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Sales Growing Or Slowing? What's a realistic Target?

Peter O'Leary Mar 12 • 3 mins read

One of the great business challenges is to deliver ongoing, continuous, growth in sales and profits. It’s an obvious objective - a common belief that it’s easy to repeat what you have previously done and then do some more.

Markets grow and, if all things are equal, brands should grow at least by the same rate. So, what does it take to grow above the base? (Isn’t that what we’re aiming to do?)

A sales lift in any given period could be because of great marketing, a big discount or simply a case of the right product, in the right place, at the right time. The question is: what’s predictable (so that you can do it again); what’s sustainable (delivers real profit); and what should be a realistic expectation for growth?

Taking the last question first - what is a realistic expectation for growth? - and most responses are typically vague. They say - there are many variables, depends on the market and changes based on which category the product is in. All of which is unhelpfully true.

The good news is that there is a better way. In 2016, Byron Sharp from Ehrenberg Bass shared some fascinating data that came from a long-term tracking study of 140 UK consumer brands. Using sales data from the previous 6 years, they assessed each brand to determine: how many were stable (within 3 share points of their first qtr position); how many had grown by more than 3 but less than 6 share points; and, how many had increased share by more than 1 point annually.

Grow by 1 point each year? Is that realistically modest or optimistic? Out of 140 brands, over 6 years - the number that achieved growth of 6+ points was 7. Just 5%. Based on this data alone, marketing would seem to be about holding ground, not driving growth! Exciting for a few - mediocre for the many.

There are, no doubt, many reasons why. The IPA (who run the UK awards) have lamented that advertising effectiveness isn’t growing, due in part to short-termism and an over emphasis on tactical activations that are sub-optimal.

Add the views of The Economist that ‘Services have commodotised. Tactics no longer work. And as traditional mediums and approaches collapse, marketing complexity is rising sharply’ - and it all sounds like a tough world.

There is a better way. (yay).

It’s not about making it simple, as complexity just can’t be simplified. It is about being disciplined, taking advantage from all of the data (and science) available - not just your own.

It’s like a 3D Puzzle. Every element connects and supports each other. Penetration is the main driver for brand growth. Find and engage new customers. Distinctive brands, intriguing creative and clever media placement are all part of the mix - (we could talk about each for days…).

There is a new normal. Can we tell you more

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