Episode 99 | 7 Essential Tips for Winning in the Era of Infinite Consumer Choice,

with SnackNation CEO Sean Kelly

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This week on Brand Builder we have a conversation about how to get close to the customer, and why that’s so important.

It all stems from the idea of infinite supply – that in the era of nearly infinite consumer choice, the way consumer brands innovate has to change if they want to survive.

We have to give credit to the team at Drift and their book This Won’t Scalewhere the idea for this conversation first came. Here’s the passage that inspired this episode:

“You can only achieve hypergrowth by being close to the customer…
We realized that in a world of infinite supply, the customer has all the power.” (p. 7)

The infinite supply dynamic has long been at play in digital products like software, but it increasingly applies  to physical products like CPG and snack brands. Consumer choice is approaching infinity, which means competition is too, and brands have to realign their approach.

Here’s what we cover.

Takeaways

  • Tip #1 – Need Brand Innovation & Connection
  • Tip #2 – Brands are Relationships
  • Tip #3 – Practice Essentialism
  • Tip #4 – Serve as a Guide to Positive Transformation
  • Tip #5 – Go To Your Customer
  • Tip #6 – Create Two-Way Conversations
  • Tip #7 – Own Your Relationships

Links

Full Transcript:

Jeff Murphy:
Welcome to Brand Builder. We’re here with Sean Kelly, SnackNation CEO, once again. These are the episodes where we talk about leadership. We talk about strategy. We talk about kind of whatever’s on our mind, right?

Sean Kelly:
Whatever’s on our mind. What’s on our mind today? I got a lot of things on my mind.

Jeff Murphy:
Well, the thing that is always on our mind is our customers.

Sean Kelly:

That is true. That is business.

Jeff Murphy:
Because our theme this year is customer obsession.

Sean Kelly:
Customer obsession, #CustomerObsession.

Jeff Murphy:
What I thought we’d do today is kind of riff on this idea. There’s this phrase that keeps popping up as we talk about this internally. It’s related to customer obsession, but it’s a little bit different and I find it really interesting. I know that you have thoughts on this as well.

Sean Kelly:
If you find it interesting, J-Money Murphy, then I’m sure everybody else is going to.

Jeff Murphy:
This is all about in an era of infinite supply, the brands that are closest to the customer win.

Sean Kelly:
Did you just say, in a time of infinite supply that the brands that are closest to the consumer win?

Jeff Murphy:
Yeah.

Sean Kelly:
That is a beautiful statement. In an era, in a time, in a world of infinite supply, when the supply is endless, those brands, those companies, those products that are closest to the consumer win. I agree. Do you know where we first heard that phrase, that sentence, that line?

Jeff Murphy:
I don’t know. I thought that you made it up. Is that true?

Sean Kelly:
I think I took credit for it for a while, but no. I actually did not come up with that. I read that first in a book called This Won’t Scale. I think I’m getting that correct. This Won’t Scale by The Drift Marketing Team.

Jeff Murphy:
Yes.

Sean Kelly:
A fun little book. It’s a really quick little read of a lot of marketing tips, but that was the line that I found that I absolutely loved. When you and I were speaking about it, we were like, “We should record a little miniature episode on this.”

Jeff Murphy:
Yeah, absolutely. The idea, the premise itself, the context there of, we’re in an era of infinite supply, was really intriguing to me. I don’t really understand it yet, so I was hoping maybe we start there.

Sean Kelly:
Yeah. Yeah. What does that mean? In a world, in a time of infinite supply? It really means if you’re a business, that things are more competitive than ever before.

Sean Kelly:
It also means that the customer has more options than they’ve ever had. If you’re in just a relevant category whatsoever, there’s going to be tons of options. The customer has all of the power.

Sean Kelly:
If you’re a brand, whether it’s a product, whether it’s a consumer product, whether it’s a piece of software in a particular category, you’re going to be competing with so many others for that customer’s attention and eventually that customer’s wallet.

Sean Kelly:
There really is infinite supply. I mean, in our world, in the snack and food and beverage world, look at what happens at Expo West. You were at Expo West [crosstalk 00:05:51] year.

Jeff Murphy:
I was, yeah.

Sean Kelly:
There’s an endless number of protein bars, an endless number of chips, an endless number of everything where at some point it’s like, “Oh, my gosh.”

Sean Kelly:
It’s not just about product innovation. You literally need brand innovation. You need brands today that are so close and so connected to the consumer, they become connected with the consumer’s identity.

Sean Kelly:
If you’re not really close with the consumer, you’re not connected and ingrained with their identity, you’re not going to win because you’re just not going to stand out. You’re just going to be one of a million other products on the shelf.

Jeff Murphy:
The customer, they have all the power, they have all the leverage. What does that really mean? Is that really true that when you have infinite supply, the customer’s basically in the driver’s seat? How does that work?

Sean Kelly:
I think so. I mean, look at when our parents, okay, grew up. You and I are about the same age. Our parents are probably about the same age. They grew up and they had, like, three brands of laundry detergent.

Jeff Murphy:
Yep.

Sean Kelly:
And so, back then, it was really a brand dominated world. I mean, when you have three to five brands of laundry detergent for tens and hundreds of millions of people, the brands have a lot of leverage there. It’s not that hard to stand out when you have a few competitors. Today, I have no idea how many different laundry detergent brands there are out there, but there’s a ton of them.

Sean Kelly:
When you have a massive amount of supply and you’ll have a finite amount of demand, the customer does have all the power. They can have different demands than they used to, whereas back in the day it was all about trust. It’s like, “Oh, my gosh. My expectation for a brand is that it’s about consistency and trust. I know what I’m getting every time.”

Sean Kelly:
Today’s consumer is much more picky. Trust is like … That’s just the first filter. They want to make sure that they have trust. They want to make sure they have consistency. They want to make sure a brand serves them and their needs and their aspirations. They have a much longer list of demands, making it more difficult, you could say, for brands and for products to meet those. I would say yes, the customer is in full power today.

Jeff Murphy:
Is this dynamic sort of the flip side of … We talk about in CPG, specifically-

Sean Kelly:
Consumer packaged goods.

Jeff Murphy:
That’s right. In this industry specifically, we talk about we’re in kind of a golden age and that capital has never been more accessible. The marketing channels have never been more accessible. It’s maybe created this proliferation of brands. Is this sort of the flip side, the new challenge that comes with this golden age?

Sean Kelly:
Yeah, and I would actually say … I think, yes. I mean, at SnackNation, we serve the long tail. We actually love the fact that there’s all these awesome products and all these awesome brands, and we get to serve as a platform for those brands that are otherwise finding it difficult to access and to get close to the consumer. We help those brands do this.

Sean Kelly:
But I think there’s also a problem. I think the problem is that there are so many products, and there’s not enough brands, right? People think, “Oh my gosh, I can just innovate on a product. I can make a protein bar a little bit better. I can make this beverage or this T-shirt a little bit better.”

Sean Kelly:
That’s not enough. You need to have a brand. What does a brand do? A brand communicates with the end consumer and truly creates a relationship. Just like you have a relationship with another person, with a friend, that’s what brands do.

Sean Kelly:
My belief today is that we need to focus a little bit less on product and feature innovation, and we need to go a lot deeper in terms of serving our customers’ aspirations. That’s awesome if you have the capabilities and the know-how to do that as a company. It’s not awesome if you’re just okay competing against the competition or competing against features when you’re just going to get drowned out in all the noise.

Jeff Murphy:
There’s almost too much product innovation. Companies or brands are innovating things that the customers don’t even want, right? Is that part of this dynamic, too, that-

Sean Kelly:
Absolutely. It absolutely is. I mean, I think people … So often companies are innovating based on what their capabilities are, right? We talked about this in our customer obsession episode where it’s like, “Oh, my gosh, what are we good at? What do we know? What do we want to do?”

Sean Kelly:
And they do those things rather than saying, “Okay, who is our core customer? What are the things that are most important to them? And beyond that, we’re not going to serve anything else.”

Sean Kelly:
Right? Because all the other stuff, it’s not only noise and it’s not only that your customers don’t care about it, it actually produces negative value because you’re focusing on things other than those things that are essential to your customer. Which just means, again, that if you’re not ultra-focused on only those things that matter most, you’re probably not going to, again, make the noise and create the brand that you need to in this world of infinite supply.

Jeff Murphy:
Let’s talk about brand again. After all, this is Brand Builder. One of the things you said was trust used to be the primary thing that was communicated through brand and the most important thing for consumers, and now it’s just the first filter. What are the other filters? What are the other things that brand communicates, and why is brand the right medium for those things?

Sean Kelly:
Yeah. Well, I think a brand, what it does now is, again, it used to be trust. Now I think a brand has to tie into a customer’s aspiration. Which means that as a brand, you need to understand deeply who your core customer is, just like you understand a dear friend, or even much more so, like your wife or your husband or your girlfriend or boyfriend.

Sean Kelly:
You need to know where they are in life. You need to understand what their pain points are. What do they love? What do they dread? And most importantly, where do they want to go? We’ve talked about this before. The brands that end up the best and that connect with a core consumer’s identity the most and the closest are those that serve as a guide to their customers’ positive transformation.

Sean Kelly:
In order to understand somebody’s true aspirations, you need to know them deeply, right? You have needed to get past several obstacles and hurdles to understand what they actually want in life. That’s an intimate relationship.

Sean Kelly:
If you can serve that customer in terms of where they want to go, not where they are today, that’s, I believe, what the best brands today do. It’s all about aspiration. Because have you ever met anybody, okay … Your wife, Tori. Can your daughter talk yet? You don’t know her aspirations yet, right? They’re mainly about food.

Jeff Murphy:
Yeah, they’re very basic.

Sean Kelly:
They’re very basic.

Jeff Murphy:
But she has a few aspirations, yeah.

Sean Kelly:
Okay, a few aspirations, right? Hers are mainly like, “I want to get a little bit bigger,” whatever it may be. But have you ever met anybody that doesn’t want to change or improve in some way?

Jeff Murphy:
I don’t think I have. If there are those people out there, I honestly try to edit them from my life.

Sean Kelly:
Yeah. For the most part … And even those people that you edit from your life because probably they kind of drag you down. They obviously, if they were being honest and authentic, will tell you that they wish their life was different. I think that if you can be a guide and you can actually help somebody experience a better life, there’s nothing more powerful than that.

Sean Kelly:
That’s why I think brands need to think … It’s kind of like Gretzky, right? Wayne Gretzky, best hockey player of all time. I think that’s not even arguable. Maybe it is for the big Sidney Crosby fans or something. But he always talked about, why was Gretzky so great? Do you remember the line?

Jeff Murphy:
It’s because he went where the puck was going.

Sean Kelly:
Yes. He skated to where the puck was going, not where it is. That’s what the best brands are doing. Even those that are like, “Well, jeez, I’m in the legal …”

Sean Kelly:
No, whatever you do, you can serve your customer’s aspiration. That’s the most important thing that a brand does today.

Jeff Murphy:
I’m starting to understand the theory, the why. That makes a lot of sense to me. Let’s talk a little bit about actually how you do this, a little bit of the tactical. Well, not too deep in the tactical, but how do you do it? How do you win in this area? How do you win in this era? How do you get close to your customer in the right way, in a meaningful way?

Sean Kelly:
Yeah. Well, I think, we’ve talked already about a couple of things, knowing your customer deeply. I think the next thing is you just look at distribution and advertising after knowing your core consumer intensely. I mean, probably even better than your significant other.

Sean Kelly:
After that, you then need to go where your customer is. You have to be where they’re at. If you have a physical good, that means that you’re literally where they are showing up in life. You’re no longer okay with just being like, “Oh, I’m going to create a product and compete on retail shelves.”

Sean Kelly:
That’s not a good idea. You’re instead saying, “Where does my customer … Where is my customer avatar? Where do they spend their time? How do I find a way to put my product wherever they are living, right? So I can be a part of their life, not just a part of their shopping experience.”

Sean Kelly:
Right? That’s why, again, I mean, that could sound a little bit self-serving with the SnackNation, because it is, but that’s why we focus on engaging with consumers during their most precious moments, right?

Sean Kelly:
Why do we focus on delivering snacks in the office? Because that’s where people snack the most. That’s where they live. That’s a trend that’s not going to be going away. They’re interacting with a lot of other people. You need to put your product where people are. That’s why, obviously, direct-to-consumer and at-home has been such a big focus with consumer products.

Sean Kelly:
And then, even from an advertising and marketing perspective. Where are people consuming education? Where are they consuming entertainment? If your customer avatar never goes on Facebook, okay, or never goes on LinkedIn, don’t advertise there. If your customer is always at, I don’t know, triathlon events, you better be at that event, right?

Sean Kelly:
The first thing is know your customer. The second one is be where they are. After that, it’s about … After you do those things, you’re in the right place, you understand who the hell you actually want to speak to, you need to speak to them, which means actually having a two-way dialogue, having a continual conversation.

Sean Kelly:
Not speaking with them once, going and designing a product, creating it, launching it, and then checking back in with a year, right? I don’t know about you, but if you or I did that with our significant others, our wives, probably be pretty bad. We’d probably get kicked on the curb, right?

Jeff Murphy:
Yeah, I don’t even want to imagine that.

Sean Kelly:
Yeah, it’s bad, right? It doesn’t end well for us. Same thing with the customer. It’s a two-way conversation continually because customers also now more than ever want to be a part of the companies that they’re investing in.

Sean Kelly:
When I say investing in, I also think that’s a little bit different. Customers aren’t just looking at spending their money on consuming something. They’re saying, “I’m investing in this brand by buying it,” and they want to feel like they’re a part of that life cycle.

Sean Kelly:
So, a continual conversation, continuously finding a way for always getting feedback, and understanding and really developing a really strong relationship.

Jeff Murphy:
Where does data fit into this whole equation? Feedback and communication is sort of a form of data, but what about the more granular type of quantitative data?

Sean Kelly:
Yeah, quantitative data. I mean, I think what data is … I mean, I don’t think there’s anything that takes the place of human connection. Human connection is everything. I think the problem is, is that human connection, sometimes it’s hard to describe succinctly. It’s obviously very hard to quantify and sometimes it’s hard to scale.

Sean Kelly:
I think the nice thing about data is if you look at human behavior, if you look at human connection, if you look at human relationships, what are the data? What are the statistical elements that we can pull out of the conversations, that we can pull out of our core demographic groups that give us a more refined way to communicate to our teams in terms of where we should go?

Sean Kelly:
It’s basically quantifying the qualitative and being able to use this kind of binary mechanism, these numbers, to help lead us to where we want to go. That’s really what it is. It allows us to create measurements around things that would otherwise be challenging to measure.

Jeff Murphy:
Now, this isn’t a totally new idea, but it’s a relatively new idea, and some brands are practicing it now. From what you see in the industry, what are brands doing well, and where are they getting it wrong? What mistakes are they making? If they understand the concept and they’re trying to integrate it into their strategy, what are they getting wrong?

Sean Kelly:
I think, first and foremost, they’re not living and breathing in the customer’s shoes. They’re not doing … I mean, for instance, I think we’ve come across almost every emerging brand CEO, entrepreneur, professionals that are building these products, and a lot of them are not living and breathing in the customer’s shoes.

Sean Kelly:
I think that comes down to, at the most basic example, having a touchpoint throughout your day, throughout your week, where you are literally sitting in your customer’s shoes and saying, “What are they doing?”

Sean Kelly:
That could be analyzing NPS reports, and actually making sure that the executives and the biggest decision makers on your team have access to the conversations and the communications and the emails and the phone calls that your company’s having with customers.

Sean Kelly
A lot of companies, they’re just not even having enough of those conversations, right? They’re looking out there and they’re tracking their sales and tracking as those go up and down. But at some point, maybe they were good in the beginning, but they kind of fall off. They’re not having enough of those conversations. They’re not thinking about their business from a perspective of human connection and human relationships.

Sean Kelly:
I think those are some of the things that they’re doing wrong. I also think there’s … We’ve heard this a million times, that there’s a lot of brands out there that are just trying to do things the same old way or the same way as everyone else. The brands that are truly innovating, I think, are looking at, “Oh my gosh, how can I interact and engage my consumer differently?”

Jeff Murphy:
One thing that struck me as we’re talking here, that it’s important to own the customer relationship.

Sean Kelly:
Yes.

Jeff Murphy:
As a marketer, I know it is something we think about as well. It definitely plays a factor in our strategy on which platforms we’re on. In the context of what we’re talking about, how do you ensure that ultimately you’re owning these customer relationships and that the most important data and the feedback isn’t living somewhere else?

Sean Kelly:
Yeah. I mean, that’s … Right? You can talk about Amazon. I’m blown away at how many companies, especially the big companies, are outsourcing all of their e-commerce to Amazon. It completely befuddles me. I mean, it makes no sense. They’re like, “Oh, my gosh, yeah. We’re doing a half billion in e-commerce for this one brand, but it’s all on Amazon.”

Sean Kelly:
It’s like, “Okay.”

Sean Kelly:
Trust me, I get that virtually everyone is on Amazon. You need to utilize it as a platform. But that can’t be your only mechanism to access the customer in a different way, because why? Amazon’s not sharing all that information. The relationship’s with Amazon.

Sean Kelly:
It doesn’t mean that all of your customer relationships need to be completely proprietary and owned, but you need to have a mechanism where you can continually converse with the customer who’s actually experiencing your product or your service.

Sean Kelly:
Maybe that means if you’re a consumer product, you’re going to be okay having up to 50% of your sales on Amazon, and you’re going to continually try to create relationships that you own elsewhere. I think that’s an important thing, is just having some proprietary relationships. By the way, even if it’s more expensive, even if you say, “Man, on Amazon, I might not make as [inaudible 00:21:09] as margin, but my cost of acquisition’s really low.”

Sean Kelly:
Even if you have a higher cost of acquisition to maintain a customer base of, say, I don’t know if it’s a thousand or 10,000 customers over here. Just remember that you’re paying for the data, you’re paying for the insights, you’re paying for the relationship. Even if you have a runaway success product today, you can continue iterating and continue to have those product successes, right?

Sean Kelly:
I just think so often we look at really short-term results, and we forget. Like, “Okay, I’m spending more on this proprietary channel.”

Sean Kelly:
Well, what if that proprietary channel delivers 10X the value, right? Then, okay, if you’re spending 2X on it, that seems like it’s a pretty good equation.

Jeff Murphy:                          You may have just answered this, but what’s sort of the ideal mix as far as Amazon in your retail strategy? Where does it fit into the strategy? Is it more of a driver? Is it more of you just want to make sure that it’s part of your strategy?

Sean Kelly:
I think it depends. I think the honest answer is it depends on the brand. It depends on what the particular product is. My belief with this is that you need to be able to have the relationships, the qualitative relationships, the human connection that creates statistically significant data that you can do something with.

Sean Kelly:
Right? A big reason … I mean, at SnackNation, why have we invested in SnackNation Insights, in this data and analytics platform? It’s so that emerging brands can tap into this statistically significant information to inform them to make the right decisions.

Sean Kelly:
I think it’s about … You don’t need to go hog wild, but you need to make sure that you’re getting the data, the insights. You’re creating the relationships that you need to ensure that your product’s not only fitting correctly in the marketplace and with your core demographic today, but it’s also going to be set up for success in the future.

Sean Kelly:
Because no product today, I don’t care … You think about the most successful consumer products today. If they don’t change, if they don’t iterate, if they don’t adjust with their consumer as they evolve, they will fail or they will obviously not be as successful as they are today. That’s how I look at it. I know that’s not a perfect answer, but it’s how we view the world.

Jeff Murphy:
Well, Sean, I want to thank you for helping me at least take something that’s very esoteric, a little bit abstract, and helping me understand what it actually looks like in the real world. Before we go, can you maybe summarize a little bit of what we talked about? First with what the concept is, what it means, and then a couple of those strategies we talked about.

Sean Kelly:
In a world of infinite supply, the brands that are closest to the consumer win. How do you do that? What is that saying? First of all, things are getting more and more competitive. The consumer’s only getting more powerful. I don’t think those trends are going to change, right? The world’s not going to get less competitive and the customer less powerful, right?

Sean Kelly:
I think it’s really important to look at things and to invest and to educate yourself on trends that are not going to alter. How do you do that? You do that by making sure you understand your customer deeply. Create a relationship with them, even better than you have with your significant other.

Sean Kelly:
Make sure that your product is where they are, not only from a physical perspective of distribution, but also from a marketing perspective. Make sure that where your customer goes for entertainment, for education, make sure that your product’s there as well.

Sean Kelly:
Maintain two-way conversations, okay, with the customer. Make sure that you have a continuous feedback loop. You treat them like a real person that is sitting next to you. That’s one of the reasons Amazon always has the proverbial open chair at all of their meetings.

Sean Kelly:
And then, lastly, speaking about Amazon again, you need to own the customer relationship at least to a certain degree to ensure that you’re having those conversations, that feedback loop, collecting that data that allow you to not only win today, but continue to win in the future.

Jeff Murphy:
Well, Sean, thank you for that. Thank you everybody for listening.

Sean Kelly:
Thank you, J-Money Murphy.

Brand Builder is a co-production of SnackNation and ForceBrands.

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