I have one example, but it’s a really strong example. Okay. But it’s totally worked on me. Okay. But, um, we’ll keep going through the please. I, I, unless you want me to, I’m 

Sam McEwin  – 0:5:12
Gonna an, I’m gonna an, an well, the research, according to 

Dean Millson – 0:5:16
Berg, that <laugh>, I know that research 

Sam McEwin  – 0:5:19
Would say 

Dean Millson – 0:5:21
Yes. Do they 

Sam McEwin  – 0:5:23
Only a little bit though, and Okay. It’s not much, but yes. And this is one of the, the most misunderstood Oh yeah. 

Dean Millson – 0:5:32
Cause I would’ve said No, there 

Sam McEwin  – 0:5:33
You go. From, uh, from how brands grow and, and the research, there’s actually two areas. Oh, that makes 

Dean Millson – 0:5:39
Me feel so much better. So you’re correct, because my, my, um, well, only cuz I, yeah, cuz I, I think about this often, um, when it comes to this certain lly program and I was just like, maybe I think there’s a reason for it, which when I reveal what it is, it’s, um, I, I think you understand why, but I’ve always thought, wow, it absolutely works on me. Like <laugh>, am I the only one? 

Sam McEwin  – 0:6:0
Well, no, no. So the, the, the conclusion, and this is fairly, well, maybe not clearly stated cause everyone misunderstands it, but it, it is stated within, within, you know, how brands grow and, and in the research that Yes, loyalty programs do increase loyalty just a little 

Dean Millson – 0:6:15
Bit. Yeah. Okay. So the point really was they increase loyalty. They’re good, but don’t rely on them to, to, to, to on your, on your brand. 

Sam McEwin  – 0:6:24
We’ll return to the 

Dean Millson – 0:6:25

Sam McEwin  – 0:6:26
We’ll go back to this. Okay. So question number two. Yes. Do loyalty programs increase growth, market share? 

Dean Millson – 0:6:35

Sam McEwin  – 0:6:37
No. Absolutely. I was gonna say, uh, well the, actually the answer is not really. Maybe a little bit sometimes, but no. Um, and the third question, number three. And last final question. Do loyalty programs increase the profitability of those organizations that employ them? 

Dean Millson – 0:7:1
In my experience, I’d say no. 

Sam McEwin  – 0:7:4
No. And that is an absolute fundamental, I mean, obviously this is general research, right? There’s, I’m sure there’s an outlier or two, but No, no, they don’t. And that is the reason why loyalty programs should be rightly considered very much on the nose. Because yes, they do improve loyalty a little bit. Um, no, they don’t really increase growth at all. And actually they don’t increase profitability. What they do is decrease profitability of your most already existing, most loyal, uh, buyers. 

Dean Millson – 0:7:39
The fascinating Catch 22. Because with the example, should I just share it or? 

Sam McEwin  – 0:7:44
Yeah, go. 

Dean Millson – 0:7:45
So it’s vintage sellers. Yeah. Okay. And so they have a loyalty club, which you, you earn points for dollars you spend on wine. And the deal is actually pretty shit. <laugh> <laugh>. Um, so the end, like, and, and it’s, so there’s, you know, so much kind of interesting stuff from behavioral sides going on here. You spend $500, 500 points and you get 25 bucks back. So it’s, it’s not that good. But they do things like, they have triple points, weekends and stuff like this. And, and so what generally happens with me is I’ll make larger purchases that might have, you know, um, for they’re gonna last me a while when they throw up that, that that deal. So, but it, it got me to, that’s where I shop now for, for wine. Now it’s a bit different though because I had to start budgeting, you know, um, a bit tighter. 

Dean Millson – 0:8:32
Like I had 12, 18 months ago. And so beca became a, like a, a a price thing. Like I wasn’t just gonna knock jump down to the, the local, you know, um, wine merchant with, with fair enough than the nicer wine. Yeah. I was looking for, so I had price, price going on here a little bit that I, you know, I had to be conscious of, but, so that, that really suited my kind of preferences. So it’s not for, for everyone, but I will, you know, I’ll shop there and I’ll, you know, my, my wife laughs and it was Triple Points weekend last weekend. I, I did like a, you know, a two month shop for, for wine, cuz I got my, you know, 50 bucks off. And, but, so, but yeah. Profitable, like, I, I, they’re not, it’s not being more profitable for me, but I probably wouldn’t shop there as much if it wasn’t there. I would, yeah. I would just go to other bottle shops or try other things. So a part of me, I’m kind of locked in there. Yeah. Their cycle a little bit. So, 

Sam McEwin  – 0:9:30
So follow up question though. Yeah. How, how did you, do you remember the time you signed up to that 

Dean Millson – 0:9:35
Loyalty program? I signed up for that 20 years ago whenever, like, but I, it set dormant FRAs really? So I really only started using it kind of two years ago again, because they were, they were there and I’d become budget conscious and, you know, wanted to get the most, most bang for buck. There’s 

Sam McEwin  – 0:9:50
Some serious 5 95 rule going on there. No. 

Dean Millson – 0:9:53
Yeah, no, they’re, they’re, they’re, they’re, well, yeah, there, there are. And I know, but the other side, there’s one close to my house. So there’s the other thing, you know, you can’t Physical availability. Physical availability, that’s right. Yeah. So, but, but it’s interesting. I, I would say so it totally doesn’t, um, for me, and this is sample of one, so it’s not, it’s, it’s, it’s not really, um, not, you know, don’t hold too much weight with it. But, um, I, you know, if you said there was other people out there like me, um, it doesn’t increase profitability in a sense that I’m only, I’m buying there in order to get, you know, get some free money or, you know, extra wine, really. Um, but I wouldn’t shop there as much if the, if I wasn’t into the program. So I don’t know what, how you work that out. 

Sam McEwin  – 0:10:40
Well, there you go. And that’s, and that where I, I think they say, well, it does increase loyalty. You are, you are more loyal and there’s those times, you know, maybe you’d shop there anyway because it’s local. Um, but there’s times when you, you would, you know, maybe for convenience you’re near another, uh, competitor that you, you know, now you are, you know, the loyalty program is this, oh no, I won’t do that. I’ll, I’ll, 

Dean Millson – 0:11:1
I’ll wait, wait until do that there, 

Sam McEwin  – 0:11:2
Which makes sense. There’s the little bit, 

Dean Millson – 0:11:5
There’s the, there’s a 

Sam McEwin  – 0:11:6
Little bit, the reason where it breaks down this is, this is, um, so what’s contained in, in how brands grow and what’s, um, certainly sort of featured in, in the Berg bass studies and those ba those studies. So what, what I wanted, I didn’t want this to be just, uh, you know, Sam ru recites a chapter from How Brands Grow, 

Dean Millson – 0:11:24
Because that’s tough. Our podcast 

Sam McEwin  – 0:11:26
<laugh>. Yeah, I know. And there’s plenty of podcasts out there that, that sort of do that. So I, I will sort of go, I, there’s a, a few questions that, that I don’t think have been answered. I haven’t seen that in any of the research. Okay. Any the other studies that have come that I think maybe we can tackle. Yep. Um, but yeah, certainly Erin Berg Bus did a lot of studies and, and their study was on flybys the main one. Right? Ah, uh, and so it was a, you know, in, in some ways it’s, it’s not your typical loyalty program, you know, which, which raises the questions. But then that particular study was replicated numerous times. It was done in, oh, I wanna say France, maybe around some grocery store chains and different things and, and a number of other studies. And they all come to the exact same conclusions. Uh, and the reason why, uh, that Yeah, 

Dean Millson – 0:12:8
Just on that, I wonder, this is a side note. Um, I, I wonder partly with that, like maybe you’re gonna cover this, um, it’s not connected to the brand. Like it’s, you know, you, so what flybys here is, is Coles and then a bunch of related businesses, and Woolworth has got worse. I think their one is, I don’t know, but it’s not the video tellers one for me, it’s like connected to the brand. Yeah. I see. A direct connection. Whereas, because when they have their own brand, it’s like, it’s once more removed. It doesn’t feel as strong. 

Sam McEwin  – 0:12:38
Yeah. Well, uh, there, there may be some reasons why actually not being part of the brand might be a actually, uh, oh yeah. A good thing. Um, but certain, look, I, I think it would apply to vintage sellers as much as it applied to, to flybys. And the reason that it doesn’t work is, um, and, and this is to quote this time from how brands grow. Cause I think, uh, how brands grow actually do do a really good job of explaining it, which is, um, what they say is from a marketing strategy perspective, there is something unusual about loyalty programs. And that is that they skew more than other marketing interventions towards heavier, more loyal buyers of the brand. And there’s 

Dean Millson – 0:13:16
Two, I’m putting my hand up right now because that’s why I sound gonna overshare buyer, every 

Sam McEwin  – 0:13:21
Buyer, buyer 

Dean Millson – 0:13:22
Heavy, get buyer of wine. Very 

Sam McEwin  – 0:13:24
Good. And that, and that’s what it is. So firstly, right, if you are someone, and this might not be exactly, uh, you know, to, to your Casper, as you said, uh, simple of one, um, if you are already a heavy category buyer and you’re already brand loyal to that particular brand that’s running the loyalty program, then you are much more likely to actually be aware of the loyalty program. And because most loyalty programs you sign up in the store or maybe on the website. Yeah. Uh, so, you know, just, just statistically speaking, you’re more likely to sort of be aware of it and sign up because you’re always in there and you’re already loyal. Yep. Uh, and then the second part, of course, is economic, well, heavy category buyers who are already loyal to that particular brand are going to benefit from the discounts more Yep. Than, you know, light non-lawyer buyers or heavy, uh, category purchases that are, that are non-lawyer. Yep. And, and therefore they’re gonna see the benefit. And that right there is why they’re not profitable, and it doesn’t increase growth very much. Yeah. Because all you are really doing is just shaving off your margins to your already loyal. And, uh, 

Dean Millson – 0:14:27
But I definitely wouldn’t be loyal in that regard. Yeah. I’m loyal because of this. I, without a doubt. And that’s, but it’s, 

Sam McEwin  – 0:14:33
And that is what the studies, all the studies do sort of mention Yeah. As the, there will be some level of increased purchase. Like there will be some effect across the sort of four main types of buyers, which I mentioned in, in a moment. Yeah. So that they’re all, but it skews really, really heavily to already loyal, high, you know, heavy 

Dean Millson – 0:14:53
Purchases. And we know that, you know, you need to be looking for light buyers and more of them Right. To 

Sam McEwin  – 0:14:58
To Exactly. And that’s certainly the conclusions, uh, that, that, uh, the good professor Byron Sharper Yeah. Uh, goes to. So yeah. But it’s, it is really interesting. So in, in the book, um, you know, they have this beautiful sort of quadrant where they show, you know, uh, the four types of buyers which are, uh, heavy, highly loyal, uh, buyers, which they say are really the most undesirable for a sort of program like this, because they’ve, you know, you’ve already got them, they’re already heavy purchases and they’re already really loyal. Yep. Um, then heavy, but heavy buyers, but low loyalty. And that’s ultimately the ones that you want to program like this to attract. You know, they’re, they’re heavy purchases in the category, but they’re not loyal to your brand. Mm-hmm. <affirmative>. So if you have a loyalty program, attract them across, but of course, they’re not loyal to your brand, so they don’t come across the, the, uh, program very often <laugh>, uh, and, uh, you know, and so, so you’re just not gonna have a huge amount of impact with, with those types of buyers. Uh, and then you’ve got your, you know, light, but loyal buyers, which are also undesirable and the, the, um, you know, light but low loyalty buyers, which I guess would be somewhat desirable as, as far as becoming part of your, your loyalty scheme. But, you know, they really buy much. They’re not gonna make 

Sam McEwin  – 0:16:5
Yep. Not be very profitable. So that’s, I mean, that’s the, uh, that’s the Ehrenburg, bass <laugh> Institute, uh, portion of today’s podcast. Okay. But, um, it, it did, look, there’s a few questions that, that, um, that came out. I’ve got four questions, so we’ll throw them out and, and, and see where they go. So first question, why, you know, this, this, these studies are so like well known, you know, they’re, they’re out there. If we sort of, you know, as a, as a marketing industry, uh, we know this stuff, why do brands keep persisting with loyalty programs? 

Dean Millson – 0:16:42
I think it feels, it, it feels comfortable, feels easy. They’re there. Keep them there because it, you know, feels, it just, I think it just feels easier. Um, there’s a few less, there’s less unknowns. We can see these people. We know they’re there. Yeah. You know, other than, I dunno where those people are. I have to find them. We kind of know a bit about them. So, um, that’s probably it. And then maybe people have similar experiences to me where, where they, I, I’m picking part of my head now, like Yeah. Some of the reasons why, I think in some categories it can work a little bit more, which is maybe a question for one of your other questions later on. But Yeah, look, I think it just, just feels, feels, feels easy. Um, yeah. 

Sam McEwin  – 0:17:32
Look, I think some of it is, is in, you know, that confusion on the question. That’s why fraden it that way. You know, do loyalty programs work? Well, the definition of work is, is is the interesting thing, because as, as your experience sort of shows, well, yes, it increases loyalty. So if, if you run the program, there will be more loyalty. And if you, depending on how you measure that loyalty, you’ll, you can easily come to the conclusion that the campaign’s been successful. But if you’re not measuring it by profitability, 

Dean Millson – 0:17:59
So loyalty’s the wrong thing to measure, that’s probably why they’re being done. It’s easy to measure. 

Sam McEwin  – 0:18:2
Yeah. Yeah. Whereas if you’re measuring it by market share or growth, then suddenly it doesn’t stack up and, and should be abandoned, but not all. I mean, depending on the organization. Right. Not all marketers and ne necessarily even have that information. Right. You know, and this, this shows to the sort of siloed na nature of some bigger businesses is you’ve got, you know, marketing as the color and in department <laugh>, um, yeah. You know, sort of running their, running their campaigns and, and potentially measuring it by increased loyalty showing. And then it’s great successful setting up in front of the, the, uh, you know, easy to measure all hand me meeting and saying, what a great job we’re doing. And, and everyone claps, maybe <laugh>. Yep. It’s been a while since I’ve worked client side, so apologies if I’ve, but, uh, but yeah, so I mean that, that’s it. 

Sam McEwin  – 0:18:42
But, and the other things I put down is, is a bit of me tooism, alright, well if your competitors got it, okay, let’s, let’s roll that out. And there’s, there’s no shortage of loyalty platforms and, you know, and, and different features and, uh, and these kind of things that are out there that are very easy to set up. And, you know, sometimes, you know, we, we might not do the research that we, that we should into whether something’s effective or not, but we just say, oh, wow, there’s a platform here. We are not doing it. We’re just gonna do doing it. This is new and, and effective. Um, probably when I, when I looked into it a little bit deeper though, I think the other one is that there’s some poorly designed analysis, which I guess I sort of touched on there. Is, is, is, you know, well, if you’re measuring it by loyalty, it, it’s, it works. 

Sam McEwin  – 0:19:23
But the, the other side of that is if you took, if you run a loyalty program right? And run for a period of time, and then you say, okay, let’s test if it’s, if it’s, uh, improved profitability, or let’s test if it’s improved our customer lifetime value or our bar basket size. And depending on how you set that analysis up, you know, what some people might do incorrectly is say, okay, let’s take all the members of our loyalty program and let’s compare that against people who purchase, who aren’t loyalty members. And let’s compare those two things. And are they more loyal? Uh, do they buy, do they cons purchase, you know, larger in larger amounts, do you know, and all these kind of things. And I think, 

Dean Millson – 0:20:5
And you’d say the answer would be yes, 

Sam McEwin  – 0:20:7
It’s gonna be yes every time. Right? And, and that’s maybe because we don’t understand that loyalty programs skew towards your already loyal Yeah. Already heavy buyers. So suddenly you’re gonna get all this data that says, oh, well our, um, our loyalty members are heavier buyers. They, you know, 

Dean Millson – 0:20:21
The more loyalty members, more loyalty 

Sam McEwin  – 0:20:22
Can get. Yeah. Okay. And, and so you’re gonna get the sort of false positives there in, in your analysis, so. Yep. You know, um, yeah. So I, I can 

Dean Millson – 0:20:30
Hear that 

Sam McEwin  – 0:20:30
They’re, they’re my two. Yeah. Anyway, so next question. Yeah. Are there any loyalty programs that could potentially break the mold and, and drive growth? 

Dean Millson – 0:20:43
Oh, no, you, you’ve thought of something I hope 

Sam McEwin  – 0:20:47
<laugh> Well, the, the, yeah. Well, I thought, what’s really interesting is, well 

Dean Millson – 0:20:52
Keep talking. Let me think while you’re 

Sam McEwin  – 0:20:54
Talking. Yeah. Okay. So for, for me, if what we’ve sort of said is, is we’ve taken, the environment is such that most loyalty programs, you sign up in store or online, therefore they skewed two heavy buyers Yep. And already loyal buyers. But if you could change that paradigm somewhat, so the loyalty programs are somehow more visible to heavy category buyers who aren’t loyal and aren’t in the shop, then maybe, you know, there’s no reason why it can’t work. Right. I haven’t seen any studies on this or whatever. Yeah. But the one that immediately, immediately comes to mind is Amazon Prime. And the reason I think is because why? I don’t know why would a lot of people anyway, a a fair majority, I would suggest, and I don’t have, unfortunately, I don’t have the data, there’s no statistics I was able to find about Prime. But why would you sign up to Prime? I think a number of people sign up because, well, they wanna watch Man in a High Castle or, you know, one of the, the, the many shows on Amazon Prime as a streaming TV service. Therefore it’s got broad appeal, mass market appeal. And if you wanna watch the shows that are on Amazon Prime, you’ll sign up to Prime for $6. But hey, as a bonus, you now get free shipping on any orders from 

Dean Millson – 0:22:9
I went the other way. 

Sam McEwin  – 0:22:10
Really? Yeah. So you were already in Amazon. 

Dean Millson – 0:22:13
I was buying something on Amazon and I realized that I, the shipping was about the same amount as the Prime. Yep. Um, price. So 

Sam McEwin  – 0:22:21
I want to get some free TV shows works both ways for, for mine. So for me, you know, we we’re potentially the, and almost making a big assumption that it’s effective and that it’s increased profitability and, and market share. But I would, I don’t know, I don’t think I’m going out on a limb to suggest that it has, 

Dean Millson – 0:22:38
Maybe the difference there though, is the payment then. So there’s a bit of skin in the game Yeah. To be part of it. Cuz another one I can think of now is, um, there, I, I’ve, I signed up to like a membership at National Pharmacies. So the national, the pharmacy. I was always a, um, a recent until recently a chemist warehouse guy, cuz it’s the, the cheapest. But I’ve gotta drive a little bit of the way to get there. And as I’m getting older, I’m there to take more medication. And so I overshared in the <laugh> I’ve over shared too much again already. But, um, damnit, 

Sam McEwin  – 0:23:14
I appreciate your over. 

Dean Millson – 0:23:15
So, and, and then I, I, I, I walked past I was, I I was in there, you know, browsing or something cause I had to get something quick, and then I kind of looked into the loyalty program, the membership, and I think I paid $40 for the year. So it’s not, not cheap, but I would, I, I could tell that on the subscription, the prescriptions I get, I’d be making that back easy for the rest of the year. And then, then, you know, I get 15% off everything else in the store. So it’s changed my behavior from the point of view of now I’ve, I’ve paid for it, I’ve gotta use it. Yeah. And, and, and, and you can do a family as well, which we didn’t do because it didn’t kind of seem to make sense. But then I can go buy the family things. 

Dean Millson – 0:23:54
Like last night I bought, you know, my son’s got some mosquito bullets and things. And, and so I, I, like, once again, I, I wouldn’t go there as much as I do. It’s taken me from Chemist Warehouse, I’ve paid for it. My wife still thinks I, it probably doesn’t work out <laugh> a better deal, uh, from the, from the mental accounting that, that, that I’ve done. It does. But that probably goes to show you it doesn’t. Um, but that’s definitely shifting. But I think the difference, I’ve paid for it. And, and, and that’s Prime as well. You gotta pay your monthly thing Yeah. To keep it going. I’ve just canceled by Prime, but I’m sure I’ll take it up again when the, you know, the, the shipping is kind of the same and it becomes a, a value add and then I’ll keep it for a few months. So. 

Sam McEwin  – 0:24:38
Yeah. Yeah. I think that works. And, and I think that’s for me, like, you know, if, if you’re thinking about this Yeah. If, if you go into crafting a loyalty program with you, and I hope Professor Byron Sharp doesn’t listen, he might, I might get a, I might get a, uh, very harsh tweet from him. Twitter or something. <laugh>. Yeah. Um, but um, you know, but I, I think if you were to, to, to go into looking at a loyalty program, well thinking, you know, and, and with your eyes open knowing, okay, well it’s, it’s going, if we just do the, the standard, you know, run of the mill loyalty program, it’s definitely gonna skew towards our already loyal heavy purchases. So how can we change that paradigm a little bit? How can we change that environment? I re I think absolutely charging for it works because now, okay, maybe this is a, a mechanism that allows us to take a light buyer, you know, a loyal light buyer to a, to turn them into a, a loyal heavy buyer. 

Sam McEwin  – 0:25:30
Yeah. You know, so it’s still gonna skew towards already loyal buyers potentially, but now suddenly they, they’re worth more and that profitability and, and of course if they don’t, well you’ve got $4 anyway. You know, so, so it sort of offsets it a little bit. So I think that works. I think the genius of, of Amazon goes beyond that in the sense that it applies now to a, a market. Like, you know, if you have, like, if there’s the mar, if the audience is Avid TV viewers, you know, that sign up to all the subscription services because they just wanna watch all the tv, you know, then suddenly when they’re purchasing from the everything store Right. You know, there’s, there’s, you know, so they’ve got two broader pure products here that can clash together and say, okay, well, you know, now you get free shipping, you know, and, and you’re gonna pay. Yeah. 

Dean Millson – 0:26:10
Fascinat say that. Cause I, I always saw primers. I’ve only ever seen it at the, it was cuz it was first just through a shipping. Yeah. Wasn’t it? And then they streaming service. 

Sam McEwin  – 0:26:20
So I, I should know this cause it was all in the, uh, shareholder letters of Jeff Faso. Yeah. I think it did start off as a, as a free shipping type thing. 

Dean Millson – 0:26:29
It was you. Yeah. And I think maybe even in memory, I remember seeing, like, I’ve, I’ve watched one too many, like feel good videos on, on Facebook. Like something good happening or like a, a one of the troops coming home and surprising their children Now I just get constantly bombarded with these kind of, you know, stories. But one of them I’ve, I saw again last week, and I reckon I saw it years ago, was like this guy that was buying things for homeless people Yep. And having them delivered, you know, in an hour to, to the corner that they’re begging on in, in, in New York. I feel like that was almost the start of Prime. It was like you could supercharge your, your delivery. Anyway, we, we digress. 

Sam McEwin  – 0:27:7
Well, and and that’s the thing. I mean, it’s been through a, it’s been through a journey and we sometimes, you know, we look at these, the finished product and we, and we, uh, we come back from there. But is is 

Dean Millson – 0:27:14
It a loyalty? Like, so I guess this is the other kind of part to it all. Like what is a loyalty program? I guess it’s a loyalty program. The paradigm though, you know, is is a, is or I guess originally was, you know, you buy more from us and you’ll get something else. Yeah. Fly buys, you know, buy this, you’ll get points. You’ll better turn those points into this, you know, vintage sellers buy this adds up to points. You’ll get a voucher to, to, to for some free stuff. You know, even down to the coffee card, you know, by, um, by, you know, here’s your, you’ll get your 10th coffee fr coffee free. I, I want to add into that just a side note. Um, a great little bit of behavioral science. I came across that, um, I wish I could remember the name of the bias, but the, the, if you give someone a coffee card, uh, with um, yes. With 12, 12 spots on it and you give them the first two free, um, and you give someone a coffee cup with 10 spots on it, but you give them, you know, no stamps, the people with the, the, the, the one with the couple of free stamps where you’ve already helped them along their way will perform way better than the other one. Because I think it’s to do with getting, moving you closer to a goal or something like that. So 

Sam McEwin  – 0:28:21
Once we, it’s, it’s, it’s um, what’s the, the old word, uh, Oprah Winfrey. It’s, uh, um, closure. 

Dean Millson – 0:28:29

Sam McEwin  – 0:28:29
Yeah. So yeah. Human brain demands closure. So if you start something, you know, despite what, uh, some of my unfinished projects line around in various places might suggest most humans want to finish things and we have a strong desire to finish things and we can’t. That’s thus the, the cliff hanger. Yeah. You know, we have to keep watching to, to resolve that. You know, that’s why, why we can’t, we, we need that resolution. Yeah. 

Dean Millson – 0:28:51
So I love that one cuz at the end it’s still the 10 spots. But 

Sam McEwin  – 0:28:54
Yeah, it’s it’s a brilliant one. I mean, the other, um, but you know, the, the coffee loyalty card is a perfect one actually, because, um, they’re exactly the ones, no, there’s no loyalty there. Like, I just used to get a free coffee every now and again from the coffee shop I went to every single day. Yeah. Because 

Dean Millson – 0:29:7
It was the most, and I would’ve gone, gone there 

Sam McEwin  – 0:29:8
Anyway. The best. Yeah. And I would’ve gone there anyway. Yeah. 

Dean Millson – 0:29:10
It’s funny, I, and, and, uh, the the coffee <laugh>, uh, the coffee shop just below our studios just shut because of Covid, unfortunately. Yeah. Um, but I, I remember, you know, them coming up and going, here’s your loyalty cards. And I felt like going, I’m gonna buy coffee here anyway, but Okay. 

Sam McEwin  – 0:29:25
If you wanna, it’s, it’s the, it’s the perfect, pure, pure example. You know, like the only people that get it are people that buy coffees every day. Yeah. And the only people that are gonna use it are the ones that, that do buy the coffee every day. I’m 

Dean Millson – 0:29:35
Glad I’ve contributed. 

Sam McEwin  – 0:29:36
There you go. Um, but the inter other interesting thing about that which reflects, which you’ve just made me think of is, is there’s a great book called Drive. And I’ve heard this research in a few things as well. Yes. That’s the one Yep. Um, that talks about what motivates people. And, um, we love randomness. Yes. So the, the problem with loyalty cards, it’s not random, is it’s not random. And we, we expect it, and this, it might be, um, thrilling at the start, but then we soon just sort of do the mental maths and factor that into our decision making. And we just expect that, 

Dean Millson – 0:30:5
Which goes back to, I think we’ve talked about it before, just, you know, we are riffing now on examples of this <laugh>, but do you remember we, we spoke about lo um, uh, word of mouth. Yes. Um, strategic word of mouth. There was that restaurant in That’s right. The US that, um, uh, you could pick a, um, pick a card out of the deck of cards and if you got the Joker, you’ve got your meal for free. So there’s a randomness happening there. Um, because, so a, it was a talk trigger. So people talked and shared, shared that, you know, go down there, you never know. You, you, you get a chance. The randomness is there because, you know, am I gonna win my meal? Am I not? Yeah. Um, and then there’s also the, the loyalty aspect of it. It’s kind of a program in a sense that it’s a, it’s an offer for for to come here and, um, to, it’s probably not a loyally program, isn’t it? But it’s a, it’s kind of similar. And that’s the randomness. 

Sam McEwin  – 0:30:54
And they’ve done heaps of studies on this too. Like they did one, I think there was a human study where you could get 50% off the price of something, a particular percentage of the price of, of something or spin the wheel That’s right. And potentially get a hundred percent. But the chances of getting, getting it was so much worse that like, you, you’d be better. 

Dean Millson – 0:31:11
You probably, 

Sam McEwin  – 0:31:12
But everyone was spins the wheel. And there was another one with pigeons where they gave them 

Dean Millson – 0:31:16
Love, a good pigeons where 

Sam McEwin  – 0:31:18
They gave, um, you know, like two sort of buttons that they could pick to get feed would drop out. One gave feed a hundred percent of the time, and the others was random. And they all ended up into the random one. Apparently. It’s a, it’s a very common sort of, uh, a lot of animals and, and humans included. Yeah. Um, it’s just part of the, we just, we just respond to randomness much more than we do. Yeah. 

Dean Millson – 0:31:40
Yeah. So, no, that’s, it’s a really interesting idea. Yeah. So the coffee cup coffee card fails. 

Sam McEwin  – 0:31:44
Yeah. Just go, just to sort of, to finalize that, that point of are there any that break the world? So I think, I think Amazon’s a good one, which then sort of makes me think, and I haven’t seen many of these that, well, loyalty programs could therefore work. If your maybe one of these sort of, um, umbrella brands and you have a number of products within, you know, a number of brands under your, under your umbrella that potentially share an audience that having like some sort of combined loyalty program that, that, you know, yes, you are already loyal buyers of one brand might come into contact with, but then that might encourage loyalty of the rest of the group Yeah. Could potentially be, be effective or some sort of sort of co-op style, um, collaboration potentially with an alternative brand. Yeah. That is not a competing brand that shares the same audience, therefore may be something 

Dean Millson – 0:32:35
That help each other out. 

Sam McEwin  – 0:32:36
But I, again, I haven’t heard of this. I expect maybe a swift wrap over the knuckles from Professor Byron Sharp if he, uh, do share this with hi with the good professor. If he’s not a, a shy, I’d love to love to hear from you professor. Uh, <laugh> 

Dean Millson – 0:32:50

Sam McEwin  – 0:32:50
In trouble now. But anyway, just thinking out loud. I feel like they could be two areas worth exploring. I’d certainly love to see some research into, into this if, if anyone’s done it. So that’s my second question. Um, third one, you know, is, is there, if we, if we know, um, maybe I should’ve put this first. You know, if, if we know that loyalty programs aren’t going to drive growth, is there a reason to have one beyond growth? You know, is is there a reason why it can be effective? And I might, uh, put you out of your misery quickly on this one Dean and say, for mine, the, the, the reason is data and Yeah. Okay. Uh, in, in particular data that links online and offline purchase behavior. So, um, the, the example I love was the, uh, group general manager of 

Dean Millson – 0:33:39
Haines. And and that’s really like flybys isn’t a loyalty program. Flybys is a data mining operation. Operation. 

Sam McEwin  – 0:33:45
That’s that’s exactly right. Yeah. And then it’s 

Dean Millson – 0:33:46
Not a loyalty program. Yeah. I guess that’s why I feel 

Sam McEwin  – 0:33:48
Yeah. <laugh> that. Yeah. Well that’s why I had, that’s the problem I had with the Berg Bass one. Like that was my first frame of reference to this. Right. Yeah. And I’ve since gone away and read some of the other studies or given to them, um, <laugh> and, uh, you know, but tried to do a little bit of research into it and, and click cause because, you know, the, the first thing it all made sense and I said, this is great, but this is one study on fly buyers, which doesn’t seem your typical loyalty. And yeah, as I said, it’s not really loyalty. So, or you know, it’s not just loyalty. I mean, that is a data mining pro. And that’s, you know, and that, that’s this and, and, um, you know, connecting that data and connecting offline and online purchases is a really big challenge for retailers, you know, that, that have a bricks and mortar store and an online retail store. 

Sam McEwin  – 0:34:33
And the way that you do that is through loyalty programs. And the, the wonderful example is, um, yeah, the Haes group, uh, is the general manager of online, I, I’ve forgotten his name, Ryan, someone or other now, um, he, I I, I went to a, uh, a talk conference that he was speaking at and he spoke about bonds and how they use their sort of loyalty program to, to link online and offline data. And that then enabled them to really target advertising that was really meaningful to their users because they know that journey from um, pregnancy Ah, yeah, of course. Right, right. Through that life cycle. Um, and they, they can, if you know one purchase, you can map that cycle out. Say, okay, great, we start at maternity brass, we move on to Yeah. You know, wonder suits or whatever, you know, post pregnancy leggings if they sell that kind of thing. But yeah. You know, they, they, they, they can map that right through and so suddenly your advertising becomes more meaningful, more targeted, um, and also they’re able to stop advertising for things that people have purchased offline, um, because they now know this No. That you’ve got, which is, is more effective use of your advertising. Yeah. So, you know, I think, I mean, you’ve got probably gotta be a pretty big brand and Yeah. You know, to, to benefit from that. But I guess maybe on, 

Dean Millson – 0:35:49
Yeah, I think that makes sense. There’s another, yeah. I think that makes sense. 

Sam McEwin  – 0:35:52
And that’s why the me Tooism I mentioned before could be dangerous for little brands, right? Because you look at someone like bonds, you know, or you look at Kmart or, or something like that, having a loyalty program, you go, oh, well, you know, Kmart are doing it. That must be fairly well researched. That must be working, you know, maybe my little online store should, should go down that loyalty path as well. 

Dean Millson – 0:36:10
Yep. Maybe you think of another one. Talk about, um, kids stuff. Like there’s a, there’s a loyalty program. There’s a kids shoe store in Melbourne Yep. Bought socks and shoes or something really clever. Um, but they’ve got a lordy programs. You buy six or seven pairs. I think it’s six pairs near the seventh. Three now. Just made me think of like, I guess with a, it, it kind of makes sense with a, with a, with a, with a child, they’re gonna probably grow out of shoes maybe every six to eight months, maybe a year. But it’s still a long way. Like we’ve ju our son’s five and a bit and he’s just got his first pair of free shoes. But funnily going onto that kind of closure idea, <laugh>, he’s like, you know, it’s, we’ve, we’ve, you know, we haven’t bought shoes from anywhere else because, um, uh, it’s probably not the whole reason, but maybe it’s me who thinks about these things we’ve over sharing. 

Dean Millson – 0:37:3
Yeah. Um, but they, but, but yeah, it, so whereas I was going with that, that it’s, it’s, it’s a, it’s a lordy that takes a little bit of an effort to get to. Yep. It’s not a, not a, yeah. It’s, it’s, and I guess vintage sellers, you could say $500 of wine’s, a bit of an effort to get to as well. It doesn’t seem like for some people the same as, well it’s probably the same amount in shoes now I think about it. Um, but uh, but something that gives you, you know, you’ve got a bit of an effort to get there so that you’re not giving away something kind of straight away. Actually, I don’t know. You don’t 

Sam McEwin  – 0:37:34
Have ITT make sense? And, and what it does, I think is sort of, well it’s not really, these aren’t, Lord, the successful ones are not loyalty programs. It’s not about loyalty. It’s about 

Dean Millson – 0:37:41
Driving you 

Sam McEwin  – 0:37:42
Yeah. Increasing purchase value or something. 

Dean Millson – 0:37:45
Yeah. Yeah. That’s a good, maybe that’s a different way to reframe 

Sam McEwin  – 0:37:47
It. Yeah. So which is, which sort of does does take me to the, the next point, which is what are the alternatives? Um, you know, and I think that’s, you know, potentially one of them is, is you know, pr rather than rolling out a loyalty program, work on upsell opportunities and basket size optimization and you know, providing Yeah. Opportunities to sort of in increase that basket size. Yep. You know, and then maybe, uh, use that, that randomness to surprise your really already loyal customers with, you know, um, a VIP event or a money I can’t buy offer or Yeah. You know, if it’s the coffee shop, just give them a occasional coffee for free 

Dean Millson – 0:38:25
<laugh>. Yeah. I’m trying to think of an example. I can’t, but Yeah, it makes, it, it, it makes sense. It makes sense. 

Sam McEwin  – 0:38:34
So I mean, mean, you know, and, and I guess to, to extend that, uh, I’m curious if, you know, what you would potentially advise clients to, to do instead of, of launching a, a loyalty. But, you know, the obvious one that, that, um, you know, the Ehrenberg BAS Institute would say is just focus on attracting new customers. 

Dean Millson – 0:38:51
Yeah. I like, I, um, I don’t have any clients that are big enough to do a loyalty, loyalty, um, program. If I’m, if I’m, if I’m honest, um, yet <laugh>, uh, but, um, I would be always focusing on the, you know, the, the, the, the new light buyers. But I, I, I don’t have an answer, um, for you, but it’s, I’ve often wondered whether, um, like you even using the soap, um, um, company, the, the, the carwash soap company I used in the last podcast, an example, like in a B2B context, um, what, what, what could you do? But, but it’s the same thing. You are just gonna be given away something that they probably would’ve purchased anyway. But it’s, it’s whether or not maybe if there’s a level of relationship in it somewhere, like it’s, so it becomes a little bit less mass. It’s, you know, it’s more, you, you’re giving something away. 

Dean Millson – 0:39:44
Um, when there’s more, it’s, there’s a relationship going on their mail maybe with the, so they, you know, with the Carish guys, you know, they have a relationship, you know, they have salespeople, they have a relationship with their customers and they’re, they’re, they kind of try to embed themselves in their businesses and become, you know, mentors to not only sell them, you know, car wash soap, but to, to also to to help them, you know, help them run their businesses better. Cuz they’ve got an amazing amount of expertise in the industry. So maybe it’s a diff you know, 

Sam McEwin  – 0:40:15
I still, I guess I’d still, I mean, I think it about, I’d still say it’s probably wasted. Like if I was gonna go that path, I’d, I’d, I’d go, okay, it’s b2b. Let’s, let’s focus on stickiness, general stickiness. Yeah. You know, and, and improve the service so that it’s, it’s harder to leave and no one would in their right mind would leave and Yeah. You know, and, and those kind of things, you know, and that might be, you know, creating some sort of software that, you know, your, your customers use. Yeah. You completely unrelated to your core product, but by, you know, in using it, it’s, it’s, you know, or something like that. Like, like thinking out, out outside that box and sort of expanding 

Dean Millson – 0:40:51
You. Oh, I know these guys have like an education, I they call it soap school or something. We might be changing that, but, um, but, but it, but it was helping them, you know, up upskill and a lot of these people are, you know, they’re, you know, they’re, they’re often without stereotyping like, you know, um, retirees that have bought a franchise or, or something like that. And, you know, they need help through. So in a way it’s kind of, it’s a loyalty, once again, it’s a loyalty program that’s not a loyalty program. Yeah. It’s got another, I guess in the end it’s loyalty, but you’re not, you’re not, you’re reframing it a different way. It’s, it’s, it’s more about stickiness, but you don’t wanna call it a stickiness program, cuz that sounds pretty, 

Sam McEwin  – 0:41:32
Uh, you wouldn’t, you wouldn’t mention mention that out loud in a podcast. 

Dean Millson – 0:41:34
No, you probably wouldn’t. You’d, you’d edit that out 

Sam McEwin  – 0:41:37
<laugh>, but No, but yeah, it is something, you know, what is it? Uh, uh, yeah. Anyway, it’s, yep. I, I think that, I mean that’s probably, you know, talking this through, I think that’s the conclusion is you come to, is that, you know, you, you probably needs to be more bespoke, needs to be more customized. It needs to be more thoughtful and rolling out, uh, you know, get your fifth purchase free, but loyalty program is, is unlikely to do much for your bottom line. Yeah. And, um, yeah, so I mean, you know, I had a couple of other alternatives here, but, you know, um, so I think is 

Dean Millson – 0:42:9
There reciprocity going on maybe as well, like the reciprocity bias? You know, we will do, we will, we, we, we will do things for other people that have done something for ourselves. Um, that, 

Sam McEwin  – 0:42:20
That’s where I think random, like, that’s where I think the randomness comes back to, because I just think there’s no reciprocity there. If the expectation is every time you, you buy your 10th coffee, you get one free where Correct. Whereas, whereas if you had like, you know, if you gave your, your a budget or something Right. Like, you know, and, and said, okay, you, you’re allowed to give out a free coffee every now and then, you know, or you can give out one free coffee a day or something. Yep. Um, you know, and, and you might do it random to, it’s, it’s gonna be more impactful and then, then you would have the rest of, of reciprocity. Gotcha. So, um, yeah, I think when you, when you make a system, and this is I think to the B2B example, you know, like there’s, there’s so many great ways to, to build loyalty as a B2B organization and as a service organization, uh, you know, that, that like as if you rolled out some sort of, you know, cookie cutter type program, it’s gonna look really fake. And I, I don’t think it’s gonna land spin 

Dean Millson – 0:43:12
The wheel for 

Sam McEwin  – 0:43:13
This fees free. So 

Dean Millson – 0:43:16
Is it, although that could be kind of cool, but, but once again, you’re not gonna attract customers by doing that. You wouldn’t 

Sam McEwin  – 0:43:22
No, no. I think, I think in, in b2b you should be able to be more thoughtful about it and there should be a deeper relationship there, and you should be able to do some, some extra things even for b2c. I think if you, if you focus on experience, you know, like forget the loyalty program. I mean, why throw away all that discount and lets just make the the shopping experience incredible. Um, yeah. You know, and, and uh, and um, you know, make sure that those frequent buyers that are in there do just get an amazing conversation. And maybe there’s some talk triggers there, Dean? Uh, 

Dean Millson – 0:43:50
Still there are, I’m sure there. So 

Sam McEwin  – 0:43:52
Anyway, look, I think there’s, I, I hope I wanted to do this because I hope it progresses the conversation a little bit. You know, like it’s, I think a lot of what we cover here is, is fairly obvious once you hear it, but maybe not so obvious, you know, on the surface. And, and we can sometimes just blindly go down the path of, of, you know, looking at a loyalty program. But hopefully it, it’s, uh, progresses a conversation a little bit and, and, uh, yeah. Some food for thought and we can make better decisions and more profitable ones and, and ultimately serve our customers better as well. Right. 

Dean Millson – 0:44:24
Amazing topic. 

Sam McEwin  – 0:44:25
Yes. So that’s it. We’ll wrap it up, um, as is going to become the norm. Just a quick reminder that the, the best way to support the podcast is to be loyal to the podcast <laugh> and be loyal to the podcast, uh, is to, is to sh is to share it, tell people about it, talk about it, uh, but ultimately also leave reviews. The review engine is what drives the, uh, podcast appearance in the various, uh, searches. And, uh, will give us a nice little dopamine hit that will encourage us to continue to record these and, uh, that’s right and all that. So please do that. Um, you know, and do get in touch. We want to hear from people we don’t, haven’t heard from anyone yet. I don’t think they heard. We have heard. No. We have heard from a few people. We’ve had, we have heard from a few people, uh, hundreds of people <laugh> every single episode. Uh, but we’d love to hear from more social proof that’s called Sam. Ah, yes, yes. Um, we need some of it. <laugh>, maybe the next podcast. <laugh> do some research. Yeah. Okay. Done. But, uh, let’s do that. And, um, you know, and if you can’t be bothered doing either of those, then just tune into the next podcast and, uh, will you shall see you there. You there? Yeah. We’ll see you then.

Is the 95:5 rule the new 60:40 for B2B?

Get ready for another insightful episode of Brandwidth – ‘Big Ideas on Small Business Marketing’! In this episode, we introduce you to the 95:5 rule and discuss key marketing strategies that can help you grow your small business. 

Throughout the episode, we cover topics such as why focusing too much on immediate engagement or downloads can set you up for failure, incorporating big brand thinking into your small business strategy to gain a competitive advantage, and the effectiveness of content marketing in creating connections and brand loyalty. In addition, we discuss the importance of smart objectives, understanding your target audience, and the difference between brand awareness and direct response outcomes.

Show Description

Attention all small business owners and marketers! Are you tired of focusing on short-term gains that just don’t seem to add up to much in the long run? Then you need to tune into the latest episode of Brandwidth® ‘Big Ideas on Small Business Marketing’ with Sam McEwin and Dean Millson!

In this episode, Dean Millson drops some serious truth bombs about B2B advertising through the 95:5 rule. That’s right, only 5% of the market is ready to buy at any given time, which means 95% of advertising hits buyers who aren’t in the window… So, forget about trying to get people to engage or download immediately; it’s time to start building familiarity with your target audience.

Dean and Sam go on to discuss how familiarity takes time but can lead to significant returns, especially when it comes to B2B purchasing decisions. They also touch upon the importance of content marketing and the power of providing relevant information that helps your audience be more profitable. 

Throughout the episode, the hosts emphasise the importance of knowing your audience, having clear objectives, and splitting your budget between brand awareness and direct response campaigns. They also caution against the measurability bias and the dangers of hyper-targeted marketing.

So, if you want to gain a competitive advantage, build a strong brand, and be part of the initial consideration set for future customers, you need to listen to this episode now! And don’t forget to share your thoughts and reviews with Sam and Dean; they love to hear from their listeners and will continue the conversation next time.

Episode Timestamps

00:00 – Introduction
01:35 – The 95:5 rule explained
04:02 – Applying big brand thinking to small businesses
07:23 – Building familiarity and trust with your audience
10:15 – Content marketing and its effectiveness
13:50 – The importance of smart objectives
16:25 – Understanding your target audience
19:30 – Brand awareness vs. direct response outcome
22:15 – Closing thoughts and reminders

Resources Mentioned

B2B Institute – How B2B Brands Grow –


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Episode Title: Is The 95:5 Rule The New 60:40 For B2B?

Host(s): Dean Millson, Sam McEwin


Sam McEwin – 0:0:27
Yes. Welcome to another episode of the Brand Whip Podcast. My name’s Sam Quan, and joining me as always, Dean Nielsen. How are you today, Dean?

Dean Millson – 0:0:34
I am splendid. Sam, really good to be here.

Sam McEwin – 0:0:37
That is good to hear.

Dean Millson – 0:0:38
Really good to see you. Really good to be back in a room together and, uh, and and talking marketing.

Sam McEwin – 0:0:44
Yes. And, um, so, uh, housekeeping, we’ve been told we need to do housekeeping. I think so. Um, firstly, I guess for those joining us for the first time, this is a, uh, podcast about branding and marketing where one of us comes to the party with a topic, uh, topic without notice. Without

Dean Millson – 0:1:5

Sam McEwin – 0:1:5
And we see where it takes us. Um,

Dean Millson – 0:1:8
We aim for half an hour and it never seems to go

Sam McEwin – 0:1:10
That short. No. 50 minutes is the new half an hour, I believe, <laugh>, but we’re there. Um, so you’re gonna, you’re gonna throw us a, uh, a topic

Dean Millson – 0:1:19
Today? I am, yeah. We’ll, uh, we’ll, we’ll get right into a, this is such a simple idea. I’m worried it could be our shortest podcast, so we might actually get to, to, to 30 minutes. Cuz there’s, it’s, it’s a really little idea, but I’ll say put on the table now. It’s one of the most powerful ideas I’ve come across. Okay.

Sam McEwin – 0:1:39

Dean Millson – 0:1:40
I’m setting this up big.

Sam McEwin – 0:1:41
Yeah, yeah. And, and you’re also setting us up to, to

Dean Millson – 0:1:43
Fail when, yeah. No, I don’t think we’ll fail with this. This is, this is really cool. Um, so I found it a few months ago in a paper, um, by a guy called Professor John Dos from Ehrenberg Bass. And it, it was done through or with the LinkedIn’s B2B Institute. So we’ve talked about these guys before. They, they, they, um, they, they do some great work. They’re probably the best kind of branded <laugh>, um, uh, research institute I reckon. But, um, there’s some, um, there’s some really, you know, interesting content. Um, and so I’ll wind back a little bit. We have, um, talked about a number of times before, um, bonnet and Fields 60 40 rule when it comes to, you know, long term and, and, and, and tactical like brand building versus tactical advertising, which

Sam McEwin – 0:2:30
Is 60% brand, 40%. That’s tactical

Dean Millson – 0:2:34
Direct that, that’s, that’s right. And it’s, I’ve talked about that with clients before, like, and, and I think some of them just glaze over. Like it’s,

Dean Millson – 0:2:42
It makes sense to marketing people. Yeah. Um, but it, there’s a bit to unpack still. Like you can show, you know, we’ve all seen that kind of, that that graph with the, the, the, the, the sore tooth kind of, you know, you can, if you saw the video here, I’d be doing a sore tooth in the air, but, you know, the, the bump that you’re kind of, you know, the, the marketing got when you kind of combine the two and Yeah. And the, the quick drop off when it was just kind of tactical. So, but the idea and principle of, you know, marketing for the long term rather than the short term, you know, as a general rule, you know, obviously makes sense. But he’s reframed a similar concept. This is he John dos, um, professor John dos in a, in a different way, um, and a really much more compelling way, I think. So I’m just gonna read almost verbatim to how he describes

Sam McEwin – 0:3:30
It. And, and you, when you say reframed, he’s reframed for b2b. That’s

Dean Millson – 0:3:34
Right. Sorry. Yeah. For, for, for for B to B. Well, 60 40 B2 B or no, no, no, no. 60 40 was a general rule and it was difficult,

Sam McEwin – 0:3:43
Difficult. B2b, a lot of, a lot of the, um, evidence tends to be very heavy b2 c but it Correct. You know, you, you, you tend to sort of assume Unilever whenever I read something

Dean Millson – 0:3:53
Like that. Yeah, no, they did a B2B one as well, and maybe it was,

Sam McEwin – 0:3:57
I think they may have said as much the same, or

Dean Millson – 0:3:59
It was much the same, or

Sam McEwin – 0:4:0
It might have 6535 or

Dean Millson – 0:4:2
Something. But yeah, I should know that before coming in to do a goddamn podcast on this. But, um, it was about the same, but, so yes, this we’re talking about B2B here, sorry. Um, and, um, but, but which is, you know, like, like a lot of these things we’ve, we’ve talked about this as well, like these rules of thumb and things sometimes are hard to apply to the everyday brands that you and I work on. And often in the B2B space, you know, often quite, quite, quite a lot smaller. So,

Sam McEwin – 0:4:27
And, and I think sometimes when, you know that, that, that the eyes glazing over, like it is ha you know, it happens to me a lot too. You know, I think sometimes that’s be, you know, it’s very easy to go, okay, yeah. Cool. I get that. But, but we are different. It, it doesn’t, doesn’t apply to us. Yeah, yeah,

Dean Millson – 0:4:42
Yeah. No, they do. They do. So I’ll set the scene. Yep. So this is with a few changes for, you know, for talking about it kind of almost word for word for the introduction from the paper. So think about the last time your business made a significant purchase, like a new phone system engaged, a new payroll software vendor signed a contract with a Salesforce IT support company, or perhaps even new bought new carpet for the office, or in, you know, my case engage a brand agency or like, you know these Yeah. If you’ve done that recently, you’ll know that you are not in the market for those items now anymore, nor will you be for quite a while. Mm-hmm. <affirmative>, the time between purchases for goods and services is quite long. We can’t argue with that. Corporations change service providers such as their principal bank or law firm once around every five years on average. That means that only 20% of business buyers are in the market over the course of an entire year. So that’s a bit over five years. Um, uh, or to put it another way, something like 5% a quarter, or to put it another way, again, 95% of your market at any given time isn’t in the market.

Sam McEwin – 0:5:45
Yeah. Wow. Okay.

Dean Millson – 0:5:46
So he calls this the, uh, the, I call it the five to 95 rule. Maybe they call it ninety five five. I think the five first is important. Mm. Because what does that actually means is that only 5% of your market right now is ready to buy. And so 95% of all B2B advertising mostly hits buyers who aren’t gonna buy any ti time soon. Yep. And, and so what, what that I, I, you know, when you talk about it like that, I just think it reframes it. And I’ve watched people’s eyes light up in the meeting room, not glaze over, because I think it, it, it, it, it illustrates a point that we all kind of kind of know deep down. But, you know, so it’s the same idea of 60 40 in a sense. You’ve gotta invest more in the long term than in the short term.

Dean Millson – 0:6:31
Yeah. But it talks about the market that’s happening. Uh, you know, that’s in the market right now. Yeah. And when you put it that way, if you are just focusing on, you know, trying to get people to, you know, um, click or engage or, you know, sign a form or download this or, you know, make an appointment or whatever, you, you’re setting yourself up for failure. Yeah. Because it’s only a small minute. And I’ve had a couple of campaigns recently where I’ve, you know, I, I, I’m happy to admit in, in, in hindsight, kind of, you know, maybe set the wrong objectives for thinking that we could kind of, you know, have a buck, you know, or a buck each way mm-hmm. <affirmative>. But really at the end of the day, um, the people that you are, you are advertising in b2b, um, that, that you want your ad to resonate with, it’s gotta resonate with them in the future.

Sam McEwin – 0:7:18
Yeah. That’s five years is a long time. Yeah. Right. Like, yep. Um, that’s, it’s, yeah. That’s, that’s really interesting, isn’t

Dean Millson – 0:7:27
It? Yeah. So, um, you know, to think about another way you, you know, you can’t, it can’t be about stimulating people to buy, um, when they’re not in the market because you actually can’t convince them

Sam McEwin – 0:7:38
No. Because

Dean Millson – 0:7:39
They’re not interested. They’re, they’re, they’re not interested. They’re not interested. So you, you know, you’ve gotta be, um, you’ve gotta be thinking about it, you know, way more in the long term. So how, I think it’s kind of interesting that you’re, you’re looking at building, I think, familiarity. Yeah. And, you know, that’s just, uh, that’s a, you’re looking to communicate with that 95% that in the future will be ready, but now they aren’t. So I had kind of like a, um, we’re working with, I, I love working with like, really, I dunno whether they’d say this, they might, but really kind of boring, <laugh> boring brands. Boring industries. Like, we’re working at the moment with a, with a company who are in the professional soap business for car washes. I think they’re like number three.

Sam McEwin – 0:8:20
I I, I love these businesses too. Yeah.

Dean Millson – 0:8:22
Yeah. They’re, and they’re ripe. But honestly, like, I think this is where, um, where the gold is for, for a lot of business in that area. Yeah. Like they, to, to kind of, you know, to approach things in, in a way that I’d call kind of big brand thinking, you know, when you are, when you are, but, but you know, at a different level, you, it’s the, your competition isn’t doing it. Mainly <laugh>. Yeah. So, um, but yeah, soap, soap for car washes, and I was gonna find the number of, they told me the number of car washes that are done per day in Australia. And I, I’ll put in the show notes cuz I can’t remember, but it’s, it’s huge. Like, you know, of course it’s, um, their main competitor has a foothold in the market, mainly due to the fact that they also sell the carwash machines.

Dean Millson – 0:9:4
Yep. So, um, and but so it’s kind of like a, you buy our machines, you buy our product, but you know, these guys are, um, you know, starting to pick customers off that are unhappy with that incumbent as often happens, you know, pretty big company not getting the kind of service they want. You know, they’re, they’re, you know, they’re starting to become happy but unhappy. But that doesn’t happen overnight. Like, it, it, it takes a while. You don’t wake up in the morning and decide, right. That’s it. I’m changing. Like, it, it’s, it, it takes, it takes time. It happens gradually. It’s a big decision for a business. Like, even if you think about like, the difference options between B2B and b2c, like, you know, me deciding to buy a can of Coke as opposed to a, you know, a can of, um, Sprite, or it’s a, you know, it’s a, it’s a similar price or it’s a couple of bucks, it’s, it’s whatever.

Dean Millson – 0:9:47
But it’s not really in effect my life in the long term, but changing a business supplier, you know, it’s got massive ram Yeah. Ramification. So you can see there’s a, there’s a way different, um, kind of frame a a around all of it. So it’s, um, so it’s a, it ends up being a combination of things. It’s, you’re not gonna also see an ad and go, oh, that looks nice. Mm-hmm. <affirmative>, look at that shiny thing. It’s, it’s not gonna happen like that. Um, it’s going to be a combination of things that makes you start thinking about it, and then you start searching. So at that point, if you’ve never heard of an alternative brand, it would take a massive leap of trust to kind of go, oh, and a massive leap of luck even to have a salesman kind of ready to kind of walk in your door when

Sam McEwin – 0:10:26
This is important point, I think. Right. Like, because it’s not like you can say, okay, well that’s all right. We’ll just focus, uh, our advertising on the 5% that are ready to buy. Yeah. Because it’s, you’re talking a big purchase and, and y you know, um, then there’s no familiarity there. You’ve gotta, you’ve gotta, you’ve got a lot to build. Uh, that’s, that’s sort the point, right? Isn’t it? Yeah, no,

Dean Millson – 0:10:47
That, that, that, that is so, you know, that 5% when they’re in the market, who, it’s that 5% that are in the market now, let’s go back to kinda talking about it like that, um, uh, uh, are now kind of ready to buy with the memory structures they already had from five, the last five years. Yeah. So if you are not in that, you know, if you’re not in their head or you’re not in their kind of, you know, frame of reference, then you, you are, you’re behind the eight ball anyway. Yeah. So you, you, you can’t just target that 5% because that 5% existed last year <laugh>.

Sam McEwin – 0:11:19
Exactly. Which, which, which goes to the, uh, my favorite stat that I, I, uh, repeat ad nauseum, which is that, um, 35% of final purchasing decisions come from brands that are included within that initial consideration set. Yeah. And I dare say with b2b, it’s gonna be a lot higher than that. Yeah. Yeah. I think so that’s, that’s the, that’s the general 60 40 type number, right? Yep. Um, yep. So, you know, straight away, well, you know, if you’re not part of that initial consideration set, you’re at a disadvantage. Yep. Um, you know, and b2b, there’s a smaller number of, of purchases, um, you know, in the market anyway.

Dean Millson – 0:11:55
No, that’s, that, that’s right. So, you know, this idea of familiarity, I think is kind of the nice simple idea that’s key. It sounds, I mean, it, it sounds a bit daunting to be fair. Mm-hmm. Like we, we are doing a bit of digital marketing for our, for our, for ourselves at, at, at Demark. And to, to be in the situation of having to use a budget and go, right, I’m gonna spend something now that the end of the day, you know, five years away, I might start to get a return on feel

Sam McEwin – 0:12:21
Great. But No,

Dean Millson – 0:12:22
It is, it is what it is. <laugh>.

Sam McEwin – 0:12:24
So how are you thinking about this then? What’s the, what, uh, am I jumping ahead, Tony?

Dean Millson – 0:12:29
No, no, no. Well, I, I, there’s another analogy I thought of, which might sound really flippant and stupid, but it came to me and I thought, actually, it’s a nice way of thinking about it. Like, that idea of familiarity, taking time. So what I’m thinking is at, at the, at the moment, like, you know, if you are, you know, if you’re a B2B brand, what is that kind of, that, that thing you wanna be known for, that you can just slowly kind of push out the people and continually reinforce it and just kind of be there. And I, I thought of the weirdly, I don’t know why scenario of, you know, if, if I ran up to you on a train, Sam, and just started talking to you and telling you all about myself, you know, getting in your face about, you know, how I am who I am and why we should be friends, you’re probably gonna get annoyed.

Dean Millson – 0:13:12
Yeah. Fair to say. But if you see me every day for the year catching the same train as you one day, we might start talking and, you know, because you know, you’re a bit familiar, and it might even be like, wow, we actually have something in common. Like, we catch the same train and maybe, we’ll, you know, maybe we’ve got something else in common. It’s a weird little analogy I’m not sure of great. But, but I, I kind of think it is, it’s like, it’s just, you know, here we, here I am, you know, I’m not pushing, pushing too hard. I’m, I’m just, I’m, I’m just there. And I think as a, you know, B2B brands have to think a little bit like that. Sure. You’ve gotta be ready to go when that, that call comes in. Um, or you’ve gotta be, but, but at the end of the day, you’re not really convincing someone to, you know, try this now. It’s not like you’re giving away a free sample, so please try my new product. And maybe, you know, you’ll like it and, and, and switch that switch is that switch is big. Um, it’s a big decision.

Sam McEwin – 0:14:3
Yeah. Well, you know, you know, this is the, um, case for content marketing. Yeah.

Dean Millson – 0:14:8
Oh, no. This

Sam McEwin – 0:14:9
Is a case for blogging. So this, um, yeah, true. Okay. You know, I know we follow a few people. There’s a, there’s a few content marketing critics out there, and it sometimes gets wrapped into, uh, you know, some of the satire that gets thrown around, uh, at different cases. But this, this for me is, is the ca is the case for for content marketing Yeah. Because it’s about being part of the discussion, being friendly and helpful and familiar to your audience Yep. Knowing that they’re not in the market yet. Yep. You know, and, and good content marketing and some of the great brands that have done it in our, in MySpace, like I think HubSpot or a Beacon for a brand that was built, not entirely, but, um, to, you know, a large part of that, that brand was built off the back of, you know, huge team of content writers just publishing content that was useful and relevant to their, to their target audience.

Sam McEwin – 0:14:56
Yep. Um, but, but that’s certainly one of those main tactics is saying, okay, well, instead of selling our product when we know that 95% of the per, uh, of our target audience and not in the market, let’s build our brand around being helpful to the a hundred percent of our target audience Yep. With the kinds of problems and that they deal with every day. Yeah. And, and, and in doing so, we’ll become a trusted sort of source of, of information, and maybe they’ll also learn a little bit about our products over those years and, and we can sort of, you know, take the long slow road to, to, um, to turn them into a,

Dean Millson – 0:15:31
Into a customer. Yeah. Part of, we think, so this is a little bit different or even before that, because Sure. The content’s there, but to find it, you’ve gotta go searching. So you already would you, you agree like,

Sam McEwin – 0:15:42
Well, well, it’s how, it’s how you frame it. I mean, we, um, you know, we, we sort of, we spoke a number of years ago to a, um, a mortgage broker. They weren’t, they weren’t a mortgage broker. They were a, um, sort of an aggregator of mortgage brokers. But, but in that same sort of audience anyway. And, um, you know, for, for them it was sort of like, okay, often when you think content marketing, you think straight away, okay. How to choose a mortgage broker or, you know, it’s all about brokering and, and mortgages. Yeah. You know, but, you know, we sort of looked at it and said, okay, who’s your audience? And when are they making decisions about choosing a mortgage broker? Well, they’re often, um, families, you know, they’ve just, you know, when do you buy, when do you think about buying a new home? Okay. I see. And then it’s often like shortly after you’ve got married, maybe it’s your first kid when you upgrade your home, there’s all these sort of life cycle stages. So ultimately who, who are your audiences or their families? So if you are riding content for them, it might be, you know, there’s actually a broad range of of topics that, that interest them when they’re not in the market for a mortgage break.

Dean Millson – 0:16:40
And it’s mortgage broker

Sam McEwin – 0:16:40
It’s mortgage, it might be about, yeah. Okay. Yeah. And you could maybe type back so there’s some relevance to the brand, so the, the sort of the we recommended there Yeah. Or teaching your children about money. Right. You know, or, or some of those sort of life stage things that says, okay, this is, this is a, you know, this is a exactly our target of audience, and these are the kind of questions that they ask when they’re not in the market to buy a mortgage broker. Yeah. You know, and then obviously you can get them to engage, and there’s all sorts of tactical things that you can apply to that around Okay, we know they’re in our target audience, so we can apply retargeting, or we can, you know, we, we can sort of message, you know, we ne they’re known to us, so we can now sort of message to them, but ultimately it also gives some of that familiarity and, you know, it’s a trusted

Dean Millson – 0:17:19
Part. I see what you’re saying. Yeah. In those context. Yeah. I was more, yeah. So, okay. That’s, that’s interesting. I didn’t, I didn’t think about it like that. Um, you are, you are still, so you are, even though you’re searching, you’re not searching for a brand you’re searching for. Yeah.

Sam McEwin – 0:17:31
And you might not be in that, in that case, you’re not searching for a mortgage broker either. Yeah, yeah, yeah. You know, and for, you know, for, for, for example, with your, um, you know, your soap company, you know, okay, well, people aren’t looking for a soap provider very often, you know? No. And most of their audience aren’t, but, you know, know if they provided information, uh, that is relevant to people who run car washes.

Dean Millson – 0:17:54
No, they do. No. And, and that’s absolutely the

Sam McEwin – 0:17:56
Strategy that’s, that’s that connection, you know, and, uh, you know, and, and, and that, you know, for, for me’s

Dean Millson – 0:18:1
All and, and helping those people. I know. And that is actually part of the, the, the, the brand strategy for me working with them, it’s helping them be more profitable in their, you know, I’m That’s right. The guy that owns the, the cut the carwash, so Yeah. Yeah, sure. The soap is the thing, but like, how can you help me? Exactly. You know, um, be more profitable

Sam McEwin – 0:18:17
And business, and maybe they come back to them, or maybe you just, now they’ve made themselves known as like, who would, who would, I don’t know, download the Excel spreadsheet budget planner for carwash businesses Yeah. Other than people who own carwash carwash businesses. So then you can say, okay, great, well we know who they are. Now we can target them with ads for our soap <laugh>, and at some point in the next five years, they might be absolutely in the market for it or whatever. But I mean, for me, it, it’s always been about like the challenge if you understand, I mean, I, you know, um, I sort of knew the 95 5 because I think you shared this document with one of the guys in our team, but I haven’t read it myself yet. Um, but you know, you, as you said, you sort of instinctively understand it, but when it’s put in in such,

Dean Millson – 0:18:58
Well, cause there’s a number there, like you can go, you know, I just, um, yeah. Market for the long term, or I think it was more what changed it for me was I always thought about brand building as kind of a slow, you know, building of familiarity, right? Yeah. But when you are ab actually able to put a kind of a number on just how small, um, yeah. Or large, the future opportunity is small, how the small, the current opportunity is, it kind of, it, it just painted a completely different picture for me. And, um, I think anyone in business can, can understand that you,

Sam McEwin – 0:19:33
That instantly sort of feel to pull back down. Like you instantly just sort of lean into more brand building act like as soon as you sort of pointed out you think, oh yeah, okay, well hey, we can relax. Like, you know, we don’t need, we don’t need that consumer promotion, you know? Yeah. Um, what we, what we need is just to a permission to be part of a conversation. Yeah. And that’s probably the challenge, you know, it’s like, okay, how are we relevant when we know that they’re not interested in our core service? Um, yeah. Bad time for the leaf blower to walk past. Hopefully that’s been picked up in the, in the microphone. But Yeah. You know, that manufacturing, I guess permission to have a conversation with your audience is probably the challenge. Yeah. That’s, that’s where my, and

Dean Millson – 0:20:12
It’s No, no, it is. But I, I think the challenge is though, just understanding you’ve gotta beat the long haul. No one kind of likes to, you know, we’re all, um, uh, you know, so even like, even though I, you know, gonna preach this, having to then do it myself, <laugh> Yeah. <laugh> and realize that that budget I’m putting, putting aside, you know, is, is, is, you know, I’m gonna be looking at kind of three or four years down the track is, um, is, you know, I I guess that’s a bit of, you know, a bit of skin the game from from Yeah. From, from our point of view, from, from my point of view. Like, uh, I’m putting my sh point, my myself in my client’s client’s shoes, uh, is a good thing. It

Sam McEwin – 0:20:48
Certainly shifts the, the, um, focus, I guess to, to, to one of longevity, you know, and, and to, you know, I mean

Dean Millson – 0:20:57
Cost of doing business, it’s almost like a Yeah. A fixed cost.

Sam McEwin – 0:21:0
Yeah. You

Dean Millson – 0:21:1
Just have to plug in and

Sam McEwin – 0:21:3
To potentially postpone your assessment of, uh, the effectiveness of a campaign. You know, like, I mean, it was sort of what you’re saying is that you’re not really gonna fully understand the effectiveness of your advertising for five years and it probably evolves over that time. Yeah,

Dean Millson – 0:21:18
Yeah, yeah. Well, I guess, yeah, you, you’d like to think for year or cut two, you had to see

Sam McEwin – 0:21:23
Something, see something. Yeah.

Dean Millson – 0:21:24
But, uh, but, but I guess that, yeah, it’s a, it’s a good point. It’s, it’s, um, you’ve gotta be prepared to sit back and just let it go and, and, um, and, and relax.

Sam McEwin – 0:21:33
Yeah. Well it’s one for the marketing instincts over the mar of the data analysts, isn’t it? Yeah. You know, and you know, I mean that’s, we, it seems like every podcast we mentioned on here’s a, here’s another topic for a podcast, but, you know, one, one of one of my, um, big things, I’ll definitely do a podcast topic on this at some point, is, is this measurability bias. And, you know, and, and, and what I see, which I think is related to this often is Oh yeah, cool. Yeah. We get the 60 40. Yeah. Yeah. Okay. It’s, it’s long term. We’re gonna long term activity. Um, but what were our direct sales from that last month and, and yeah.

Dean Millson – 0:22:7
Actually happened

Sam McEwin – 0:22:8
And yeah. And this, there has been some studies, you know, the term measurability bias comes from the fact that there’s, there’s been shown to be this huge bias to run the kind of advertising that’s easy to measure, not necessarily what’s effective in, in the long term growth of the, of the business. And, and I think, you know, certainly there’s maybe industries or certain products and types where that direct line to purchase is really easy to measure and it’s also really effective. And that’s, and that’s great, but I guess there’s a certain discipline that’s required if you are in the potentially B2B space to, to, to look beyond that, that measurability.

Dean Millson – 0:22:42
I reckon we should definitely, definitely talk about that. Cuz I’ve, I’ve even, I’m, you know, you mentioned, alright, 60 40, great, we’re gonna do this. It’s almost like I’ve, um, I’ve kind of ticked things off in my head with like, okay, this approach is right. Cool, let’s do it. <laugh>. Yeah. And then, and kind of forgot about. I I, there is the funny joke, I don’t know whether I’ve had this conversation with them on, at, at, at Demark or you and I have had it, but like, you know, um, brand building campaigns are often, they’re called brand building campaigns cuz you know, they haven’t actually done anything.

Sam McEwin – 0:23:11
What, what, what do you call a marketing campaign that doesn’t work?

Dean Millson – 0:23:14
Brand building <laugh>.

Sam McEwin – 0:23:15
Yeah, but that’s a bad joke because it’s wrong. It is, it is. It’s flat out flat. It’s funny.

Dean Millson – 0:23:20
But I think it’s been used sometimes like I I think it’s an excuse. Yeah. Like, uh, you know, I’ve, we’ve all done it, I’m sure. Um, you know, I hasn’t quite, you know, hasn’t quite worked that out. It’s gonna take longer. Like you’ve had an experience. No, not, I’ve got a client at the moment who’s had an experience like this with, um, with a, with a, with a supplier that’s promising leads and things like that. And, um, I, you know, nothing’s gonna happened in the, you know, it’s nowhere near what they promised in the three months. It’s like, well it just takes, takes time, <laugh>. And so it’s either a case of underdeliver un under promising and, uh, and over delivering or you know, someone over promising, but it’d been used, the excuse, you’re right, it’s wrong. But it’s often the joke’s there because,

Sam McEwin – 0:23:57
And that’s why I think objectives are really important, right. And, and, and having smart objectives if you wanna go down that path. Um, although I, I feel like the, all the letters of smart are just too much to, to manage. There’s too, but, um, but you know, having, having an objective, you go into a, to a, a campaign, like if the objectives is leads, then, um, it’s not a brand awareness campaign. You know, like, you know, it, it’s, it either delivers the leads and it was a great campaign or it, it doesn’t, the, the interesting thing from mine is, is I’ve found myself in this situation many times over the years and, and you know, we changed our, as an agency, we changed our approach to this is, is you’d often find it in the briefing stage or when you’re sort of crafting a strategy for a client that, yeah, okay, cool.

Sam McEwin – 0:24:37
Yeah. 60 40, yeah, we get that. Or whatever it is. Oh yeah, we want, or our objectives are part brand awareness and also part, you know, we need to drive this, this outcome. And you know, what I found over, over a long period of time is if you don’t carefully split that budget and say, okay, well what is it? Is it 60 40 or is it 30 70, whatever it is, how much are we, how much of your budget are we directing to brand awareness as an objective verse? You know, that direct response outcome and being really clear with it upfront and, and

Dean Millson – 0:25:13
Crafting that. Cause it doesn’t get really lost in the conversation after all. If,

Sam McEwin – 0:25:16
If we didn’t do that a hundred percent of the time, the whole effectiveness of the campaign would be judged by the direct response outcome. I just, you know, and that’s that measurability bias again, I guess in a different, in a different form is, is, you know, we say we want awareness until you have to measure a campaign by, or whatever. So,

Dean Millson – 0:25:33
Um, yeah. And, and it’s, you’ve just made me think of something else actually. Cuz that example that I’m talking about with the, the person that’s had the, the, um, you know, been disappointed with the leads, they’re a startup.

Sam McEwin – 0:25:42

Dean Millson – 0:25:43
And I didn’t think about this before when I, we’ve telling me the story, but, you know, to to to start a startup and then kind of jump into, you know, get me leads kind of doesn’t make sense. Yeah. In the slightest it’s what you need. You need business Yeah. Of, of, of course. But it’s, um, you’re really up against the wall if no one who’s who you are. And, you know, you’ve gotta kind of get that sell and familiarity and uh, that it really is like the guy on the train running up to you and, and telling you all about about themselves.

Sam McEwin – 0:26:9
So Yeah. It’s, it’s a, it’s a it is. Exactly. So Yeah. Yeah. There, there’s challenges there and I think that’s what it is. I mean that, that reality of, you’re in the moment of oh yeah, we’re a startup, we need leads. You know, that’s what directs you to, I guess putting together a campaign that’s focused on the wrong objective and, and you know, taking your eye, you know, it’s really, it’s really easy to sit there and have a conversation and say, yeah, great, only 5% of your audience are in the market. Um, but those pressures do sometimes take you down the wrong path. And, and um,

Dean Millson – 0:26:36
And I guess with these as well, like it’s still, the pressures are there, they’re not gonna go away. So yeah, it’s the same thing, you know, with, with talking about a lot of this, these kind of rules of thumb, you know, with, you know, the lot of them, you know, the examples are with big consumer brands with massive budgets and, you know, that doesn’t translate to, to someone that doesn’t have a, have a, you know, have a big budget or doesn’t feel. Right. So just because the rule of thumbs there doesn’t mean the challenge goes away. You’ve just gotta kind of

Sam McEwin – 0:27:2
The project. It’s, it’s, I mean, it’s not a case of just, you know, running some, some adss and sitting back and not measuring them, right. Like, you know, it’s not, you just sit back and, and ah, yeah, they’ll, they’ll come. I guess you still need to focus on the 5%. There’s still gotta be a mechanism Yeah. There to, to convert them, you know, and you know, there’s probably a lot more activity that you need to do to be successful, but, you know, it’s not just a case of kicking back

Dean Millson – 0:27:27
And No, no, that No, that’s right. Not, but that, that, that, um, yeah, you, you, you’ve, you, you’ve gotta wait. So I, I just, it’s a, it’s, it’s, it’s a really cool simple idea, um, that um, that um, that I think, um, it’s good. It’s a good one to also talk with, with, with, with clients about, cause I think they can help them. Yeah. So to kind of, to, to kind of summarize, there was kind of three points to kind of rethinking, you know, rethinking everything in, in the lens of this, you know, 5 95 rule. And that was expect sales results mostly in the long term. Um, not in the short term. So,

Sam McEwin – 0:28:3
Yeah. Does that, the, does that also just mean me like changing the length of time that you’re measuring, you know, so I mean, we off, we get caught in quarters and months and Yeah. And financial years and

Dean Millson – 0:28:15
I think we, you’re gonna wanna measure those months, but you probably, you don’t put it to the, you know, don’t to the campaigns like, shit, this isn’t working six months, let’s pull it and try something else. And that is

Sam McEwin – 0:28:25
The, and trends, I guess. Yeah. You know, what you expect is if you’re running a brand campaign for five years, that the trend will be up. Yeah. Yeah. That growth will, uh, you know, each month should be better than the last. Yep. Uh, but, but maybe not, you know, we’re not measuring the whole success of, uh, you know, a specific month’s spend on, you know, the, the month that leads it or something. Well,

Dean Millson – 0:28:45
That’s right. Yeah. So, but this is, this is another interesting thing. Develop creative that will be remembered most by future buyers, not current buyers. So when, you know, the soap guy for example, you know, when those future buyers are in the market, what do we want them to remember? We want them to remember us cuz we’ve given them, you know, we’ve something interesting and creative and it might be funny or it might just be, you know, but it’s gotta be memorable and distinctive. But then, you know, what, what is that thing? And that’s why it’s the, that’s the important part I think, of having a kind of a, a strong kind of brand platform for, for your brand understanding. You know, what it is you want to be remembered for. What’s that one thing? What’s those couple of things you, you know, what is it? So you can make sure that’s a part of your, your your, your your campaign and your cr you know, your career.

Sam McEwin – 0:29:36
And I, I guess just thinking about that now too, like that five year period, there’s, there’s probably a fair portion if I think about some of the sort of business buying decisions that I’ve made, there’s a fair portion of time when you’ve sort of made a commitment that, you know, like when, uh, when, when the time comes that I’m going to purchase this or switch pres providers, it’s probably going to be with this provider. Yep. Yep. But I might, it might be another year or two before I actually get to making that decision. Yeah. You do sit on these things for a long time, don’t you? So I guess there’s, it makes me think there’s, there’s no reason why you shouldn’t be focusing on your, you know, benefits and features and benefits. No, no. That, that’s right. And that, that, um, developing those, those, um, mental structures and, and all those kind

Dean Millson – 0:30:24
Of things and they’ve gotta be easy to find, like, you know, that just might be on your website though. Yeah. Like, you know, when someone’s ready to kind of, you know, I’ve heard that, you know, heard that ad, heard that line, whatever, it’s like, I’m gonna, you know, you, I’m gonna find out more now and then, and there it is. You know, you can’t get that all across in, you know, in, in the short amount of time you have. So I, that’s, and I think that’s an interesting one. And, and then the other thing to think about from that is also about a targeting. And Roy Sutherland talks about this a little bit. Um, you know, that that, um, that CFO that you wanna target, you know, at the moment is just an, you know, just a trainee accountant right now or Yeah. You know, that, that, that, um, so that the people that are, the, the, the roles that people are in now aren’t the roles they’re gonna be in five years.

Dean Millson – 0:31:9
So Yeah. And so the leaders of tomorrow, if you are, uh, you know, the business decision makers of tomorrow aren’t business decision makers now. So you’ve, you know, that that’s even an argument about, you know, that hyper-targeted, you know, um, targeting, you know, say LinkedIn for example, which we’ve spoke about before, is, you know, is, is, is, is not as effective as, as you might think, but, you know, targeting or this is part, probably partly why, you know, yes, I know that my buyer is, um, you know, um, a cfo, well, let’s target all the CFOs that all the companies, you know, and why we’ve got a list of all these companies we know, you know, we want, want to use, well, they’re not ready to buy, but the, you know, the, the accountant or the someone in finance or whatever like think creatively about, about what the future’s gonna look like. Yeah. So that we know those people have been familiar. They’ve kind of, and that even goes maybe Sam to the, the content marketing piece. Like, um, you know, helping those people, giving them the tools or giving them the knowledge that, you know, helps them win. Yeah. Helps them feel smart, helps them get ahead. So by the time they’ve, they they get ahead that, um, you know, you’ve been a part of that, you know that, that, that journey.

Sam McEwin – 0:32:17
Yeah. Yeah. And that’s, yeah, I think that’s huge. That’s, that’s, um, yeah. Point well

Dean Millson – 0:32:22
Made. Thank you. Thank you. So that’s, how do we go? That wasn’t, wasn’t

Sam McEwin – 0:32:28
32 minutes. We did

Dean Millson – 0:32:29
Five seconds. There we go. Perfect. So it maybe is one of the shortest, but like a, a little idea. You, we don’t, you know, doesn’t need to be spoken about so much. It’s so simple. And that’s what I, what I, what I love about it. It’s, um, it’s uh, it’s there to be taken and, and used and it’s a great little rule.

Sam McEwin – 0:32:45
And there, there’s a, there’s a reasonably hefty, uh, document that, that, uh, sort of goes over all this in.

Dean Millson – 0:32:51
It’s actually not that hefty. There’s a, there’s a, um, the document has got quite a few different case studies I’ve just got. And so this is a part of it. Um, it’s just called, we’ll put it up in the, in the link, but advertising effective is effectiveness and the 95 5 year, there you go. He calls it 95 5. I like your way. Yeah. Um, most B2B buyers are not in the market right now, and it’s, you know, the papers, what is it? Six pages long. So, and it’s actually, I mean, maybe, um, it’s detriment. It’s only like four or five references. So I think that that idea where that f that that 5% came from is that, you know, you know, five year buying cycle. So that’s not that scientific, but it’s, it’s, it just, there’s a good gut feel about a lot of it and I’m happy to, to, to run with that. Um, look,

Sam McEwin – 0:33:36
And, and as you said, if it helps frame a discussion, if it helps, it helps to, you know, straighten out your thinking a little bit and, you know, cuz there’s a, there’s a fundamental truth there, you know, it’s, it’s obvious. It does. Yeah. It doesn’t need to be more than that. Yep. Um, yeah, it works. So great. That’ll be in the show notes. Uh, I mentioned at the start, housekeeping, we’ve been encouraged by certain members of our team to, to do a little bit of housekeeping and, uh, the, the important one of course is to mention how you can help to support the show. If you love the show, I hope you do love the show and you get something out of it. Um, but the number one way of course is reviews. I know you hear it on every podcast, but, uh, if you could feel to, uh, you know, if you could be encouraged to go to iTunes or wherever you, you download your podcast form and give us a nice healthy five star review, uh, that would of course be, uh, very helpful. Or talk about us, share us, make someone listen. Um, we do this for the love. I think we get a lot out of it regardless, uh, Dean. But we’d certainly love to share

Dean Millson – 0:34:37
If you’ve got something outta this drop, you know, drop us a line, get in. Yes, get in, get in touch. It’s, um, it’s nice to know there are a few of you out there, um, listening to us, but, um, we can see there are so Yep. Um, yeah, so good to, good to see you again mate. Um, good talking about that stuff. And we will, uh, we’ll continue this conversation next time and I can’t wait to hear what you’ve got to share.

Sam McEwin – 0:35:0
Thank you, Dean.

How to build a B2B brand and the problem with LinkedIn Ads

In this episode we discuss:
  • Why is so much marketing literature focussed on B2C

  • What does Jenni Romaniuk have to say about B2B?

  • Does the law of double jeopardy matter for B2B as much as it does for B2C?

  • Benefits of ling term brand building for B2B businesses

  • Priming a buyer for your B2B brand

  • In market buyers vs out of market buyers.

  • How and where should we advertise for B2B?

  • Is LinkedIn a dog?

  • Social media usage statistics and why they matter.

  • The biggest LinkedIn understatement of the year so far. You heard it here, second.

  • Why Facebook may be a better place for your B2B ad than LinkedIn

  • The truth about display advertising

  • Could Microsoft display network be better aligned to B2B advertising than the Google Display Network

  • Are people who are in business still people and should we treat them as such?

  • Do CEO’s watch Lego Wars?

  • 3 ways to use LinkedIn for B2B (2 of which work.)

Resources Mentioned

Michaela Jefferson – Customer acquisition is the only viable growth strategy in B2B, says Ehrenberg-Bass’s Romaniuk –

 Peter Weinberg & Jon Lombardo – Why B2B marketers need to bet big on ‘The Big Long’ –

The B2b Institute


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What is the leading brand of politics in Australia?

In this episode we discuss:
  • Why you don’t mess with social media influencers on social media.
  • If not sales, what should marketing be ultimately measured by?
  • What is the leading brand of politics in Australia?
  • What really is “the Murdoch press” anyway?
  • Is news media a product and if so, should they tailor that product to fit a particular market?
  • Is politics the one true case where brand purpose makes actual sense?

Resources Mentioned

Prof. Byron Sharp – How Brands Grow –

Dee Madigan – The Hard Sell: The tricks of political advertising –


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The 5 Best Digital Channels (that are not Facebook or Google)

In this episode we discuss:
  • The scary fact that 60% of digital advertising spend is spent with just two companies, Facebook & Google.
  • How did Google ads evolve and why are they now dominated by big brands?
  • Are we now seeing a golden age for new digital channels?
  • What are the top 5 digital channels which are not owned by Facebook or Google?

Resources Mentioned

Taboola –

Outbrain –

Digital Out of Home

Petrol Station Ads

Amazon Ads –

Ebay Ads –

Spotify Ads –

Catch Up TV Advertising –



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Can you be strategic about word of mouth?

In this episode we discuss:
  • Word of mouth is always seen as important, but why aren’t we more strategic about it?
  • What is a Talk Trigger?
  • What’s the difference between a USP and a Talk Trigger?

Types of Talk Triggers – Talkable Empathy, Talkable Usefulness, Talkable Generosity, Talkable Speed, Talkable Attitude

Talk Trigger Criteria – Be Remarkable, Be Relevant, Be Reasonable, Be Repeatable

Resources Mentioned

Skip’s Kitchen

Five Guys Fries

Penn & Teller

Air NZ Sky Couch

Umpqua Bank

Holiday World & Splashin’ Safari

Dr. Snip



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Measuring & Leveraging Cognitive Biases for Fun & Profit – The Messy Middle Pt 2

In this episode we discuss:
  • The impact of cognitive biases on purchasing decisions
  • What exactly are category heuristics and why do they matter?
  • Experts vs Acquaintances who do consumers really pay attention to?
  • Why 2 for 1 is better than 50% off, every time
  • Stacking biases and other fun games for marketers
  • Brand preference fragility, another dagger in the heart for poor old brand loyalty theory?
  • Consumers don’t know why they purchase what they purchase and neither do you.
  • Why exactly does Sam need three TVs anyway, and who the hell is Hisense?

Resources Mentioned

Google and the Behavioural Architects – Decoding Decisions: The Messy Middle of Purchase Behaviour –

Matt Johnson, PhD & Prince Ghuman – Insights into the Psychology of Decision-Making from a Split-Brain Mind –


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The Job to be Done

In this episode we discuss:
  • What job are we ‘hiring’ the products we purchase to perform?
  • The surprising truth behind milkshake purchasing behaviour
  • A better question to ask consumers than “why” they purchased something
  • Are two jobs to be done better than one?
  • Why you should talk to your customers instead of talking about yourself
  • Does something need to be ugly to be believably functional?

Resources Mentioned

Clayton M. Christensen, Scott Cook, and Taddy Hall – Marketing Malpractice: The Cause and the Cure –

Clayton M. Christensen, Taddy Hall, Karen Dillon, and David S. Duncan – Know Your Customers’ “Jobs to Be Done” –

Clay Christensen – The “Job” of a McDonald’s Milkshake –

Brand Deck

Trigger Cards


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B2B Brand Strategy: Are the rules different?

In this episode we discuss:
  • Branding in the B2B space compared to B2C
  • B2B brand strategy is important as an internal driver of organisations
  • How are B2B brands built vs B2C brands
  • The important role of people in B2B brands
  • The role of brand purpose in B2B
  • Marketing mix and effectiveness in B2B brands
  • B2B targeting 
  • ‘Emotion’ in B2B marketing
  • Influencing behaviour 

Resources Mentioned

Prof. Byron Sharp – How Brands Grow –

Binet & Field – The Long & the Short of It –

Julian Cole & Mark Pollard – Live Action Strategy (Dos Toros) –



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The Messy Middle of Purchase Behaviour

In this episode we discuss:
  • The evolution of consumer buyer journey frameworks
  • Initial consideration vs active evaluation
  • The latest research into active evaluation
  • What exactly is the ‘messy middle’
  • Exploration and evaluation loops
  • The power of purchasing triggers
  • Is purchase abandonment a bigger issue than cart abandonment?
  • Behavioural biases raise their head again

Resources Mentioned

Decoding Decisions: The Messy Middle of Purchase Behaviour 

MickInsey & Company – The Consumer Journey –

Think with Google – Decoding how consumers make purchase decisions –

Rory Sutherland – Alchemy: The surprising power of ideas that don’t make sense –

22 Immutable Laws of Branding – Trout & Reis –


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