Scott Norton, co-founder of Sir Kensington’s and founder of N+1 Ventures, knows a thing or two about marketing consumables in an online world. The internet has changed everything about the way we shop: how we buy, where we’re most receptive to advertising, and who we get our information from. The food industry is no different. From social media posts to internet cookbooks, the internet has shaped the way people buy and consume food. If you want your CPG company to keep up with the trends, you have to change your marketing strategy. Scott joined us on Subscription Radio to discuss CPG marketing, the pitfalls of ecommerce, and how to create a community for your brand.
- Build on ritual and celebration
- Help customers estimate their usage
- Create your own community
- Don’t fall prey to marketing FOMO
- Make membership special
- Check out N+1 Ventures
- Connect with Scott Norton on LinkedIn or Twitter
- Check out Rodeo
- Connect with Ben Fisher on LinkedIn or Twitter
- Connect with Joel Van Horn on LinkedIn or Twitter
03:33 – The internet changed the way ideas flow through society
Scott said the internet is what has changed the food industry the most, because the internet has shaped the way ideas flow through our society.
“I was on a panel a couple of years ago, and someone asks, what's the biggest thing that's changing your industry? And this is the food industry. I thought about that. And of course, you'd expect an answer like, healthier habits, or sustainability, or a certain retailer’s pricing model. The answer I came up with was the internet, because the internet changed the way that ideas flow through our society. And now, instead of people just getting their food education from television and from fast food advertisements, they started to get their education from social media, from peer to peer, internet cookbooks, from global flavors, and stories. And of course the food network was an interesting overlapping part of that. But now all of a sudden you saw the rise of these frankly cultural diet trends, like keto or paleo, or even plant-based movement is of course big here, too. That originated on the internet.”
09:53 – The pitfalls of ecommerce
Ecommerce used to be a democratizing platform for product marketing, but now the rules change too quickly to keep up with.
“Now the new gatekeeper is not Whole Foods. The new gatekeeper is Meta, formerly known as Facebook. And with Whole Foods I knew that in 2011 when I pitched them, they would take a 38% margin on my product. Today they take a 38% margin on my product. They're always going to take that, maybe 42%, whatever, but it's in a very narrow band. Facebook as a distribution awareness channel, they change their margin on you like that. So one month you might have a sustainable business and you know how much Facebook is taking of your overall pie. The next month Facebook says, you know what, we're a price maker. You're a price taker. We're making quarterly earnings on Wall Street, like clockwork. They have PhDs, fantastic data scientists. They know exactly what they need to do for price elasticity to raise prices for you to go to market and for them to make their earnings. So the rules of the game in this new world change a lot more quickly than the rules of the game in the old world. And what was once seen as a great democratizing factor of ecommerce has actually now become a trap if you don't play your cards right.”
13:37 – Don’t fall prey to marketing FOMO
It’s easy to get FOMO over not being able to go down every marketing avenue. But it’s important to make the most of the resources you have available to you.
“In a lot of ways I used to have a lot of FOMO. Because I was like, ‘Oh DTC is so cool. I want to come out with this spice blend, and I want to create something where we have a direct connection to the consumer.’ And I still wish that we really knew who each and every one of our customers were, that would be so powerful. And that's such a majestical idea. And something that's really hard for these big CPGs who all worked through channels, but at the same time too, I like having our products available in lots of stores with predictable economics. And of course what those stores do is they create awareness for you. And not only do they create awareness, but they're also a check mark of approval, because then you walk into Whole Foods and you see something at Whole Foods, that carries a lot of weight. You knew we went through their buying process, through their ingredient list. And when they merchandise it, Whole Foods is kind of like an art gallery in that respect, where they curate the products in there, versus other retailers which might just offer everything under the sun.”
15:37 – Create your own community
Scott explained how Sir Kensington’s built a community within their brand called Taste Buds as a way for consumers to connect with the brand and with each other.
“What we did though, is we created this community called the Taste Buds. And the Taste Buds is the Sir Kensington's fan club. And we have tens of thousands of members that basically are a member of this private forum. And we've built that list through affiliate emails. Even on the side of our packaging, actually we have variable printing where some of our mayonnaise say one thing and some say another thing. One of them says, ‘Do you know that this mayonnaise has a secret society?’ And it's a picture of an Illuminati pyramid. And so part of that, it took us a long time to understand the mindset model for our customers. And our customers ultimately are someone who's a lovable weirdo and is always looking for a better way and does things left of normal. And so our customer is someone that would be like, ‘Do I want a regular mayonnaise? Or do I want a mayonnaise that has its own secret society? That's the mayonnaise that I want.’”
18:18 – The resurgence of QR codes
It can be hard to get people to do things like scan a QR code or sign up for an email list, but the pandemic has caused touchless interaction to rise in popularity.
“We were never really heavy on digital marketing because there was no attribution. Because we weren't funneling people through a buy box, it was really hard to ramp up the spend because of awareness. So this is a very interesting holy grail, and I'm now looking for companies that are able to bridge this gap between the space of the retailer. Basically finding really creative ways to do what you're talking about, Ben, which is to register the product. Because people just have a million things to do. And like even scanning a QR code, putting an email in, it's a lot to ask unless you're really deep into the brand. But I think what's interesting about this space is that the pandemic has totally changed the way we use QR codes. The technology is 20 years old, but we have now reoriented. One, obviously, because everyone has smartphones, but two, because with the pandemic you did everything touchless. So I'm curious how those are going to evolve.”
22:27 – Build on ritual and celebration
People engage in rituals and habits every day. To boost your product’s chances of success, link your product with a common practice or habit people already have.
“In life, there are habits and rituals that we engage in every day. And the definition of a habit is a behavior that you don't use any brain cells to do. You don't decide to do it. And then there are different ad hoc actions that fill our lives. What am I going to do today? What am I making for dinner? All these things we actually have to expend mental energy doing. And what I've found is that in terms of getting involved with businesses, investing, even creating products, is occasion is a really, really crucial element to the success of a consumable product. And so there's a reason why Corona uses this image of the beach. Because what they’re saying is not only when you're on vacation, but anytime you want to feel like you're on vacation, that's the occasion for Corona. I think beer does this often, by using after work or certainly football. They group themselves around these occasions. And I think what we found with Sir Kensington's mayonnaise, for instance, which is a far, far bigger business than our ketchup, was that there was a lot more occasion around mayonnaise because people would make sandwiches on a daily basis. Whether it's for their kids' lunches or for their own lunches. And so when you get in that sandwich routine, all of a sudden it's magic.”
24:13 – Engage in your customer’s world
Habits are hard to break and hard to make. Think about the customer’s world, what habits they already possess, and connect your product with one of those habits.
“I think that you've got to have both a ritual behavior that's already in a customer's life. And if you can create that ritual behavior, then that's magic, but good luck. Because habits are really hard to break, and habits are really hard to create. And you need a sufficiently differentiated product. I'm not really interested in subscription coffee companies because, yeah, it's an amazing ritual, but you can just swap them in. And it's very hard for customers to differentiate between different roasts of coffee. There’s not a big moat there, in terms of product. So I would say, for any founder, any early-stage entrepreneur, or even later stage development products, think a lot about the customer's world as a clock with different data parts. The morning, they get up at 7:00 A.M., they go to bed at 10:00 P.M. What are the different elements of their life and where are their occasions? Where are their rituals there? That's what you're plugging into. That's the canvas that you have to paint on as a CPG brand.”
25:29 – Help customers estimate their usage
With subscription offerings in CPG and consumables, sometimes it’s hard to determine how much product you really need. Make it easy for customers to estimate their usage.
“One of the challenges for subscription offerings in CPG and consumables, and food especially, is that it's really hard for customers to estimate their usage. So you go to that subscribe and save page, and you're like, well, yeah. Chia. I have chia in a smoothie. I make chia smoothies often. I buy the same skew every time. I know I'm going to be right back there buying chia. But I don't know, am I going to make 10 smoothies this month? Am I gonna make 50 smoothies this month? And then when I make a smoothie do I put in a tablespoon? Do I put in two tablespoons? Well, this package is labeled in net weight. How many tablespoons are in the net weight? This is too complicated for me, just let me buy it once. So there's probably an opportunity in software around usage estimation or around even historical, like, ‘Oh, you've bought this product three times, and you do it at this frequency. We know how frequently you do it. Do you want to subscribe to it?’ Stuff like that could be interesting.”
36:11- Create a brand voice
Consumers and inquirers want to see a brand with a strong cultural presence that creates community and not just customers. Make your consumers feel like a part of the brand and overall community.
39:51 – Make membership special
If you want to grow your brand, you need to make your membership valuable to your customers. Find a unique angle for your product’s membership and capitalize on it.
“Generally this internet marketing world of ‘growth marketing’ has neglected the badge value of a lot of these brands. And that's why you see now all of these brands doing single-digit millions in revenue, and maybe they're economically sustainable, maybe they're not. But where are they going to go? And who's going to pick them up? Because the big acquirers, a lot of the nuts and bolts of the business, they don't actually really care about. But what they do want is that you have a distinct cultural voice that inspires enrollment in people. And to stand for something, to have this tribe, for lack of better word. And so that I think is also something that brands could really do a lot more of is recognize that when people are subscribers, they're members, and they should be thought of as card-carrying members, that there's community there, reciprocity. Treat those people really well. So I think there's a lot of fertile territory there, especially as retention becomes higher on people's priority lists about what can we do for our members to make them feel like they're part of a community they’re proud to be a part of, and also see regular benefits there.”
45:01 – The importance of magic and logic
Scott said the most successful companies have a combination of magic and logic, which is crucial for brand building.
“My company N+1 is my platform. And one of the things that N+1 stands for is language and mathematics on equal footing, coming together. It's about the magic and the logic. So I've seen too many people basically create these art school brands and they think the idea is everything. And they commercially go nowhere. They were cute things that belong in a museum. And I've also seen a ton of people who were really, really smart with MBAs and private equity backing create something that doesn't have that magic that's going to spread virally. So it can't just be, I’ll phrase it another way, I don't necessarily want to get involved with things that are just one or the other. I want to be involved in things where the magic and the logic come together. And so emotional engagement, that's just what's interesting to me. And I think that also is just a crucial part of brand building.”