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4 The original 4Ps of marketing

The 4 P’s of marketing for E-Commerce (Plus one.)

Every year, thousands of American E-commerce startups are launched with nothing more than a whim and a prayer and website. Most will fail. Some will muddle through, doing nothing particularly amazing, beyond staying afloat.

the 4 Ps of marketing and ecommerceBut a few will experience meteoric success and become iconic brands. (Think Zappos)

What’s the difference? Why do some e-commerce start-ups succeed while so many others come and go faster than a bad Chinese restaurant?

Often it’s for the same reason that traditional, brick and mortar businesses fail: They ignore the 4 Ps of marketing.

Many people in the on-line world seem to think you should abandon everything that was taught in Marketing 101 simply because they have a new distribution method. Apparently, the rules don’t apply to ecommerce entrepreneurs.

Nonsense. You don’t have to reinvent the wheel just because you’re only doing business online. You just have to take a little different route.

Take, for example, the traditional 4Ps of marketing: Product, Price, Place & Promotion. It’s an old-school notion that’s just as applicable today as it was in the heyday of Madison Avenue. However, there’s at least one new P you should also seriously consider.

But before we get to that, let’s look at the originals that make up the 4 Ps of marketing. Consider it a handy refresher:

1. Product

There’s an old saying in advertising circles… “nothing kills a crummy product faster than great advertising.” These days, it happens in hyper time.

Blogs, tweets, and consumer-generated reviews doom products that don’t deliver faster than you can type “#bankrupt.” So the first P is more important than it’s ever been.

The original 4Ps of marketing

Thirty years ago, if you had pockets deep enough for a sustained mass media campaign and a good creative team, you could you could go to market with a mediocre, me-too product or service.

Not anymore. These days your product or product line-up has to be among the best in class. Because people expect more. They’re looking for something compelling — and genuinely different — that’s built in to your core product or service. In other words, the marketing needs to be baked right into the product.

Seth Godin talks about a Purple Cow or a “Free prize inside.”

Tom Peters talks about the pursuit of WOW!

Whatever. The fact is, Product still is, and always will be, the single most important P of the 4 Ps of Marketing. Doesn’t matter if your business is providing the latest, greatest mobile web technology, or an old-fashioned widget, Product comes first and all the other P’s fall in line from there.

2. Price.

I’m no expert on pricing, but I know this: Smart pricing strategies are more important than ever. Here are just a few of the reasons:

ecommerce marketing• The internet enables us to make more intelligent purchases than we did 15 years ago. We’re doing more research and minimizing “bad”purchases and buyer’s remorse. We’re still willing to pay a little more for premium brands, but we’re not going to get gouged. And we’re much more likely to price shop, since it doesn’t involve driving all over town.

• In the world of e-Business you can’t just apply the old “cost-plus” pricing model. It’s way more complicated than that. Even though internet-based businesses tend to have high margins you have to work really hard to develop sustainable revenue streams. In order to build a loyal following and, ultimately, generate revenues, many companies don’t charge anything.

• It’s harder than ever to compete on price. Unless you’re the size of Amazon or Walmart, forget about it! There’s always some other website waiting to undercut your price. You might be the low price leader in your little town, but now people are searching the world for a measly little discount.

So you have to go back to the first P. You have to devise a product or service that has a perceived value that’s higher than your competitor’s, but a sale price that’s equal or lower.

Apple has adamantly stuck to their premium pricing strategy. It keeps them honest. It’s one of their brand fundamentals. They know they have to keep launching products that are superior in design and function. They understand price elasticity and the value of their brand.

3. Place.

The traditional third “P” refers to distribution channels and the placement of your product in stores. Basically, where and how you sell your product. This is still one of the most fundamental elements of any solid business plan.

Look at Costco… They said, we’re a wholesaler, but we’re going to open our warehouses to the public.

That’s a big idea. A purple cow based on the 3rd P.

Even though you may be selling your product strictly over the internet, Place is still critically important. In fact, you could argue that the internet, as a distribution channel, has actually added complexity to the decision…

Will you sell on Amazon? Use Amazon fulfillment? Start an affiliate program and let other web merchants sell your products? Will you warehouse some products, or drop-ship everything? Sell to specialty brick & mortar stores at wholesale? Thanks to the internet, there are all sorts of possibilities.

One thing’s for sure, when your website is your only storefront as well as your #1 marketing tool, you need to make sure it’s absolutely fantastic on every level. 

Messaging. Content. Ease of use. Overall design. Product presentation. Back-end functionality. It’s all important.

 4. Promotion.

Historically, the fourth P revolved around mass media advertising. Sure, there were other elements such as sales promotions, telemarketing, PR and direct response, but advertising was the heart of it. And many businesspeople equated advertising with marketing.

These days, a lot of people seem to think social media is synonymous with marketing.

But social media is just another marketing tactic… Just another way to spread the word about your product or service. There are dozens of other tactics you should consider once you’ve devised a clear brand strategy.

Insight first, then execution. Strategy then tactics.

Once again, the internet complicates matters… Where there used to be just four or five you now have dozens… Content marketing, You Tube videos, paid search, Facebook posts, Twitter, Snapchat and a hundred other online options complicate the mix. The marketing landscape isn’t so much a landscape these days, as it is a landslide. Most business owners are overwhelmed by all the “marketing opportunities” out there.

And don’t forget packaging, which has always been lumped into this category. If you’re doing business exclusively online, your website is, essentially, the packaging.

But here’s the good news about the 4th P: The internet offers advertisers what they’ve always wanted: definitive, trackable ROI on every ad placement. Tracking those click-throughs to conversion allows you to hone in on the message that’s most persuasive and eliminate the promotional efforts that don’t pull.

So that’s a brief on the traditional 4P’s of marketing. Think you can afford to ignore any of them?

What about the new one I mentioned?

The biggest complaint against the original 4 P’s was this: They’re designed from the top down, around what the company wants, rather than what the consumer really needs. They’re too inwardly focused.

So here’s a new P for your consideration:

5. Perspective. The consumer’s perspective, to be precise.

Companies that thrive today are the ones that embrace the perspective of the consumer. Not the 1980’s idea of the consumer as one, massive heard of lemmings. We’re talking about individuals. Real people who are involved and engaged with your brand.

How do you do that?

It starts with market research in its most basic, fundamental form. It’s what Tom Peters calls “strategic listening,” and he contends it’s the most important job of any C-level exec or business owner.

4 Ps of marketing for ecommerceStrategic listening requires that you set aside your existing perspective and listen without prejudice. Some people simply can’t do it themselves… they’re too far inside the bottle to see clearly. So get some professional help. Talk to your front-line employees, customers, non-customers, competitor’s customers. Do it on the phone. In focus groups. In on-line chats. On Twitter or Facebook. Doesn’t matter. Just do it.

The point is, you’ll come away with a new perspective about the genuine wants and needs of your potential customers. And that insight is what weaves all the other Ps together. It should be the starting point, not an afterthought.

You may have to change your product or revise your service. You might have to rethink your pricing structure, shift your promotional strategy or adopt an entirely new business model, but it’ll be worth it.

Because then you’ll have a business built on a foundation of solid marketing fundamentals… five P’s. Put them all together, and sustain the effort, and you’ll have one big, iconic B:  A Brand.

Want more on the 4 Ps of marketing and the fundamentals of branding: Try this post.

Need help getting that new perspective you need for the new year? Call me. 541-815-0075. You can also follow the Brand Insight Blog on Twitter: Brandsight.

How to do a great branding ad — Subaru scores with skier-focused print.

“Winter storm slams into Washington.”

“Travel advisory for the entire New England area.”

“Heavy snow accumulations across the Rockies.”

Subaru of America loves headlines like that. Every time a big storm

how to do a good branding ad

brings traffic to a standstill, the front page of the newspaper reads like a branding ad for Subaru.

Which brings me to an ad that I spotted in Ski Magazine some years ago. It was pleasantly simple:

“Snowstorm Advisory.
(More of a calling than a warning)”

Subaru.

No photo of the car. Just a dramatic photo of a lonely road in a blizzard. It’s taken in the first-person perspective, as if I’m sitting in the front seat on my way to the mountain.

That ad doesn’t just speak to me. It sings.

Hats off to the creative team that did that ad. And a round of applause for the client at Subaru who actually stood up against the industry convention and agreed to leave the car out altogether.

It takes guts to run a full page ad in a national magazine without showing the product. And I’m sure the dealers gripe about it, and say “it’s just a branding ad, it’s never going to sell anything.”

how to do a great branding ad

This is the type of product-as-hero image that every dealer wants in every ad.

But nevertheless, it works.

It speaks volumes about the brand, and it touches a highly relevant emotional chord with anyone who has ever driven through a blizzard to be first on the chairlift.

Besides, with a limited budget there’s a good, practical reason to leave out the product shot: The appeal is not limited to any one model of Subaru. It’s not an ad for the Outback, it’s an ad for the brand.

Just let them imagine whatever Subaru model they like. For a younger, California skier it could be a WRX. For a Birkenstock-wearing telemark skier in Vermont, it’s a Forrester.

By NOT showing the model, they actually sell every Subaru in the line up.

Damn right it’s a branding ad! You should be so lucky.

The Subaru ad reflects a genuine, empathetic understanding of the core audience.

Kevin Mayer, Subaru’s Director of Marketing, says his brand is as much about customers as it is about products.

Subaru caters to outdoorsy people of comfortable means who opt for function over fashion every time. It’s a well-targeted niche market of skiers, hikers and kayakers who need all-wheel-drive for navigating unpredictable roads. (Not surprisingly, most Subarus are sold in the Northwest and the Northeast, where there’s a lot of skiing, kayaking and hiking.)

But more importantly, “Subaru owners are experience seekers – they want to live bigger, more engaged lives,” Mayer, said. “To them, the car is the enabler of that bigger life. A conscious alternative to the mainstream.”

It’s obvious that the ski magazine ad came directly from that sort of crystal-clear consumer insight and brand strategy.

“We went back to the customer and started thinking again about their values and how our values are alike. We dialed in our strategies back to core,” Mayer said in a MediaPost.com article.

To me, the message is loud and clear… crummy, snowy roads can’t stop me from doing what I love.

In this ad, it’s benefits over features, all the way to the bank.

Karl Greenberg, editor of Mediapost said, “Subaru has the kind of brand equity and staunch loyalty you usually find in luxury marques, which means they can keep their message on product and brand, not on deals or features.”

Rather than running a headline that touts the features of a Subaru (ie the “symmetrical all-wheel-drive system) the ski magazine ad conveys the benefits of that system: Being in the mountains doing what I love.

While everyone else is stuck at home, Subaru owners are out enjoying life. Having fun. Missing nothing. It’s a message of empowerment wrapped in a warm, wintery blanket.

That’s what long term brand advertising is all about… connecting with specific groups of people in a relevant, emotional manner, time after time, after time. Until people start feeing like they’re part of the club.

Clearly the top executives at Subaru get it. They know their market. They’re clear on company values. And they’ve designed products that align perfectly with the brand, the message and the medium.

how to do a great branding ad

You couldn’t place that Subaru ad in The New Yorker or Parade Magazine, even during a snow storm. It would be out of context and off target.

When you see it in context of ski magazine, it doesn’t come across as hype. It’s as authentic as they come.

But no brand is perfect, and Subaru has had its share of flops, Like this ridiculous photoshop job on the right…

Subaru buyers don’t want to forget about winter. They want to embrace it. Be out in it. Conquer it.

Then there’s the granddaddy of automotive cliches:  A Subaru on a curvy road is not only off brand, it’s also downright generic… it reads just like any other standard, run of the mill car ad. That one’s definitely not firing on all cylinders.

how to do a great branding ad

Subaru’s foray into the luxury, upscale SUV market was a flop. Subaru CEO Ikuo Mori admitted that the “up market migration” with the B9 Tribeca hasn’t worked.

Too big and too flashy for that family of cars. Jim Treece from Automotive news said, “There is nothing especially wrong with the B9 Tribeca, except that it has utterly nothing to do with Subaru’s brand.”

Subaru enjoys tremendously high brand loyalty. Rally enthusiasts swear by the WRX. Forrester owners love the practicality.  And defacto brand ambassadors sell their neighbors on Subaru based on their own brand stories.

Which is the basis for Subaru’s excellent print campaign titled “Dear Subaru.”

Fantastic teasers! I want to go to their site, just to get more about these true stories. Two words and an intriguing photo of a car that’s not posed, polished and fake. That’s all you need for a brilliant branding ad.

how to do a great brand ad

For more about automotive industry branding, try this post.

If you’re thinking of launching your first branding ad, give me a call at BNBranding.

BN Branding

tips for new logo design by BNBranding

Need a new logo? (5 things to know before you hire professional help)

A lot of people think they need a new logo. Or “rebranding,” which is usually just a logo revision.

newtips for new logo design by BNBrandingAnd there many ways to get that job done… You can hire a big design firm, a strategic branding agency, a freelance graphic designer, a commercial illustrator or even an animator.

Unfortunately, you can also have your cousin’s wife’s kid draw a new logo for you, or you can crowd source it through one of those online sweatshops.

But what you think you want may not be what your business really needs.

To succeed in business, at any level, you need a brand. Not just a logo. And brands are much more than just a graphic design exercise.

So here are five important tips for getting a brand off the ground. This is what you need to know before doing a new logo in order to get the best results from any brand identity team or graphic designer.

tips for new logo design by BNBranding1. Logo design is not the place to start.

Before anyone dives into the design of a new logo, you need an idea. Because brands are built on ideas.

What’s the idea behind your brand? What are the motives that drive the business? What’s your cause or the purpose behind all that hard work you do?

You have to spell it out. You need a clear brand strategy, written down, so the designers have something to work with.

Otherwise, it’s just garbage in, garbage out. Meaningless art.

By dialing in your brand platform and core brand messages you’ll save everyone from frustrating false starts and wasted effort. Unfortunately, most graphic designers cannot help you with this strategy piece. (It’s not just a form you fill out.) So you’ll either need to figure it out for yourself, or hire a strategic branding firm. Here’s a post that’ll help you get started.

2. Be clear about what you stand for.

There’s an old saying in the design business… “Show us your soul and we’ll show you your brand.”

The soul of your brand, and the foundation for your brand identity, begins with core values and shared beliefs. Those beliefs, your passion and your sense of purpose are all critically important for the design team. If you don’t know what you stand for, it’s going to be very difficult to build an iconic brand. Here’s some help on how to define your brand values.

3. A brand identity does not equate to a brand.

The logo is just the tip of the branding iceberg. The logo is what people see, initially, but if you want to establish a memorable, lasting brand – and ultimately an iconic brand – you’ll need to go a little deeper. The vast mass below the surface is a thousand times bigger and more important than the design work on top. The logo should be a reflection of what’s going on down there.

Click here for some more insight on that. 

4. You’re completely blind to the creative possibilities.

tips for new logo design by BNBrandingThis is not an insult, it’s just a fact of life. Unless you’ve studied graphic design, you have no idea how great your brand identity could really be. You’d be amazed.

Your expectations are based only on what you see everyday… the ho-hum, literal graphics that are standard fare in your industry, your town, and your local grocery store.

If you can set-aside your preconceived notions and move past those visual cliches, you’ll be much closer to success. Be open minded, not literal-minded. Let your design team explore the ideas that seem most outrageous to you. Those are the ideas that are remembered.

Here’s more on the possibilities of logo design. 

5. The agency can only get you so far…

The scope of work among branding firms and graphic design studios varies dramatically, depending on the talent pool. Some firms, like mine, provide research, strategy, planning and brand messaging in addition to design. Others limit their bag of tricks to just the graphics.

In any case, the agency cannot guarantee long-term branding success. We can devise a strategy, point the way, and help communicate things in a breathtaking manner, but we can’t force you live up to your brand’s reputation.

You have to do that. Every day.

The trick to building a lasting, iconic brand is in the operational details. You have to continually prove that you can live up to your brand promise.

Your product has to deliver. Your service has to be up to snuff. Your people have to believe in your brand. Your brand affiliations need to line up. And your marketing communications need to be a reflection of that operational reality.

Otherwise all the branding talk is just wishful thinking.

 

 

 

perception vs reality in natural foods marketing by BNBranding

Secondary Reality (Alternative facts in natural foods marketing)

Here’s a comment you hear in corporate conference rooms everywhere:

“Those marketing guys aren’t dealing in reality.”

Damn right. If we dealt only in reality the operations guys wouldn’t have backlogs. The finance guys wouldn’t have profits to count. The Human Resources department wouldn’t need more resources.

perception vs reality in natural foods marketing by BNBrandingBecause in marketing, perception IS reality. Especially when it comes to natural foods marketing.

A few years ago in a piece on brand credibility I said, “The best story tellers — novelists, screenwriters, movie makers, comedians, preachers — know how to get audiences to suspend disbelief and go along with plots that are a bit far-fetched.

By using vivid, believable details and dialog they draw us into their stories and “sell” ubrand insight blog post about brand credibilitys on characters that are bigger than life and settings that are out of this world. Think The Matrix, Star Wars and The Lord of the Rings.

J.R.R. Tolkien commented on the suspension of disbelief in an essay, “On Fairy Stories.”  Tolkien says that, “in order for the narrative to work, the reader must believe that what he reads is true within the secondary reality of the fictional world.”

There’s a secondary reality in every market segment. Consumers within that segment share a powerful belief system that is not based on facts at all. It’s what psychologists call Motivated Reasoning.

“Motivated reasoning is a pervasive tendency of human cognition,” says Peter Ditto, PhD, a social psychologist at the University of California, Irvine, who studies how motivation, emotion and intuition influence judgment. “People are capable of being thoughtful and rational, but our wishes, hopes, fears and motivations often tip the scales to make us more likely to accept something as true if it supports what we want to believe.”

We all have a natural tendency to cherry pick the facts. We tune in to the information that fits our existing beliefs, and blow-off everything else.

Our modern media landscape seems to be amplifying the retreat from facts. “These are wonderful times for motivated reasoners,” said Matthew Hornsey, PhD, a professor of psychology at the University of Queensland. “The internet provides an almost infinite number of sources of information from which to choose your preferred reality. There’s an echo chamber out there for everyone.”

Golfers, for instance, live in a constant state of delusion about how well they could ever play. It’s wishful thinking based on a skewed reality of hope… “If only I had that new $450 driver I’m sure I’d break 80.” They construct a set of assumptions such as “more distance equals lower scores” and “that big-name pro would never steer me wrong with lousy instruction.”

The fact is, those perceptions drive sales. Reality doesn’t even come into play. In fact, it’s quite perilous if you choose to present a story that contradicts that alternate reality with actual facts.

They just don’t want to hear it.

In the natural foods industry there’s a secondary reality that says if it’s in this category, then it must be good for me. That’s simply not true. The reality is that many so-called “natural” foods have no health benefit whatsoever.

Doesn’t matter. Perception is reality.

natural foods marketingThe tribe of people who who are drinking the natural, fortified kool-aid of the health food industry make certain assumptions and hold a particular set of beliefs that the rest of the world does not share.

So you don’t have to present scientific proof that it’s actually healthy. You just have to work with the existing perception, and present the alternative fact that your product is healthier than the traditional choice.

Vitamin Water is healthier than Coke or Pepsi. It’s less bad for you than the traditional option.

Seth Godin refers to these as “truth” stories. They’re true within the alternate reality of the market segment.

For example… Those natural potato chips that I crave everyday for lunch… probably not good for me. But I believe they’re healthier than the traditional, mainstream choice – Lays. So my own motivated reasoning tells me to buy the natural alternative.

I know it’s not like eating broccoli, but it’s incrementally healthier than what I used to eat, and that’s okay. That’s what fits into my own personal reality. That’s my truth.

So if you’re making “healthy” salty snack foods, remember… You can’t compete with broccoli on healthiness. But you can compete with Lays.

Here are some other examples of alternative facts from the health food industry:

Baked is better than fried. Doesn’t matter if those natural cheese puffs are loaded with fat, the mainstream consumer will buy them as long as they’re not fried. And health foods are moving more and more into the mainstream.

Healthy fats are okay.  Forget about the old adage that says “fats make you fat.” The pendulum is swinging the other direction right now, and many companies are using the term “healthy fats” in their product claims. The FDA’s not buying it, and it’s highly debatable in the scientific community, but that doesn’t matter. Consumers are buying it.  Just look at the sales of coconut oil.

natural foods marketing on the brand insight blog by BNBranding

XYZ secret ingredient is the best thing ever.  Health-minded consumers are quick to jump on whatever ingredient is trendy…. Acai, turmeric, ginger, apple cider vinegar, duck fat, coconut water, Aquamin, prebiotoics, probiotics, whatever.

Beware… Those trends are fickle. All it takes is one high-profile “scientific” study to discredit your main ingredient and doom your entire product line.

Here’s the real truth behind ingredients for the supplements industry: Companies that market those ingredients routinely accept anything more than 50% success rate in initial clinical trials. So in other words… even if the ingredient is only effective half the time, it’s still commercially viable.

Are you kidding me? Doesn’t matter. Consumers are swallowing it. Perception IS reality.

In natural foods marketing it’s not just about ingredient – even the best ingredients cannot drive sales by themselves. It’s not about what the product is, it’s what the product could be in the mind of the person who lives in the same, alternative reality. It’s entirely aspirational.

Advertising legend George Lois put it quite well; “Great advertising campaigns should portray what we feel in our hearts the product can grow to become. The imagery should be ahead of the product, not in a way that assails credulity, but in a sensitive way that inspires belief in the product’s benefits and instills a greater sense of purpose to those who produce and sell it.”

Credulity is rampant in natural foods marketing. In every category.

Michael Proctor, a colleague of mine who’s been in the health food industry for 30 years, says you have to dance around the side of things. “The messages are getting more mainstream. The benchmarks and buzzwords keep changing, so it’s like a crab, always moving sideways. But you have to know what the prevailing reality is, in order to skirt around it and find the reality that you resonate with.”

Know the reality. Tap into the prevmarketing supplements Brand Insight Blogailing perception.

Getting your messaging right is not an easy task. The good news is, most of your competitors are probably missing it, which means you have room to move in and effectively control the dialog.supplements marketing BNBranding

Is “25 billion probiotics” an effective claim to make? 50 billion? 100 billion? 200 billion? What’s the number?

Probably none marketing supplements and natural foods marketingof the above. Those companies are getting caught up in a numbers race and are missing the more relevant point.

Probably time to move like a crab and find another story to tell.

To learn more, give me a call.

For more on truth in marketing, check out THIS post.

 

 

 

 

 

3 How to make websites work on many levels.

It’s been very interesting to witness the progression of web development and website design over the last 25 years. A lot of trends come and go, technology improves, entirely new platforms have been developed and the graphic style continues to evolve.

These days it’s much easier to do it yourself, and that DIY trend seems to be producing a lot of cookie-cutter, template-driven websites that are wearily one dimensional. The fact is, your site needs to be multi-dimensional. In this age of mobile computing it needs to function as an on-line calling card, a customer service tool, a lead generation tool, an educational tool and, for many companies, a storefront.

So let’s look at a few of the most critical levels of website performance…

The good, old-fashioned, phonebook level.

In case you hadn’t noticed, the phone book has faded faster than you can say “Blackberry.” Now that we all have a computer in our hands at all times, Google IyellowbookpittsburghS the phonebook.

So on the most basic level, your website needs to function as a phonebook listing. There’s nothing fancy about that. Phonebooks provided only the basics; who you are, what you do, when you’re open, where you’re located, and of course, the phone number.

The same can be said for your local listings on Google. Cover the basics, front and center, and make it very simple for people to access more information if they want it.

But that’s just the first 5 seconds of engagement. In many cases that same website design has to work much harder than that, for 50 seconds, or even five minutes.

Here’s an example:  Say you’re locked out of your car on a cold night and you’re searching for a locksmith. You’ll probably call the first company that pops up on Google that offers emergency service.

Comparison shopping doesn’t come into play.

website design on the brand insight blog

Six months later you need new locks on the doors of your office. There’s valuable stuff in there,  so you find yourself searching, once again, for a locksmith. But this time you have a completely different set of needs and expectations.

Same search terms. Same exact unique visitor. Different context. Different search criteria. Different emotion. Different behavior. So in that case, the locksmith’s website needs to work on another level. What served the purpose in an emergency doesn’t work for a more thoughtful purchase.

The first impression level.

The most basic rule of marketing is to make a good impression. Quickly! If you don’t, your prospects will never make it to conversion. Doesn’t matter if it’s a business card, a Powerpoint presentation, any other tactical marketing tool… the first step to success is making a good impression.

So how do you do that on a website?

Famous Chicago MadMan, Leo Burnett, once said, “Make is simple. Make it memorable. Make it inviting to look at. Make it fun to read.”  There you go. That old-school thinking still applies.

Unfortunately, that’s a tall order for web developers who are accustomed to writing code, not copy. And it’s impossible for business owners who are muddling through a do-it-yourself website… “Choose a color. Insert logo here. Put content there. Proceed to check out!”

The fact is, most small-business websites fail miserably on this basic, 30-second marketing level… They’re not memorable. They’re not fun to read. And they look just like a million other websites built on the exact same design template.

That’s why the bounce rate from home pages is so ridiculously high… They don’t make a good first impression. In fact, most make no impression at all.

The conceptual, branding level.

Pliny The Elder once said, “Human nature craves novelty.”

More recently, marketing guru Seth Godin said, “In a crowded marketplace, fitting in is failing. Not standing out is the same as being invisible.” The whole premise of his book, Purple Cow, is “if you’re not Distinct, you’ll be Extinct.”

Being distinct is what branding is all about.

Unfortunately, most business owners have no idea what “distinct” looks like in a website. And web programmers have a hard time disrupting the conventions of their tech-driven business, so you can’t rely on them for design innovation.

The conceptual level of your website revolves around your core brand concept — that one, engaging idea that goes beyond your product and price, and touches on a deeper meaning for your business.

bmw_uou

Brilliant, one-word ad that says it all for BMW.

For example, BMW’s core brand concept is stated very clearly: “The Ultimate Driving Machine.” It’s about engineering, handling and speed. It’s not a brand for soccer moms. The first glance at their website makes that clear.

When communicated consistently, a core brand concept will provide three things: Differentiation. Relevance. And credibility. Every great brand maintains those three things over time.

Often it’s not an overt statement, it’s a collection of symbolic cues and signals that come together to provide the ultimate take-away for the web user.

It’s the use of iconic, eye-catching images rather than stock photography.  It’s a headline that stops people in their tracks and questions your competitors. It’s navigation design that’s both intuitive to use, AND distinctly different. It’s clear, compelling messages each step of the way. And most importantly, it’s craftsmanship!

When your site is well crafted your conversion rates will dramatically increase. Guaranteed. So rather than just jumping into a quick, do-it-yourself site, stop and think about your brand. Do you even know what your brand stands for?  What your promise is? Can you communicate your idea in one sentence? Do you really know your market, your customers, your value proposition?

Those are the fundamentals. That’s the homework you need to do before you even start thinking about HTML programming. Because no amount of technological wizardry can compensate for the lack of a clear, 2349098787_2cd660c18csingle-minded brand idea.

The research or “how-to” level.

The deepest level of engagement is content that educates. People are hungry for information and quick to examine the details of even the smallest purchases, so give them the meat they need to make an informed decision. Don’t make them go to your competitor’s website for honest insight on the purchase decision they face.

On business-to-business websites this often takes the form of webinars, white papers, videos, articles, blogs and tutorials. On retail sites it’s third party reviews, product comparisons and user-generated content. This is where you site can get very deep and very relevant for serious prospects. Don’t overlook it.

The conversion level.

Lest we not forget the ultimate goal of most sites… to persuade, sell, motivate and move people to action. If your site’s working on all those previous levels, it’ll happen quite naturally.

If you want to improve the performance of your website, and transform your ordinary business into a powerful brand, give me a call. 541-815-0075. If you want more on Website design and development, try THIS post:

 

1 content marketing blog post from BNBranding in Bend Oregon

The secret, missing ingredient of content marketing.

It’s the age of information, and much of the marketing buzz these days revolves around content marketing. Especially for business-to-business marketers, it’s all the rage.

We have YouTube videos, webinars, blog posts, slide sharing Powerpoint Presentations, Facebook updates, LinkedIn articles, tweets, podcasts, websites, ebooks, and white papers coming out our ears.

In many cases, all that content just adds up to too much information. Or at least, too much of the wrong kind of information.

brand insight blog post on content marketing The model that’s emerging seems to rely on dry, analytical information. Data, data and more data. Most of it is totally devoid of emotion.

Occasionally, when someone gets really creative, they take the data and spruce it up with an “infographic.” So it looks a little cooler, but that doesn’t make the data any more interesting or relevant. It’s still just boring, factual stuff written for 20 bucks by someone in a faraway land who doesn’t know your business or your market or your brand.

What’s missing is a compelling narrative. A relevant story. An inkling of copy that will touch a nerve, make an emotional connection, and persuade people to do something.

As the old saying goes, facts tell, stories sell.

content marketing blog post from BNBranding in Bend Oregon

For better content marketing, be novel – tell a story!

Nothing teaches more effectively than a good story. Stories suck people in and involve the listener/reader/user on a gut level. The use of character archetypes, metaphors, plot and drama can bring any subject to life. Even if you’re in a highly technical, scientific market niche, you can still use narratives effectively in your content marketing.

And that applies to all forms of content marketing, from cheesy little YouTube videos to elaborate webinars. You need to forget about information for a minute, and think about entertainment.  How you can involve the audience, so their eyes don’t just glaze over?

The trick is taking all that data, and pulling a story out of it that will resonate with the target audience.

There aren’t very many people who are good at that.

If you have a marketing staff of ten people, you might find one who can do it. If you’re a department of one, or a business owner/Chief Marketing Officer, forget about it. You don’t have time to research the articles and craft good stories.

So you better outsource it. Very carefully.

You need a good copywriter who can translate all your insider information, market research data, and “repurposed” sales material into something that actually engages people. It doesn’t matter what type of content is is… could be a script for your next video production, or an investor pitch, or a trade show presentation. You need someone who can come up with a big idea and spin information into a memorable, relevant tale.

Nobody’s better at that than advertising people.

Many business people these days seem to think there’s no redeeming value in advertising. They think content is better, and that consumers will rail against anything that smacks of advertising. But people aren’t dumb… they know your “content” is just advertising in disguise.

branding blog from BNBranding in Bend Oregon about content marketingAdman George Lois said it well in his book, What’s The Big Idea: “I think people are absolutely brilliant about advertising. They have a microchip in their heads that places any ad in marketing context in lightning speed, enabling them to judge astutely what they see.”

So if they know it’s really advertising, you might as well make it great advertising.

Ad guys know how to tell stories that originate from one big idea. We can synthesize a whole bunch of client input into 30-seconds of entertainment. We can engage an audience quickly and effectively with repeatable sound bites and compelling, memorable images.

“Advertising can crystalize, in a few words, what the client’s business is all about,” Lois said. “If you create both visual and verbal imagery, one plus one equals three. Advertising is like poisonous gas… it should bring tears to your eyes and unhinge your nervous system.”

I bet your content marketing doesn’t do that.

Content marketing, like traditional advertising, needs both a strategic foundation and  exceptional creative execution. It should be one part science & technology, three parts art.

Advertising people are the only professionals who can bring those elements together. Journalists can report on what’s going on at your company, but they can’t deliver the missing ingredient in most content marketing efforts… art.

Advertising is an artistic mix of images and copy. It’s big, game-changing ideas based on savvy business insight. It’s craftsmanship in design, typography and copy. And it’s painstaking attention to detail.

If companies would apply those same standards to content marketing, we’d all be better off.

For more on George Lois, try this site.

For more lessons from the advertising greats, try this post. 

 

9 brand core values

Successful brands are built on beliefs. Not products.

Most small business owners never think about the important underpinnings of their brand. They just want to deliver a good product. Build the business. Make some sales. And earn a good living. Branding and brand values just aren’t a high priority.

how to define your core brand values on the brand insight blogThat’s understandable given the daily workload that business owners endure.

But the most successful small businesses — and all the beloved, billion-dollar brands — are built on a solid foundation of shared values and beliefs. And those core brand values go way beyond product attributes or corporate mission statements.

So if you’re launching a new business, or if you’re trying to define the core brand values of an existing one, it pays to think like a beloved brand.

In “Corporate Religion” Jesper Kunde put it this way:  “What leads a company to success is its philosophy, values and beliefs, clearly articulated. Communicating the company’s attitudes and values becomes the decisive parameter for success.  And it demands that you find out who you are as a company.”

brand core values

Brands are built on authentic values and beliefs. Not BS.

Who you are. (Brand personality)

What you believe in. (Core Brand Values)

In “Good To Great,” Jim Collins says, ” Our research shows that a fundamental element of all great companies is a core ideology — core values and a sense of purpose beyond just making money — that inspires people throughout the organization and remains relatively fixed for long periods of time.”

Here’s an exercise that’ll help you find your passion and articulate the beliefs that become the spine of your brand…

Get some quiet, focused time away from the office. Then start a list of all the things you believe in. Personal and professional. If you’re trying to define your core brand values for the first time, you should also make a list of the things that really piss you off. Those hot button issues can be a great source of inspiration for core values and a fantastic differentiator for you business.

My partners and I recently did this as part of our website re-vamp. The fact is, prospective customers want to do business with those who share their own values and ideals. So if we want to leverage those beliefs, and attract like-minded clients, it’s important to include that content on our website. They are also a constant source of material for social media posts, advertising and PR efforts.

“The better your company communicates its attitudes and beliefs, the stronger you will be.” Kunde said. “When consumers are confronted with too many choices, their decisions become increasingly informed by shared beliefs.”

Our core brand values at BNBranding are helpful reminders for anyone who’s trying to build a lasting, respected brand:

We believe that creativity is the ultimate business weapon. Inspired, innovative thinking is behind every great brand, from Apple to Zappos. We also believe that it’s hard to be creative when you’re stuck, up to your neck, in day-to-day operations. Most business owners need a spark from the the outside.

We believe in the power of disruptive words. Proven fact: Well-crafted messages with unexpected words and images have more impact. Because the human brain automatically screens out the normal, mundane language of most business pitches. It’s in one ear, and out the other, without disturbing a single brain cell. Great messages, on the other hand, fire the synapses and trigger an emotional response.

We believe that when it comes to selling, emotion trumps logic every time. Research it yourself… the latest brain science proves that people make emotional purchases, then use reason to justify the decision. No great brand has ever been built on reason alone. Not one. In branding, it’s what they feel, not what they think.

We still believe in the marketing MIX. Technology is a great new weapon in our quiver of marketing tools, but it’s not the bow. You still need a mix of marketing tactics. Facebook,Twitter, LinkedIn, Pinterest and Snapchat provide exciting new ways to tell stories and make connections, but technology itself isn’t the story. And yes, TV, radio and even direct mail advertising still deserve a spot in the mix.

We believe in the glory of a good story.  Every great business has an engaging story to tell. So tell it! Find creative new ways to spin that tale, and keep telling it over and over again. Tell it in ads, tell it on your site, tell it presentations, tweets and Facebook posts. It does you no good to define your core brand values, and then NOT communicate them. Facts tell, stories sell.

core brand values on the Brand Insight Blog by John FurgursonWe believe that image matters. The image you portray − in words, graphics, music, pictures, events, affiliations − can differentiate your business and give you a leg up on the competition. But the style needs substance, as well.

We believe Design belongs in business school.  Tom Peters calls it “the soul of new enterprise.”  It’s Design that differentiates the world’s most valuable brand – Apple. It’s Design that made Tupperware a cultural phenomenon. Design evokes passion, emotion and attachment… all required elements of great brands.

We believe in the art of persuasion. Data is a big deal these days. But effective marketing communications still comes down to saying the right thing, and saying it well. A brilliantly crafted combination of words and images will always be more motivating than data.

So what about you?  What do you honestly, passionately believe in, and how can those personal beliefs be translated into core brand values?

You cannot be one thing in life, and another thing in business. It’s called brand authenticity, and if you’re faking it, potential customers will figure it out.

I once worked for a company that was less than upfront about their true values. They posted a mission and values statement on their site, but the words didn’t ring true to those of us on the inside. It was just corporate BS, which we discovered soon enough during a PR firestorm.

I can tell you emphatically… NOT divulging your true values to your team is a recipe for disaster. It’s literally impossible to lead effectively, motivate the troops and employ true brand ambassadors without being upfront about your true self.

The language that companies use for the “core values” often gives them away. Don’t ever say you’re “dedicated to” something or “committed to” whatever.  The most common cliche is “committed to quality.”  Or “dedicated to excellence.” You can’t build a brand around that. That aint even good english.

And one final thing… keep in mind that most of your competitors are not thinking about authenticity, core brand values, or anything resembling deep-seated truths. So when you do, you’ll have a significant competitive advantage over them. At least with the people who believe as you do.

If you’re interested in building a strong culture based on honest brand values, check out this post.

 

1 Bend, oregon advertising agency blog post about brand credibility.

How to build brand credibility, one little leap at a time.

The brands I work with are not like WalMart.  They don’t spend  a half a billion dollars a year flooding the airwaves with advertising. They don’t have enough money to sway public opinion in their favor. And all of them face stiff competition from bigger businesses. So brand credibility is essential.

Last week I had to convince a retail client that he couldn’t change people’s minds regarding his biggest competitor; the big box store.

“You can’t compete on price,” I said. “It’s just not a credible message.”

“Yes we can… They’re not really cheaper, not in this business,” he said.

“Doesn’t matter,” I replied. “Everyone believes they’re cheaper because the big box stores can buy in bulk. They have special deals with manufacturers.”

“No they don’t. No different than what we get.”

“I know they don’t and you know they don’t, but the public believes they do. And you can’t fight that perception.  It’s like City Hall. Even if we advertised lower prices week-in and week-out for years, consumers won’t believe that you can match the big chains on price. If you want a credible brand, you have to hang your hat on something else.”

In that case, it was service that became the centerpiece of their marketing. That’s a credible brand message. The little guys can always compete on service, because the public perception is that big chains suck at it. (Every trip to Home Depot confirms that for me.)

But it’s not enough to just start running digital ads or TV spots that say you have great service. First you have to prove it, demonstrate it, and actually deliver it every day. That way, all the reviews and stuff that show up on social media will substantiate the claim.

Bend, oregon advertising agency blog post about brand credibility.Here’s the challenge: Consumers begin every brand relationship in a state of total DISbelief. They don’t have enough information about your business to like or dislike it, but they are not neutral about it, due to their inherent skepticism. It’s the built-in BS meter they all have.

They don’t believe anything you say.

So if they have no experience with your brand, and no point of reference, you have to do little things that will allow prospects to suspend their DISbelief.

It’s a far cry from getting them to believing your pitch or trust your brand, but it’s a start. You have to build credibility, step by step.

The best story tellers — novelists, screenwriters, movie makers, comedians, preachers — know how to get audiences to suspend disbelief and go along with plots that are a bit far-fetched.

By using vivid, believable details and dialog they draw us into their stories and “sell” ubrand insight blog post about brand credibilitys on characters that are bigger than life and settings that are out of this world. Think The Matrix, Star Wars and The Lord of the Rings.

J.R.R. Tolkien commented on the suspension of disbelief in an essay, “On Fairy Stories.”  Tolkien says that, “in order for the narrative to work, the reader must believe that what he reads is true within the secondary reality of the fictional world.”

In marketing, there’s a secondary reality in every market segment. If you want people to suspend their disbelief long enough to “hear” your business pitch, you need to tell stories and use details that fit the context of that secondary reality. Like the retail reality that says little guys can’t compete with the big box stores on price. You have to work within that secondary reality, not against it.

In fictional works lively, realistic details that fit within that secondary reality make the story more believable, more engrossing. The same holds true for marketing communications of all sorts. Dramatic details and believable situations help you sell your story and sway skeptics. Not dry, hard-selling facts, but character details that reveal the personality of your brand and demonstrate your understanding of the consumer and his or her problem.

Instead of shoving your product features down their throats, try for a more novel approach.

Start by listening. Suspend your own disbelief and really listen to what customer, prospects, and non-customers have to say about your brand and your business category.  Every little nugget of insight can be turned into a new detail that will help you build brand credibility, if you use them right.

Here’s a simple, practical example: Choosing the right photos for your website. Every image should help tell the story and support the secondary reality you’re working within. If you load up lousy, stock images that everyone in your industry uses, no one’s going to believe the story that goes with the photos. Your brand cred will be shot.

That retail client of ours needed images that would support his story of superior customer service. So we didn’t use stock photos of smiling, happy customers. We created a whole new guarantee program that the big box store could never duplicate. Then we branded that idea with attention-getting graphics for the website, the ads, and the store. Good service wasn’t just talk. It was guaranteed.

Headlines are equally important. You should keep your headlines consistent with the images and with the secondary reality of your target audience. (You can’t show one thing, and say something else.)

brand insight blog on brand credibility by John Furgurson at BNBrandingIf you keep all those little executional details in sync with your operation, and maintain good practices over time, disbelief will turn to reluctant acceptance, acceptance to approval and approval to purchase. For a few lucky brands, it’ll even progress to a lifelong love.

As movie goers, game players and book readers, humans love to suspend disbelief. It’s an easy, welcome reprieve from the reality of everyday life. We jump on every opportunity we get… that’s why great commercials become part of the pop culture. The Mayhem guy for AllState or the Old Spice campaign requires a bit of a leap. But we’re happy to do it, and go along with that reality, 30-seconds at a time.

We don’t want to be sold, we want to be entertained. If you do things right we’re willing to suspend our disbelief long enough for you to establish a dialog with us. And then a relationship. And that’s what brand credibility is all about.

For help with your own brand message, call me at BNBranding.

For more on building an authentic brand, check out THIS post. 

3 naming your business

Naming your baby vs. naming your business

I’ve done a good number of naming projects over the years. I’ve conjured up business names, product names, non-profit names and even named some corporate marketing initiatives. Here’s one thing I’ve learned: Naming babies is much easier than naming your business.

naming your business First of all, with baby names there are only two people who have a say in the decision. It’s a simple democratic process where the wife always has veto power over anything the husband comes up with.

With company names, you have to get the consensus of many people. Sometimes there are even committees involved, which usually lead to winning names like Poolife for a swimming pool cleaning company.

When you’re naming a baby you can refer to all sorts of books and websites full of perfectly acceptable names with all their hidden meanings and Latin derivatives. With company names, you have to rule out every name that’s ever been used before and start entirely from scratch. You can’t even go through the family tree and choose some obscure middle name, like you can with a child.

There aren’t any trademark laws protecting children’s names. You’re free to call your son Sam, even if there are seven other Sams in your neighborhood.

Doesn’t work that way in the business world. There are hordes of lawyers who do nothing but trademark protection and application work. So if your product name even sounds like something that’s already out there, you’re in trouble. Case in point: There was a little coffee shop in the small town of Astoria, Oregon that got sued by Starbucks for trademark infringement. It was called Sambucks.

naming your business or your product - beware of the Nova And then there’s the whole translation issue. Face it, you probably don’t care what “Clark” means in Hungarian. But there are dozens of stories of product names like the Chevy Nova, which didn’t translate real well. (In Spanish, Nova means “does not go.”) If you’re doing business globally, your naming project just got astronomically harder.

And here’s an important distinction: your child’s livelihood doesn’t depend on people remembering his or her name. Sure, unfortunate names like Major Slaughter, Ima Nut or Moon Unit might cause a lifetime of grief, but they won’t make or break the poor kid’s career like a bad product name can.

Most people don’t need professional help to come up with a good baby name. Business names are a different story. The do-it-yourself approach usually results in one of three types of lame names:

• Overly clever, pun-filled names like The Hairport or The Family Hairloom. Har har.

• Totally boring, literal names like the now defunct Third Street Coffee House.

• Names that backfire completely when applied to internet URLs. Need a therapist? Try www.therapistfinder.com. Need some good art, go to www.speedofart.com. Looking for a nice pen? www.penisland.com.

another example of bad business namingA good name can be costly, but not nearly as costly as blunders like that. So save yourself a lot of time, money and frustration and just hire a branding firm to help from the very beginning. Not a design firm… they focus on the language of images, not words. And not an ad agency… For some reason, ad agencies love to use one-word names that are just too cool for school. Like “North” “Red F” “Citrus” “Fuel” If you want to confuse people, just follow that lead.

Here are a few other exnaming services from BNBranding amples of names, both good and bad:

• Federal Express decided to shorten its name, and became Fed Ex. A smart move, considering that’s what everyone called them anyway. Besides, repainting all their jets with the new shorter logo saved the company millions year in fuel costs alone.

• Dress Barn??? How many women will admit to shopping there, much less bringing herds friends in? Tough to be a brand ambassador for a place called the Dress Barn.

• Drug companies spend billions every year on names, yet they come up with some of the worst: “Nasalcom” for an inhaled antihistamine. Sounds like a rat poison that works when they sniff it. “Vagistat” for a yeast infection medicine. “Cutivate” for a skin condition medicine. “Aspercreme” for an ointment that doesn’t even have any aspirin in it. “Idebenone” for neurological disorders. The list is long.

Viagra, on the other hand, is a great drug name. It says virility and vitality and conjures romantic images of Niagra falls.

Here are a few of my own: PointsWest for a resort development on the west side of Bend on the edge of the Deschutes National Forest.  “Sit Down Dinners” for a family-style personal chef service. “Aspire” for a smoking cessation program. Widgi Creek for a golf club. (No one knows what Widgi refers to, but they sure remember it.)

Before you spend a dime for your sign or your website URL, spend some focused time naming your business. There are many considerations… How it sounds. How it looks in type. Is it legally protectable? What are connotations of the word? Does it translate? Is it confusing?

Your name is the foundation of your brand. So if your business IS your baby, get started right with a memorable name.  Call BNBranding for affordable help with your brand name and identity.

kombucha marketing kombucha wonder drink brand

How to compete in the booming Kombucha Market

Interview with Steven Lee of Kombucha Wonder Drink.

Steven Lee Kombucha wonder brand insight blogIn the tea business Stephen Lee is a household name. A pioneer. You could also say he’s the father of Oregon’s booming Kombucha market.

Lee first tried the popular elixir of fermented tea on a business trip to Russia, back when the U.S. and the USSR were coldly pitted against one another.

“When I first experienced Kombucha in Russia − I thought it was one of the most amazing things I’d ever experienced,” Lee said. “There was no question in my mind. I knew it was going to be a phenomenon.”

So Lee brought a SCOBY back with him and started brewing his own kombucha in his kitchen. But it would be many years, and several start-ups later, before he would jump into commercial kombucha production.

Over the years Lee built and sold five different tea companies. He literally wrote the book on Kombucha and today he is continuing to help lead Kombucha Wonder Drink, which he recently sold to Harris Freeman, America’s largest private label tea packer.

I sat down with Steve to talk brand building, marketing, business creativity and his long list of successful entrepreneurial ventures. It all started with Universal Tea Company in the early 1970s with $2500 and a basement full of herbs, spices, teas and dreams…

SL: When we started Universal Tea Company back in 1972 there was there wasn’t much competition… Lipton, Celestial, Bigelow and Twinnings. We were selling bulk to natural foods stores, but we really hit on peppermint… We were bringing peppermint in from Eastern Oregon — It’s the finest peppermint in the world — and selling it in bulk. We actually bought a wheat combine for $800, reversed the airflow, got a tractor-trailer license and began processing and hauling. We sold hundreds of tons of mint to Lipton and Celestial Seasonings.
tea and Kombucha market

JF: How did that transition into Stash Tea Company?

SL: We sold universal Tea Company to our bookkeeper for $45,000 in 1977. It had taken us five years  to figure out what we wanted to do with Stash Tea, because everything we tried, failed. We finally decided to sell tea bags to the food service industry and through mail order. It was a slow build over 21 years. We did everything as inexpensively as possible.

JF: From what I heard, you had some very innovative marketing programs.

SL: Yes, have I told you the story of Stash? That’ll have to be another conversation… We had more than 100,000 people on our mailing list. We used gifts, discounts and eventually free shipping to create loyal customers. By the late 80’s mail order accounted for 10% of our revenues, but 35% of the company’s total profits. Eventually Fred Meyer called us, and asked if we’d be interested in selling our tea in their chain of stores here in the Northwest. So they were our first retail account.

By 1990 Stash was the second largest purveyor of specialty teas, behind Bigelow. Lee and his partner, Steve Smith, sold Stash tea in 1993 to Yamamotoyama, the oldest tea company in the world.

JF: What did you do differently after that, when you were starting Tazo?

SL: Well, we started Stash tea with $2500. Tazo was capitalized with a half a million. Plus, we had 20 years of experience under our belts. We had a lot of courage and a lot of confidence. We just marched right out there with it. We knew where to go. Who to contact. How to be creative…

branding blog on tazo teaWe got a very talented team of people together. The guys at the design firm and a copywriter worked with my partner, Steve Smith, and they were just brilliant together. Such a creative force!

There are a lot of people who get involved in the brand building process early on who set precedents. The name, for instance… With Stash, from the day we came up with that name, we had to back-peddle. “No, we’re not about marijuana.”

With a name like TAZO, and the right creative team, anything could happen. The writer said, “it’s kinda like marco polo meets Merlin on the crossroads of existence.” That was the beginning of the whole storyline. They pulled that one outta their hats.

Steve Sandoz, the copywriter on the Tazo project, once told a reporter that Tazo was “the name of the whirling mating dance of the pharaohs of ancient Egypt and a cheery salutation used by Druids and 5th-century residents of Easter Island.” Proof that sheer creativity can pay tremendous dividends when it comes to building a brand.

JF: It also helped that the specialty tea category was booming by the time you started. Didn’t Republic of Tea pave the way for Tazo?

SL: They certainly did. There were no longer just five or six tea companies out there. There was some real innovation happening and consumers were aware of better teas.

JF: Tazo launched with a product that cost almost twice as much as Stash. Was premium pricing a big part of your strategy, or was it just that the ingredients were more expensive?

SL: Our strategy was to launch with a product that was made of much higher quality ingredients, and that dictated the retail price. We made no more margin. 40 to 45% gross margin.

marketing kombucha tea marketingIn 1998, Steve Smith and Steve Lee noticed that Starbucks was piloting a brand of tea called Tiazzi, which they perceived as an infringement on the Tazo brand. A polite “cease and desist” letter led to a meeting in which Starbucks offered to buy the Portland company. The sale closed for a reported $9.1 million. Only five years from founding to acquisition. Tazo grew to be a billion dollar brand before being replaced by another Starbuck’s brand, Teavana.

JF: So at that point you had the exit that every entrepreneur dreams of. You could have done anything… What drove you to start all over again?

SL: That’s what I do. My forte is getting things started that inspire and motivate me, then surviving through tough times.

JF: (laughing…) That’s your entrepreneurial strategy??? Get it started and then hang on?

SL: Yeah. I’m attracted to esoteric, romantic categories that inspire me. Tea is very romantic. I was very inspired by that first taste of kombucha that I had in Russia.

SL: The first domestic commercial kombucha that I knew of was a brand called Oocha Brew, here in Portland, that started in 94. That was before GT Dave. I was ready to invest in their company. Unfortunately for Oocha Brew, they learned very fast that when you create a raw kombucha you have to be very careful… If it’s not handled properly all the way through the distribution channels to the store and all the way home into the fridge there’s a high risk of being too high in alcohol. In 1998 they sold a large quantity to QFC stores and the bottles all started exploding. The caps were coming off. That was enough to bankrupt them.

SL: GT Dave began in ’95, grew very slowly until he got some funding in 2003. At that point, Synergy quickly became #1 in the kombucha world with a raw product, and he never looked back.

We started developing Kombucha Wonder Drink in 1999 and launched in 2001. We had a lot of confidence then too, because all the retailers that I talked with said, “oh yeah, if you do kombucha we’re all over it.” So getting it in the stores was easy for us, but moving it off the shelves proved very difficult at first. What we discovered was, even natural foods consumers didn’t know what it was. We did a lot of sampling, and it was a real love/hate thing. Some people would just gag.

JF: An acquired taste…

SL: Yes. Even though our product was a little more palatable than some. Even now, less than 10% of American consumers are aware of what kombucha is. So it still has a long way to go among the so-called “early adopters.”

We determined from the very beginning that the way to go was shelf stable. Our premise is, most all the benefits of kombucha are in the acids. Those are not affected by pasteurization. But in two years time, in 2003, we were still struggling with consumers accepting the taste. It was a slow process.

kombucha marketing kombucha wonder drink brandJF: Was that a strategic error, not doing raw kombucha? Were you kickin’ yourself then?

SL: There was a five year period there of self doubt and struggle. We grew every year, but it was not like what was happening in the raw segment. The two other founders left… Didn’t want to do it anymore because it wasn’t growing like it had with Tazo or Stash.

We thought we saw the market, but it was tougher than we expected. Then in 2010 there was the mother of all recalls, when all unpasteurized kombucha brands got yanked off the shelves. Even Honest Tea had a raw kombucha that got recalled. CocaCola had a 1/3 interest in Honest Tea at the time, but they had no interest in doing anything with raw kombucha, so they just let it die. It never returned.

In order to get back on the shelves Synergy and all of them had to change the way they made their kombucha. They had to filter out most of the bacteria and prove that they wouldn’t exceed the .5% alcohol limit. We never had a problem with that, with our brand.

JF: So where’s it going now? Around here, every time your turn around it seems like there’s a new brand of kombucha popping up. You have Brew Dr., Eva’s, Hmmm, Lion Heart, and dozens of others just in Oregon. Pepsi bought Kevita. Coke’s investment arm has an interest in at least one kombucha company…

Kombucha market Kombucha Wonder DrinkSL: Yes, everybody’s going to have a kombucha. Good tasting, functional drinks are rising by leaps and bounds right now. There are different sodas with less sugar and different sweeteners. There’s Kefir. It’s changing rapidly.

SL: Our trade association, Kombucha Brewers International has 80 members. And that’s not all… there are well over 100 brands. It’s an easy product for people to launch. You can brew kombucha in your kitchen, go to a couple farmer’s markets, become enthusiastic, find and a couple local stores, and you’re in business.

JF: Sure, the kombucha market is booming, so it’s easy to launch. But it’s not, necessarily, easy to succeed in. Just because they can brew it doesn’t mean they can build a brand, like you did.

SL: That’s true. It’s too hard for too many people.

JF: Even now that’s it’s a $600 million market it’s a relatively small pie. I’m sure it’ll get to a billion dollars soon enough, and it’s going to continue to grow, but the question is, is it growing fast enough to support all the new competitors who are jumping into it?

SL: The answer is no. But time will tell. Everything’s going to happen in kombucha market. Everyone is going to experiment and there will be every form and flavor possible. But there’s always a falling out of brands. Phenomenon or not, only five out of 100 startups make it. The shakeout is happening simultaneously as more brands are launched.

But Steven Lee has launched his last company. His future now is in writing. He recently wrote a book about kombucha for Random House, and he plans to use those connections to do something else that inspires him. Something romantic.

“Once I’m done with Kombucha Wonder, I’m going to go write children’s books,” he said.

 

If you’re thinking about entering the Kombucha Market or if you have an existing natural foods company, BNBranding can provide all the insight and creative inspiration you need. Call me. 541-815-0075.

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