Growth matters, but good and sustainable growth matters even more.
Even if the barrier for launching and developing a brand is lower than a few years ago, the competition is fierce and the main challenge is how to retain customers. There are multiple tactics that founders can take on when building a successful brand but oftentimes brands treat execution as a reaction to business challenges and changing situations.
Setting up distribution channels, whether through a retail partner or a marketplace, takes a lot of thought and analysis. Sooner or later entrepreneurs face opportunities that can be tempting but instead of simply reacting and accepting any possibility, founders can take a pause and analyze how is it going to impact their business. What’s the size of the opportunity? How will the brand be represented? What resources and budget will be needed?
We’ve rounded up some key insights for a strategy that allows founders to set up their brand for growth and successful execution.
You are a brand, then be a brand (not just a product)
For any ambitious and disrupting business it is easy to place too much importance on their product, but the “build it and they will come” motif is a misleading approach.
The true test of a modern brand is their ability to define their audience which boils down to: how well can your company define and understand who your customer is? The answer to this question includes knowing what your customer wants and also in which context they make decisions, what they pay attention to, and what they spend money on.
Why is this important? It’s because even if you offer a great product, that isn’t enough to add value to your ideal customer’s life. In addition, if a brand merely tries to win on pricing and product, there will always be another competitor waiting to offer that same product or service for cheaper.
That’s why knowing your customer and offering value beyond a single offering is so important to stop being just a commodity. The best brands evolve and become an experience. Those successful names have one thing in common: not only they understood their customer, they actually understood how to translate that into their product or service.
By offering tangible value to consumers, brands can lay the foundations for a more authentic relationship and get their audiences to buy into their vision and their products.
Should you build around price?
If you are transaction-focused, you will end up focusing only on pricing and there will always be a competitor selling a similar product for cheaper. Don’t sell a product for the cheapest, but instead make customers pay for the brand and the experience they get out of it.
Sometimes it can be hard to realize that you don’t necessarily have to compete on price and that you are actually competing for eyeballs. Both visibility and perception mean a proper setup of your SEO (Search Engine Optimization), PPC (Pay Per Click), and organic channels.
The problem is that all these customer acquisition channels cost companies significant amounts of money.
Overall, common mistakes when it comes to brands selling online and their pricing strategies break down into the following: the product is too cheap, the upsell isn’t there, and the pricing isn’t flexible and dynamic as the market changes.
Finally, abusing your discounts and promotion strategy is also a negative point since brands can easily oversaturate a consumer with too many discounts and make brand building harder as well to compromise its authenticity. You need to strike a balance between brand integrity and fast easy sales.
Do things that work and can be scaled but be ready to try new hacks
No matter how you build your business, at some point, customer acquisition will change and you will need to understand how to rework a strategy that has performed well in the past. The channels mentioned in the point above are constantly evolving with new features, fluctuating prices, and new players competing for the same audience. As a brand, you need to be ready to do new things like revamping your product, rolling out new products, or expanding your marketing to new channels.
For instance, for some DTC brands, prioritizing products that don’t perform as well with other retail channels is an approach that works well. Certain products may see more successful marketing results when targeted to a particular channel. In some cases, it can create the starting point that helps a business overcome a marketing challenge and it can potentially steal action away from best-selling products.
DTC founders can take a page from the tech startups’ book and understand that at the beginning they need to adopt less-scalable strategies because getting 1000 users is very different from getting the next 10,000.
As DRVE’s CMO Agna Poznanska puts it:“capturing consumer motivations, interests, and preferences at scale is challenging but early-stage brands can start by leveraging small hacks like writing a personal email to customers or organizing an event with a brand with a similar target audience“.
Even with small actions like commenting back to customer reviews and leveraging community Q&A, brands can create a two-way conversation with customers and increase sales. As marketing expert Nik Sharma put it back in 2017: “In order to succeed you need to do things that DON’T scale.”
Listen with your eyes: you can’t afford to overlook data
You know what your customers have purchased in the past, but do you have the data to know what they are going to do in the future? Although it may seem counterintuitive, data collection and analysis should be a priority from day one. In the very early days of most brands, customers prove to be a vital resource for going deep with a particular company and understanding the addressable need in the market. Of course, data collection looks different to every business.
For very early-stage companies, it involves determining your value proposition, attracting interest in your products, and lots and lots of research. Lots! During this phase, it is key to focus on researching and gathering as much competitor and market data as possible since you likely won’t have much in your own analytics to track.
Data becomes increasingly important as a business grows and once your customers give you insights into your market, it is time to start unifying all the disparate customer data into a single point of control to improve the shopping experience. Implementing the right tools and software is a big part of the equation but the game changer is to instill a culture of data collection so your team can execute an effective customer data strategy.
Eventually, data will offer performance measures that are highly valuable not only for the team but also for investors and partners reporting.
Think of the entire customer journey
The journey people go on to buy our product is so multifaceted that businesses should focus on ways to build services around that process.
As a founder, it is crucial to look at data around the strength of the brand and how consumers engage with it. It’s all about asking the right questions to get a good sense of what the cohort data looks like over time and adjusting the customer journey according to these insights.
By taking the “things that don’t scale” path, entrepreneurs of early-stage brands become empowered to build direct relationships with consumers and better personalize their services, offers, and products.
This may seem obvious but these days we rarely see a truly innovative product or service come to market, why do we see so many versions of the iPhone instead of a new smartphone altogether?
However, we see an ever-increasing spectrum of differentiation and substitutes. One has to research and understand the market or category at a granular level to figure out where your product/service fits in the ‘food chain’? Are you premium or more mass-market? Solving a problem? Enhancing wellbeing? Deliver a product ready straight from the box, do-it-yourself, or have a ritual that resonates with customers? Sure Coca-Cola or Apple can be all things to all people, but it was not always the case.
Knowing where you fit in the market helps address many questions, tasks, and developments; from the website to the customer journey, to what scent your packaging gives off on the delivery.