CXL - You have 2 options

Your host today is Peep Laja, Founder at CXL

Assuming that you want significant growth for your business, broadly speaking you have 2 options to win the game:

1) win the brand preference war
2) build a new sub-category and make competitors irrelevant

In the brand preference game, you're trying to:

1) get inside the consideration set
2) be the brand they pick from that limited selection

If you're in a mature category, you're up against many tens if not hundreds of direct competitors.

Let's be honest: even if you build a new CRM startup that has *every single feature* that Salesforce has AND you're 10x cheaper, you still won't win. Hell, you won't even break into the top 20. Most likely you're gonna be ignored as "more of the same".

This very thing is happening in email marketing. There are 100 email marketing tools that have every single feature that Mailchimp has, and they're also cheaper.

Are they winning? Not at all.

The market positions are extremely stable. Incremental innovation (someone has a feature others don't) is not enough to affect market dynamics in a significant way.

Excess share of voice (outspending others in the category relative to their market share) does work - but it will take many years and a lot of money.

Creating a new sub-category might just be an easier game to win.

Take door locks. I personally know of Kwikset, but here are lots of multi-billion dollar brands like Dormakaba, Allegion, and a thousand others that I've never heard of.

If you'd start a brand new door lock company, the odds of you winning the market or getting any word of mouth are extremely slim.

The door lock I use? August. And I chose it intentionally.

How would I even find out about them? Because it's a different category product - smart locks.

By creating a new sub-category, you create a new set of must-faves (in their case mobile app controlled door lock, auto-unlock with Bluetooth etc) that makes the parent category options irrelevant. I'm no longer considering Kwikset. You get inside the consideration set by creating a new set.

The other way is to become a leader in an emerging category - while all the pieces are still up in the air.

We can see this with the "global payroll" category - massive land grab happening with Deel, Oyster and Remote fighting for market positions. I'm not sure which one of them was "the first", but it doesn't matter.

Toyota Prius was not the first compact hybrid, but became the leader fast and became the exemplar brand (all other hybrids are now measured against the Prius).

First-mover advantage can help: remain a monopoly for as long as you can while you build up moats, and shape the category definition. If you're successful, all the brands that follow have to play your game.

Yeti built the premium coolers subcategory. They established themselves as the commercial leader, they built a brand and can charge a price premium. Yeti became the exemplar brand that all other premium cooler makers are measured against.

What do you choose: 1 or 2?

Connect with Peep on LinkedIn.

Your weekly dose of marketing updates

1. Playbook community

In the coming year, we’re looking to significantly develop CXL’s Playbook community and we want to hear your thoughts.

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2. How to create an effective branding campaign that inspires a movement

Brand is the perception of your company in the eyes of the world. It’s shorthand for who and what you are. 

Getting branding right gives people a reason to love you, which they’ll reward with loyalty. Getting it wrong, however, can create an impression you may never be able to change.

In this article, you’ll learn what’s required to create a branding campaign that strikes the right chord. We’ll look at the importance of strategy and cover the key ingredients a campaign needs to increase brand awareness. We’ll also give you creative fuel by breaking down how Lemonade has used branding to disrupt the market.

Read the entire article here.

3. Our email & SMS marketing course is here

The world of ecommerce is getting more competitive everyday and is not as easy to grow as an ecommerce brand as it was 3 years ago. Having less access to data makes targeting and advertising harder. Plus a lot of more players are getting in the market, making competition tougher than ever.

The money is in the list, it always was, has but now people are more aware of this. Subscribers and shoppers inboxes are blowing up right now.

This course will teach you the foundations on how to collect invaluable first-party data as you grow your email & SMS lists, and how to use it to deliver a delightful customer experience, while growing your email engagement, conversion, and retention.

Check out the course.

4. CXL job board

Some great new job offers on CXL’s Job Board this week. There’s more here.

If you want top brands to reach out to you, sign up for CXL Talent Pool. It's free. 

And if you're a company looking to directly access the best marketing talent and skip all the spammy applicants, apply here.

5. Latest episode on How to Win 

Doug Winter is the person you want to hear talking when it comes to staying true to brand identity.

He's the co-founder and CEO of Seismic, a sales enablement platform helping teams be more productive and engage with buyers.

He can tell you all about how to achieve success by committing to keeping their specific subset of customers extremely happy.

Listen to him spill his beans on Spotify, Apple Podcast, or your favorite podcast platform. 

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Ognjen Bošković
Growth Lead at CXL

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