99 points on marketing, branding, product and the works to get you thinking

Ramblings by Rohit

2019 was a rather lukewarm year professionally as I kept coming up with terrific ideas for side projects and kept winging them everyday. As a catharsis to my analysis - paralysis, I spent the last 15 days doing 2 things (a) Reflected on all the marketing activities I did this year (b) Deep-dived into a variety of marketing books, blogs and newsletters to refresh my own understanding.

I summarized this into 99 points shared below. These are in no particular order and are more like pointers that you will scribble on a whiteboard during a brainstorming meeting. Not comprehensive or prescriptive. I also thought that the last day of the year is the best time to start a newsletter.

You may find this utterly useless or some of it useful or all of it useful. If you find it mildly useful, do subscribe to the newsletter ‘Seeking North’ where hopefully I will be able to produce more content which you will find mildly useful in future.

Product

1. Obvious point first - There is no substitute to a great product. No amount of VC money (think WeWork), advertising (think Microsoft Vista or Vanilla Coke) or celebrity endorsement (Pan Bahar and Pierce Brosnan) can give any tailwinds to a bad product

2. A good product starts from a great insight. A great insight is a ‘a piece of actionable information that directs you to the solution of a problem that someone is facing’.

3. A problem is an ‘unmet need of a group of people’. It could be emotional (need to have a friend/need to have a relationship) or physical (need to spend less time washing clothes/need to spend less time commuting) or a combination of both (need to read to appear more knowledgeable/need to lose weight to look better)

4. A great insight seldom comes from expensive market research. The two most common ways to get great insights are (a) Your own deep and personal connect with the problem (think Dropbox/AirBnB) (b) Direct connect with customers (think Surf Excelmatic/Netflix) who are struggling with that problem

5. On most occasions the company/founder/product manager comes up with an idea or a hypothesis based on his personal connect with the problem he is facing

6. In such cases the holy grail for go/no-go is ‘to understand if your deep personal connect with the problem gives you an insight to a solution that is remarkably better than the available options people are using’

7. Remarkably better = not 2X or 10X better. Perhaps 50X or 100X better, because after this stage, at every stage, the ‘level of being better’ (which is qualitative) will keep on nosediving

8. Remarkably better = Saves time/saves money/creates money/saves life/etc.

9. Remarkably better = Anything that ‘saves’ something (time/money/resources) is usually valued much more by people, than something that generates something (money/resources). That’s the way humans are naturally wired - our sense of loss is greater than our sense of gain

10. Available options = You have to look at the options in the right context. You may be creating a music discovery service and think of YouTube, Spotify, etc. as the available options. But people may be discovering music on Instagram and TikTok

11. Available options = The problem may actually be wider than you are expecting it to be. For instance, you may be trying to solve the problem of indie music discovery for customers but the problem may actually be wider - bored people looking for any source of entertainment for short spans of time

12. The problem defines the available options for people and not vice versa

13. Available options = People may not even be using any available products to solve the problem that you think they have and just be living with the problem

14. Understand = The only way to understand if your deep personal connect is remarkably better is to talk to the customers (direct connect with the customers)

15. Understand = This is not a one time step and is more of a recursive loop as every time you will talk to the customers, your own understanding will change and then you have to go to the customers again with a new hypothesis

16. Understand = There is no point going to your customers with open ended questions or ‘Tell me how you transfer files from laptop to your mobile’ or “what are the features you want to see in a smartphone’ (answer - everything!). It is important that your deep personal connect with the problem is distilled into a set of hypotheses and then you test these hypotheses by talking tot he customers

17. Direct connect with customers = It is not enough to just spend some time with the customers asking them questions about your product. It’s because (a) customers at times tend to say stuff that they know you will want to hear (b) they may themselves not be aware about the problems they are facing (c) they may just want you to bugger off.

18. Direct connect with customers = You need to spend time living with your customers and observing them as they go through their daily tasks and wait to see the various context/situations/use cases in which the problem arises. This will allow you to see the (a) available options they are using to solve the problem (b) understand if your insight will lead to a solution that is remarkably better

19. Direct connect with customers = At times minor changes in customer’s context can lead to a massive difference in the way you go forward. For instance, take the problem of listening to music. A customer listening to music in the morning uses a pre-curated playlist as he is driving but in the office has time to search through different songs and in the evening at home may be having a party and hence uses a pre-curated party playlist

20. Direct connect with customers = Hence, it is essential to have (a) 24 hours understanding of customer’s daily tasks (b) All possible scenarios in which the problem you are trying to solve can surface during those 24 hours

21. Direct connect with customers = It is often debated which customers you should observe/speak to? Heavy users or light users. It is always better to go to heavy users of the category in which you are trying to solve a problem - heavy music listeners, people with long daily commutes, people with interest in high fashion, voracious readers, etc. Because (a) you will get more use cases (b) more context to the use cases (c) these users will most likely be your first customers

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Distribution and Customer Acquisition (For digital products)

1. Even a great product needs great distribution to reach its customers. You cannot build a product with vacuum around it and then expect customers to miraculously reach it

2. The distribution strategy should be a part of the product development strategy and not an after thought. In the age of constantly shrinking attention spans, proliferation of ‘there is an app for this’ and plummeting cost of creating a digital product, it needs a focused approach to get your product to its audience

3. Each type of product is usually aligned with a set of channels which can be used for distribution and customer acquisition, which is usually defined by the product’s attributes. This is called the ‘Product-Channel Fit’ (as propounded by Brian Balfour) and it is very expensive and difficult for products to break this fit

4. There are essentially three types of digital distribution types - Paid marketing, Virality, and Organic. Usually products are able to straddle 2 of these partially and one of these fully

5. Paid marketing = SEM, programmatic, Social Media and the works. This essentially works for products which have these attributes (a) Product is able to demonstrate its promise in a short time once the user starts using the product (b) The product appeals to a large set of users across multiple use cases and is not a nice product with specific use cases (to get enough reach on paid marketing channels) (c) It is a paid product or at least a freemium product to support paid marketing in the long run

6. Paid marketing = If you are building a product that depends exclusively on paid marketing, then you need to rethink your product strategy or have a terrific monetization strategy as sooner or later you will run out of (a) money (b) people who can see your ads

7. Paid marketing = If you are building a product for niche audience (think classical music app for connoisseurs, VOD app to show only classic cinema, art appreciation app for renaissance art, etc.), then you should stay as far away from paid marketing as possible as the audience may not be large enough to get you low enough Customer Acquisition Cost which works for your unit economics. Instead, look for organic or virality (more on it below)

8. Paid marketing = When in doubt, optimize your marketing for reach. It is always better to reach out to a larger set of people a few number of times than a smaller set of people many times. Also, most people tend to be more similar in their characteristics and buying behaviour than you would want to believe

9. The exception to this rule is when your product is creating a new category (dropbox or box for file sharing) in which case optimize your marketing for conversion because there is no historical buying behavior for such cases

10. Paid marketing = In any case, the CAC of paid marketing should be factored into your pricing model for your product (if it satisfies the product attributes mentioned above), unless you have Softbank as your VC which can pump-in IPO level money without an IPO

11. Paid marketing = As a marketer, you need to test and iterate through the various options available within paid marketing spectrum to identify the ones which work for you. It is better to test a smaller number of options rather than all the options at once. This way you can compare and discard the ones which do not work for you

12. Paid marketing = All other things being equal, cost per ‘metric you want to measure’ should be the driving force for deciding on which option works for you. It could be cost per lead, cost per song streamed, cost per 7 day retention, etc.

13. Paid marketing = In continuation with the above point, diversity for the sake of diversity is meaningless. For instance if a combination of Facebook + Instagram is giving you the lowest cost, it is illogical and irresponsible to ‘try out’ programmatic or SEM for the sake of it. Stick to a winning combination

14. Paid marketing = Even if you are using more than 3-4 paid marketing options, a bulk of your goal will usually get achieved by 2-3 of these options. It’s like Pareto’s rule applied to paid digital marketing. Thus, with each additional option you chose, the incremental ROI on the metric you are chasing will be lower and CAC will be higher. Another reason, not to go for all possible paid media options and use test + iteration to select the ones which work for you

15. Virality = Distribution through virality means that the products are shared by the users with other users digitally to (a) show-off (b) as part of a use case (such as to communicate)

16. Virality = There are only a certain types of products which align with virality as a distribution/acquisition channel (a) The value of the product for users increases every time the product is shared (b) The product has ‘sharing’ as a built-in feature and the product allows easy sharing (c) the product solves a problem that is focused and needs a one step quick cycle solution rather than long drawn process (think Whatsapp and Dropbox vs Asana and Github)

17. Virality = Virality has to be built into the product at the time of product development itself at multiple levels. It could range from simple things as having a link at the bottom of the mailers being sent by Mailchimp to one click invitation to phone address book used by LinkedIn/Facebook to the product itself being viral (Wetransfer file sharing - everytime a file is shared, wetransfer as a whole product gets shared)

18. Virality = Contrary to popular belief, paid marketing cannot ‘create’ virality. However, it can extend the period of virality and the reach of a viral product

19. Virality = If you are developing a niche product, viral cycles are short and almost impossible to achieve

20. Virality = In most cases, virality once attained, lasts through a few cycles, after which it has to be supported by paid marketing to increase reach. For instance, you can reach out to all your early users through virality but to reach to the other half of the user curve, paid marketing will be needed

21. Organic = Organic typically refers to users reaching the product on their own (such as through search engine or through a piece of content on the website or through a product review, etc.)

22. Organic = There are certain types of products which lend well to organic channels (a) They are solving a focused problem for their users (b) the users in the category don’t have a fixed consideration set for buying and are motivated to expand their consideration set (c) Typically B2B products or products with very high levels of engagement fit into this bucket

23. Organic = Organic channel ramps up slowest, compared to virality and paid marketing channels. This has impact on product growth and hence if your product aligns with organic channel, you need to be sure about the growth numbers you are projecting

24. Organic = You need to be certain that you are operating in a category where the users are motivated to search for a product. For instance in Higher Education space, people search for multiple universities before making a decision, however for buying a magazine subscription, people may not search at all (paid marketing works better here)

25. Organic = Two of the most valuable options here are (a) SEO (b) User Generated Content. The purpose of both of these is to do a Google Search Page (or any other search page such as YouTube) land grab and be among the top 1-3 links

26. Organic = Your website should be (a) running top notch SEO (b) UGC should be a part of your product strategy

27. Focus of distribution - heavy users/light users. Increase penetration and increase frequency of consumption. Increasing consumption per use does not work

28. Last words on this topic, don’t go and chase the next big shiny thing. Marketers’ favorite interest area is to explore the next media channel that will disrupt the existing landscape and we are often biased towards any new shiny thing. So before you sign-off on that multi million dollar TikTok media plan, do think if it is giving you (a) higher reach (b) at lower cost per metric you want to measure (c) is not against your brand’s known associations in the minds of customers

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Segmentation

1. Let’s address the elephant in the room. Segmentation is not dead and is still very relevant to how marketing works (I know legends like Bryon Sharp disagree, but it is ok)

2. The death of segmentation is usually associated with the phrase that ‘people are more similar to each other than brand managers want to believe and most products appeal to most people’

3. I also wrote something similar in one of the points above and the grave mistake in this phrase is that it misses the most important part of any marketing activity - Context!

4. Segments are created so that any product/brand with a specific benefit/problem solving, can be communicated through a clear value proposition to that segment

5. Segments which read like this: ‘18-34 year old males who live in tier 1 cities and with HH income of more than 1 lakh per month’ are dead, there’s no doubt

6. But such segments were evolved for the convenience of brand managers by media selling companies (print and TV) as these were the only metrics the media companies could gather about their readers through syndicated research (Nielsen, IMRB, etc.) and TAM data

7. Just because you use digital media, there is no need to use all the segmentation available to you and over-segment. You can reach out to people who like Taylor Swift and people who like Katy Perry and people who like Brian Adams. Or you can just reach to the people who like Pop music. You get the point

8. One of the key issues in over segmenting is that your product misses out on key users. For instance, if you are an app which provides fantasy league for Basketball, you may want to target ‘rich youngsters’ as their affiliation to Basketball may be strongest (a logical assumption). However, while the percentage of middle class youngsters watching basketball may be lesser, the total number will still be higher than the rich youngsters as there are more middle class HH in India. Thus, by narrowly defining a segment, the product may miss out on a larger lucrative segment.

9. Hence, experts may say that segmentation is not needed in such scenario and a unsegmented marketing approach will work better (Bryon Sharp and followers have this way of looking at segments)

10. There are three fallacies with the above argument: (a) It assumes that you have infinite media budget (b) Large number of people are similar in large number of ways but large number of people are also dissimilar in smaller number of ways (c) Value propositions are not static

11. Media Budget = While every brand marketer will want to reach out to every potential customer, the reach is constrained by budget. With large media budget, you can pursue an unsegmented strategy

12. If you are a start-up or a brand with limited budget, you will want to access some part of the population before you approach the full population. In such scenario, dividing the population into segments is not an academic exercise, but a practical one

13. Similarities and dissimilarities = People are similar in many ways when it comes to broad lifestyle choices - eating, drinking, dressing up, entertainment, communication, etc. However, it is impossible to paint everyone with same broad strokes when it comes to every unmet need. Even within the unmet need of ‘staying connected with family and friends’, people use Facebook, Instagram, Snapchat, Whasapp and other apps because of slight difference in the way we want to communicate (Instagram = show-off vs Whatsapp = intimate communication)

14. Value proposition = Value proposition brings the benefit of the product one step closer to the customer. So if brand/product attribute of a printer is ‘it uses 30% less ink to print’, the benefit is that ‘it will cost lesser per print for the customer’, the value proposition is ‘print and store more photos of your loved ones’

15. Value proposition = An unsegmented approach assumes that the same value proposition will appeal to everyone, which may work if the product has a simple benefit which can be communicated to a large set of people (think of a washing powder or a car). But in case the product is more nuanced (Basketball fantasy league) different value propositions will be needed to appeal to different types of people

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Positioning

1. Positioning is like providing a context to your brand/product by associating it with phrases/words that the customer understands. It is completely possible to sell your product well without any context but having a well-crafted context helps

2. Positioning also means moving your product/brand from attribute to benefit to value, while keeping the context in mind. The ‘value to the customer’ is the position that your product will occupy in the customer’s mind (AirBnB - cheap, clean, trustworthy, real experience, etc./Mailchimp - mail solution, cheap, reliable, old, etc.)

3. Context usually includes - competitive alternatives, category and market in which you want to sell you product

4. As positioning is about contextualizing the benefit your product offers (value to the customer), it is aligned to a segment. This does not mean that you cannot position your product across multiple segments (because you totally can). However, you will need different value statements for each segment

5. There is nothing like absolute positioning. Positioning of your product is always relative to the comparative alternatives that the customer will consider for the specific unmet need 

6. It is important to have a positioning map of your product, relative to your comparative alternatives. It is usually a 2X2 chart with X and Y axes being the 2 key associations you are trying to build (for instance cheap and fast, premium and smooth, durable and cheap) and you plot this on the basis of feedback from customers

7. It is also quite possible to do this on a multi-variate basis. In this case you create a ‘spider chart’ with multiple axes, with each axis reflecting one association of the product

8. It is important to mark the desired position of your product vs. the actual position. It is quite possible that the desired position is not the same as actual position, in which case course correction is needed

9. Positioning is the first step to branding. Simply speaking, branding is a set of activities which strengthens the positioning in the minds of the customers - communication, advertising, product experience, customer service, pricing, etc.

10. Advertising is just one way to build positioning. It is totally possible to build positioning without spending a penny in advertising

11. Again an obvious thing - positioning should be based on product’s attributes and not on wishful thinking. So if you are saying that your music app has the largest collection of indie Jazz music, then it should really have it

12. It is important to position your product on points of difference (this you have and they dont) and not on points of parity (which both of you have) with your comparative alternatives. Points of parity are usually category definers and it’s going to be a wasteful exercise (you cant position your phone as ‘it has a camera’, you need to say how your phone’s camera is different from the alternatives)

13. There’s a lot of debate on two points related to positioning - (a) is it needed at all in today’s world of short attention spans and arithmetically driven digital marketing (b) How sharp should be your positioning

14. Positioning is a must if you are willing to invest in building a brand as brands provide long term benefits. However, if (a) you are looking to run the business only for next 12 months (b) are still in product development stage (beta/later/earlier) and hence still deciding on product attributes (c) have no budget to invest in brand building, then positioning is not for you

15. With the ever reducing attention spans, positioning becomes more important rather than less. You want to communicate about your product’s value to your customers in the shortest possible time, which is exactly what positioning does

16. You cannot force positioning without your product having points of difference from your comparative alternatives. And in such scenario, you need to go back to product development to build points of difference into your product

17. The extent of sharpness of your positioning is determined by a variety of factors - (a) The number of people for whom your product is solving a problem (b) The relative importance of the problem in their lives (c) Positioning of comparative alternatives (d) How much better your points of difference are, compared to the alternatives

18. If you are solving a relatively large/important problem even for a small set of people, you can have a very sharp positioning. On the other extreme, if you are solving a relatively simple/small problem for a large set of people, it makes sense to have a broad positioning (which also means only 1 or 2 segments, which automatically simplifies positioning)

19. If your competitors have sharply defined positioning, then you will need to counter that through a sharp positioning for your own product

20. Points of difference usually come from innovation in the category. Many of these can be easily copied and hence are useful for a shorter time period now, compared to earlier

21. Positioning is not a solution for poor distribution or weak sales team

22. Price is the worst attribute to position your product

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Branding

1. Customers use brands as a way to make sense of a world getting more and more complicated. Brands provide a sense of trust to customers and eases decision making

2. Brand is basically a sign that evokes a signal in customer’s head. The sign could be a logo, color, smell, sound, etc. It could also be a person (think Trivago)

3. All brands aspire towards only one signal - Trust. Once the customer trusts the brand wrapper of a product, that brand can last longer and command a premium in the market

4. Building a brand means providing consistent experience to customers at all possible touchpoints - product, website, social media, point of sale, e-commerce, sales persons, etc. Consistency is one of the most under-valued aspect of brand building

5. Brand building activities build what Byron Sharp calls ‘mental availability’

6. Typically customers will have one trusted brand in each category which will occupy the Top of Mind position. This is the brand which will be the first brand that people will recall in a spontaneous test in a category

7. Trusted brands are typically category leaders in the categories they operate. This means that not only they are the preferred brand for heavy users of the category but when the light users of the category decide to purchase, they will purchase the trusted brand more often

8. If you are operating in an established category (i.e. your product is not trying to create a new category), it is important that your branding activities focus on creating brand salience. Brand salience is essentially the mental availability of your brand in customer’s head at the time of making the purchase

9. One of the most contentious issues in branding is ‘brand extensions’ - taking an existing brand and stretching it across another category. Brand extensions, to put it mildly, are difficult to pull off in most situations

10. Brand extensions tend to work better if these conditions are being met (a) You are extending to an adjacent ctageory i.e. category which shares similar buying criteria as the current category (soap and shampoo/car and bike) (b) The brand extension carries forward part of the positioning to the new category (c) The new category has a set of people whose needs are not being met by the existing products

11. One of the biggest issues with brand extensions is that it if it fails, it ends up damaging the overall brand equity, even in the brand’s/product’s existing category

12. Your branding activities should be targeted at the light users of your brand or the category. Heavy users of your brand are already highly receptive to your brand’s messaging and thus there chances of lapping up any activity is much higher

13. The best branding activity for the brand is product experience and no amount of messaging/communication can elevate a poor product to a great brand over medium and long term (for short term it can)