I have a major problem with the free model. To me, it’s misleading – and the reason why is that it’s based on a false premise: that if you offer goods for free, people will in time upgrade to the paid model.
I see why people are tempted to go down this track. It’s easy to see free as a simple way to open the jaws of the funnel. Free gets you awareness and therefore volume, the thinking goes. And there is an implication given by some that you can then trust the conversion process to secure enough sales off that added volume to make the give-away worth it.
Easy too to believe, as you look around the social media environment, that with so many people giving away so much, you have little choice but to do the same.
The problem with this reasoning as I see it is that free is not a generator. On the contrary, it is a competitor. And the reason is that giving so much away sets up an expectation that more should be free. Free becomes a right, an entitlement. It actively competes with the willingness to pay.
Don’t get me wrong. I think there are things you can and should share without cost. You should share some thinking, for example, because there is a pay-off, if you do it well. Hubspot gives away lots of great content to entice you to trust them to at least trial their inbound marketing software. And as Seth Godin points out in this thought-provoking piece McKinsey’s consulting philosophy is free, it’s the bespoke work that costs money.
An ingredient brand is a well-known brand with well-known qualities that is included as a component or feature of another brand or product to enhance perceptions and the marketability of that brand or product. The ingredient brand calls out unique features or performance and is often used to increase the acceptance of a product or brand that is using a new technology identified by the ingredient brand.
Following are some examples of ingredient brands:
- Dolby Digital
- Plus a touch of Downy
- HEMI (Dodge)
- Hybrid Synergy Drive
- Intel Inside
- Contains Scotchgard Protector 3M
- (Dupont) Teflon
So, what leads to successful ingredient branding?
Brands are all about habits. But as this article in Time reminds us, sometimes the best thing a brand can look to do is to change a habit – even if they helped create the habit in the first place. Of course, brands tell themselves they do this all the time – but for many brands, the focus of their problem solving is on increasing consumption.
Their answer to a pattern they feel they know and understand is more of that pattern.
But the insight here is that changing a habit for the better doesn’t necessarily mean just offering the consumer more of what they have, or more of what the brand perceives consumers want.
In the context of the fast food industry for example, generosity is not a competitive advantage. When everyone’s offering bigger portions, the portions aren’t more generous. They quickly become the new normal. The pattern itself hasn’t changed, it’s just got bigger.
One of the reasons why brands are so reluctant to change patterns is that they take so many of their cues from what they perceive to be consumer behaviors. What they don’t always stop to do is check whether those “normal” behaviors are how people want to behave, or whether in fact they are simply how people do behave because a sector is driving the behavior that way.
Here’s a pattern, by way of example. Consumers are eating the double-stack burger and barrel of chips because that’s what everyone is offering them when they order a family-size meal. And if it’s there, they’ll eat it. Habit. It’s not their fault – “The brand made me do it.”
Marketers mostly focus on repositioning their own brands. But, you can also reposition a competitor’s brand. That is, you can create messaging about your brand that shed’s a negative light on the competitor’s brand, making your brand look better in comparison. Repositioning is how you adjust perceptions, whether those perceptions are about you or about your competition often hanging a negative on the competition as a way to set up a positive. Here are some examples of that.
- Avis leveraged its #2 rental car position with the tagline and campaign “We try harder,” implying that the #1 brand Hertz was resting on its laurels.
- Scope focused not on the consumer problem which its product cured, but on the consumer problem its competitor caused. Scope used this weakness to reposition Listerine as “medicine breath.”
- Apple repositioned PCs as stodgy and boring in its ‘I’m a Mac and I’m a PC’ campaign. A Bill Gates look-a-like punctuated the portrayal of PC’s while Mac had a cool, progressive Jobs-esque character.
- Arrowhead Smoke Shop and Gas Mart (in Upstate New York) ended a series of television ads with the comment, “and we don’t add water to our gasoline” implying that some of their competitors might (a claim that I believe only a few people would find credible).
- We helped one health care system reposition their competitors as not being able to handle the toughest medical cases, identifying many proof points to reinforce this perception.
- We helped FootJoy tap into golfers’ aspirations to be seen as serious golfers with the tagline “The mark of a player” implying that its competitors’ brands are not the choice of the most serious golfers.
- Tylenol repositioned Bayer and its miracle drug aspirin as something that is harsh on your stomach by claiming that “aspirin can irritate the stomach lining…for those that cannot take aspirin, fortunately, there is Tylenol.”
A great piece in AdWeek on the failure of single-item brands is a reminder of a question that comes up a lot: whether to dive deep or go wide. Specialty vs diversity.
Both are attractive. For some brand owners, the opportunity to offer a detailed and nuanced offering within an area is the embodiment of singularity. In a complex and cluttered world, this argument goes, there’s power in being known for one thing. There was a lovely story in The New York Times International recently about Michael Vachon who was writing software until he discovered that there was a real interest in upstart American distilleries in London. Cue Maverick Drinks, catering for a renewed interest in American spirits. It’s a great story based on a growing need. So success, right?
Yes, but as the AdWeek article points out, vulnerability also. A fashionable rush on a specific item is usually followed by an equally unfashionable rush as consumers move onto whatever captures their attention next. That’s the shortfall of being a bright shiny object. At some point you fade. If you’ve expanded resources and footprint in the meantime to meet current and anticipated demand, the sudden departure of consumers in droves quickly leaves you on the rocks. The disappearance of Crumbs was the latest in a long line-up of one-hit brands that have gone the same way.
Diversity can also look very attractive. Here, the attraction is to expand the offering into new markets in order to trade on current equity and to attract new customers. Again, the theory has its merits – capitalize on your reputation and provide your customers with more opportunities to engage with you more often. There comes a point though when brands can expand so far beyond their core business that they either mean nothing to their consumers anymore (because they’re trying to be all things to all people) or they lose sight of where they began. Starbucks, famously, lost sight of its core business of coffee in its bid to establish footprint before self-correcting.