Marketing Funnel is still relevant but the connected world offers an unprecedented opportunity to craft and disruptor brands, especially within consumer packaged goods, to grow profitably and sustainably with an alternative: Brand Diffusion.
What is a Typical Brand Marketing Funnel?
Traditional Marketing Funnel starts broad on top with the initial goal as awareness of target market, a fraction of which translates to consideration, a few then actually purchase, very few purchase again and become loyal, and ultimately percolate down to a negligible % of brand advocates.
As a new brand, you typically focus on awareness. Since familiarity breeds liking, the aim is to first make consumers familiar with the brand, so they are able to recall and feel comfortable with the brand name. Objective is unaided brand recall, and a useful tool to achieve brand awareness is by breaking the clutter along with a clearly understood and remembered message.
This is where the consumer has the brand in her consideration set to choose from. When they feel the need to buy or decide to buy, your brand should be one of the options. Objective is to make your proposition clearly stand out for the problem you solve for the target consumer, and a useful tool during this stage is a campaign reinforcing the positioning.
This stage you compete with the others, in the consideration set, to make your brand most preferred for the target consumer. Objective is that they try the brand by choosing it over available options in the consideration set. A useful tool is distribution and communicating the superiority of solution vs others.
This is where you seek adoption by targeting current buyers and inducing repeat purchase from them. Objective is to make them try the brand repeatedly. A useful tool is reducing dissonance and re-affirming their choice. Distribution is a big driver, and a watch out is over-selling and under delivering.
Turning repeat buyers into loyal buyers. Objective is bigger shopping cart size than average and a higher frequency of purchase. A useful tool is improving the product offering, new product development, rewarding loyalty and creating rituals around product consumption.
This is where you create a tribe, an intersection of outright vocal advocates, loyal and responsive Brand Champions. Objective, in this stage, is creating memorable experiences for the tribe members for them to truly advocate the brand. A useful tool is experiential reward for advocates to feel both an inordinate sense of belonging and an emotionally charged experience.
Benefits Of Marketing Funnel
Broad and Instant Reach
You could go fairly broad, and that too instantly, in your advertising/storytelling. Consumers will self-select themselves based on their match.
Typical Pull Model
Model works on creating a brand pull with communication as the biggest driver. You track the leak in funnel and try to fix it with a unique approach for every stage of the funnel. But once the product is tried by the consumer, mere communication won’t convert them into repeat, loyal fans or brand advocates.
Drawbacks Of Marketing Funnel
Starts with awareness while loyalty and advocacy come later in the game. It is an iterative process to increase the width of the funnel.
You could choose to target only early innovators with mass media or social media and these early innovators would then spread the idea to early adopters thereby increasing the width of awareness funnel but again the typical, long process of consideration, purchase and loyalty would follow and would also narrow down the funnel.
You pay to target all but it is only the early innovators who respond first, especially, if it is a new brand. Also, the marketing funnel relies on the idea that it takes multiple communication attempts before the consumer moves your brand to the consideration or trial stage making it a very expensive exercise.
There is no real-time, two-way engagement or relationship per se, and data is not available for course correction. You could do brand recall surveys but that is again a huge cost and time consuming process.
Marketing Funnel Is For?
Existing Massive Distribution
If you have massive existing distribution with proportionate levels of awareness, and you need to create a campaign to promote offtake instantly, support launch at shelf, maintain or gain market share, then, moving existing consumers, in all distributed locations, along the brand marketing funnel will help your cause.
Mass Brands and Challenger Brands
These brands need to be top of mind with their consumers because they are playing the market share game and are usually value driven.
P&G defined first moment of truth(FMOT) as the first 3-5 seconds a consumer sees the package on the shelf, and concluded that 60% of in-store purchase is driven by FMOT. With the ever increasing digital permeation of our lives, consumer now goes back and forth between various clicks and mortar touch points before they buy.
In any case, for brands that hold the number 1 or number 2 position in the category, market share is both a function of awareness and distribution. Consumers can suffer from memory decay especially at the time of purchase leading to a loss in market share.
Why No Marketing Funnel For A Craft Or Disruptor Brand?
Has little to no resources, has a very small base of consumers, hardly a significant distribution and usually a premium price point with higher cost of goods sold.
But, has a few loyal, hardcore fans who swear by the brand because of its superior value proposition to a niche group of consumers like free of certain allergens, of evil ingredients like sugar, or local and environmentally inclined.
A totally unique product that appeals to the early innovators and adopters because it redefines a category or business. A disruptive brand does not need to appeal to masses at the onset as the product needs refinement and is too novel to suite their appetite.
Both for a Craft brand and a Disruptive brand, you need to focus on the early, loyal fans and turn them into advocates to both acquire new consumers, increase the cart size and get further referrals, all at the same time.
Introducing Brand Diffusion
Brand Diffusion is the process of identifying loyal fans, building tribes out of them and simultaneously leveraging those tribes to ultimately create an army of loyal fans, yielding organic and profitable growth without significant resources.
Benefits Of Brand Diffusion
1. Quick and High ROI
Starts with loyal consumers and turns them into tribes for both Advocacy and higher offtake. You also increase your $/loyal fan with new product purchases, higher volume of existing products, higher frequency and new referrals by turning them into advocates.
No more wasting resources on mass media or even social media for creating awareness. You could even start with 10 loyal fans.
3. More Design than Resource Oriented
It is how you design a tribe program rather than money you invest which determines brand diffusion success and ultimately profitability. Success, as with any strategy, is about design and focus rather than of investment or choices made during execution.
4. Relationship Oriented
Brand Diffusion leverages Brand Tribe to help develop long-term, win-win, highly strategic relationships. You will not only acquire new and profitable consumers, increase consumer lifetime value but also create better new products, book pre-orders, and also create a powerful Brand Equity.
5. Highly Profitable
Higher consumer lifetime value coupled with higher brand advocacy result in a virtuous cycle of yielding lower cost of consumer acquisition, with even higher consumer lifetime value and repeat. You command premium pricing and higher margins while lowering your cost.
4-Step Process For Brand Diffusion
Higher Ground: Brand Story
The first, and most critical step, is creating a powerful brand story. Ideally, you should design a brand story around an emotional core promise keeping the element of surprise as a key ingredient or create a core promise with an element of surprise( link) first and, then transform the brand emotionally. A powerful brand story puts you on an uncontested plane, allowing you to charge a premium with lower cost of consumer acquisition, which is critical to success.
Driver: Immersive Story Experience: E-Commerce/Website/Owned site/Packaging/POSM
Objective: Immersion, Engagement & Sales
Quite often, a conscious CPG brand jumps straight to storytelling via social media, a typical marketing funnel initiative, thereby skipping an important step. Website is an owned asset, and a key to experiencing the story, the way you want it to be experienced. The objective is to get engagement and enrolment into your tribe from the most potentially motivated fans.
Website, for example, creates an unprecedented opportunity, for a consumer packaged goods brand, to create an experience for your fans. It is an owned virtual store. Too often, craft CPG brands chose to make sales their obvious focus on the site. Nothing wrong with that, but if you don’t immerse consumers/visitors in your story, you won’t be able to engage and enroll potentially loyal, tribe members.
Packaging is another opportunity, an owned asset, to immerse the consumer in your story. Nom Noms Food World does a great job of accomplishing the same with their packaging.
Driver: Design a Tribe Program and Integrate with Site
First, design a tribe program, not just a loyalty program, that is consistent with your Brand Story, and then integrate the same with your website. Design, delve into and hype around ritualized moments and experiences and for increasing the usage occasions and usage/occasion.
Objective: Enrolment and Building Tribe3-way engagement, Us Vs Them for Sense of Belonging, Fascinating Experiences
Start with 10 highly motivated, TG, who are a tribe. Create a sense of belonging by facilitating 3-way engagement between the company, fans and amongst fans. Deliver ritualized, fascinating experiences coherent with brand story by hyping usage/occasion and new usage occasions.
Sephora achieves the same with Beauty Boutique.
Leverage Tribe: Advocacy and Referrals for New Consumer Acquisition, Lift and Engagement with Tribe Program
Create a showcase program for diffusion, acquire consumers via program without investing money in ads, that is, organically. The referral program should focus on current tribe members inviting new consumers to experience the brand on the site who then enroll themselves onto the tribe program. Also, use the tribe for co-creation and funding the new product launches and ensuring launch success.
For example, Glossier beauty co-creates products with around 500 tribe members and then leverages them for succeeding with the launch.
Iterate and Repeat
To further convert new consumers into loyal consumers and then advocates, reduce COCA( Cost of Consumer Acquisition) and further increase CLTV( Consumer Lifetime Value), create and improve memorable experiences for the tribe members.
Experiences like an opportunity to co-create a product as a privilege or work on refining a campaign, or a cause that the tribe and the brand believes in or an opportunity to share and learn from the lives of other tribe members and co-create new brand rituals with the community.
Invite, Immerse, Engage, Acquire, Loyal, Tribe for advocacy and repeat the process to create an army of highly profitable loyal and advocate fans.
Traditional brand marketing funnel banks heavily on breadth of awareness and is a very time and resource taxing process, especially in a HABA CPG brand’s early phase of evolution.
Mass and challenger brands, with substantial market share and multiple channel, near perfect, distribution are best suited for a typical marketing funnel.
Brand Diffusion is inverted Brand marketing funnel. It is what a craft or disruptor brand needs to acquire new consumers by leveraging their tribe-loyal, vocal and responsive fans.
Use the 4-step process to achieve Brand Diffusion
1. Brand Story-Immerse, Engage and Sales
2. Design and Integrate a Tribe Program: Enrol and Build a Tribe.
3. Leverage Tribe
4. Repeat the Process with New tribe members.
Audit to uncover the type and power of your current brand story!
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ROHIT BANOTA, Founder of StorySaves, has transformed dozens into envied beauty brands for sharp and profitable growth, kickstarted from day 1 with “strategic brand story” and “story-led brand strategy” & powered by digital.
He has over 17 years of marketing and business experience growing consumer packaged brands including with startups and MNCs like P&G Beauty and Grooming.