PODCASTS / E27
AUG 01, 2020
00:19 Welcome to Episode 27, a reading from Ramping Your Brand on Iteration. Unfortunately, product is the most commonly overlooked source of underperformance in new CPG brands, especially the consumable good in the package. Package symbolism is a close second. Both are something you want to get right before you have unwittingly spread half-assed, meh tasting, confusingly labeled UPCs from Seattle to Miami and four different channels.
00:50 Yes, it is possible to pivot on product after a national rollout, but it could take many months for the new product to replace the old, depending on how slowly it is moving in some of your channels and accounts. If it’s a major reformulation, it could necessitate switching co-manufacturers. Gulp.
01:10 The odds are slim to none that the UPCs you first sell are across all consumer touchpoints, precisely what will ramp well over the long term. Trust me, Skinny Pop, Caulipower, Chobani, and other similar brands that scale immediately out of the gate strike me as pure anomalies.
01:28 Why do I make a big deal about this? Most founders do not have experience in industrial scale food and drink formulations. A commercial kitchen formula is not proof of concept that your product is industrially scalable. I wish it were so.
01:43 Most founders also do not hire top shelf CPG branding agencies to design their initial packages and brand identity. Today’s market is simply too competitive to tolerate the kind of amateurish designs that send no clear signals past the thalamus and into the consumer mind at the shelf, even after they peruse the package.
02:02 The kind of scratch your head, natural product that frequently went to market in the 1980s and ’90s survive primarily because the early consumers were ideologues and not representative of any scalable addressable market. The consumers of those products were, to put it simply, weird folks. They were happy to put in the extra work of figuring out what it was. They hated marketing and branding that looked too slick. After all, these are the people who drove miles and miles just to get to that health food store to shop for basic food items. That extra effort was part of their righteous rebellion against the mainstream food system, the capitalist machine, even The Man. Remember, at the time, the revolution still was not televised. Peace out.
02:45 Founders today have to accept that their initial UPC mix is essentially a beta software test. You won’t know precisely what is wrong across all touch points until you get it out there, build a community of repeat purchasing fans, and learn the attribute associations, driving scalable repeat purchase. Let your early fans help you fix the line.
03:06 There are two primary risks with any product iteration: tweaking that affects nothing, and virtual relaunch. Tweaking that affects nothing. Making tweaks, the consumer is unlikely ever to notice. You changed what about the font shadowing? You lowered the sugar grams from 22 to 20, huh? A virtual relaunch is a radical overhaul that loses many of your initial heavy buyers who haven’t fully memorized your trademark yet and were relying heavily on the package’s graphic designed to find you on each trip to the store.
03:42 Now let’s look at each of these risks in a bit more detail. So the problem with tweaking. Tweaks are the result of timidity and frankly, something I normally associate with Big Co. Too many times, I’ve sat in on endless PowerPoint-fueled torture sessions, focused on whether the parent brand should be moved up or down left or right, or whether the trademark color could switch a few pantones here or there. Increasingly, though, I’ve seen this apparently highly contagious thought virus spread among entrepreneurs who are supposed to be risk takers. Come on, folks.
04:15 Common examples of tweaking include updating the trademark font or font design. This primarily gets noticed by existing customers, but honestly, they’ll probably miss it if everything else looks the same. Nor is it enough of a design change to alter key velocity variables, i.e., how much they will buy. This is not going to create some huge behavioral reaction at the shelf. The only exception I can think of is if you originally used an unprofessionally small font and, voila, finally made it visible.
04:44 Obsessing over front panel certs. Among CPG entrepreneurs, this almost always means adding more certs and claims to a panel where there are already too many. I call it feature-itis. Clutter is deadly to clean, quick uptake and attribute outcome signaling. If you display too many symbols on your front panel, your panel doesn’t stand out on the shelf. For those consumers who do approach your product, you are throwing away a key source of communications control and allowing one time buyers many orthogonal reasons to buy you that will necessarily lead to deep engagement. You feed low quality trial, clueless, trial, random trial, et cetera.
05:24 Fussing with your brand story on the back panel is a great example of overly idealistic tweaking. It is based on the mistaken notion that your consumer is buying a narrative when they’re really buying food, beverages, shampoo, pet treats. The only time CBG consumers are buying a narrative is when they buy books. I don’t know how else to say it. Over time as repeat buyers, they may come to appreciate the backstory. They may also not give a rat’s petard about it ever. I have yet to see any scientific evidence that brand backstories cause repeat or help sustain it. They are great attention getters to initially drive trial, but pumping up trial won’t solve longterm velocity problems.
06:06 The primary problem with tweaking is less what is tweaked than the spirit behind the behavior, an unwillingness to make a bold, big strategic pivot based on fresh fan understanding. Unlike in a precision obsessed chemistry or pharmaceutical lab, in CPG, you need to wield a big iteration mallet. Otherwise the consumer just won’t notice or react. The consumer is not a molecule in a test tube. They’re distracted, impatient, hasty and assaulted with lame, irrelevant marketing 24/7. Unlike a molecule, they also possess an arrogant human thalamus that shuts out 90% of inbound signals all day long. Remember, too, that Big Co outguns you with more shelf space and communication resources than you would even know what to do with as a new founder. That is why, if you’re going to iterate product, you absolutely need to do something that is visually or otherwise sensorially huge, mongo, big, thunderous.
07:07 It should also be a research based decision, not the artistic guests of an otherwise talented graphic designer, copywriter or suspiciously well-dressed Tesla driving agency head. Multiple touch points may or may not need to come into play.
07:21 Virtual relaunch. The problem with completely redoing almost everything about your product but the trademark is that you may lose consumers and you may lose trust with the trade and investors. Look, if there’s a critical flaw and you found out too late, sometimes you have to pull the plug and restart. Don’t sweat it, but recognize that you will have a major storytelling challenge on your hands. Know your story about why you’re relaunching. Most relaunches follow a failed launch, and the retail trade is very well aware of the sequence of events.
07:49 So if you try to portray yourself as a tiny group making huge product changes strategically, you’ll still have to battle the relaunching stigma with all your stakeholders. Are you financially prepared for the scenario? Not to mention the fact that you could lose distribution and accounts if the relaunch is not carefully managed.
08:05 Relaunch is probably not even the right term. It’s more like “Here’s my new brand.” LinkedIn profiles are chock full of these stories if you scroll down far enough. It can work, but you need to keep it to a professional minimum in a tightly connected trade.
08:21 As I mentioned to Chapter 4, the kind of relaunch you desperately want to avoid is one in which the trademark changes. If the trademark is indeed most of the problem, then you may have no choice, but it’s important to recognize that this is essentially a windout. The new trademark, even in the same category, will be considered by all stakeholders including the consumer, as a completely new branded company. The fact that the same LLC launched it is immaterial.
08:46 If this intrigues you, listeners, please buy my book and you will learn about the middle ground, bold, one p-iteration.
08:55 That’s all I’ve got for this episode of Startup Confidential. And remember, always be safe out there.