This Way Up: Packaging to Grow

Packaging is the touch point that reaches every one of a client’s existing customers, who are – as Julian Saunders notes – a client’s most important audience; “The economics of winning a new customer versus keeping an existing on is generally well known.  A healthy and mature service business should get most of its business from existing customers” [1].

This post is about how by adopting three behaviours a brand can best use packaging as a communications channel to drive growth through existing customers. Furthermore, I’ll suggest how these three behaviours can be systemised and applied to the majority of packaged brands in the form of a model for brand growth – packaging to grow. 

Behaviour I – Adding Value In A World Of Abundance

The principle change over the last decade has been a shift from media scarcity to media abundance – was the view expressed by Rory Sutherland at a conference last year [2], something which also applies to packaging media [3].  At the same time, behavioural research shows that shoppers are becoming more selective – they know what items they need and only go down those aisles [4].

In a world of abundance in which consumers know what they want, brands must fight for the only scarce resource that remains –attention. Adding value through packaging is a key strategy to get and maintain attention, ensuring consumers keep your brand in their ‘evoked set’ [5].

That’s why each winter bottles of Innocent smoothies wear hand-made bobble hats. It’s why Abercrombie and Fitch bags could be mistaken for posters [6], and it’s how the addition of packaging (as opposed to download only) increased the retail value of Radiohead’s recent ‘In Rainbows’ album more than nine-fold [7]. Value goes both ways.

Adding value (top down): Innocent Bobble hats, Radiohead’s ‘In Rainbows’ boxed set and A&F posterbags

By adding value, packaging promotes brand growth through re-conversion, reinforcing the decision to purchase, and increasing future propensity to repurchase.

Behaviour II – Getting Personal In A Consumer-Made World

trendwatching.com [8] first identified 'customer-made' in 2005. By allowing consumers to co-create, brands not only tap into the collective intellectual capital of the crowd, but give their existing consumers personalised reasons to repurchase.

That’s why Jones’s Water has thousands of different customer-designed labels, and why Pepsi commissioned 35 new designs for its cans [9]. It’s why Heinz let’s you buy a bottle of ketchup with your name on it, and why the design on Saks Fifth Avenue’s bags is recombined in an infinite – and therefore unique – number of ways [10].
 

Personalisation and customisation (top down): Customised labels courtesy of My Heinz, Jones Soda Co’s labels as co-created with customers, Pentagram’s Saks Fifth Avenue bag (the original logo is recombined into unique combinations)

By promoting customisation and personalisation, packaging promotes brand growth by enticing the consumer back for more of the different; a unique experience; increasing frequency of purchase.

Behaviour III – Stimulating Conversations In A Networked World

“In the old paradigm … mass persuasion involved exposing millions of consumers to commercial messages … in the new paradigm, the boot is on the other foot … Target audiences are … a community of interconnected people within which brand perceptions are shaped by multiple influences” notes Will Collin [11]. There exists legislation in these networks; its Gladwell’s Law of the Few – which describes how ‘Connectors’ behave like social glue, spreading a message [12].

An LSE’s study into brand advocacy proved that the more advocates a brand has, the higher the brand growth; in general, brands grow four times faster with positive as opposed to negative word-of-mouth profiles [13]. So it’s in a brand’s interests to give its potential advocates – its consumers – reasons to start conversations.

That’s why first BBC2 and now Channel 4 invest buckets in idents (programme packaging) that gets talked about, and why Nokia created bespoke packaging that fitted through a letterbox if you told them you didn’t need a new charger.

TV Packaging (top down): BBC2’s ‘Saw’, Channel 4’s ‘City’ and ‘Corn Field’

By stimulating conversations amongst its existing clients, packaging promotes brand growth by introducing new consumers to a brand, increasing penetration.

Packaging to Grow: A Model

Making it Happen

Case Study One: Powerade

Mission: grow volumes

• Powerade could add value by printing specific gym programmes with expert trainer advice on the side of bottles.
• They personalise packaging by encouraging consumers to suggest new programmes which are rotated on a 10 week basis; encouraging variation in gym routine [14] and generating sales through increased frequency of purchase.
• Word on mouth is encouraged by displaying monthly challenges on in-gym vending machines; ‘challenge a friend to do the workout with you’.

Case Study Two: UKTV Food

Mission: Grow share of audience

• In a digital world every niche station is fighting for share, and UKTV Food is no exception. They add value to idents (their packaging) by suggesting interesting new ingredients under the banner of; ‘Different Every Day’.
• Customisation is delivered thru red-button – click on an ident for more information on an ingredient and how it can be incorporated into individual cooking regimes.
• Partnering with Sainsbury’s and aligning UKTV Food’s ‘Different Every Day’ to the retailer’s ‘Try Something New today’ would see Sainsbury’s signpost in-store to the ingredient of the week; stimulating conversations via the most credible of corporate advocates.

Case Study three: Dulux

Mission: Consolidate market share

• Dulux could add-value by attaching unique colour charts to their tins of paint, indicating – for future use – what items will match the new colour on the walls of Andy and Charlie’s room.
• Behaviour two allows Andy and Charlie to create their own unique colour of paint, but rather than packaging it in a standard tins, they customise their own design and take the paint home in a bespoke tin.
• Dulux then builds a social network group that allows customers to patent and publish their colours. This encourages Andy and Charlie to contact their friends, advising them that they can now order Andy and Charlie’s own patented Dulux colour for their own homes [15].

 

What you waiting for?

One model: three behaviours;

Add value, personalise, and stimulate conversations.

Use packaging to grow.

Sources and References

[1] Quotation from A market leader exclusive report: What is really changing in Marketing Communications? (Julian Saunders). This crucial importance of existing customers was reinforced in an influential piece of research by the LSE who identified that “businesses seeking year-on-year growth may be overlooking their most powerful growth-generating asset – existing clients, customers and consumers” (Source: Advocacy drives growth – Exclusive research from the London School of Economics reveals the benefits and pitfalls of word-of-mouth communication (LSE 2005)

[2] Delivering the Landmark Creative Campaign – a speech to the IPA Outdoor’s Seeing Digital Conference (Rory Sutherland).

[3] This shift is reflected in the supermarket packaging media; John Hagel has commented that “over time, more and more products entered the market and shelf space became the scarce good (quoting John Hagel)

[4] Source: The In-store Environment. Research observed that whilst 30% of shoppers demonstrated ‘selective’ shopping in 2003, by 2006 that figure had risen to 34%. Notably, this behaviour is reflected online, where there are no isles; search engines make virtually all customer orientation selective

[5] Source: The In-store Environment. Quoting from the same source: “The evoked set is the group of products from which the shopper will make their final decision … if categories or products do not appear in the evoked set, it is harder for the merchandising and point of sale activity to differentiate a category or product because it must enable both the conversion from visitor to shopper, and from shopper to buyer”.

[6] Or art prints – depending on your perspective!

[7] When Radiohead’s ‘in rainbows’ was released in October 2007 as download only – unpackaged – the value was determined by consumers; they could choose their own purchase price – the average price chosen to pay was £3.88 (source). At the start of December 2007 the same content was released in the form of a three-format discbox. The asking price for a product valued at £3.88 with packaging? ...£40.00.

[8] source ... Quoting the site; "Get ready for CUSTOMER-MADE: the phenomenon of corporations creating goods, services and experiences in close cooperation with consumers, tapping into their intellectual capital, and in exchange giving them a direct say in what actually gets produced, manufactured, developed, designed, serviced, or processed"

[9] Early in 2007 Pepsi commissioned US design company Arnell Group to develop 35 designs new designs for its cans, including 12 inch vinyls, gleaming hubcabs, swirling tattoos and 31 other pieces of artwork drawing from different strands of youth culture - source.

[10] Whilst the bag – designed by Pentagram Design – technically didn’t have an infinite number of designs, more than several trillion combinations gets it pretty much there.

[11] Quoting: Will Collin writing about the paradigm shift in the communications industry in a Campaign supplement

[12] Source: The terms ‘Law of the Few’ and ‘Connectors’ were coined by Malcolm Gladwell in The Tipping Point.

[13] Source: Advocacy drives growth – Exclusive research from the London School of Economics reveals the benefits and pitfalls of word-of-mouth communication (LSE 2005)

[14] One of the key aspects of training is to change your workout regularly. Varying the routine not only avoids boredom but works different muscle groups preventing ‘plateauing’ in body-response. Different programmes could be created – for example the strength-training work-out cardiovascular work-out.

[15] Their friends won’t, nobody would be seen dead with someone else’s colour on their own wall. They’ll want their own unique colour, and they’ll know where to get it!

Comments

[MJ]

great post. couldn't agree more.