Podcast Summary: Let's Talk Branding – "The Secret Behind Brand Advocacy with John Lyons"

Release Date: December 9, 2024

In this insightful episode of Let's Talk Branding, host Stef Hamerlinck converses with marketing veteran John Lyons about the often-misunderstood concepts of brand advocacy and customer loyalty. John, a seasoned marketer with over 25 years of experience, delves deep into the mechanics of building and sustaining brand loyalty, offering practical strategies and challenging prevalent misconceptions.

Introduction to John Lyons and Fractional CMO Role

[00:33] John Lyons begins by outlining his extensive background in marketing, highlighting his tenure at agencies and his pivotal role at the LEGO Group in Denmark. Currently, John operates as a Fractional Chief Marketing Officer (CMO), assisting B2B businesses, professional services, and tech companies in leveraging effective marketing strategies to drive growth.

[01:21] John Lyons explains the essence of his fractional role:

"Fractional means like timeshare. I split my time fractionally between clients... It's a very holistic approach... How can we grow your business, what are our opportunities, what does that look like from the bottom line?"

He emphasizes the practicality of focusing on business growth opportunities without the entanglements of day-to-day corporate politics.

[02:43] Steph reflects on the hybrid nature of the fractional CMO role, likening it to having the flexibility of agency work combined with the depth of in-house positions.

Dissecting Brand Loyalty: Misconceptions and Realities

The conversation shifts to the contentious topic of brand loyalty. John addresses a common misconception propagated by the Ernst & Young's Institute and Byron Sharp, which suggests that loyalty is non-existent. He vehemently disagrees, citing the Double Jeopardy Law:

[08:58] John Lyons asserts:

"Loyalty absolutely exists. Even if we kind of take a step back... You generally go for what you know."

He elaborates on the nature of loyalty, describing it as polygamous rather than monogamous. For instance, a customer might prefer Diet Coke but switch to Diet Pepsi or water if Diet Coke isn't available, demonstrating category-based loyalty.

[12:53] Steph concurs, adding that loyalty often emerges as a natural consequence of brand growth and increased availability, but questions whether smaller brands can intentionally cultivate loyalty.

[13:50] John Lyons responds affirmatively, particularly highlighting subscription-based models in tech and SaaS industries that inherently require customer loyalty. He provides examples like the BBC's Couch to 5K program, which fosters loyalty by engaging users over time.

Strategic Investment: Acquisition vs. Loyalty

A significant portion of the discussion revolves around where brands should allocate their marketing budgets—between acquiring new customers or fostering loyalty among existing ones.

[12:53] John Lyons agrees with the Erba Bass principle that brands should prioritize penetration over retention:

"If you have to make a choice between acquisition and loyalty, go for acquisition."

However, he notes exceptions for leading brands like LEGO, where loyalty programs complement acquisition strategies effectively.

[18:28] John Lyons outlines multiple benefits of investing in loyalty programs beyond mere repeat purchases:

• Financial Benefits: While not the primary advantage, increased sales from loyal customers contribute financially.
• Owned Database: Building a direct relationship with customers.
• Community Development: Encouraging brand advocacy and creating ambassadors, as seen with LEGO and Nutella.

He underscores that loyalty should not replace acquisition but rather complement it, given the polygamous nature of brand loyalty and inevitable customer churn.

Building Effective Loyalty Programs

John shares practical insights from his experience managing loyalty programs at LEGO and Hasbro. He emphasizes the importance of creating value beyond discounts to foster genuine loyalty.

[22:34] John Lyons criticizes simplistic loyalty models:

"The discount only model is fundamentally flawed... providing exclusive rewards is a far better way of doing it."

He highlights LEGO's AFOLs (Adult Fans of LEGO) program, which allows fans to create and vote on custom sets, fostering a sense of community and belonging. Additionally, loyalty programs can drive acquisition by extending reach to customers purchasing through non-branded retail channels, as demonstrated by LEGO's partnership with Target.

Overcoming Challenges in Advocating for Brand Investment

Stef raises the issue of convincing corporate leaders to invest in brand-building initiatives over easily measurable performance marketing.

[33:25] John Lyons acknowledges the difficulty and proposes strategies to make the case for brand investment:

"You need to first kind of understand the case for brand and then be able to quantify it to senior leadership."

He suggests leveraging the Double Jeopardy Law and share of voice metrics to demonstrate the tangible benefits of brand investment. For instance, increasing a brand's share of voice relative to its market share can directly correlate with market growth.

John also emphasizes translating brand metrics into business language, making the financial implications clear to decision-makers who prioritize quantifiable outcomes.

Future Endeavors and Content Creation

Towards the end of the episode, John shares his plans to further demystify marketing concepts and assist other marketers in practical applications.

[41:07] John Lyons discusses upcoming projects including:

• Bin Juice: A bi-weekly video series tackling practical marketing topics.
• The Lion's Share: His ongoing newsletter.
• Collaborations with Seb McKay: Engaging in LinkedIn Live sessions focusing on positioning and copywriting.

He also mentions plans to create a more inclusive panel for an online marketing forum, aiming to incorporate diverse perspectives and expand the dialogue around real-world marketing challenges.

Conclusion

Stef wraps up the episode by applauding John's contributions to the marketing community and his commitment to bridging theory with practical application.

[44:05] Steph remarks:

"We need to start talking more about real cases and real stuff and get beyond the theory... Marketers doing it in real life, talking about it that really make it come to life."

John reciprocates the appreciation, reinforcing the importance of actionable insights in the branding landscape.

Key Takeaways:

1. Loyalty Exists and is Multifaceted: Contrary to some theories, customer loyalty is real and often polygamous, encompassing repeated purchases and brand advocacy.

2. Strategic Investment in Acquisition Over Retention: While both are important, acquisition should take precedence unless a brand has the scale and opportunity to effectively integrate loyalty programs.

3. Effective Loyalty Programs Go Beyond Discounts: Building community, offering exclusive rewards, and engaging customers in meaningful ways are essential for fostering genuine loyalty.

4. Quantifying Brand Investment: Marketers must translate brand-building efforts into business language and measurable outcomes to secure investment from leadership.

5. Practical Application and Inclusivity: Sharing real-world cases and incorporating diverse perspectives enhances the effectiveness and relatability of marketing strategies.

For marketers seeking to deepen their understanding of brand advocacy and loyalty, John Lyons' expertise offers valuable guidance on navigating the complexities of modern brand-building.