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Building Digital Brands with Analog Products

Here’s How Today’s Hottest New Companies Actually Disrupt

Micah Rosenbloom, managing partner at Founder Collective in San Francisco, knows a thing or two about bringing digital ideas to the analog world. The Cornell grad started the 3D scanning company Brontes, which introduced a handheld scanner to replace the conventional dental impressions used for centuries.

His company was purchased by 3M, which he says “put enough money in my pockets to start angel investing.” At Founder Collective, he and his partners built a fund to invest in the next generation of great businesses at the seed stage. While the company originally focused on technology companies like Uber, BuzzFeed and Hotel Tonight, Rosenbloom quickly became attracted to brands that were building digital success while selling old-school analog products like mattresses, jewelry and eyeglasses.

Rosenbloom joined eCornell’s Chris Wofford as part of our Entrepreneurship WebCast Series. What follows is an abridged version of his presentation.

Casper. Dollar Shave Club. Warby Parker. These days, some of the fastest-growing companies aren’t what you think of, traditionally, as tech businesses.

These companies are what Andy Dunn, the CEO of Bonobos, has dubbed ‘DNVBs”—Digitally Native Vertical Brands.” In other words, brands that have a direct relationship with their customers. For example, if you were to buy a mattress from Sealy in the past, Sealy didn’t know that you yourself were the buyer of their mattress. All the company knew was that it was selling mattresses to Sleepy’s Mattress Store, and Sleepy’s was the one that actually had the knowledge of the buyer. What most businesses come to realize is that whoever knows the end customer has the most value. In the end, the customer information and that relationship is the most valuable.

Many new companies have decided to go directly to the customer rather than through retailers. Some may not even go through Amazon. There are exceptions to this, of course, but the idea is that most of these brands are primarily online.

Most of these “DNVB” brands were born in the last ten years and that newness has allowed them to be built  on modern systems. They’re not saddled with legacy software. They’re not bogged down by crazy inventory systems that have to talk to Target and Walmart. They’re building on web-based technologies that give them a way of speeding up the process in the way they communicate with customers or offer promotions.

That’s just too hard for the incumbents—they simply couldn’t build a business this way.  So that’s why you are seeing a lot of the big players starting to buy these new guys up.

That’s the D—digital—in DNVB. Now let’s talk about the V: the vertical specific. One of the things you learn in the startup world is focus, focus, focus. While conventional wisdom has always been that it is better to have a bigger menu and the more options the better, what some of these new hot brands have realized is that people are overwhelmed with information. It’s actually very difficult to pick which glasses, which mattress, which this and which that. We want people to help us pick it. So what we’re seeing is a realization of the benefits of just having one or maybe a few products.

Price is also really important here. The best Digital Native Vertical Brands are a fifth to a tenth of the cost of the traditional ones. Dollar Shave Club is probably the perfect example of this. Just as the name suggests, they came in and said, “It’s a dollar.” There are those who say that the blades at Dollar Shave Club are not as good as Gillette blades, but for the lion’s share of the customer base, being able to save that much money on the product and still get a good enough product is a really strong value proposition.

So when you’re thinking about these businesses, both as an investor and as a builder, the goal is to be able to charge five to ten times less than a similar equivalent by pulling out of physical retail, by focusing on a few products and by not paying a margin to a distributor.

Some DNVB companies have also managed to disrupt the traditional buying practices. I think most consumers kind of hate the experience of buying a mattress and even to an extent, buying things like glasses or luggage. You just feel like it was a lot of B.S., a lot of marketing. One of the interesting things about Casper is they have a 100 night trial. After a hundred nights or fewer, if you don’t like it, they’ll take it back for a full refund. Changing the way people think about buying things—taking out the risk, the anxiety, the dealing with that sleazy salesperson—really changes the game and that’s why you’re seeing the growth of a lot of these brands.

I feel like I’m doing a commercial for Casper, but it is also a good example of how these types of businesses focus on design and packaging. If you search on YouTube, you can find all of these videos of people unboxing their mattresses and they spring out because they are so highly compressed into this box. If you think about it, it’s a real innovation. In the past, if you were buying a mattress, not only would you have to buy it from a sleazy dude but usually a couple other sleazy guys would come into your home, maybe take their shoes off if you’re lucky, go into your bedroom, take out the old mattress, and put in the new one. The reason they did this is that mattresses just couldn’t ship via UPS. Now all of a sudden, you’ve got a brand that uses traditional delivery services, and that changes the way one can get a mattress.

A lot of the innovation also centers around packaging. We’re involved with a company called PillPack, which is a pharmacy that fills all your prescriptions. Instead of those little brown bottles with the white tops that are hard to open, they put the pills in this beautifully designed sealed envelope that will have your name and the day of the week. The pack will say ‘Thursday’ and then you rip it open and it’s everything you should take on Thursday. It’s a great experience but it’s not a different product. These are the same pills you would take if you went to CVS or Walgreens, but it’s the packaging and the design.

The other thing these great brands share is having a voice. They have a unique edge, a unique perspective, a unique way of talking to their customers. Casper’s branding, for example, uses a lot of animation. The Warby Parker branding uses a lot of cool literary names to market the glasses. The Honest Company has the actress Jessica Alba as the spokesperson and face behind it and even that word, Honest, suggests something very specific about the company’s voice, which is, “You’re going to know the ingredients, you’re going to trust us, and this is going to be good for you.”

That voice has to be very inherent to the owners of the brand, it can’t be artificial. I think that’s what sets these modern companies apart from the traditional guys. When you see a Gillette  commercial you kind of think, “Yeah, it was entertaining, but there was probably an agency, and there was a committee, and there were edits.” Then you watch the Dollar Shave Club video with the the dude who says, “Our blades are f’ing great,” and you think, “ I like that guy.” There’s something really authentic about it and it makes you want to buy them.

We’re starting to see the fruits of these new approaches and I think it’s just the beginning. You see Unilever buying Dollar Shave Club for a billion dollars, you see Unilever also in talks to buy Honest Company, and I suspect it’s only a matter of time before we start seeing some of the other brands, like Warby and Casper and these others, potentially get acquired or maybe even go public.

That’s sort of the next chapter, but as they say, it’s the early days. Having said everything I’ve  said about these brands, I think you have to be careful. It’s not as easy as simply saying you’re going to come up with the best new earbuds or shirts or cell phone cases. Most of these categories have been historically extremely hard to break into, and there are many, many companies out there.

Product companies, unlike traditional technology companies, require building stuff, making stuff, slow turnarounds, and taking inventory. It is not just bits and bytes like software, where you can write some more code, see how it goes, release it into the wild, and fix it tomorrow. You can’t do that with glasses or mattresses or shampoo.

I think one needs to do a lot of homework before thinking about launching their own brand, or investing in one. So here’s some of the cold water. One, the multiples in these industries are low. Historically, consumer goods have traded at one to 3x sales, not five to 10x like software and technology. Second, you’ll quickly find that you have a lot of competitors. If you Google “buy a mattress online,” you’ll see Casper was first but is now hardly alone. So new companies will find that others will quickly copy them and undercut them on pricing, so that’s a challenge. Third, the brand message is hard to get right. You really have to have that voice and it’s got to be authentic. Some brands do that well and some don’t.

Finally, this idea of creating a hipster brand for everything that’s going to cost less is just not that simple. There are structural differences between all these industries. You’ve got to really look at the industry structure and see if you think there are some soft spots.

Let’s take glasses for example. If you Google Luxottica you’ll discover it owns almost every other brand in glasses you could ever imagine. But I think what what is nice about monopolies from an entrepreneur’s standpoint is that typically one company that owns a lot of the market will price a little bit too high because it’s had pricing power, so if you can get in there with a new product you can really disrupt practices that have been around for a long time.

 

Want to hear more? This article is based on Micah Rosenbloom’s live eCornell WebSeries event, Building Digital Brands in Analog Product Categories. Subscribe now to gain access to a recording of this event and other Entrepreneurship topics. 

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eCornell’s New Data Analytics Certificate Equips Professionals to Translate Big Data into Actionable Business Insights

— Program is essential step in data science career, ranked best job in America for 2017 —

Data scientists and data analysts are hot commodities; they were ranked the #1 job in America for 2017 by Glassdoor and named the sexiest job of the 21st century by Harvard Business Review. Demand for these roles—and their intersecting skills in business, statistics, and programming—is driven by organizations swimming in data but hamstrung by a shortage of employees with the critical mindset needed to translate it into meaningful decisions. Yet educational institutions lag in preparing students for these jobs. To close the gap, Cornell University is now offering professionals the opportunity to earn an executive certificate in Data Analytics so they can build core fluency in data analysis and a foundation for further technical study.

“Data analysis requires professionals to be informed consumers of data. Technical knowledge is necessary, but it’s actually even more valuable to know which questions to ask, how to ask them, test them, and translate them into business intelligence. Done well, data analysis provides a valid narrative business leaders can follow to make more successful strategic decisions,” said Chris Anderson, Ph.D., the certificate’s faculty author from Cornell University.

The Data Analytics certificate consists of three intensive courses that provide professionals with an essential understanding of how and why data is used to create value in business: Understanding and Visualizing Data, Implementing Scientific Decision-Making, and Using Predictive Data Analysis. Each three-week course builds the analytical mindset, starting with what data is, and moving into how to visualize data and build predictive models and reporting. Students strengthen their ability to connect data to decisions—learning how to make inferences about data samples and analyze relationships across data to predict future outcomes, with the option to use datasets from their own companies.

Courses offer step-by-step “How Tos” for all statistical processes and teach universal Excel-based analysis tools. From data visualization to predictive analytics, Professor Anderson combines accessible terminology with his wide-ranging experience in management science and statistics to teach skills that translate across software platforms.

The Data Analytics certificate is a critical credential for today’s professionals across many industries, complementing several eCornell certificate programs in marketing, leadership, revenue management, and human resources. For students new to statistics, courses expose them to the fundamentals and remove barriers to getting started. Professionals with deeper statistical knowledge will learn to ground data in the language of business decisions, and current data analysts will enhance their ability to communicate with key audiences and make meaning out of data. Senior executives will also become more critical consumers of data, and better able to guide and manage analysts productively.

Students who complete the program receive an Executive Certificate from Cornell University and will earn 0.6 Professional Continuing Education Units (CEUs) for each course completed.

 

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About eCornell
As Cornell University’s online learning unit, eCornell delivers online professional certificate courses to individuals and organizations around the world. Courses are personally developed by Cornell faculty with expertise in a wide range of topics, including hospitality, management, marketing, human resources and leadership.  Students learn in an interactive, small cohort format to gain skills they can immediately apply in their organizations, ultimately earning a professional certificate from Cornell University. eCornell has offered online learning courses and certificate programs for 15 years to over 130,000 students at more than 2,000 companies.

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Why Branding is Dead, and Why Mindset Is Your Only Hope In the Future

There was more content created online in the last two years than was created in all of the prior 2000 years. Every conversation, tweet, and piece of content is a part of your brand image, and impacts a prospect’s experience with your brand.

The future success of your brand relies on you being able to provide and manage a positive experience across over 60+ marketing channels, 24 hours a day. Simple branding no longer works; the only sustainable way to consistently provide a positive experience to your prospects is by understanding Mindset.

Salesforce.com’s Mathew Sweezey explains why the modern digital landscape has killed the traditional concept of branding, and why Mindset is your only hope for building a consistent brand in the future.

Mathew Sweezey is the Head of B2B Marketing Thought Leadership for Salesforce.com. A consummate writer, he authors a column for Clickz.com on marketing automation, has been featured in publications such as Marketing Automation Times, DemandGen Report, Marketing Sherpa, ZDNet, and is the author of Marketing Automation for Dummies. Mathew speaks more than 50 times per year around the world at events such as Conversion Conference, Dreamforce, SugarCon, and to companies including Microsoft, Investec, NetJets, and Restaurants.com, to name a few.

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Psychographic Segmentation – What Is It and Why You Need To Use It

No two people are created equal, and no two customers are identical. Market segmentation is a must for any company that wants to maximize its reach. Even within a specific niche, segmenting enables you to reach different sections of society, giving you inroads to more customers and increasing the loyalty of those consumers.

Demographic Segmentation

The most common form of segmenting is breaking down a population by demographics. For example, men might get a different message than women, and older customers would receive a different style of marketing than younger consumers. On the surface, this is a great way to differentiate between groups of customers who are fundamentally different and cannot be reached via identical means.

However, while demographic segmentation does have its place in marketing, it’s not the most efficient way to segment. To really find out the divisions in your marketplace, you have to dig a little deeper. After all, there’s more to people than their age or gender. Behaviors and attitudes are far more important in terms of creating customer profiles and identifying ways to reach groups of people.

Psychographic Segmentation

Psychographic segmentation takes the traditional forms of segmenting and goes well beyond the barriers that once existed. As the name suggests, psychographic segmentation ventures into the various ways that people think and feel about the world around them.

The more you understand a population, the better you’ll be able to market to this group. Psychographic segmentation allows you to develop new insights based on questions you might never have considered. For example, you can learn whether your customers value price or brand name, and you can also see how different discounts affect buying behavior.

The sky’s the limit with psychographic segmentation, but the deeper you try to go with market segmentation, the more diminishing returns you’re likely to receive. For instance, sending out surveys to determine consumer behavior only works if you get a high response rate and your customers tell the truth. Psychographic segmentation also requires frequent maintenance and updating of customer profiles. After all, demographics rarely change, but people’s attitudes change frequently.

In spite of some flaws, psychographic segmentation is easily the most effective and incisive way to understand your customers and give them the personal touch that’s necessary to retain their business. To learn more about psychographic segmentation and other market research tools, check out eCornell’s Marketing Strategy Certificate. This online program offers in-depth training on:

  • Marketing strategy, marketing research and analysis
  • Applied tools such as segmentation, targeting, positioning, and strategic pricing
  • Brand management and brand equity
  • Promotion strategies

Get more information on our Marketing Strategy Certificate.

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Finally! How To Close the Sales-Marketing Gap With Social Media

User-generated and brand-generated content on social media are great for bringing value to the customer relationship, but ultimately you’ll want to encourage a transaction. If your audience is engaged but you’ve failed to produce a desired result or a transaction, then it’s time to revisit your social media marketing strategy.

According to Forrester Research, US marketers are projected to spend $16.2 billion in social media advertising by 2019, which can inadvertently drive customers away from the point of transaction if done incorrectly.

You don’t own your customer on social media. You are only renting your space on platforms like Facebook, Twitter, Instagram, Youtube, and Pinterest. It’s time to reclaim ownership of your content and see true ROI from your marketing efforts.

In this informative session, Hashtagio’s Alicia Whalen explores how the marketing mix has shifted in the age of social media, and we’ll look at how a poorly executed social media plan can inadvertently direct a customer away from the path to purchase. You’ll learn how to close the gap between social media and sales and enjoy true ROI from social media marketing.

UPDATE: It was a great session > Watch it here.

 

 

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Pinterest Best Practices for Hotels

Recently, Pinterest launched an analytics dashboard for businesses, which gives brands the ability to more closely monitor their presence on the platform. If you haven’t started using Pinterest, it is a pinboard-style photo-sharing website that allows users to create and manage theme-based image collections such as events, hobbies and interests. Users can browse other pinboards for images, ‘repin’ images to their own pinboards, or ‘like’ photos. Hotels and restaurants can have their own boards where they can ‘pin’ images, track which users have repinned their images, and identify followers.

Best Practice Tips for Hotels

If you are just starting out with Pinterest, we recommend the following best practices tips for hotels and restaurants:

1. Start off strong with a visually striking profile. 

Choose your brand logo as your profile photo on the website (160×165 pixels in size) to maintain brand consistency across all social media platforms. If you haven’t done so already, take a few minutes and make sure that you are using the same high-quality image on all of the different social media sites your hotel is on. This will increase your brand recognition and will clue your followers in that the profile is the official one.

2. Organize boards that make sense for you.

The biggest power of Pinterest is that it gives your brand the ability to tell a highly visual story that drives real website traffic. Pinterest users have the ability to choose which pinboard that they want to follow, so not every one of your boards has to appeal to the broadest of audiences. That said, each of your boards should consist of at least 10 photos so that it’s substantial enough for a user to follow. Also, when naming your board, make sure that your title reflects the content accurately and is 20 characters or less.

3. Get creative with your pinning.

Similar to photos you share on Facebook or Instagram, the photos you share on Pinterest should reflect the fun and personal side of your brand and ought to tell a story that you couldn’t otherwise tell on your traditional website or OTA presence. Accordingly, some best practice pinboards that we’ve come across in the hospitality industry focus on seasonal events, specific hotel offerings and amenities, vacation themes and quirky destination tips from the hotel or restaurant. Here are a few examples:

Waikiki Scenes Inspiring Hotel Interiors Aqua's Hawaii Hotels Quintessential Austin

4. Spread the wealth and stay active.

In addition to pinning your own images, your hotel or restaurant should also repin photos from others to add to your boards. This will allow you to tell a richer brand or destination story. Also, you will want to keep your pin descriptions as concise as your board descriptions. Pinterest suggests that, for the travel industry, you simply identify the location in the image and the kinds of things you can do there. Keep it to no more than a few sentences in length.

5. Activity is rewarded.

Pinterest is similar to many other social platforms in that its home feed feature is how users discover and share new content. Accordingly, if you hotel is serious about managing a Pinterest account, you should commit to pinning new imagery at least a few times a week if not once a day. By doing so, you will give your brand a better chance to be discovered and engaged with. Once you have an active presence established, make it easy for people to pin your content by adding Pinterest’s follow and pin it buttons to your website and add a Pinterest link in your emails.

Measure Your Pinterest Activity

Pinterest’s new dashboard now gives business owners the ability to see all of their Pinterest traffic activity in an intuitive, cleanly laid out display. Your Pinterest data will show your pins/week, repins/week and followers. In close, it’s never been more apparent that Pinterest has become a major social media platform that can effectively augment your overall social media strategy.

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Account-Based Marketing & the Future of B2B Demand Gen

Account-based marketing (ABM) is shaping up to be the biggest revenue driver for B2B sales right now. While ABM as a business strategy has been around for quite some time, emerging technologies and new ways of looking at customer data have enabled it to become the go-to B2B strategy right now.

ABM is a red-hot topic in business, but many sales and marketing departments are still surprisingly unclear about why and how ABM works. So we’ve assembled a team of expert panelists to look closely at ABM and discuss its implications for the near and distant future.

In this 45-minute video panel discussion, we’re joined by three leading experts on account-based marketing: Engagio’s Jon Miller, Maria Pergolino from Apttus, and Craig Rosenberg, aka the Funnelholic, from TOPO. So don’t miss this video; it’s essential viewing for B2B marketers and sales teams.

And there’s more! We covered a lot of territory in the video, but I highly recommend these resources from our panelists:

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Determine Your Customer Lifetime Value

Marketing is all about maximizing a customer’s financial contribution to your brand. The more a customer spends on your products or services, the better it is for your bottom line. But there’s more that goes into a customer’s value than a big purchase here and there. We’ve taken the formula for determining your customer’s lifetime value from our certificate in Data-Driven Marketing to give you a sneak peek into the Ivy League strategies we can offer to enhance your marketing campaign.

Customer Lifetime Value Equation

You can use a simple equation to determine exactly how valuable a customer is to your overall success as a company. By figuring out the customer lifetime value (CLV) for your top customers, you’ll be able to see just how much each contributes to your revenue goals.

The customer lifetime value calculation consists of three distinct parts, which are multiplied to give you a quantifiable figure that shows a customer’s overall worth. Use this formula to see how your top customers shape up or to analyze a specific segment to see how certain customers can become more valuable.

Average Spend

The first part of the equation is simple. How much does a given customer spend, on average, when he or she patronizes your business? This number can be easily calculated through any sort of internal database you may have. You can also help to drill down to the individual customer by using customer loyalty cards or personalized website logins for online purchases.

Repeat Sales

Knowing how much a customer spends is only valuable if placed in the right context. A customer who spends $1,000 for a one-time purchase is less valuable than someone who spends $100 each month over the course of a year. While you obviously want a customer to spend as much as possible, the frequency with which a customer shops is just as important. Furthermore, frequent visits show a measure of loyalty that can’t be quantified by looking solely at a customer’s average expenditure.

Retention Time

Let’s face it, there’s no such thing as a lifelong customer. You’d be foolish to expect a customer to stick around forever. But you can figure out how long the average customer supports your business and apply that to the general population. Again, the longer the retention time, the better off you are, but some businesses aren’t based around lengthy periods of retention. For example, a store that specializes in baby merchandise won’t be able to retain customers for as long as a store that targets adults.

When you multiply all three of these elements, you end up with a figure that can be used to represent a customer’s lifetime value to your business. This amounts to the present value of future cash flows, so you may end up getting more out of customers than you expect. In any case, customer lifetime value is a great tool to use as you attempt to identify and target your most important customers.

Alternate Calculations

The calculation described above is just one way to calculate CLV. Other formulas incorporate additional factors, such as acquisition costs, direct mailing costs, and your company’s margin rate.

If you’re interested in learning more about CLV and other marketing concepts, consider the Data-Driven Marketing certificate program offered by eCornell. You’ll learn about the elements that comprise customer lifetime value, as well as how it can best be used as part of a comprehensive marketing campaign.

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Google’s 9 Principles of Innovation for Every Organization

In just 16+ short years (how time flies when it comes to innovation online), Google has gone from a company with one product to one with more projects than you can name, daily touching the lives of billions around the world, pushing the boundaries of innovation at every turn. Google’s Chief Social Evangelist, Gopi Kallayil, outlines the 9 principles of innovation at Google and how they can be applied to your organization.

1. Innovation should come from everywhere

Do you have an innovation department? Maybe a Chief Innovation Officer? Probably not. And they don’t exist at Google either. It is the job of everyone to innovate, from top to bottom. Innovation can come from anywhere in the company and many times, allowing each employee the opportunity to contribute to big innovative ideas, you will get some surprising results.

Google example: Dr. Roni Zeiger, chief health strategist for Google, convinced higher ups it’s Google’s moral responsibility to include Suicide Prevention Hotline information above the algorithmic search results for suicide.

2. Focus on the User

Product design decisions should always be made around solving customers’ problems, not by how much money it will make. Design a beautiful and useful user experience, and the revenue will follow, even if it is much later.

Google example: Instant Search provides search results as you type, leaving no time for the user to see the ads, but the UX is so great, people come back to Google over and over.

3. Think 10X

If you come into work every day and improve your process a little each day, you only achieve incremental progress. If you want innovative change, you need to think about how to change things by 10X. Think bigger than what you think is possible and don’t let available resources stop you.

Google example: Google Books was started in 2004 when Google didn’t have the power, funding, or technology to take on such a huge project, but that didn’t stop them!

*Fun fact: Marissa Mayer was the first page flipper for the project in prototype until robotic arms were built to flip the pages in time with the camera exposures.

4. Bet on Unique Insights

Every organization has unique insights because they see the world through a certain lens that no one else has. Don’t get stuck innovating your own products when you could have the next big idea to change the world.

Google example: The self driving car: Why did Google come up with this instead of a car company? Because their engineers saw a solution to the problem of over 1,000,000 fatal car accidents every year. The problem was human error. Take out the human and solve the problem.

5. Launch and Iterate

Some companies only ship when products are flawless and perfect. The problem is that no product is ever perfect. Once it hits the users, there are always nooks and crannies that appear full of issues and needed improvements. Take a leap of faith and release your next product as a reasonably functioning prototype and let your users provide all the feedback in less time. Iterate, then relaunch, then iterate and relaunch again. The most important button on any product is the feedback button. Use it!

Google example: Google releases a new version of Chrome every six weeks. Constant iteration has led it to become the #1 browser in many countries around the world.

6. 20% Time 

Give your employees 20% of their time to focus on the items they are most passionate about. You may be worried they will waste their time on frivolous side tracks, but when the ideas are shared around, people spend their 20% devoting their time and resources to the best ones, creating a self-governing and self-regulating environment. This truly allows everyone in the organization the time to act on their innovative spirit.

Google example: Street View on a bike was a great idea developed by Dan Ratner, Senior Mechanical Engineer. He spent his 20% time working to make the equipment smaller and more portable so that people could view the world’s most interesting places that aren’t accessible by Street View cars. Check out the underwater cam on the Galapagos Islands!

7. Default to open

Everyone wants to hire the best and brightest top 1%, but who can hire 7 million people? By opening up your your development to the world, you are tapping into a huge community of all the top 1% minds in the world. Tap into the collective wisdom of the people that use your product as well. They use it, so let them come up with your marketing ideas and strategies, like these adorable kids.

Google example: Map Maker is letting rural communities around the world create their own Google Maps. Over the course of 3 years, the small village of Kottayam in India built a very comprehensive map of the town where a map never existed before.

8. Fail Well

There should be no stigma attached to failure. If you don’t fail often, you’re not trying hard enough. You’re not pushing the boundaries of innovation. Failure is a badge of honor. Be honest about it and fail with pride.

Google example: Do a google search for failed google products and you will find a digital graveyard complete with skulls and crossbones. A few of my favorites: Buzz, Google Wave, and Google Dictionary.

9. Have a Mission that Matters

The most important principle for innovation in your organization is having a mission that people can believe in. Having a sense of  mission and purpose gets people in the door every day with the need to be innovative.

Google example: Ask any Googler why they work there. It’s not the great benefits or common areas stocked with snacks and ping pong tables, it’s the mission. They seriously believe the work they do has a huge impact on millions and millions of people. In tens of thousands of rural poor schools around the world, access to computers and the internet with products and services from Google level the playing field for information. Everyone has the same access to information whether they are in a small village or the Stanford University library.

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How to Write Market Positioning Statements

Your organization is gearing up to launch a new product or service, or enter a new market. You’re on the marketing team. You’re familiar with the details of these new endeavors; you know your customers. Where do you start? (The following guide is an excerpt from my Marketing Strategy certificate.)

Start with the positioning statement.

A positioning statement is a concise description of your target market as well as a compelling picture of how you want that market to perceive your brand. Though it may read like something from your promotional materials, your positioning statement is an internal tool. Every product and marketing decision you make regarding your brand has to align with and support your positioning statement. A good positioning statement is a guidepost for your marketing efforts. It helps you maintain focus on your brand and its value proposition while you work on market strategy and tactics.

Guidelines for Good Positioning Statements

What makes a good positioning statement? Here are six keys to keep in mind:

  1. It is simple, memorable, and tailored to the target market.
  2. It provides an unmistakable and easily understood picture of your brand that differentiates it from your competitors.
  3. It is credible, and your brand can deliver on its promise.
  4. Your brand can be the sole occupier of this particular position in the market. You can “own” it.
  5. It helps you evaluate whether or not marketing decisions are consistent with and supportive of your brand.
  6. It leaves room for growth.

Template for Writing a Positioning Statement

Here’s a basic template for writing a positioning statement:

For [insert Target Market], the [insert Brand] is the [insert Point of Differentiation] among all [insert Frame of Reference] because [insert Reason to Believe].

  • The point of differentiation (POD) describes how your brand or product benefits customers in ways that set you apart from your competitors.
  • The frame of reference (FOR) is the segment or category in which your company competes.
  • The reason to believe is just what it says. This is a statement providing compelling evidence and reasons why customers in your target market can have confidence in your differentiation claims.

The wording of your positioning statement doesn’t have to match this template exactly, but to be effective, it must contain the five main components in brackets above. Occasionally, a positioning statement will contain a point of parity, when it is central to a product’s positioning.

Above all, your point of differentiation, frame of reference, and reason to believe must be meaningful, important, and convincing to your customers, not just to your company.

Examples of Great Positioning Statements

The following positioning statement was used by Amazon.com in 2001, when it sold books almost exclusively:

For World Wide Web users who enjoy books, Amazon.com is a retail bookseller that provides instant access to over 1.1 million books. Unlike traditional book retailers, Amazon.com provides a combination of extraordinary convenience, low prices, and comprehensive selection.

Our fictitious company, Underfoot Industries, has decided to pursue two target markets: schools and light commercial customers. These are distinct market segments whose customers rate their needs differently, so the company must develop two positioning statements:

For schools, the Underfoot Industries EverAwesome line is the strongest, most durable carpet among all commercial-grade carpets for organizations on a budget, because it is made using our patented SteelTwist technology. The EverAwesome line features Underfoot Industries’ patented technology for producing high-strength, low-wear carpets. Underfoot named its production technology “SteelTwist” to appeal to customers, such as schools, who place a very high value on carpet strength.

For today’s appearance-conscious business, the Underfoot Industries EverAwesome line is the carpet that stays new-looking longest among all commercial-grade carpets. Our patented technology produces durable, low-wear carpet whose lifetime cost is 40-80% lower than other brands. The brand name “EverAwesome” tells customers: “This carpet looks great, AND it will last a long time.”

If this guide to market positioning statements has helped you guide your marketing strategy, I highly recommend you learn more about the Marketing Strategy certificate I teach through eCornell. It covers communicating the value of your brand in more detail as well as marketing research and analysis, distribution strategy, decision-making, and new media marketing.

Update: Thanks to the immense popularity of this post and all the great feedback we have received, we created a free Market Positioning Statement generator. Simply plug in a few pieces of information, hit submit and get your statement in 30 seconds! It’s time to take your business to the next level- check it out here.