There is a certain way an innovation diffuses into the market and money is not the most significant part of that equation. Now, notice I said there’s a certain way an innovation diffuses into the market, and I use that word innovation for a reason.

These 6 X profitable superfans, you cannot just use them for your sales. If they even get a whiff that all you need are affiliates or mercenaries to get more and more sales, they will opt-out. So, the first thing you have to do is your brand has to be seen as a brand that elevates the category.

  Hey Beauty Founder, a question I get asked a lot is, Rohit, you speak a lot about 6x profitable superfans. Tell me, how are these different from your normal consumer? And why do I need 6x profitable superfans? How do I find them? And how do I work with these superfans?

 I’ve been getting these questions on email, in my LinkedIn inbox, on my Instagram inbox. So, I decided why not do a full blown episode on the same.

  First things first, why do you need 6x profitable superfans?

Okay, let’s deep dive.

You have a brand, now you need consumers to grow. So what do you do? You go to social media and start posting content, but your reach is limited. You’re only able to reach a certain number of consumers. And,

unless you pay for ads, which can get very costly because you have to outbid your competitors.

Either way, when you market using social media, SEO, even shows, even if you do ads, you are creating a top-down funnel.

  It starts from awareness, then it comes down to consideration, trial, purchase, repeat purchase, loyalty, and then advocacy. It’s a very long funnel.

And there are two issues with a top-down marketing funnel,

unless you have a lot of money. The two issues are,

First is the leaks. At every stage of the funnel, from awareness to consideration to trial to purchase, repeat purchase, loyalty and advocacy, there will be a significant leak. So, the biggest leak, if you’re just starting out, will be from awareness to consideration.

And by the time you’ll reach the end, the leaks would have been so big that you will be left hardly with any loyal percentage of consumers, forget about advocacy.

The second problem with the top-down funnel is ‘it takes too long.’ And it ties in with the previous one, but I just want to make a point: it’s a very long funnel because you’re starting from awareness, then, you first try to get as many people aware about you in your target market.

Then you start focusing on consideration? Then you, let’s say, you have fixed that leak. Then you go to trial. How do I get more people to try? You cannot create all the awareness in one single day. You need multiple hits.

  That’s why advertising works on a threshold principle, below a certain frequency and budget, you will not see any results. So, it’s a very long funnel. And second, there are a lot of leaks within the different stages of the funnel. By the time you reach what matters, a loyal consumer, even if I don’t talk about advocacy, at least you want loyal consumers, the percentage would be hardly anything.

You’ll need years, not just months, to acquire a substantial number of loyal consumers.

Advertising works, and you should use it. But only when you can afford to use it. It’s not about advertising for a few months; It’s a long game. If you stop advertising after some time, you’ll start seeing a dip in sales. It’s just about managing that funnel, but it’s a long funnel, It’s a top-down funnel and the real cream, what you’re after, is at the bottom of the funnel. That’s why this growth paradigm is flawed for early-stage beauty brands, especially bootstrapped beauty brands.

What’s the alternative?

  You need to invert your funnel and start from advocacy, thereby, shortening the funnel. And this is what I mean you need to work with 6x profitable superfans, in the absence, and especially if you’re a bootstrapped brand, in the absence of huge amounts of money for advertising.

Now, how are these 6X profitable superfans, your advocates, different from a typical consumer?

There are two ways they are different.

Let’s start with the first one.

Based on the problem that your brand is solving, these are those people, who are most motivated by the problem your brand is trying to solve, so they feel the problem with the highest amount of intensity, the problem has the biggest impact in their lives, in their personal lives- professional lives, the frequency with which they perceive this problem is higher whatever role that problem plays, is much higher than your typical consumer.

The second way they are different is, which is tied to the first one, is behaviorally. These are the people, you do not need a very long funnel to convert because they feel the problem so much they are dying for a solution, no pun intended. You want a lifetime value, but they are dying for a solution for a problem that they face very intensely. And that’s why they convert fast. You can upsell and cross-sell to them, and you will get a referral,all in one step, which is your advertising answer.

And since they will recommend new consumers, they will feed the funnel back. And that’s how they will create a virtuous cycle as long as you do it right. And that is why they are 6x profitable versus your typical consumer, also based on some research done on brand fans versus typical consumers.

Now, how do you find them?

  A Tribe Strategy is creating advocacy with strategic interconnected initiatives around your brand’s conversation catalysts that focus on identifying, finding, and then leveraging 6 X profitable or potential profitable superfans to feed your funnel back.

After a certain threshold, you could reap similar benefits to going viral, but it’ll be much more sustainable, and you will achieve all three. Purchase, buy more products, a bigger range of products, and also recommending a new consumer, all in one step.

Advocacy has the highest conversion rate, and it is the ultimate validation because It is highly likely that someone who advocates actually is loyal to your brand. So, loyalty is a given. And then advocates, what do they do? They recommend new consumers. So, they feed the funnel back for a virtuous cycle.

And why is it a virtuous cycle? Because the acquisition itself is profitable. Unlike advertising with the consumer lifetime value concept,where you spend the money now, expecting the consumer lifetime value to make that acquisition profitable over a certain number of months, even years, right?

So here, the acquisition itself is profitable, which means you can keep investing

money back in order to scale that strategic initiative for acquiring  the 6X Profitable Superfans.

 And if you’re a startup brand, an early-stage brand, do not think that the 6x Profitable Superfans are limited in numbers.

They are not. The early-stage market is very big.

 Some people think the early stage market will stop when your brand touches $10 million; that’s not true. You can even go to high eight figures and still play in the early-stage market.

The early-stage market is not a small market. If you go by the definition of VCs, where beyond $10 million you enter the growth stage, I do agree, because they’re trying to penetrate now, and when you try to use a penetration strategy, then you are entering the mass consumers—no doubt about that. But, you can even penetrate the early-stage market. You can cross 10 million dollars. You can do 20 million dollars, even more than that, even if you penetrate the early-stage market instead of rapidly jumping into penetrating the early mass or mass market.

Now, how do I create advocacy with tribe strategy for identifying, finding and leveraging the 6X profitable superfans?

  Jump has a 7 Cs model for designing tribe strategy initiatives. These are Community, Conversation Catalyst, Collaborative Experience, Capability to deliver that collaborative experience, and a Channel through which you will deliver that collaborative experience. Then, Calibrating, meaning improving and iterating the collaborative experience and, in the end, Consequence for the brand, achieving the desired advocacy results and profitability for your beauty brand.

 I’ll give you some mathematics of what you will calibrate and the consequence that you want for the brand. You want an opt-in rate to be as close to one as possible. You will go viral; any brand will go viral, If the viral coefficient is one, meaning if everyone who knows about your beauty brand tells at least one person, it will create an unending chain of virality.

 That’s the mathematics of virality. But the problem is not everyone recommends. So there’s an opt-in rate. Let’s say one out of five people refers to your brand, your opt-in rate for advocacy becomes one out of five. The referral coefficient is one person who does refer, how many people does that person refer?

So, the referral coefficient should be greater than equal to the viral coefficient, which is one upon opt-in rate. Simple. If the opt-in rate is one upon five, meaning one out of five people recommend your brand, then one person who does recommend or refer should refer at least five people, and that’s how you’ll go viral.

That’s what I mean by Calibrating and Consequence in the seven Cs framework. That’s what you iterate upon as the end outcome of the 7 Cs model.

Now, the strategic initiatives, the 7 Cs model has to be applied, and this is not a complete or exhaustive list. The list is unlimited, but let’s say you can apply it to your…

Emotionally Resonant Loyalty program. You can apply it to Seeding Communities and Groups. You can apply it to a Self Referencing Ambassador Group. You can apply it to your Ambassador program. You can even apply it to your Affiliate program. You can apply it to Non- Conflict Brand Partnerships, and you can also apply it to Channel Partnerships.

Here’s an example of Beekman 1802’s tribe strategy.

First C, Community: They partnered with hotels in New York City. Because the brand is based in New York state, they partnered with hotels in and around New York City and therefore broadened its community.

Second C, Conversation Catalyst: Experience the pure goat farm.

Their collaboration Experience: Experience the pure goat farm, come and do goat bonding and goat yoga, drink pure goat milk, buy pure goat milk products, and take pictures with your friends and your family.

The Channel they used was the extended community of hotels, so they turned hotels into their partners, and the hotels promoted the farm, the pure goat farm, as an added attraction to their guests. So now think about this: a kid in New York City or somebody who’s travelling to New York City, who has never seen a goat in his life and has never had pure goat milk,

for him, the experience at the farm, for the entire family, it’s a bonding experience. It’s a new experience. It’s like I said, they came, they saw the goat farm, they experienced it, they drank the pure goat milk, and they bought hundreds if not thousands of dollars of goat milk products took pictures, shared with their friends, took coupons, et cetera, et cetera.

And they sent more and more of their friends back to that goat farm. So, they created a virtuous cycle.

The Capability: Creating hotel partnerships, decking up the farm, goat games, etc., that the kids can play and also making it entertaining and amusing and experiential for all the guests who come to the farm.

Consequence: As I mentioned before, the families came, and they bought hundreds of dollars of products if not thousands. They took coupons, they took pictures with the goats of their kids, etc. They shared on social media, wrote stories, and then recommended their friends and family so that they could bring more consumers back to the farm, creating a virtuous cycle.

Beekman 1802’s partnership, which is a strategic initiative with hotels, around their conversation catalyst “experience the goat farm” and the collaborative experience they created, the activities created advocacy. Then they scaled it up by partnering with more and more hotels, all of this without spending any advertising dollars.

Another example of Jump partner brand “Besame Cosmetics,” the Community was the

diehard

digital fans of the brand. The Conversation Catalyst was a Red Carpet event where they would learn fast makeup looks by the founder herself.

The Collaborative Experience: the digital fans brought their friends and family as special guests to these events. Gabriela, the founder, showed them fast looks that they can create in no time with Bésame products, and that enhances their natural self rather than super glam looks.

And then special deals, coupons, etc., for new consumers, the guests, on the red carpet events.

Channel: they chose their direct-to-consumer channel and their social media for spreading the word, doing lives, et cetera, and letting people know about these events.

Capability Besame Cosmetics needed, was, an assortment of different looks that could be done in no time, and they all enhanced their super fans.

Consequence, the brand has increased its direct-to-consumer conversion rate by a significant percentage. Also, acquiring new consumers at a much healthier rate than before. And all of this without spending any money on ads, purely organically.

Here is one insight:” When you think about 6X profitable super fans,

 there is a certain way an innovation diffuses into the market, and money is not the most significant part of that equation. Now, notice, I said there’s a certain way an innovation diffuses into the market, and I use that word innovation for a reason.

These 6 X profitable superfans, you cannot just use them for your sales. If they even get a whiff that all you need are affiliates or mercenaries to get more and more sales, they will opt-out. So, the first thing you have to do is your brand has to be seen as a brand that elevates the category.

So your brand idea needs to redefine the category or elevate the category to motivate the 6 X profitable superfans who don’t mind the money, but are not in it only for the money. These are the people who will help you navigate the early stage market, get your new consumers, and get you the influence so that your brand can truly win the early stage market, even without advertising dollars, which would help, money can always help,

but like I said, it’s not the core deciding factor.

The moral of the story is you’ve got first to redefine your brand idea creatively so that it elevates the category. Then you’ve got to invert your marketing funnel, start from advocacy to identify, find and leverage 6X profitable superfans.

Thank you.