When A Brand Starts to Lose Momentum

Small Changes

When A Brand Starts to Lose Momentum

Let’s dive into a real example and see how this all applies by looking at what happens when things go wrong and strategy is misaligned.

Back to our online shoe company…

Case study background:
Let’s say, we are carefully tracking results and we see that across all our ideal customers:

  • They are no longer purchasing shoes every ten weeks or so after two years. Our data shows this drifting closer to 12 – 14 weeks.
  • This means consumers are taking an additional 20% – 40% longer to make another purchase.
  • Referrals have dipped a bit and we are able to roughly determine we are only getting one new customer from word of mouth recommendations, where we used to average between two and three.

But are sales show strong growth – the brand is growing and the total revenue generated is showing a nice linear trend up and to the right over time.

“Nice job marketing! Keep up the good work.” (cue  champagne bottles and cheap appetizers at the quarterly meeting)

Should we pat ourselves on the back? Cheerfully grin and say, “No problem boss – we’ll keep it up!”

Nope. Not if we want to have a job in a few months.

What just happened – the company is growing right? Sales are up!

Unfortunately, our brand is starting to show the early signs of grinding to a halt. Our acquisition costs are rising and the CLV (Customer Lifetime Value) is slipping.

Small Shifts If Left Unattended…
This ever so slight gradual shift in buying behaviour could have big implications if ignored and not fully investigated. While not immediately apparent, the company will have problems. The metrics mentioned above are usually monitored by marketing (hopefully) but it is what happens next that makes or breaks marketing’s role and ultimately the brand’s place in the marketplace.

Note: Granted, the company could shift its strategy in relation to investor goals or founders wanting to exit (sell the business off). This usually involves focus on growing through pure acquisition and really ramping up the brand to show impressive sales growth for courting a potential buyer. This is expensive to do but often times the case in preparation for a successful exit. In short, it’s a near-sighted strategy with long-term implications as it can sacrifice the customer experience in exchange for impressive (but misleading) sales figures and the brand usually gets tarnished in the process.

Remember, we like to focus on something measurable like profitability and tying strategy back to a quantifiable metric we can point to.