From Stalled Growth to Sustained Success

HINT: It's more chandeliers, fewer laser pointers.

A great many growing brands reach a point where growth starts to flatline. You’ve got a decent media budget, your digital channels are running efficiently, but the growth you once saw from these channels is starting to taper off. The conversion rates are starting to stall and your customer acquisition costs are creeping up. So, what do you do?

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This frustrating stagnation is common for medium-sized brands that have maxed out the effectiveness of their current marketing tactics. They've focused on converting in market customers that fit with their ideal customer profile, and because that worked so well in early days, they've found little reason to revisit this.

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Brands often rely heavily on digital, performance-driven channels, like social and paid search to deliver results from high intent audiences. Anything that purports to deliver over a longer time period, or to a marginally broader audience seems indulgent and wasteful. And the results back up the decision making. At least, to begin with. They see great returns initially, but over time, the high intent audiences are tapped out, and their earlier growth stalls.

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This is particularly relevant for brands right now, because those very same performance channels are also seeing significant price increases, with Google CPC up over 12% an Insta CPMs up over 20%. *Based on data from the Tinuiti Digital Ads Benchmark report for Q2. So marketers are getting squeezed in both ways. On the one hand by their own tactics, and on the other by the upward price shifts in their default channels.

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So, how to break out of this pattern? What should they change?

There may be a temptation to reframe the customer profile, to seek out low hanging fruit in a marginally different audience segment. But this is flawed in two ways. First, the price rises still apply, so you're having to stomach a higher acquisition cost. But secondly the same saturation problem will arise. By only seeking to convert a high intent audience, you will soon run out of people willing to convert (and may piss off a lot of them by going after them too aggressively). You'll be the rapacious Brazilian cattle rancher, felling trees to clear the way for pasture, only to suck the life out of that patch of land, and then looking to fell more trees to open up new land. Eventually there'll be no new land, and the business dies.

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So, the right approach is in fact to pivot to include a wholly different portion of the ICP. Those not in market.

The reason for this is that only a staggeringly small part of your target audience is in market at any given time. This is often referred to as the 95% rule. Not really a hard rule, just really great guidance, this originates from Professor John Dawes at the Ehrenberg-Bass Institute, and popularised in the marketers best friend, How Brands Grow by Professor Byron Sharp. The 95% rule is a key part of the principle that brands should focus on mental availability - ensuring their brand is top-of-mind whenever a buyer does enter the market - rather than trying to reach only those actively shopping. The exact percentage that is not in market varies by category, but is invariably higher than most marketers tend to think.

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So for brands who want to break new ground, and take an approach that is more likely to lead to sustainable growth, it is critical to ensure your marketing efforts and media spend is also put into building mental availability among those not in market.

Performance marketing tends to work best when it’s complemented by brand-building. If you’ve tapped out your core audience through paid social or search, you’re limiting your growth to that small pool of in-market buyers. You need to reach new audiences to grow. This means venturing beyond the platforms you’ve grown comfortable with.

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In other words, to break through the stagnation, brands must diversify their channel mix and target potential customers who aren’t yet familiar with the brand.

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This approach was brilliantly illuminated (lol, pun) in an interview with Brian Chesky, the co-founder and CEO of Airbnb, on Lenny Rachitsky's podcast. Chesky used this metaphor to emphasize his observation of the powerful impact that broad, brand-building marketing approaches ("chandeliers") can have, compared to narrowly targeted, direct-response tactics ("laser pointers"). He argued that, while laser-focused marketing (like direct-response ads) is very good at bringing in immediate results, it lacks the brand-building power and emotional impact that broader, more inspirational campaigns can have.

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The chandelier approach, as Chesky described, is about reaching all four corners of your market in a way that resonates widely, creating a lasting impression and building the memory structures that get a brand bought. This reflects Airbnb's strategy to focus on the brand's story, its mission of belonging, and memorable experiences rather than just chasing quick conversions.

How to break new ground:

1. Broaden your channel mix: If you’ve been primarily investing in Google and Meta, it’s time to explore new channels. TV/CTV, publishers, radio, podcast advertising, Out-of-Home, are all viable options for scaling your reach and building familiarity.
2. Move the success horizon: Sometimes tough to get buy in from internal stakeholders, but it's absolutely critical that the definitions for success are based on the demonstrable and profitable growth of the business. Once finance colleagues see that customer acquisition costs are rising, and conversion rates are dropping, and they see that you have a plan for it, the case is easier to make.
3. Test and learn: Take “small bets” in less familiar channels. Carving out budget for innovation and new opportunities can lead to surprising results. Experiment with new media platforms, test different messages, and see what moves the needle.

Time to go light up that room!