Byron Sharp- wrong and getting wronger, according to pigeons

Sound crazy? Maybe a little. But the disciplines of economics and biology have been swapping ideas for decades now. So, bear with me.

People have had doubts over the universality of Byron Sharp’s theory of brand growth for a while now, but it used to be largely limited to categories like cars and houses. Lately, it seems those doubts are being voiced in lower cost, higher frequency categories. In order to explain the apparently diminishing applicability of Byron Sharp’s theory across categories, I think we need to start thinking about consumer behaviour like behavioural ecologists started thinking about pigeons - we need to start thinking in terms of fluidity and spectrums. Once we start doing that, we can start to understand what moves consumers up or down that spectrum and the forces we can see changing consumer behaviour today.

To summarise, Byron Sharp turned the marketing world upside down with a groundbreaking assertion that a brand’s growth is determined by its mental and physical availability. In more modern lingo, our consumer purchasing decisions are driven by our System One brains - we are slaves to our subconscious. As long as you are memorable and distinctive, and you’re physically available when people are ready to buy, then the slave-driving system one brains of your consumers will work in your favour and your brand will grow.

There has been opposition to this theory ever since it was first voiced. What about cars? Or houses? People tend to put much more consideration in here so surely differentiation in these categories needs to be more than just about memorability- we need to think of functionality, what needs we’re trying to solve in different consumer segments’ lives. Objections to Byron Sharp used to be isolated to low frequency, high cost purchase categories, but now they seem to be spreading into higher frequency, lower cost categories…. So what’s going on?

Morality in fiction is often binary. You have good and evil, Bond and the villain with one eye and a traumatic childhood turned vendetta against the world, a boy and his dragon versus an evil wizard, Superman and Lex Luther. Lately, we’ve seen a shift. George R Martin has been a champion of the morality spectrum, writing in shades of grey. I think we need to start thinking of our consumers in the same way. The relationship between the system one and system two brains isn’t all or nothing. 

Let’s take a break for a moment and circle back to my earlier, seemingly outlandish assertion that we can better understand consumer behaviour by looking at pigeons. For years, Biological Mathematicians and Statisticians were confounded when they made predictions on the optimal foraging strategy for pigeons and yet, when studied, the wretched plague-carrying birds would continually defy their predictions. It was only when researchers took a more holistic cost/benefit approach did they finally crack the problem. 

In their first experiments, the researchers had been making predictions based on energy requirements. They weren’t doing it through a wide enough lens of fitness - what were the consequences in these animals’ environments if they tried to approach that optimum? They discovered a number of complex determining factors in their studies, but I’ll take a simple one as a first example here: predation. In environments with a high number of predators, more time spent foraging for food meant a higher risk of predation and pigeons tended to undershoot the optimum. Less predators, and they would tend to be greedy and over-shoot it. Other factors included the effort involved and the benefits of foraging. If you manipulated how easy it was for pigeons to find food, you could change their behaviour accordingly. Easier foraging meant more foraging, harder foraging meant less. The same would happen if you changed the benefits of foraging by manipulating the quality of the food: better = more ; worse = less. Foraging behaviour of pigeons (and other animals) existed on a spectrum and it could be manipulated. 

The System One brain is a cost saving evolutionary tool that helps us save time and energy through instinct-driven decision making. The extent to which System One helps us in a decision is determined by the cost of the decision (the energy required to make it) versus the benefit/risk of the of the decision. So like the pigeons’ foraging behaviour, and the morality of the characters in Game of Thrones, the rationality of our purchasing behaviour exists on a spectrum. That’s why the strength of Byron Sharp’s theory has always been more tenuous in categories like cars.

With cars, there is a relatively high cost to the decision - choosing a car takes time, there are tonnes of features of each product to consider, payment plans, different brands and models out there to pick from. But that cost is vastly offset by the benefits and risks of the decision. A car is a massive part of consumers’ lives. Their image and day to day travel depends on it. And then you have the risk. A car is a product that you will have to live with for a long time, and it requires a large amount of resource to acquire (cash). In evolutionary terms, a car has a high impact on your fitness. Those risks and benefits increase significantly if you have family members who will also be affected by the purchasing decision. That’s why we tend to see more rational, considered consumer behaviour in car purchases. 

I’ll put my hands up and say I haven’t got the research to back some of those assertions up, but it wouldn’t be difficult to test. For example, if we think that consumers’ rationality is dependent on the perceived risk of the purchasing decision, then surely they would become more impulsive if you lowered that perceived risk? So, for example: wealthy people for whom the cost of a car is relatively less important should be more impulsive. Another example could be: those without families that increase the benefit/cost conferred by a car should also be more impulsive in their car-purchases than those consumers with affected families. 

So let’s look at categories in which Byron Sharp’s theory on brand growth has traditionally been believed to hold at its strongest: FMCG categories. If we use the same cost vs benefit/risk lens to look at these categories, it makes complete sense that Byron Sharp’s beliefs would prove to be most effective in these categories. Use snacks as an example. There are a plethora of brands out there, and if I were to try searching all of them for the best product for my needs, I could spend many hours and a great deal of energy trying to find it. That cost seems large compared to the relatively small nutritional (or otherwise) benefits/risks gained from purchasing and consuming a snack. With such categories, it seems entirely reasonable to believe that consumers would rely more on their system one, impulsive brains to make purchasing decisions.

But, there have been a number of shifts in the world that could explain increasingly rational consumer behaviour even in these categories. The world is a complex thing, and there are undoubtedly a large number of factors that I will miss out here, but I’ll pick a couple to illustrate the point. 

The first influencing factor is technology. If we believe that higher costs attached to a decision drive irrational, impulsive behaviour in consumers, then any reduction in those costs should result in a greater degree of rationality introduced into purchase decisions. E-commerce and digital technologies have unequivocally acted to reduce the effort in consumption across categories. With more and more shopping moving online, or physical shopping being augmented by digital technologies, the energy costs attached to purchasing things like popcorn and crisps are reduced and our brains can afford to be more rational when we look to buy them. With such a shift, we would expect consumers to depart further and further away from the behaviour predicted by Byron Sharp. As they do brands will have to start rely more on strategies beyond simple mental and physical availability. 

In snacking, there is one trend that is likely to have a considerably significant influence on the behaviour of consumers. With the astounding growth of plant based foods, fitness markets, and the success of environmental champions like Patagonia, it is undeniable that our consumers are becoming more conscious of their health and their impact on the world around them. One important aspect of the cost vs benefit/risk model is that the values of each are influenced by factors weighted not in absolute terms, but rather perceived terms. If you remember the example of the car, the price of a particular car remains the same in absolute terms - whether you are rich or poor, the value is ￡X. But the perceived costs in terms of price can vary, either due to attitude (consider two men with the same wealth, but one has a family and the other is a bachelor: we could expect the family man to be more cost-sensitive due to the implications his spending has on his family) or due to how much money they have. We would expect consumer rationality in their purchasing behaviour to vary accordingly. 

As consumers become more health conscious, the perceived values attached to the benefits and risks of a relevant purchasing decision will be affected, and therefore their behaviour will be affected as well. We would expect the perceived benefits and risks attached to purchases in categories like snacks to increase, whilst the costs remaining largely unaffected. As consumers become more health consciousness, we would expect them to become increasingly rational and increasingly discerning in their behaviour when it comes to categories linked to their health: food, beverages, and sportswear are a few examples. 

If we accept this spectrum model, there are a couple of interesting implications to consider.

First: We can start to be predictive. If we acknowledge that rational vs irrational exists on a spectrum determined by perceived costs vs benefits/risks, we can start to identify factors that will likely shift consumer behaviour and adjust our brand strategies accordingly.

Second: This is perhaps the more exciting implication. What if instead of using this model to be reactive, we used it to become proactive? If we know that the cost vs benefit/risk model can be influenced to make consumers more or less rational in their behaviour, can brands begin to actively try and do the influencing themselves? What new sorts of competitive advantage could we try to create?