Do Brands Grow Through Penetration Over Loyalty? Arena Finds Out

Arena today unveils research which tests Byron Sharp’s theory that brands will only grow through penetration rather than loyalty. The research, which involved over 1,000 interviews and was weighted to be nationally representative, considers brand growth through the filter of digital channels versus those offline, and looks at its impact on the growth of brands. Byron Sharp asserted his theory in his 2010 book ‘How Brands Grow: What Marketers Don’t Know’.

Analysing a range of different sectors, including takeaways, betting and financial services, the research suggests that customers who are communicated with through and actively use digital channels could display more loyalty than those who are targeted using offline media.

Key findings include:

· Pizza eaters who order online do it 3.4 times annually versus 3.1 times for those offline

· Betters placed 8.9 bets via an app in the previous three months versus 8.2 bets via a brand’s website and 6.9 in a betting shop

· The average claimed spend on betting app in a 3-month period was £111.70 compared with £82.16 in store and £81.21 online

· Online users have an average 2.3 financial products with their main current account brand versus 2.1 for offline users

“Whilst we respect Byron Sharp’s penetration theory, our new research suggests that digital is definitely disrupting the loyalty norms in sectors as diverse as financial services – traditionally a sector difficult to inspire loyalty in – food & drink and retail,” said Taj Sohal, Insight Director at Arena.  “Strategic use of the right mix of digital channels – be they apps, social media or websites – can help brands to grow by increasing frequency of purchase, weight of purchase, usage and consumer spend. Ours is just an initial investigation but it definitely suggests brands should take some time to look under the bonnet.”