Law of Diminishing Returns
In economics, there is a concept called the “Law of Diminishing Returns.” The law basically says that there comes a point when the amount you put into something becomes more than you actually get out of something. So if you’re running a factory, there will come a time when the number of man hours you put into development of a product will be greater than the product returns to you in sales.
We can apply this law in principle as it relates to driving brand interaction. From a consumer perspective, there comes a point when the more products there are in the marketplace vying for our attention, the less impact those products have on us. For instance, if there were only two automobile brands in the global marketplace, the marketing messages of those two companies would have a pretty sizable impact on us as consumers, because there are only two.
Alternatively, if there are 20 automobile brands in the global marketplace, we as consumers have exponentially more to process. The return of an individual automobile’s marketing message is much less with 19 competitors than it would be with one.
With more than 6,000 marketing messages bombarding us every day, the Law of Diminishing Returns is definitely in effect. So it’s important as business owners, brand managers and marketing directors to continually drive our customers to interact with our brands. We can build it, but that doesn’t necessarily mean they will come.
Granted, a successful brand will usually attract consumers on its own accord—that’s the whole point of doing brand development. But we can’t rely solely on the attractiveness of our brands. We have to be intentional to invite and encourage interaction—because that is what builds lasting relationships with users.
So how do we drive brand interaction? Well, first, we must understand how consumers are interacting. And this is changing rapidly with the advance of social media platforms. We also must understand how we should position our brands in light of these changes.
This is an excerpt from our new E-Book “Social Media Matters”. Click here to download for free.
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