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Is Your Rapid Sales Growth Hurting Your Brand

October 27, 2021


Is Your Rapid Sales Growth Hurting Your Brand?

A lot of brands and categories are on fire still! They are continuing to see year-over-year growth in the double digits.

That’s amazing! That’s what almost everyone in business dreams of. It means your product is an absolute hit, right?

Except … under this rapid-fire growth, there’s a potential darker story. Sales figures don’t always translate to brand health. And, in fact, the way some brands are achieving such rapid growth right now could be hurting them.

Why Can’t Sales Figures Measure Brand Health?

So many people make this mistake. They look at the sales figures for their brand and, if they’re good, say, “We’re doing great. The brand is super healthy.”

On the surface, that’s how it looks! You’re selling tons of product. If your sales figures are growing, that must mean more people are discovering your brand. And such rapid growth must mean people love the brand, right?

That’s where the darker side of the story emerges. People might be buying. Your brand might be getting sudden exposure or sudden visibility. People are picking up the product in droves. But that growth, those sales figures, don’t always mean that your brand is healthy.

Pandemic Buying Shows the Trajectory

The pandemic has let us see this in action. People shifted their buying habits radically in March 2020. Since they were staying home more, they started buying more home products. At the grocery store, they were buying snack foods in bulk.

So, the sales of snack food brands jumped at the start of the pandemic. And you had all these Marketers and brand executives looking at the sales figures and saying, “Wow! People love our brand, we’re on fire right now!”

What didn’t happen in these boardrooms was people taking a closer look at why people were buying. Panic-buying cleaned out a lot of shelves. Did your sales jump because people love your product? Or did they jump because your brand had good distribution?

There were also jumps as people panicked and bought huge quantities. Bulk-buying behaviour slowed off during the later stages of the pandemic. People started “pantry de-stocking.” So they bought huge quantities at first, causing these enormous leaps. Then had to work their way through the product they had on hand.

Chances are, then, you’ll see falling sales. People are all stocked up and every time the media starts promoting more fear, our brands may get another bump or two in sales. But are the sales real or simply a bubble that we are living in? When the “pantry de-stocking,” finishes, will they buy our brands again or search to find the brands that better deliver on the benefits they are needing to be fulfilled? Is it panic-buying or real repeatable sales?

There’s also the chance that people will be sick of some of the products they bought. They might have bought cheaper snacks in bulk at the start of the pandemic. Now, they’re looking for more “extravagant” treats. They’re going to buy less, but they’re going to spend more money on these treats.

And finally, sales should slow in this category (as one example) as people shift back to “normal” life. Yes, parents will still buy snacks for their kids’ packed school lunches. They’ll buy snacks for themselves as they head back to the office. But as people return to going out, demand for individually wrapped snacks or “extravagant” treats for home will increase. And softer sales will likely also result as people get back to being able to do things outside the house. They’re going to go out for dinner and buy dessert at a restaurant. They're going to take the kids for ice cream during a family outing versus buying a tub of ice cream to eat at home.

You Must Understand Why Your Customers Are Buying

What these sales scenarios show is that we must understand why our customers are buying. It’s not enough to look at the sales figures and say, “This is good” or “this is bad.”

This is especially true right now. The numbers may suggest our brands are super strong and healthy. Now, in the face of declining sales, more and more of our clients are beginning to see the holes and trying to understand if there are brand health issues….and “Why aren’t people still buying our brand?!”

This worry comes from not understanding consumer changing needs and behaviour. If we understood what was driving those early pandemic sales, the decline now wouldn’t look quite as catastrophic. The decline would be planned for or new product offerings/sizing/flavours would have been built in Brand Plans. The pandemic was unpredictable yes, but ensuring brand health was being monitored in a lot of companies was lost inside operational frenzy.

Understanding what was happening inside the minds and hearts of our consumers could have meant anticipating their changing needs,  and we could have shifted with them too.

When we don't understand why our customers are buying, we are forecasting production in isolation of knowing the “why” which could be a costly error on so many levels: ramping up raw material ingredients or finished goods that begin to age in warehouses as sales slow is but one risk.

Creating Sustainable Sales

When we look at sales figures alone, we miss opportunities to turn people into loyal customers.

Not everyone who panic-bought something from your brand is going to fall in love with it. Some people bought your brand out of necessity. They will never, ever buy anything from you again.

But there’s a chance you’re missing out on those people who did like your brand. They thought what they bought was pretty good. If you keep offering them the same thing though, even as their needs change, you’ll have trouble converting them.

That’s the biggest problem with these “good” sales figures or double-digit growth. So many people think that’s it, the brand has finally taken off. They expect “once a buyer, always a buyer.”

You must do something to keep these people on board. And offering them “more of the same” might be the wrong answer—for a whole host of reasons.

One of the reasons, as demonstrated, is that people’s needs are changing. The cheap bulk buy they wanted in March 2020 is not what they want to buy now. You might have got people “in the door” with a particular product. Now you’re failing to move them along the brand’s relationship curve or move them to try other products in the portfolio for other occasions.

Worse, if you focus on the wrong thing, you might be undermining your brand. Suppose you tend to make higher-end snacks, but you have one product in the portfolio that’s a little cheaper. It’s your “entry-level” product. People snapped that up during the pandemic, but now you have a problem. They don’t know you have other products in the portfolio. They might know you only for the entry-level product and judge the overall quality of the Masterbrand through the entry level experience.

If you choose to focus on that product, you’re risking your whole brand. Think about it. Haagen-Daaz positions itself as premium ice cream, which is why it only offers small quantities of its product. If Haagen-Daaz starts offering a “bulk buy” or a “discount line,” it might hollow out the brand’s image.

Another example is Peloton. Peloton did amazing at the start of the pandemic. It sold a ton of its “entry-level” product (which is quite expensive). To keep sales growing, the company is trying to move into other areas. It has tried to move beyond exercise bikes to treadmills and other home gym equipment. It’s started experimenting with subscription packages and more. And some of this has angered existing customers.

What lesson can we learn from the Peloton example? First is that their sales growth was unsustainable. The market for luxury home exercise bikes is probably a bit tapped out at the moment. Even their current price drop may not be enough to get people to invest.

The other issue is that they didn’t have anything more to offer once they got people “in the door.” Peloton then scrambled to find other products to offer, which had the effect of hollowing out the brand. People were much less enthused about Peloton-branded treadmills. Some of the proposed subscription solutions made existing customers quite upset. That wasn’t what people expected or wanted from Peloton.

What unfolded here was that Peloton didn’t listen to their customers. They saw that they had strong sales. They saw people were buying home gym equipment in the early stages of the pandemic. But they failed to understand what their customers wanted from them. People who had already invested thousands in a home exercise bike didn’t now want to invest more in a subpar (or deadly) treadmill. And since they’d already invested so much, they didn’t feel like paying an ongoing subscription fee. But unsubscribing had the risk of “bricking” their fancy new workout bike!

Rapid sales growth hurt Peloton, because they had to make moves to “sustain” that growth. The way they went about it hurt their brand.

What we can learn from this is that great sales figures and rapid sales growth doesn’t always mean good things for our brands. We must think about what we’re offering and why. And we must look to our most loyal customers—not the fair-weather fans who have hopped on the bandwagon because it looked cool.

We need to understand why our loyal customers buy from us, time and again. And we need to understand what they want from us in the future too. From there, we can learn how to stay true to our brands. That helps us avoid situations where what we do to “sustain” growth ends up driving people away and hurting our brands.

Like always then, we must remember to start with the why!


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