Companies need to know if their brand and products resonate with consumers before they launch their business on a grand scale. Many startups need help pinpointing the exact moment they may begin to diversify their services, expand their operations, raise capital, and explore new markets. Estimating when this might occur takes a lot of work. It's a waste of resources to put time and money into creating products and brands that no one wants or that can't compete with what's already on the market.
In this episode of Building Brand Advocacy, Paul Archer, Founder, and CEO of Duel and the host of the Building Brand Advocacy Podcast, shares insights into laying the groundwork from the start to achieve brand success strategically.
If you’re interested in how businesses can strategically use their early-stage growth process to achieve a brand-market fit, tune in to this episode of Building Brand Advocacy.
Paul Archer: Hello, my name is Paul Archer and welcome to Building Brand Advocacy. Now, this week we are doing something a little bit different. This week, instead of interviewing a great founder or CMO about how they built their brand, I am going to talk to you about a brand-building concept and one that I work with a lot of brands on in my consultancy work. This concept is the idea of brand market fit. Now, a lot of brands in the earlier stages struggle to understand when is the time when you can start branching out, start to scale operations, start to take funding, start to look at alternatives, either products or alternative customer bases.
The idea of when this happens is very, very hard to gauge. Now, I have a belief that there is a point, an inflection point that brands have. This is the point when the brand has fit with its market. Now, this is a concept stolen from a startup brand, which is where I spend half of my time. It's from The Lean Startup Methodology, a phenomenal book. If no one has ever, if you haven't read it, everyone should check it out. It basically is the Bible, the core principles that somebody starting a startup, a product business needs to abide by in terms of finding product market fit. This is when you've built and designed a product that the market wants. Once you have product market fit, the game is to then start scaling it, to then start selling it, getting as many people using it as possible.
Before that point, it's not about scale. It's about iteration. It's about getting the right products. It's finding the right value proposition that works for the right type of customer. If it doesn't work, maybe the problem is with the product, maybe the problem is with the buyer, the customer themselves. It's about sniffing that one out and being as iterative as you possibly can in that process. That is the approach that every startup tries to do. I think brands can learn a lot from this.
Now, it is different, though, because you're not trying to find a product that the customer wants. Let's say you're a fashion brand. A t-shirt is a t-shirt. A dress is a dress. You're not innovating from a product perspective. You know that when someone wants a t-shirt, they have lots of options. It's like they can spend £3 from one for Primark. They could spend £300 for one from Prada. How do you make sure they choose your brand at your price points because of who you are, the story that you tell and the differentiation you can provide and the value that you can provide or perceived value that you can provide, versus everyone else who's selling a t-shirt or a dress or a widget or whatever the case may be.
If you take this idea of a brand, and you start thinking about the way that they get into the minds of people, it all comes down to word of mouth. It all comes down to how many people are telling other people about your brand. I think that before you have brand market fit, the game is a game of conversations, of storytelling on a very manual one-to-one manner. You're not looking at scale. You're not looking at 1 to 10, 1 to 100, 1 to 10,000. You're looking at 1 to 1. It tends to be the senior initial people, the founders, whomever it is, that is early on in the brand, who go out there and they tell the brand narrative at every single opportunity that they can.
If you think about this, you look at Nike. If you read Shoe Dog, Phil Knight's amazing-- well, biography, but also a memoir, I think, of the development of it. Those first few years, he was a runner selling to runners, selling running shoes for them to run. It's their passion. He got it. They got it. He sold them out the back of his car at run meets to really instill this like, really support this community of runners in the way that they did. Now, the Air Jordan and basketball and all the other sports that Nike work in didn't come for many, many years after that, 10, 20 years after that initial point, because he was very focused on serving a very clear niche. This is key. It's very hard to move away from a niche until you've reached an inflection point.
First of all, if you're trying to find brand market fit, nail your niche. Who do you show up for? Who do you exist for? Who are the people that just get what you do, that totally believe in your values, that rage against the things that you rage against. Who are your people? Now, they are the ones you need to show up for exclusively. Anyone else is slightly different. Like, get rid of them. They are not going to help you. They're not going to become your core niche of fans, because what you're trying to do here is to build a very tight niche of absolutely obsessive fans, super fans, true fans who will buy anything that you do, because these true fans, they will buy your next product, your next release that you do, next season's products.
More importantly than that, they are also the ones that tell everyone that they know. They tell 10, 20, 30 people every time they speak to them. Now, on social media, they could tell thousands of people just by talking about you. They'll do it again and again and again if you provide for them, if you just really engage with them and incentivize them, recognize and reward them when they do it as well. Finding these true fans, engaging with them tends to be a manual process.
Once someone has done a thing, pick up the phone. A number of founders that I asked this in front of-- I've done this in hundreds and hundreds and hundreds of people who run businesses, and I ask how many people have phoned their customers. I've yet to really find one who has picked a phone apart from when there's been a disastrous support system, and they have to go and apologize to them.
It is such an easy way to deeply understand your customers, understand what they think of your products, your story, where you should go next, where you're doing well, where you're not doing well. It's just to pick up a phone. When a product has been delivered, just pick it up and say, "Hey. Yes, I was just wondering what you thought. Did you like it? Anything we can do better? Any feedback?" Just have a chat, and I guarantee you, that person will change their entire perception. You go from just being a product to a story. They are involved in the story. They have met someone. They've spoken to someone from the brand, and they'll tell everyone they know this story because it becomes their story.
That's such an easy hack and a way to do it. Until you reach this threshold, and I think it's about a thousand true fans, everything needs to be manual. Don't try and scale it. It takes a long time. It is hard work, but if we do the math on that, a thousand people who are obsessive fans. If you can convert 10 people a day, that is 100 days of work. It's less than a year of work to have a product that anyone will buy, and 1000 true fans is not a small brand. I think it's about a $7 million revenue rate that you have when you've got this brand market fit.
Obviously, it changes in price points and numbers and all those things. It would be lower and higher depending on what you do, but I think $7 million is that inflection point. It's an inflection point that's recognized by someone private like Piper who are private equity, who know a thing or two about investing in brands. They believe in this 7-17-70 concept. I think that seven is that, "Yes, we've got a thing. We're no longer just trying to find a way to sell it. We have more than a thing. We have a brand. We have a reputation in the market. We have core fans who'll buy anything, and we have other people that will tell other people about it. We have a flywheel, basically, a flywheel of growth, of advocacy that drives it."
Now, once you have that point, then you can start investing. I would argue that you should be doing zero advertising until this point. You should be making sure that your brand is in the product, in the hands of the customers in every single way. Gifting should be the biggest budget by far, way above your Facebook ads. You should be finding out where these true fans, where your niche targets, your target customers live and go there and talk to them and get your products in their hands, because they will then tell three people who will then go and buy your product. Eventually, once you've got 1,000 true fans, then you can start scaling this machine. You can start cranking it to get $17 million in revenue and then $70 million in revenue. You'll never get there unless you have your core base of obsessive fans in the first place.
Your initial role, if you are at a brand, when you are pre-7 mil in revenue. Particularly, if you're a founder, your job is to pick up the phone. Your job is to understand your target customers, your niche, to show up for them, to add value in every way you possibly can. For example, one of my previous guests, if you listen to Jeremy Rusco from Dynamic Discs, he was at every single disc golf meet, event, show that there possibly was. He was gifting his discs into the hands of people.
It took a long time. They traveled the whole country, but they were there. They were present. They were a part of the community. They were an infrastructure of the community. They were drinking beer with these guys every single evening and just turning each one of these people into an obsessive fans. Now, that is a massive business. I think they're the biggest business in this space, and they are doing considerably more than $7 million. I can assure you of that. It's hard work, but the benefit is you could be running and sitting on a business just like Dynamic Discs right now if you put that work in.
That's the concept, brand market fit. I think it's a useful framework. These are all obviously-- These are not hard and fast rules. These are just frameworks that can be used to try and help a person when they're building a brand, understand, "Do we launch a second product? Do we go into a new space?" Let's say that you're a snowboard company. "Do we decide to do helmets or to do outerwear, or should we just focus on the snowboards? Well, have we sold enough snowboards that we have enough people in the market, in the community of snowboarders who are obsessive about us, and that they will buy everything else we do, or do we need to keep iterating and making our product better?" That is the journey of brand market fit.
I hope you found this helpful, and I hope this framework works in this idea of-- Also, I hope this format of podcast works as well. I would love to hear some feedback. Draw me a line on LinkedIn, I'm Paul K. Archer, or drop me an email. Until next week when we have another incredible guest, this has been Building Brand Advocacy. See you very soon.
We can't wait to meet you.