One of the biggest challenges facing natural products companies, according to the Natural Products Marketing Benchmark Report 2011, is the perceived confusion in the market – confusion between organic and natural, misunderstanding of what is organic, misinformation about the products and confusion around the value proposition.
With all of the confusion in the market it should not be surprising that 50% of respondents said that price sensitivity is one of their greatest external marketing challenges, and by that they meant justifying their price.
There is not much a single company can do about the confusion between organic and natural or about the misunderstanding of organic. As a marketing consultant for the natural products industry, I have observed that this confusion comes from the self-interest of multiple companies promoting definitions which happen to support their products.
What you can do is control your company’s value proposition.
What is a Value Proposition
At its most basic, a value proposition is where you prove the value of your product in relation to its cost and benefits. It tells you why someone should buy your product or service. It helps differentiate your offerings from the competition, and it makes a compelling argument for why consumers should care.
You can find many examples of value propositions on the web. Just go to the paid ads on the right hand column of Google and click on them. Many of these will go to a specific landing page which will attempt to give you their value proposition as quickly as possible. “Vitamin C on steroids.” “Guaranteed lowest price on Echinacea” “Most Potent Goji.”
These are short term value propositions designed to convert the consumer into a paying customer.
For long term results, however, natural products companies need to define their primary and secondary value propositions, and then make sure that all marketing supports them.
Outline for Creating a Value Proposition
Before you create your value proposition you need to conduct some preliminary research.
1. Competitive Analysis
This entails first determining who your competition is. That should not be limited to companies that make the same products as you but rather it should be broadened to include those companies that provide the same wellness benefits as you do. If your super fruit is an excellent resource for Vitamin C, then you compete not only with other super fruit companies, but also with every other company that offers a Vitamin C alternative.
Once you have your list then go on their websites and try to determine what their value propositions are and whether they succeed in differentiating themselves from other companies. You need to know what others are saying about themselves so when it comes time to craft your value proposition, you can see how it’s different and better than your competition’s.
2. Keyword Analysis
Let’s face it, most people do their research on the web. So what is it that gets them to your website? What are the words that get the best results? Determining and analyzing the top keywords will tell you more about how people are finding you and what words they use. If you aren’t familiar with how to do this, there are many reputable SEO companies that can help. This will have a double benefit for you. It will help you with your value proposition and with your organic search.
3. Customer Analysis
Try to categorize your customers through segmentation and also try to find out why they use your product. If you can interview a cross section of your current customers and ask them why they chose your products, what their main reasons were for doing so and what advantages they perceive about your product compared to your competition.
4. Prospect Analysis
This is similar to the customer analysis except that you are dealing with those who have visited your website but have not purchased or those who buy your competition’s products.
Once you have conducted this preliminary research you are ready to start developing your value proposition.
5. Key Messaging
Based on the information gathered in your research develop a list of key messaging bullets. At first come up with the benefits as you perceive them. It could be how you grow your ingredients or what groups your products support or the efficacy of your product.
Then take this list and see how these bullets match up with what your competition is saying, what your customers and prospects expect, and what people look for when searching for your product’s solution.
6. Value Propositions
From the key messaging bullets and your analysis of how they match up with your research, start crafting 3-5 primary value propositions. Once these are done, compare them once again with the research. Choose 1-3 primary ones and 1-3 secondary ones.
7. Test your Value Propositions
There are many ways you can test your value propositions – focus groups, interviews, alternate landing pages from pay per click ads, internal conversations. But in the end, it is how comfortable you are in promoting your value propositions, because once you commit to them, they will become the essential support for the branding of your products and your company.
Everyone in natural products is enamored by social media marketing. According to the Natural Products Marketing Benchmark Guide 2011, Facebook is the 2nd most used marketing tactic, almost even with websites, and Twitter is #7. Natural marketers use social media for a bunch of reasons – to increase their brand awareness, to improve customer loyalty and drive web traffic, and for research (yup, the #1 type of market research conducted in the past 24 months by natural products companies).
But one of the things that came out from the report was the paucity of Facebook followers for each of the respondent’s Facebook pages. On average there were only 1,898 people who “like” their pages. (This is not all natural products companies, just from those companies that participated in the survey.)
So why so few followers?
Maybe it’s because these companies have Facebook pages like everyone else’s. There is no branding on these pages – just the standard wall. Don’t get me wrong – as a marketing consultant I love Facebook walls. They are the heart of any Facebook company page. But as far as visual branding goes – they only perpetuate the Facebook brand.
I went to some natural companies that have special branded pages and that are using their Facebook more and more like another website.
Tom’s of Maine
Over 260,000 people “like” Tom’s Facebook. When you go to their Facebook page, it’s all Tom’s.
The beauty of this page is that it emphasizes natural beauty and, more importantly, Tom’s brand in relation to that message. It ties in the Sheryl Crow tour and implies that people who “like” Tom’s will have access to the tour and free tickets, if they so choose.
You can also buy their toothpaste. Click on the link and you go to an online store.
So what’s the takeaway from this? Tom’s does not assume you understand their brand or who they support or that you know their messaging. They are still marketing to you. So if people take the trouble to find you on Facebook, give them a big and bold reason to join in your conversation.
Not boasting the same numbers as Tom’s, Stonyfield Farm has over 84,000 people who “like” them. And do they have a branded front page? Why of course.
Let’s break this page down for interaction. First there is a video embedded at the top and it’s about the organic movement. Not about yogurt. It features a short video of someone on the street who tells us how he got involved with the organic movement.
Underneath is a button that allows you to share your story. To do so you go to the www.yourorganicmoment.com site.
Scroll down and guess what. You get rewarded with coupons, free yogurt and groceries – provided that you share your story.
Now for a quick question: Name me some companies that support the organic movement. Or, name me some companies whose brand is associated with organic. I think you get the idea.
Do you think that Stonyfield would have gotten that across as quickly if their main page was their wall?
So the takeaway here is you can use your Facebook main page to build a community while getting across your key brand attributes.
Silk has over 79,000 people who like their Facebook page. Unlike Stonyfield which does not overtly promote its products, Silk is all about Silk (and not milk).
But what it’s really about is making Silk as accessible to the average person. You get a chance to see a series of videos that seem to be made by true users of Silk – kind of like a mash between a video testimonial and ad.
The takeaway is that you can use your Facebook entry page for whatever singular purpose you want. In this case it’s about getting people to feel OK about drinking Silk instead of milk.
Facebook Home Pages
There are not that many natural products companies that have unique Facebook home pages – so the opportunity to stand out early is still here. There are those companies that are doing well without these pages, but they are a minority. Burt’s Bees has a whopping 427,000+ people who “like” them, so you can still build up your Facebook followers without a unique home page.
For most of you out there who are trying to establish your brand, why wouldn’t you have a unique page that can reinforce your brand. It costs you the design of that page and nothing more and it’s pretty simple to do.
If there is one finding in from the Natural Products Marketing Benchmark Report 2011 that’s shocking, it has to be that only 39% of respondents had a method for quantifying their marketing’s ROI.
In an age where you have the tools to measure just about anything, why is it that natural products companies don’t keep tabs on what their marketing really does for them?
They have the motivation to do so. According to the Report:
In fairness to marketers selling natural products, they face some obstacles that hamper their ability to measure their ROI.
Sell-through figures: Not all stores provide sell-through figures. If you have a marketing campaign that integrates local advertising, live demos, new POP and limited-time discounts, it’s difficult tracking the ROI when the store doesn’t give you the information on how the products sold through during the period of the campaign. The only thing you have to work with is the quantity of products you sold to the store before and after the campaign. You also need the year over year comparisons. So it’s hard, but not impossible.
‘Cost-of-doing-business’ trade marketing: In the Benchmark Report, the percent of those that measure the ROI of their trade spend is paltry.
The only reason that I can see for this is that marketers must be resigned to the unfortunate fact that their trade spend is the price of doing business in the industry. Much of their trade dollars go to non-working marketing and sales spends like unauthorized deductions and distributor and retailer fees, as well as to those programs that they feel they have support to remain on the shelves such as distributor and retailer advertising. Maybe their logic is since this is the cost of doing business, why put an ROI on it?
Mmmm. Even a small amount of ROI measurement is better than no measurement at all.
Setting up the analytics and tracking ROI is not easy. It requires commitment and skill. At times it can seem overwhelming which is probably why larger companies are more likely to track marketing ROI than smaller ones (Data from Natural Products Marketing Benchmark Report 2011).
The thing to remember about ROI is that it’s a measurement, and all measurements are relative.
For ROI you want to set up some kind of benchmark from which you can start measuring the effectiveness of your marketing. The extremely broad measurement (year over year marketing spend vs. year over year sales) won’t really help you because it can’t point to which tactic worked best.
I’m not going to discuss marketing ROI from web sales, since that is a different animal from trying to measure ROI from store sales. Suffice to say that with all of the analytical and tracking tools at your disposal for web sales, can you really think of a good reason NOT to measure your marketing ROI? But back to store sales.
For those who don’t do ROI for their marketing, start small and conduct tests. Pick two to four similar shopping environments (same size towns, same store makeup, same sales etc.) and split them up. Half get one marketing campaign and the other half get another.
The ideal would be to have the store agree to give you sell-through figures. But if you can’t get that, try to get the stores to order at the same time before the test. That way you can see which stores will place a new order the soonest during or after the test.
Keep tabs on the marketing expenses (you need that in order to calculate your ROI later).
After the test compare the sales. Keep in mind, ROI is not the same as results. One type of campaign might get you better results but it might cost more than the other. The ROI is calculated by the formula - (Profit minus Investment) divided by Investment.
What you might discover from this is that your live demo program which gave you great results may actual be less profitable than the radio campaign in the other market (or visa versa). That’s the value of ROI.
Remember, if your main marketing challenges are not enough budget or convincing your boss, ROI is an excellent way to make your case. Without it, it's just you pushing the same boulder.