organic growthOrganic growth requires a demand for your products that pulls them through the distribution system. Inorganic growth is fundamentally trying to push your products through the system.

Organic growth takes place primarily as a result of word-of-mouth, quality, value, and third-party endorsements. Examples of inorganic growth tactics include advertising, temporary price reductions, quantity discounts, and couponing. But unless your product’s quality and value eventually create organic sales growth, inorganic “push style” growth initiatives must continue on an ongoing basis. This is ultimately unsustainable.

Eventually, you want your brand’s good reputation with your customers to drive organic growth. You may start sales with push, but you must sustain them with pull.

1. Support Worthy Causes

We built a national bestselling Consumer Packaged Goods brand – yet, WE NEVER ADVERTISED! At first, we couldn’t afford advertising. It seemed so futile with all the commercial advertising salespeople telling us that we had to advertise over and over again on a continuing basis in order to (hopefully) gain traction. And then, if we stopped advertising, we would be conspicuous by our absence! So then presumably we had to continue to advertise. So they had us either way, sort of good money after bad. Even if we had the money, it still looked like a no-win situation for us.

So, partially because we were unconvinced that advertising would work, and just as much because we were broke, we were forced to be resourceful and find another way to get the word out. We couldn’t just throw money at the problem. And what was the problem? We had to get customers to come into the retail stores where our products were for sale …and buy them!

One day early in our business, when we were just about to be discontinued for lack of sales, we got a call. It was from an inner-city neighborhood group who wanted us to donate to an afterschool park to keep their kids off the streets. They wanted thousands of dollars for slides, swings, and sandboxes. We had none to give.

But we did have our products. And so we offered them our wines for their next fundraiser. We told them that maybe it would loosen some folks up and they would write bigger checks. Or maybe they could auction them off and use the money to buy some slides and swings. They were disappointed that we couldn’t write them a big check on the spot, but they took the wines, thanked us, and we never heard from them again.

The next month, when the sales reports came out, they were a disaster except for one strange bright spot. You guessed it, the stores in the vicinity of the neighborhood park fundraiser all had reordered our products! We wondered if the results were caused by our donation. So we went to another neighborhood and found out what was important to them. They were trying to clean up a creek. We donated wines for their fundraiser, and this time, put out lists of where our products could be found in stores in their neighborhood.

The “anomaly” repeated itself! Had we discovered something that was very targeted, and very effective at getting the word out? If so, it was a whole lot more efficient than advertising. And a lot more rewarding, too. Worthy Cause Marketing as we termed it, became one of our most important growth strategies. We used it in neighborhood after neighborhood, city after city, region after region, and state after state, until we had covered the entire US. We even used it successfully in other countries. And even once we had enough money to afford commercial advertising, we chose to use Worthy Cause Marketing.

By supporting local nonprofits and small worthy causes in the vicinity of the stores that carried our products, we were able to give the members of those targeted groups a social reason to buy our products. It turned out to be much stronger than any mercantile reason. They didn’t just buy our products, but they felt obligated to advocate them to their friends and family. After all, we supported their cause.

And we didn’t just support their cause with product donations. We got out there and helped them set up and tear down for their events. They saw us working side-by-side with their members at fundraisers and other important functions such as beach cleanups. They saw that our products featured tags that promoted their goals and suggested that our customers should donate to their cause. And they saw that we were giving them access to a venue that they were heretofore unable to access as a forum for their cause – the retail marketplace!

This approach to organic business growth provided us with customers coming in the doors of the retail markets asking for our products. It not only saved our business, but ultimately built our brand.

This is one example of how we used pull marketing to achieve sustainable organic growth.

2. Support Consistent Quality

All the marketing in the world will not gain you traction unless the quality of your product is really there, and there on a consistent basis.

You spent all that time and money building your brand but powerful branding can be a double-edged sword. If your quality takes a dive all that work can suddenly work against you as your reputation plummets overnight.

We see this repeatedly in the marketplace. Startup brands become strong and become household words after years of effort by their original founders. Then the large holding companies acquire them, and immediately the quality suffers. This hurts their reputation and stifles organic growth.

We like to advise cash-strapped startups, “You can outsource everything except sales, accounting, and quality control!” Quality control is absolutely essential to produce organic growth. Your customers have to be so impressed with your consistent quality that they recommend your products to others. When they do that, they put their own personal reputation on the line. This is why endorsements from friends are the most powerful catalyst for organic sales growth.

When your customer becomes an advocate and the product she has been promoting loses its quality, she feels obligated to retract her recommendations and even warn her friends against future purchases of your brand. Nothing kills organic growth like poor quality.

3.Support Customer Service

organic growthOne of the biggest problems with online advertising of distributed CPG products is that they can be out of stock at a local store. Regional and national advertising also assume that your products are readily available. Don’t let your customer get all excited by your multimedia advertising program, go to their local store and then becomes frustrated because your product is not there! Maybe it had never been there, or was there, sold out, and was not replaced. No matter the reason, they say your brand is “undependable!” Never mind whose fault it might be, they blame your brand!

Organic growth can only take place when your products are reliably in stock. You, as the brand builder, cannot expect or assume that your distributor or your retailer will maintain enough inventory so they won’t run out of your products before their next order arrives. In fact, you, or someone on your payroll, may have to solicit and place the next order for them! Customer service in the CPG business means guaranteeing dependable accessibility at retail.

Another aspect of customer service affecting organic growth is how your company responds to customer complaints and suggestions. Is your customer service department really just “complaint resolution?” Or is it “customer intel” where you engage complaining customers by taking their suggestions directly to your marketing and production people.

We found that most complaining customers are really brand advocates in disguise. “Their brand” let them down. That’s why they’re calling. Your company is judged more by how you handle things when you mess up than when things are running smoothly. How you handle a complaint shouts of volumes to your customers about your integrity. By listening to them, taking action on their suggestions, and getting back to them with your solutions not only keeps your products current, but encourages, reinforces, and validates their advocacy.

4. Support Sustainability

It’s official! According to the Nielsen ratings, customers prefer brands that tout sustainability. In fact, in many cases, they will actually pay more for products that are sustainably produced or packaged, or include sustainable ingredients. The most conservative corporations can no longer ignore this new consumer megatrend. They now know they are leaving money on the table if they do!

Companies that hope for organic business growth must now stand for something beyond the goods and services they are providing. Now they must demonstrate social, environmental, production, sourcing and labor practices that sustain the general health and welfare of their customers and our planet.

In other words, customers are becoming more educated and have personally experienced the increasing effects of climate change, the detrimental effects of water contamination, and microplastics in their food supply. They may feel powerless to take on the influential status quo lobbies controlling the government. But they still have the power of the purse with everything they buy. Now their purchases are measurably voicing their preference for sustainable products.

This is an organic movement at the retail checkout counter that can only increase the market share of sustainable products. New products challenging the status quo and touting sustainability will be in the best position to benefit from the organic growth of this megatrend.

Conclusion:

Inorganic push marketing is only as good as your product’s and your company’s desirable attributes that ultimately pull your products through the distribution system. It is these other desirable attributes that give your customers a reason to become brand loyal and brand advocates. Their advocacy through word of mouth to friends, colleagues, and family create the organic growth in market share you are looking for.

Push takes place through marketing and promotional programs that seek to drive sales with discounts and bonuses. But they are not sustainable. You need real organic traction from pull initiatives that put yourself in your customer’s shoes. Knowing what is important to your customers is not a one-time vaccination, but an ongoing journey to discover and achieve current relevancy.

Start with the most often overlooked reality of CPG sales. Your product must be in stock, priced right, and merchandised properly or your customer simply can’t buy it – no matter how many other desirable attributes your products or your company may demonstrate. So, yes, often you may have to do the other guy’s job in order for your brand to get the reputation of being “dependable.” Organic sales depend on reliable and convenient local access.

Keep your quality high.

Then, treat your complaining customers like a gold mine of information. Make sure there are formal lines of communication between your customer service people who are hearing from them every day in your marketing and production people were responsible to keep your products relevant.

All retail sales are local. They come from customers who live in the neighborhoods surrounding those retail stores. Find out what’s important to them and support those groups. Your sales will grow organically as they recommend your products by word-of-mouth.

Think again about your production, labor, packaging, and ingredients. Are they really up to date with the megatrend toward sustainability? How can you expect your customers to recommend your products if they are out of step with the times? Get in front of the curve and create real organic sales growth.

When it comes to organic growth, it takes pull!

 

Who We Are

Michael Houlihan and Bonnie Harvey Barefoot Wine Founders

Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.

Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.

They offer their Guiding Principles for Success (GPS) & Shelf Smarts courses to help consumer product brand builders achieve success. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.

Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular business site at www.thebarefootspirit.com.

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.