Platforming Brands Add Households the Exactly Wrong Way

Before my time, marketing scientists established that adding households is crucial to growth in consumer brands, especially when the purchase cycle is long (e.g., condiments, soap, cars, furniture).

In consumer goods, there is a common tendency to spray out the products even in unrelated categories with the tiniest thread of semantic connection to the core. For one thing, this has a more precise ROI than almost any other growth tactic.

And it also tends to add slivers of additional households the farther away you launch from the core category. But the incremental households are meager in the vast majority of cases. 

If brands persist like this, they may have more than 20-25% of revenue from more than 20-25% of households. Why does this matter? Because it reduces the power of brand storytelling and marketing. Primarily, you will market to the core and so the smaller categories only get the benefit of trademark reminders. 

But even more crippling is that you may get tempted to use brand storytelling more appropriate for billion-dollar brands, ads that are so vague and silly that they can no longer persuade new households to join the core. And, so, media devolves to pure reminding way too early in the development cycle of the business.

CPG brands scale on the backs of 1-3 categories. All the way to one Billion dollars. This is more or less a proven law of brand formation and strength. Consumers want bands to be focused. It is a social need, really. Only greedy operators want to keep launching products because they cannot emotionally tolerate anything less than a 10% knowable, zero-risk, immediate ROI (the retail or distributor purchase order).

Dr. James Richardson

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