We see it over and over again – physical product brands spreading themselves too thin before they are established. Some brands offer so many choices that their core message is lost in the din of the marketplace. Others expand too quickly into territories that they cannot service and lose their reputation for dependability. Why?
Sometimes when they can’t achieve their true target market fast enough, they second guess their mission and try to be all things to all people. They think they will do better faster by casting a wider net. But instead of being the distinguished leader in a narrow race, they become an also-ran in the broader battle.
Their salespeople may come back from a frustrating sales trip saying, “If we only had (this or that type of) product…” As pressure mounts to make sales, brand builders can give into this seemingly relentless plea.
Building a brand in the marketplace is hard enough without blurring your message. We advise brand builders to stick to their guns – and the fewer, the better. When you’re new you have to distinguish your brand. Sure, it’s going to take longer to collect enough customers who appreciate your special approach. This is where patience and persistence really pay off.
When we started Barefoot Wines, we entered the market in a large size format that was not as popular as the standard smaller size of most wine. But this distinguished us. Now we were a new choice in the big bottle size category. And it was a very simple choice, only two types of product, a varietal red and a varietal white, and that’s all! It was easy for the buyers and easy for the customers. Folks don’t like too many choices.
Could we have sold more with a pink? We tried it. It worked! Then we thought, “How about other varietals? And why not expand the line with the smaller, more popular size bottles?” The answer came fast and hard from the retailers, “Which ones would you like to trade out for the new ones?” We were cannibalizing our own brand! Total sales were stagnant for two years!
In retrospect, we should have waited until we had more traction in the market before we began to add more choices. We now advise our clients to be careful not to exceed their “brand width”!
Another mistaken idea some brand builders have is that if their product sells well in their territory, it will sell well in other territories. The big danger is they expand prematurely before they have enough knowledge or capital to service what they sell in the new territory.
When selling in your own backyard, you tend to discount the importance of your own time. Because you are doing all the policing, merchandising and maybe even the delivery, you may not have a good handle on the cost of sales in a new territory – where you must hire people to do this work. And without your new hires, you quickly find out that you are facing out-of-stocks, poor representation, and your competition is taking advantage of your absence.
We made this mistake ourselves. We expanded too quickly with misconceptions about the cost of sales in 2 new territories. And we actually had to pull out of those markets for several years before we were strong enough to afford to hire our own representatives there. We damaged our brand in the process. It took years to recover.
So, it may seem counterintuitive to limit your offerings and your territory when you are just getting started, but you will be grateful that your brand was built on a simple and solid foundation.
Who We Are
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.
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