On Episode 98, David Lemley is back to continue our chat about retail marketing. This time we focus on his time early on at Starbucks, which taught him a lot. He takes that education with him today to help him current client roster. There are some valuable lessons in David’s story—plus he gives us a look at the future.
On Episode 97, we have David Lemley in to chat about marketing in retail—he calls it retail voodoo. David was an early employee at Starbucks, and that experience taught him a lot. His company, Retail Voodoo, does brand strategy for specialty food and beverage brands. David’s expertise in brand strategy, innovation, consumer markets, and consumer behavior is deep, so I wanted to talk to him about retail marketing, what the retail landscape looks like, and of course Starbucks (which we get to in part two). But in part one, we get the low down on Retail Voodoo.
Innovation is the lifeblood of any brand hoping to achieve long-term relevance. After all, how can you pursue meaningful growth if you’re not offering products that appeal to consumers beyond your current audience? How can you keep your devotees in the fold if you don’t delight them with new things they didn’t know they needed?
Perhaps because the stakes are so high, we’ve seen that innovation can challenge a brand both internally and externally. When pursued without the right underlying strategy, there’s a risk that innovation might:
In order to fuel year-over-year growth, not just incremental short-term sales bumps, innovation has to move beyond basic line extension. What products would truly rock your customer’s world? What are the gaps in the market that no other brand is filling? How far can you realistically expand your offering?
When a better-for-you brand seeks our help identifying new products and new opportunities, we begin by gathering their team for an innovation workshop. Together, we do a deep-dive analysis that looks at:
Innovation isn’t just a function of whatever cool new thing your R&D team can come up with. It lies in the center of a Venn diagram where audience need, market opportunity, and brand strategy overlap.
We can’t overemphasize the importance of brand strategy in innovation. It is the Rosetta Stone for translating the brand’s promise from its current state to the future, from current audience to prospective audiences. Without it, you’ll risk peeling off your longtime fans as you chase new ones.
Developing new products doesn’t just impact your external audience; it can challenge your internal culture, as well. As we coach clients on innovation, we often find a disconnect between marketing and R&D. Staffers on the innovation team are fearless and scrappy and more focused on making an impact on the world than they are on their own careers. Marketing people used to be like this — think of the “Mad Men” era. We may be generalizing a bit, but we find that marketers today are typically afraid of screwing up and cautious about swinging for the fences.
In many modern BFY companies, R&D has a seat at the table, while marketing is on the sidelines. Tools of the marketing role — consumer insights, market research, futurecasting — are commonly used by product developers. What’s more, innovators are typically BFY consumers themselves, so they’re creating new things with their own lives in mind.
More than ever, we advise our clients’ marketing and R&D teams to work hand-in-hand. As the steward of the brand, the CMO ensures that new products or lines won’t confuse or alienate your loyal audience. Marketers should pivot their ideas about product developers — they’re not simply the crazy colleagues who foist off oddball ideas; they’re valuable collaborators. Suspend disbelief until you have a viable new product in hand, then determine if it fits within the brand, you have or a sub-brand, or a new brand altogether. Share data across all layers of the organization so everyone understands the audience and the market. Know that the process of creating new products can reveal gaps in the brand strategy, and vice-versa.
The only way to future proof a brand is to have ambitions that go well beyond what you’re doing today. R&D teams and marketing teams will have greater success at launching on-brand products when they understand how the two disciplines need to communicate.
Done right, innovation — whether it’s a line extension or a leap across categories — whispers all the right things to people who already love you and waves a banner that invites new folks into the tent.
Are your brand’s new product efforts poking holes in your marketing strategy? Are you chasing the wrong opportunities? Let us help you define the future of your brand.
We’ve been thinking (and writing) about brand a lot lately. Not just because it’s the heart of what we do, but because so many really smart people we encounter misunderstand or misinterpret the concept. They interchange the words ‘brand’ and ‘branding,’ mistaking the thing, a strategy-driven business asset, for the activity, the tactical approach of deploying that asset via marketing.
(Remember, we define a brand as first, a promise, and second, the way in which your company keeps that promise.)
As a result, many people misdirect the ownership of the brand. Worse, they skip past the strategic brand foundation and go straight to marketing.
We often meet with marketing executives who think they’re solely in charge of the brand. They’re not. Instead, they are the stewards and architects of how the brand plays out in the world.
Rather, the organization owns the brand.
Because our culture is built on consumerism, it’s difficult to elegantly unpack business, brand, and marketing from one another as they are so intertwined. Each cannot exist without the other, but there’s a distinct hierarchy. Brand strategy must underpin the business and inform marketing efforts.
Brand strategy touches all aspects of the business: HR, sales, R&D, operations, merchandising mix, real estate acquisition strategy, vendor preferences, and more. It unites often competing business units behind a single goal. In a marketplace of equals, it gives consumers a reason to buy.
Marketing needs to help the business identify strategic opportunity, and the business needs marketing to keep and communicate the brand’s promise.
Modern marketing is a holistic, adaptive methodology that connects brands with real customers and drives business results by blending strategy, creative, technology, and analysis. It’s a process of measurement, testing, and refinement until you get a combination yields a measurable increase in sales.
This all sounds like 20th century tactics, so what is the difference?
Modern marketing no longer revolves around the traditional 4 P’s: product, price, place, promotion. Today, consumers expect the brands they favor to have morals and values beyond merely great products. We call this the 6 P’s of Modern Marketing: purpose, people, planet, passion, personality, and profit.
You might summarize the old approach to marketing by citing a movie line: “If you build it, they will come.” Modern brands have to tell customers why they need to come. The competitive landscape now is so crowded that simply having a product is not enough.
To paraphrase author and speaker Simon Sinek, that means thinking about your why, not just your what. Why do you do what you do? Why do employees and customers align with what you do? Why are your products, your brand, and your organization essential to the world?
If marketing has pivoted beyond product, then the underlying brand strategy is more essential then ever. Brand strategy no longer an exercise in features and benefits that move SKUs, but an exercise in cultural anthropology that helps customers understand why a product is uniquely different and especially suited for them.
Brand strategy helps ensure that marketing is driven by the heart and soul of your purpose rather than focusing on commoditizing attributes such as flavor and function. It provides a framework to ensure that your marketing efforts are supported by an established, purpose-driven vocabulary. It guides you to authentically communicate with your tribe, instead of just broadcasting a lot of noise.
Based on a brand strategy, one that’s shared across the entire business, marketing is all about deploying that strategy and using real data to determine successes and opportunities. We’ll say it again: Marketing requires a test, learn, and refine mentality.
Your brand — your purpose, your social benefit, your reason for being — is a valuable business asset. Edelman’s Earned Brand Report suggests that brand purpose is as powerful in driving sales as a multimillion-dollar advertising spend plus earned media, combined.
When we engage with our C-suite clients, we talk about brand strategy as a form of organizational development. It helps you know what business you should be in, who should be on your team, what opportunities you should go after, what partners you should align with, what needs your company should solve, what products you should develop. And, yes, what marketing channels you should pursue.
Want to bounce some ideas off us? Drop us a line.
Better-for-you food and beverage has become the investment world’s industry darling. And with good reason. All but the most resistant non-believer understands that what we eat and drink and do to stay active have a direct impact on our health.
Combine this with the pace of change that technology affords entrepreneurial business, combined with the appetite for change of the typical technology-minded investor and it is just too fast for most incumbent brands. That’s why the longstanding practice of big companies buying startups to help them stay relevant is in high gear. And there’s no reason your company can’t be one their acquisitions and tomorrow’s breakout brand.
This white paper discusses a set of often unspoken expectations that minority investors, would-be acquirers and founder-owners need one another to understand in order to help you avoid getting swallowed up by anxiety.
The white-hot world of better-for-you food and beverage has more players from the equity world looking to get in before “old guard food brands” can discover the next rising star. A lot of these new players are holding companies and tech investors looking for a way to transition from Silicon Valley thinking to something more holistic.
This better-for-you flurry has got a strong head of steam. According to foodbusinessnews.net, the number of food investors has doubled in the last 5 years. Food has so much interest that its seems as though food & beverage investments now outnumber technology investments.
But this capital-infused high comes with its own challenges.
The tech investors tend to make their money by pushing people and systems to the edge. They are not accustomed to being in the people business and, sometimes, can have the attitude of disposable people and disposable relationships. Tech investors love ABC’s Shark Tank and sometimes fancy themselves as the sharks (and that is okay as long as the brand’s founder is aware).
Founders create a gem of a brand with their own tears, blood, and sweat. They live and breathe their company culture (even if it’s bad). So, while they are looking for capital to grow their organization, they are often reluctant to bring in partners who have a track record of being heavy-handed in operations, equipment, HR, and, well anything other than sales, marketing, and funding. This isn’t because the founders don’t understand these key areas as being critical to building meaningful, operationally significant brand systems. It’s more primal that that. Many founders, when faced with the specter of an investor putting multi-expert-hands in their proverbial pie, simply recoil. It makes many of founder-owners feel that potential equity partner or investor is only about growth at all costs — and when they don’t talk openly, the relationship is bound for the therapist’s couch (at best).
To work through this, the founder needs to ask questions of the core acquisition team and talk to other brands in their past and current portfolio. This is the only way to discover if the investor’s normal mode of growing an acquisition fits well with the culture of the current brand.
Food and beverage brand creators are running on emotion and will likely question their gut instinct in the face of investor bravado.
Once contractually together, investors will often push for changes that the founder owner hadn’t anticipated. This can be resolved during the due diligence phase if the founder owner can look at and ask the following important (and often undervalued) question. Will my new partners possess and behave with the same moral compass that we used to build this business?
Food & beverage founders face a common set of fears when seeking investors.
As a founder owner of a food & beverage brand, you will sleep better if you know and understand your would-be acquirer’s investment strategy. Are they looking for quick flips? Will they invest strategically in building the company out the way you envision or will they default to a specific point of view once the deal is inked?
Here is a simplified view of common equity partner philosophies.
Obviously the best kind of equity partner for a founder-owner who wants to stay involved is the shepherd investor. But how does a founder-owner determine precisely what kind of investor they are talking to?
We recommend having a list of prepared questions about their business practices and their past wins and losses (as well as references from both). Here is starter question to ask a potential investor:
In the last three years, what has changed the most in our industry?
They should be able to speak candidly about the changing nature of consumers, the evolution of their preferences and behaviors, and connect these insights to your brand.
Many other situationally appropriate questions can be formed through a meaningful SWOT analysis prior to getting into due-diligence conversations.
For both parties it comes down to fierce, upfront dialogue. Be true to yourself and your vision from the very beginning. Listen, ask hard questions, answer boldly and with vulnerability, and whatever you do, don’t tell them what you think they want to hear.
Looking for a branding partner that has helped investors navigate founder brands – you found us. Drop us a note and let’s talk.
When you were a kid, you probably begged your parents to let you have cookies before you had dinner, right? You wanted the sweets before you ate your vegetables.
Now that you’re running marketing for a food, beverage or wellness brand, you want the good stuff (cool-looking, trendy identity, and packaging) before you’ve had the good-for-you stuff (business strategy).
We’ll be the grown-ups here and tell you: No design until you’ve done the strategy first.
This design-before-strategy trap is becoming even more prevalent: We’re finding that about 75% of our prospective clients just want something pretty and they want it now. Why the rush? These are the most common reasons we see for moving forward quickly with design changes:
We get it. Setting the stage for an effective design or redesign takes time: The process we walk our clients through typically runs six to eight months. It’s intimidating: Research might reveal mistakes you’ve made; category reviews might show that your competitors are trouncing you at retail. It takes resources: You need to allocate a budget and secure the commitment from your leadership team.
And it’s worth pointing out that brand strategy does not equal creative strategy; one comes before the other, which is important to keep in mind when you set your expectations for working with an agency.
Design becomes a beauty contest. Let’s line up three splashy new packaging systems and pick one. Which one? The one the loudest voice in the room (the CEO) favors. This is a great approach only if your leadership team knows exactly how to pick a winning, on-brand, culturally relevant design that not only appeals to current customers but also captures a huge new audience. (I have met just two in thirty years who could do this.)
Design is just guess. Without the appropriate competitive analysis, trend forecasting, white-space mapping, and brand-driven positioning language, creative execution is a total shot in the dark. How do you make design decisions that will stand out on shelf, attract buyers, and stand the test of time if you don’t understand what the market needs and wants?
Design is a short-cut solution. You’re under pressure from retail partners seeking greater velocity, and you need a redesign — fast. So you skip the three months of strategy work and go straight to picking colors and typefaces.
Design is knee-jerk reaction. You’re just chasing trends in search of a sales spike. So you redesign every 18 to 24 months in response to what’s hot in ingredients, graphics, or food photography.
Redesigning becomes an endless cycle. When the creative execution fails to move the needle, and it inevitably does, the marketing team takes another swing at it. Bad design begets bad design, and pretty soon everyone thinks it’s the design’s (and the designers’) fault. It’s the natural outcome every time.
What does a smart redesign in our space look like? Check out Kashi’s 2016 brand overhaul. They updated the logo, dropping the swishy rectangular background and emphasizing the leaf motif. The mark plays a more prominent role on packaging, yet it’s still familiar to fans. New boxes feature super-close product photography on a stark white background. A primary typography system reinforces the brand’s iconic green. It’s a pretty major redesign, but still completely in line with what the brand was before. The Kellogg team clearly built the redesign against Kashi’s existing brand strategy and in response to the marketplace, instead of changing for the sake of change.
And we’ll bet that Kashi’s marketers won’t be doing another redesign anytime soon.
You only have to look at Coke and Pepsi to know that a brand’s design can last for years. They hang on to those design systems because there’s so much equity — customers freak out if the brands make even the smallest tweak.
So, that last design your brand team unveiled … How’s that going? Not what you wanted? Thinking about a do-over? Let us guide you through it — the right way.
The “4 Ps” model has been a foundation of marketing management since the 1960s:
Product + Price + Place + Promotion = Marketing
If you manufacture a product, price it right, make it accessible to shoppers, and spread the word about it, you make the sale. Easy.
We’re here to declare this 50-year-old formula dead.
Product doesn’t (really) matter anymore. Patagonia a great example: Yvon Chouinard started the company in the ’70s, selling climbing equipment; now they’re in the food business. You can’t win on price, because Walmart has muscled brands into discounting submission. Place is irrelevant: Thanks to Amazon, people can get any product shipped anywhere. And you can’t out-spend the big brands on promotion.
Consumers today seek authenticity from the brands they buy; they want to know what’s in their food, and they expect companies to have morals and values. Now more than ever, people use brands as building blocks of personal identity—they don’t just buy your products, they view you as a reflection of themselves.
Consumers’ expectations of brands are even higher in the naturals category because those who are willing to pay more for natural products care not only about what you’re doing for them but about what you’re doing for the planet.
We see it: Many brands are struggling to be relevant in the face of changing consumer preferences. They’re increasingly pressured to do more with less and are vulnerable to better-organized, well-funded competitors.
So we guide our clients to focus on a mix of six marketing ingredients:
1. Purpose
This is your mission, your higher calling, your reason for being, beyond making a profit. What’s your contribution to society or the planet? This should be so well defined that you don’t even have to think when you’re asked about it. If it’s not ingrained in your brand’s DNA, you have major work to do.
2. People
Two components here: internal and external. How do you treat employees—not just your office staff but your manufacturing workers? Wages and working conditions are key indicators. Outwardly, what’s your giveback to your community? How are you pouring profits back into supporting your purpose?
Our client Loma Linda is a great example of this internal/external people focus: The world’s oldest vegetarian brand has a manufacturing facility in Rocky Mount, NC, a community of working poor. The founder raised wages, gave every employee food once a week, and taught them how to cook with it for their families.
3. Planet
Do you have a visible, transparent end-to-end manufacturing and supply chain? Not just for your products, but your packaging as well? It’s a challenge: All of the natural snacks brands we know want to put products in pouches, which are not recyclable or renewable. We’re constantly pushing clients to find different options; cans, for example, while not especially sexy, are sustainable and a package of choice for Loma Linda.
4. Passion
This is your why—it underpins your purpose and drives your people. It’s your origin story. Successful brands have a battle to fight, a wrong that they seek to right. Your enemy isn’t your competition; it’s a challenge that your products help people to overcome. Nike’s foe isn’t Adidas—it’s the voice in all of our heads that says, “you can’t.”
5. Personality
Your brand should sound like no one else; in fact, it should be contrarian to your competitors. It should speak in a language and tone that calls out to your tribe. For example, KIND’s core message—“Do the kind thing for your body, your taste buds & your world” wraps a basic message about health and sustainability in a larger envelope of kindness. It’s a great display of brand personality.
6. Profit
Duh. But some passion brands let profit fall by the wayside in pursuit of the higher calling. We’ve watched founder/owners mistakenly believe that being successful in the business they’ve built equals selling out. So they don’t pursue the right relationships, they let growth stagnate, they get stuck with a $25 million business that costs $30 million to run.
If you’re a better-for-you brand, having a good, wholesome product with clean ingredients is a given. You have to stand for something more: sustainable sourcing and manufacturing practices, livable wages for workers, commitment to the environment. You need a prominent, passionate founder (that’s you) with a great backstory and a voice that echoes a siren song to your people.
To this 6 Ps of Marketing, we’ll add a seventh: Partner. That’s us. We’re here to help.
We all agree that brand strategy is vital to your business. Profit, loss, fame, or ruin all hang in the balance. Since getting it right is critical and fortune favors the well-prepared, Retail Voodoo created our own brand strategy checklist toolkit to drive all client engagements.
Over the years, we’ve helped hundreds of clients evolve their businesses through brand strategy. So, we’ve learned a few things about how to make it stick. And we believe the journey of developing a comprehensive brand strategy is best broken down into three realms:
Just like people, when your organization’s brand strategy has clarity and alignment in these three realms, the outcome is strength and confidence, powerfully focused on the future. In this first installment of our brand strategy toolkit, we explore the physical, external forces that influence the mechanics of your brand. The external forces or physical aspect of brand strategy will help us see the way toward meaningful and long-lasting differentiation.
For brand strategy to be successful and lucrative, your team not only needs to understand but collectively buy-in to the ways in which the outside world shapes your brand’s reality. Let’s look at the difference between a competitive audit and competitive advantage with the goal of using both to put shape to audience mapping through the lens of trend analysis.
What is it?
The basic version is a review of all the competing brands in your space and how they communicate. But this is just the beginning. A meaningful competitive audit also looks at offerings, events, and circumstances competing for your audience’s attention and dollars.
The “Retail Voodoo Way:”
We assess all of your competitors with this checklist. We study their social media streams, public relations, consumer-facing communication, in-store, and online experience. We then benchmark your brand against that information.
What you can do with it:
When armed with a robust competitive audit, your company’ has the power to change from emotion-based marketing to differentiation based communication. It also lays the foundation for seeing innovation from a strategic perspective rather than merely opportunistic.
Questions to ask:
1. Do we know our real competition?
2. What adjacent categories are consumers looking at when considering our brand?
3. What other businesses and products might we make if we had clarity?
What is it?
A comprehensive profile of who currently purchases your brand.
The “Retail Voodoo Way:”
A meaningful core audience map goes beyond demographics by placing the people currently buying your brand into an audience-to-be universe. We use primary research to map this and find out who is different and where things overlap.
What you can do with it:
A research-driven core audience map gives a company new power. Not only does this allow for easier persona creation in sales and marketing, but helps leadership and product development get into new businesses and get out of others.
Questions to ask:
1. What primary research are you using to build your current audience map?
2. Who else in your category shares the same audience?
3. Who would you include in an audience-to-be map?
What is it?
Admit it, you think this one is obvious. But remember, there are 300 choices of toothpaste. But competitive advantage isn’t simply what you make, who you are, and how good you are at the 4 P’s of marketing (product, price, place, promotion). In our world, it’s much more.
The “Retail Voodoo Way:”
We look at competitive advantage as a three-legged stool. First, we determine what your company does or makes better than anyone else. Then we look at whether you have proprietary ingredients in your matrix, or not. Finally, we look at who is disrupting you – along with how and why. And when appropriate, we look at which competitors and adjacent categories your brand can disrupt.
What you can do with it:
Once your team understands your distinct and ownable differences in the competitive landscape, your brand has a chance to move from competing on price and being in the right place to being sought out and commanding a premium at the same time.
Questions to ask:
1. What market conditions exist to give us clear competitive advantage?
2. How and why are we different than others with similar offerings?
3. What needs to change internally or externally for our brand to have a stronger advantage?
What is it?
Trend analysis for branding is different than the financial world. In branding, history does not necessarily repeat itself. In brand strategy, trends are social proof.
The “Retail Voodoo Way:”
Since brands and branding run on the backbone of modern culture, it is imperative to anyone crafting a brand strategy to have insight into what’s coming next. But that takes more than following the Kardashians on Instagram. We believe data, shopper insights, and emerging cultural preferences are the strongest predictors of trends that brands can leverage.
What you can do with it:
A validated trend report provides management with confidence to move boldly toward a new future, create new offerings, and stop producing items that no longer fit the cultural norm.
Questions to ask:
1. How do our products and services fit into modern society?
2. What social proof do we use when evaluating our innovation pipeline?
3. How might our business change and grow by paying attention to trends as part of strategy?
In our next installment of our brand strategy checklist, we will focus on the psychological aspects that shape your brand.
We here at Retail Voodoo are big fans of ProBar. Do you know it? We’ve been buying them for sometime now. You can find them in your local Health Food store, Whole Foods, or REI. They are very wholesome, filling and just plain yummy. That said, I’m confused…like shopper confused. A couple of months ago, I went to buy my favorite, the Superberry & Greens, but what happened next is a tale of packaging tragedy, a story of beauty over brains. I saw new packaging, quite lovely new packaging, but all of a sudden, greeted by a wall of orange, everything looked the same. I had to squint and spend time discerning if I was buying the correct bar.
The whole label hierarchy broke down, and while I meant to leave the car double parked and grab my fav, I ended up getting a big fat ticket instead (*LIE*). Don’t let beautiful packaging override brains. Make sure you manage the information hierarchy correctly, and for goodness sake, change colors, or include high contrast visual cues to make it easy for those of us too addled to read on the fly to buy our favorites.
