Do perceptions drive sales or sales drive perceptions for your brand?

Based on both our experience and marketing theory, brand perceptions can drive brand purchase behavior, and brand purchase can drive brand perceptions. From the earliest ‘purchase funnel’ to the latest ‘online decision journey’, marketers proposed that consumers form a consideration set and gave the included brands preferential attention and buying likelihood. Other factors also influence purchase, including distribution coverage and prominence, and point-of-purchase actions such as price promotions and displays. Likewise, purchasing and using/consuming a brand affect consumer perceptions of it, leading also to word-of-mouth that changes other consumers’ perceptions.

What has been the subject of debate is the relative importance of brand perceptions driving sales vs sales driving brand perceptions. This is key to advising managers on brand resource allocation: the former calls for marketing to persuade prospective customers with targeted and creative communication, the latter for spending on distribution coverage and mass market awareness. On one extreme are ‘brand consultants’ who focus all their efforts on obtaining the best ‘positioning’ in consumers’ minds and trust this will translate into sales. On the other extreme is Byron Sharp, who claims in yesterday’s blog (https://byronsharp.wordpress.com/) that ‘we have practically no knowledge of how much particular perceptions affect behaviour’ and that ‘Sales (i.e. behaviour) strongly affects perceptions, so correlations between the two are largely, if not totally, due to behaviour causing the perception.’ Both extremes meet in the lack of scientific evidence for their claims, which our research aims to provide.

Scientific evidence of brand perceptions changing before consumer behavior (sales) change has been well documented in recent literature. Srinivasan, Vanhuele and Pauwels (Journal of Marketing Research, 2010) show this across fast moving consumer good (FMCG) industries and also demonstrate that including brand perceptions improves sales explanation even in a model that accounts for long-term effects of marketing actions (including advertising and distribution).  Pauwels and van Ewijk (Marketing Science Institute Best Paper award, http://www.msi.org/reports/do-online-behavior-tracking-or-attitude-survey-metrics-drive-brand-sales-an/) extend this analysis to 15 industries, including cars and service subscriptions and include online consumer behavior metrics (paid, owned and earned media) to show dual causality between them and survey-based attitude metrics. Scientific evidence of consumer behavior (sales) changing before brand perceptions change, has only recently been uncovered, mostly in unpublished studies. For one, my analysis of Spanish FMCG data over the 2000-2010 period showed that sales for diet Coke dropped almost immediately after Coke Zero was introduced. However, attitudes for diet Coke stayed up for several months before they followed the sales decline. Consistent with Byron Sharp’s view, I interpreted this as a consumer need for attitude-behavior consistency: ‘as long as there is still some diet Coke in my fridge and/or I still remember enjoying it, I will state I like it when asked in a survey/interview about my feelings’. However, after I forgot about diet Coke, I will state I don’t like it to be consistent with my behavior of not having bought it for months.

In a current analysis of 153 worldwide brands, we find 35 with brand perceptions changing at least a month before sales change, 30 for which sales change at least a month before brand perceptions change, and 11 brands with dual causality. The latter are personal care brands, so we are currently analyzing how brand and category factors influence these relationships, hoping to give managers specific guidelines. The theory relates to different levels of category involvement: for many grocery products, consumers mostly decide at the point of purchase, while for more involved purchases (such as personal care), a change in attitudes is necessary for changes in buying behavior (Alba, Hutchinson and Lynch, Handbook of Consumer Behavior 1991).  I don’t see how the truth is served by Byron Sharp’s unfounded and absolute claim that ‘This powerful causal relationship makes quantifying how particular perceptions drive other perceptions or sales impossible.’ Let’s make the impossible possible. For your brand.