I’m pleased to have David Knox guest blogginig on robgo.org today.  For those of you who read my blog, you’ll know that I’ve done a series on Brand and CPG marketing on the internet and why I think it’s going to be a huge area of growth.  Today, I’m pleased to have David contributing this thoughts from the opposite side of the table.  David is a classically trained brand marketer and leads a number of digital brand marketing initiatives for Procter and Gamble.  He is sharing his thoughts on how startups can take the lessons learned from the CPG world to better deliver products and marketing messages that delight their customers.  Thanks David!

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Increasingly when I get the question of what my job is, I tell people that I play the role of a “translator.”  After all, working in Corporate Marketing, I do not spend my time only focused on a single brand.  Instead, my role leads me to interact with a variety of brands, both inside and outside of the company.  One day that might be a fellow Brand Marketer at a consumer package goods (CPG) company.  Other times it will be a strategic partner, whether that is an agency or digital media company.  But increasingly, I am finding my interaction to be with more and more start-ups and the Venture Capitalists who invest in them.

It is in this last bucket where my role as a “translator” becomes the most evident.  After all, the numbers behind Consumer Packaged Goods are daunting when you consider comparisons such as this:

• Pampers has annual net sales of approximately $8 billion, which makes it larger than Yahoo ($6.5 billion in sales for 2009)
• In 2009, the advertising spending of the top 4 companies in the US was greater than the total fund-raising by US Venture Capital Funds ($14.5 billion vs $13 billion)

These numbers are not to say that bigger is better.  Instead, I would say that the worlds of Brand Marketers and Start-ups are just two distinct cultures.  Like all cultures, they have their differences, but also their similarities.  But more importantly, there are things that both cultures can learn from each other.

In his previous posts in this series, Rob has done a great job of providing the perspective from the start-up side of the table.   Now I wanted to provide my perspective on what start-ups can learn from the culture of CPG Brand Marketers.

#1 – The Consumer is Boss:

This is a mantra that was first coined by AG Lafley, former CEO of Procter & Gamble.  But you could say it is just an evolution of what David Ogilvy once said – “The consumer isn’t an idiot… she’s your wife.”   Consumer is Boss is a simple saying but it holds a universal truth for Brand Marketers who spend billions of dollars a year on market research.  Consumer is Boss is about letting the people using your brand / product guide your decisions.  This doesn’t mean that you follow a consumer blindly off a cliff.  But it also means you don’t add a feature just because it is a fun engineering challenge.

Now you might say that true innovators think the opposite of this.  After all, Henry Ford once said “If I had asked people what they wanted, they would have said faster horses.”  But that is taking the mantra of “Consumer is Boss” much too literally.  When Ford asked people what their problem was with transportation, they likely said that horses were too slow and that trains did not give them the freedom to go where they wanted, when the wanted. That understanding of the problems faced by consumers…the needs that they had in their lives…is what led Ford’s innovation.  Whether he realized it or not, he was one of the first people who practiced a Consumer is Boss mentality by understanding the motivations and desires of his potential consumers.  That conveniently leads to the second point…

#2 – Know Your “Who”:

Brand Marketers spend a tremendous amount of time focused on their brand’s “Who.”  Broadly defined, a Brand’s “Who” is their target consumer, the type of person with whom the brand has the greatest business potential…both in the short term and the long term.  The “Who” is a profile of a consumer and paints a picture for who that person is, what is important to them, and why they make the decisions they do.  If a brand has done a great job defining their “Who”, it makes other decisions that much easier.  Need to figure out if a product feature is worth investing the time / money to develop?  Check if your “Who” to see if that feature address a barrier your consumer has to using your product.  Need to create your marketing plan for your start-up?  Well then look at your “Who to determine where they can be most easily reached with a message about your product.  Your brand’s “Who” can be the foundation of just about every business decision your start-up makes.

I would argue that one the pillars for GroupOn’s success is that really understand their Who.  If you look at their About Us page, they list their company philosophy including this statement: “We sell stuff we want to buy.”  There is a lot of power in that short statement.  GroupOn makes their decisions about products to feature based on the things they would want to buy themselves.  They understand their Who, because they are their Who.  The company also knows that their other “Who” are local businesses that want to drive foot traffic into their stores and deal with expiring inventory.  Lots of startups approach this market with sophisticated tools taken from the online advertising realm.  But the GroupOn team understood the motivations of local businesses such that they created a very simple and practical ad format that got feet through the door and didn’t require a major onramping effort from merchants.  

Not all start-ups will be lucky enough to launch a business where they are the consumer they are trying to reach.  It is a challenge constantly faced by CPG Brand Managers and a reason why we put so much focus on really understanding our brand’s Who.

#3 – Design Matters:

Why can you recognize the Google logo even when they use different themed graphics on the home page each day?  And why has Method cleaning products been able to grow so fast in every category they enter?  It is because these brands have put a huge focus on Design, including incredible attention to their Brand Identity.  I am a huge believer in the design revolution that Jason Putori, Designer in Residence at Bessemer Ventures (formerly of Mint.com), is trying to bring to the start-up world.  Great design can be a major competitive advantage.   And this advantage is multiplied with a consistent use of the design in everything that your brand does.  You know an Apple product or message the second you see it.  With great design…and great consistency in that design… you can have the same for your start-up

#4 – Think about “Share”:

Share is everything to a Brand Marketer.  The career of a Brand Manager can be made or broken based on Dollar Share or Volume Share.  At retail, Brand Managers pay close attention to “Share of Shelf” or how many facings their brand has compared to competition.    In media, CPG Marketers look at “Share of Voice” to track the percentage of time consumers hear their brand message versus competition.  This constant, some would say obsessive, tracking of “share” is what keeps brand marketers focused.  Having viable and impactful measures for your start-up that you track consistently is something every business should do.  It helps you prioritize and keeps you focused on what moves those other important financial numbers (ie revenue, profit and cash flow)

#5 – Everything you do is part of Brand Building:

From day 1, your start-up is a brand whether you like it or not.  As Seth Godin once wrote,

“a brand is set of expectations, memories, stories, and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.”

When a CPG brand thinks about Brand Building, they take that to mean much than just advertising.  In fact, often you will hear Brand Marketers talk about “Moments of Truth”.  The First Moment of Truth is often the experience in-store from merchandising to how the product looks on shelf.  The Second Moment of Truth is about the experience after the purchase when people use the product for the first time.  While he didn’t use the language of “Moments of Truth”,  Sean Ellis of 12 in 6 is talking about that very thing when he makes this point:

Starbuck’s process of building their brand is a great example for any startup.  There was no heavy spending on brand advertising.  At Starbucks it’s all about the brand experience.  They obsessed over everything – from the quality of the cups to the quality of the toilet paper.  The music, colors, furniture…  It’s all an orchestrated brand experience.

For a CPG Brand Marketers the process of building a brand involves every facet of the business from customer service to marketing to even your company letterhead.  While a start-up has many things they have to juggle, how your build your brand should always be near (if at) the top of the list.