OCT 1, 2020
00:19 Welcome to episode 31, founder archetypes, the brand worshiper. Yes, founder archetypes are back, folks. I’ve spoken already about creative founders, folks who love creating new products but hate running a business. I’ve talked about the annoying finance founders who overemphasize bottom line thinking at the expense of calculated risk-taking required to grow early-stage brands. I’ve talked about the many serial founders who don’t actually do well with the second business, or the third, after that initial win.
01:00 These are all archetypes pegged to different primary orientations to the external world around us, and from my perspective, they reveal hidden primary biases that founders have toward what drives growth in a CPG business, or any consumer brand. Products, cash, my industry connections. But this time, I want to address another archetype whose prevalence, honestly, I think is pretty low, but you know, I meet everybody, so I’ve met him, but I do think it’s growing.
01:30 These are the founders I call brand worshipers. They tend to be disillusioned exed agency and marketing execs, though not always. These folks believe that leaning hard on modern branding techniques and execution upfront, before even selling the first unit, will help them avoid the fate of many other overpriced commodities that do not scale. Does the veneer of branding itself command a premium? Does it generate repeat purchase for that premium? And what exactly do these founders not get about how real humans adopt premium products?
02:12 Well, to attack this, we got to start with the key, and the key is that last word I just said, which is products. See brand worshipers as an archetype; these are founders who believe fervently, religiously, that in commoditized oversupplied categories, like salty snacks or condiments, you have to lean hard on brand to create differentiation or even premium status. Lean hard on bread, what the fuck does that even mean?
02:41 Seriously, have you noticed brand never gets defined by these folks? Seriously, have you noticed that brand never gets really defined by these folks? That’s because I suspect, having spoken to many of them, that it isn’t real defined in their own minds either. It’s really an ego protection, for the most part. There’s certainly no data analysis with most of these folks; they haven’t done a million dollars in market research to support the brand essence they are presenting to us. It’s basically creative writing class gone mad.
03:12 brand, quote-unquote, is a tangible thing. I’m going to define it as the visual and linguistic symbols communicating the existence of your product line to consumers. This is the most literal-minded possible way I can define it. Branding, therefore, is the act of creating a coherent visual and linguistic symbol system that will help attract tension, create memorability, and drive trial in your category.
03:37 This is the point when you will hear people layer on an entire esoteric values component to their brand and their branding. Hopefully, [inaudible 00:00:03:50], hopefully, related to some ideal consumer audience somewhat connected to reality, or not, often not. I’ll come back to this layer in a little bit because it has\ to do with my own personal, professional definition of brand, which has nothing to do with what you just heard.
04:08 Okay, anyways, there are endless debates on how to do this tangible, literal-minded thing called branding, the symbol system thingamajig. The problem is that few of the people who have a preferred way of doing it tie it to business KPIs, really. It’s still largely presented an act of faith, so to speak. You’ve probably heard the term brand refresh before, well this is just the act of updating a brand’s symbolic system, and hopefully, Oh my God, hopefully, this has been based on some now recently accumulated data on consumers, and not just the ego of the branding agency that the client hired.
04:49 But enough with the definitional stuff. The problem with founders who lean on branding is that they tend to overemphasize the amount of trust created by modern professional branding symbolism, not to mention the fact that they confuse the meanings that they and their agency impute onto the symbol system when they overthink the shit out of it, versus what the average, really fricking time-stressed, time-starved, annoyed consumer is going to attribute to the same symbols at the shelf, or in their house, or in their hand. Come back to that later.
05:25 Look, consumers can definitely discern an amateur hack job, when it comes to branding, from a professional one, without any training in graphic design. And the reason for that is we all consumed so many brands that it’s hard not to have some pattern analysis expertise sort of built into the brain bone. We can pick up on the difference between trash and good, yeah. Most of us can also discern a dated branding job because it uses techniques that, again, we saw used by hundreds of brands decades ago when we were young. Techniques that modern brands just don’t use, for largely arbitrary reasons of fashion.
06:02 Look, much of branding technique is fashion, let’s face it, right? So it does sort of anchor you in time. And signaling dated in symbolism is rarely a great move when you’re launching a brand unless the whole point is to be ironic and nostalgic. It just makes you look out of touch, and looking out of touch and dated, it’s going to weaken that initial trust, it’s going to shut down a whole bunch of trial, and it’s going to really shut down trial for pretentious, wealthy, educated urbanites who value modern branding the most, whatever the hell it means at the moment.
06:34 I mean honestly, in food, if your branding is dated, the consumer will unconsciously wonder, is this really even going to taste any good, if the package looks like shit? So there’s a whole crowd of people out there, that’s exactly how they think. And they don’t just work at agencies. So despite this branding sensitivity among the general public, you know, the ability to tell crap from the good stuff and dated from modern, that doesn’t make branding techniques this all mighty powerful thing, Thor’s hammer of trial. Great branding doesn’t move product by itself.
07:05 I once did a statistical test of a random sample of premium food and beverage brands in Spins data. And my team and I, we tagged it based on a written down, a pseudo-objective scale of professional branding that we tied to empirical metrics. And my team couldn’t find a meaningful correlation between professional high-quality modern branding and unit volume growth over three years, because it didn’t matter. Consumers are willing to look past crap for something else in the premium world, and isn’t that interesting?
07:36 So why is professional branding, by itself, so ineffective in premium CPG? And I would argue in consumer packaged goods in general. Well, in 2020, the average adult has had so many disappointing experiences with professionally branded new products that they have no reason to assume that A. a new trademark, however spiffy and swiffery, equals an outstanding consumer experience, or B. a great looking sexy package equals an excellent consumer experience because it doesn’t. They’ve all experienced disappointment in the face of that professional branding.
08:12 There is no miraculous branding touchpoint, folks, that’s going to convert a passive consumer audience awaiting your branding brilliance. There is no data to support this, and I would challenge someone to show me the data that does. And you have to statistically weed out the other variables, folks, in a random sample. It’s a pain in the ass, trust me.
08:33 In the mid 20th century, consumers were much, much more naive about brands. This is Don Draper country. Don Draper could shove his professional branding right up your [inaudible 00:08:41], and you just took it, and you loved it, and you praised Don Draper because you didn’t know better. After all, professional branding was as sexy as I don’t know, the latest ETF fund. It was new, it was interesting. It’s not interesting anymore. It’s a baseline.
09:00 The pace of consumerism today is a million times faster, and we aren’t that excited about a new brand. We’re being assaulted on like five to six screens every day with new brands. Try me, try me, free trial. We are postmodern consumers. We don’t succumb to brands; we select them, like highly finicky marital partners, prospective marital partners, on the dating market. We’re looking for outcomes, and if a right product comes along that delivers the damn outcome in a new and exciting and better way, whatever better means, then we don’t give a shit what brand is on it or what trademark is, or honestly, if the font was that particularly original. It’s immaterial.
09:44 Brand loyalty in consumer packaged goods is notoriously low. Anybody who’s looked at the consumer panel data in your average category, and looked at the percent of any brands buyers who are exclusive buyers on an annual basis, knows exactly how low those loyalty percentages are. They’re generally less than 25%. Okay? So there’s plenty of options, people dance between that consideration set, and that’s life, folks. You’d be happy to be in the consideration set; that’s a victory in today’s world.
10:13 Excessive price promotions for the last 40 years straight, in all channels, pretty much that allow them is another reason that brand loyalty has eroded in the past 20 to 30 years because we’re being bribed not to care about brand. I hate to say this, and I don’t mean offense, but CBG sales executives have killed any hope of leaning on brand as the primary approach to anything in the sector. They killed the brand with the sale signs and shelf.
10:44 But the funny thing is that consumers will remember remarkable products and the trademarks assigned to them. And generally in that order. But it takes time for them to remember the new trademark because their more interested in the damn product and the outcome it delivers, and it takes more time when they discover the product in-store.
11:00 With low awareness brands, there’s often the lag time of weeks to even months before consumers can even recall the brand symbolism and even a trademark of a favorite new product. They generally have to go back into the pantry, or their cabinets, to remind themselves. Discreet product symbolism, however, they’ll remember immediately. It’s what drove the trial; it’s what creates memorability. With or without the trademark, or the general branding is even remembered.
11:23 Now online grocery, and it’s past purchase lists are helping here to eliminate the old problem that I just described. D to C brands that have superb video marketing, that’s burning multiple impressions of the trademark into the consumer’s mind before they even try it, is almost a world-class solution to this lag time problem I just described. Which, because it exists, shows you how inferior branding and brand is in the early years as a lever.
11:52 It’s background noise, folks. Generally leaning too hard on branding at launch, as part of your strategy, is based on a misguided understanding of the product adoption process as a human-centered process, operating at the level of the artifact, the product, the UPC. Smoke and mirrors from [inaudible 00:12:14] may attract attention, I don’t doubt that, at the shelf, if it’s particularly well done, but not necessarily trial, and certainly not necessarily repeat purchase and habitual adoption, which is what you need in CBG, if you want to ride the ramp that I talk about in my book of exponential growth.
12:30 And the latter is the primary reason I warn you not to be a brand worshiper because it distracts you from running a company built on happy. These repeat consumers like consuming your products, regardless of the fancy pants symbolism and symbolic system you dressed it up in. This product centered infatuation is what builds in exponential growth brand, especially from a position of undercapitalization.
12:55 branding is basically about trialing new products, so it’s not a powerful force in either repeat or attention in premium CPGs. In other categories, it can have a much more powerful effect, but when you need a repeat purchase, branding is not what you lean on.
13:09 So if you feel like you might be a closeted brand worshiper, then it’s time to step back and make sure you are connecting with your consumers to understand what they think about your product, your artifact. For all you know, the look and feel of your brand are just of interest to you and has little to do with them. This is what many people find out when they arrive at that brand refresh juncture and have to design a branding that is consumer-centered and not founder centered.
13:39 Brand worshipers tend to be designers and artists or ex-agency employees. They overestimate the power of their core skill set because they spent the whole damn careers focusing on these specific touchpoints and the erection of complicated symbolic systems. There’s nothing wrong with a professional package design or a super clever trademark; I’m not saying that, especially as trial driving mechanisms or trial supporting mechanisms, but don’t expect it alone to accomplish much in terms of longterm growth or traction in premium CBG. Your case to the consumer has to be much, much deeper than that. You need to capture a premium price repeatedly from a measurable minority of your consumers if you want a healthy efficient business.
14:20 The one thing that brand worshipers will find that works to their favor is that their beautiful brand presence will impress the shit out of retail buyers, investors, and just about everybody in the stakeholder ecosystem. All except the most important stakeholder, the consumer who has come to expect superlative modern branding as a baseline entry point, and is therefore not even remotely impressed when they see it on the shelf.
14:51 Be safe out there.