So you have a product that you think will sell on Amazon, or through Walmart’s or Target’s shelves. Maybe you are still playing around with the idea, or you might be in the early stages of product design and development and you want to take a step back by asking which comes first before launching your product: is it branding, or perfecting your product? Many innovators, inventors, and non-business savvy people get completely shocked when we say that branding must come first. The truth is that many of the things involved in product development and the design process are expensive and time consuming. Discover why knowing your brand the first step in determining the best product design as well as in identifying the perfect retail price, and in knowing how to channel your marketing efforts in the most effective way possible.
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We have a topic of brand or product. Which comes first? What comes first? For a couple of product people, what do you think the answer should be? I think it’s supposed to be products. Most people would think product than most inventors whose focus is a product of some time are going to put emphasis on the product. The reality is if you start with the product and you go down the road you’d learn too many times, you can have issues with what that specifics of the market for that product are and it can cost you a lot more in marketing dollars to force fit that product.
This is a big deal for a lot of those of you in our audience, who are private labelers and other things because you all start with this keyword in your product and then you think of the brand later. The big problem with that is, if your goal is to have an acquisitionable brand or to have an acquisitionable line, if that’s your exit strategy, then you must start with the brand first. While those keywords are important, use it as a screener to decide whether or not that product fits that brand. At the end of the day, if you have all these disparate products all over the place, you haven’t built up something that’s acquirable. The big subject of product or brand first, the reality is there has to be a complete alignment of your product and products with your brand, your brand promise, your brand strategy. That goes into your marketing effort in dollars, who is going to buy the product?
I can’t tell you how many branding people that I talk to and debate this with them. We believe brand comes first shocks people but it needs to. The reason for this is so much deeper than just a choice that you’re making. There are so many things that happen in the product development and design process that are expensive. If you don’t get your brand right, those things may be not a choice for you in the future. It may require all new tooling. It may require all new packaging. Every choice you make is a very expensive redo. You need to make those choices first. The other part of that, the flip side of that is when you get your brand right, when you figure out what it’s going to be and who it resonates with, that who is telling you exactly who we’re designing for, it makes our job so much easier.
It makes your job easier as an inventor. Whether your product is something that needs to be designed at a high level or your product is more of a commercial product, it’s mostly engineered, it does not matter. Understanding that market who is for and laying that out before the product is fully developed is critical because then you know exactly who you are designing, developing that product for. You develop it to that market so that makes the marketing dollars you will spend, the marketing efforts you will undergo, flip that much better and it’s more efficient from a cost perspective and the timeline of your project.
You’re designing for impact, that’s the goal. You want to make sure that it resonates with the target market. That your goal is that it has impact with them, that it sells itself. Whether or not you’re on a page on Amazon or a shelf in Walmart, it doesn’t matter. Those items must sell themselves. The features that resonate with your target market must be obvious. They have to show in a photo in a little tiny thumbnail sometimes. There’s no assisted sales process in mass retail and while you can have description and keywords in your searching helping you online, which is of benefit and it does help less obvious products and maybe even less quality products rise to the top. That process, the reality is that it won’t last long. That’s always going to be a fight because the ones that do better, the ones that resonate better, the ones that have met the needs of the target market will always out review in the long run. They’ll always do better in sales, they’ll always get the referrals, all of that. When it sells itself, it’s like going viral. It sells itself.
Let’s go into maybe a little bit of what that is. The reality is if you develop product first for what your intuition or you’re shooting from the hip, your preconceived notion is of who this product is intended for, you develop that product and then you go and produce it. You bring it to market. If you haven’t reached that market first, one of the key things is you may not know where the sweet spot of the price point is. You go to market and you’ve done it on a manufacturing cost basis because you’ve gone product first. You’re going to develop this product for what you think it should be. You’re going to determine what it costs to manufacture it based on the assumptions you’ve made of what it needs to be. Let’s say this product is going to retail for $39.99 or $40. When you get to market, you put it out there at $40, but you’re finding that you’re not getting a lot of traction. You realize, “It needs to be $10 cheaper in order to achieve some velocity of selling.”
Brand or Product?: If your goal is to have an acquisitionable brand or to have an acquisitionable line, if that’s your exit strategy, then you must start with the brand first.
You lower it. If your cost basis is such that you only get your full margin at $40, now you can see here’s a situation where had you understood upfront that the sweet spot in the market was $30. You develop the product, made some different decisions for features, finish, how it’s manufactured, material process, manufacturing process. Had you made different decisions to make a product that essentially cost you maybe $10 to manufacture instead of $13 or $14 to manufacture than to get to that price point, you end up with a mismatch. What you’ve done essentially is developed a product based on manufacturing cost basis instead of market cost basis.
It has a whole host of other problems that happen to you and that it will never be able to be discounted and you have a whole bunch of problems. If you start online first and you think, “I’ve got a lot of margin to move.” You haven’t understood what’s going to happen when you get on a shelf eventually. You have to build in those margins from the beginning. You have to understand your market access, which is a part of brand development. If you know what your market brand is and who it’s resonating with, then you know are they willing to pay these kinds of prices or are they not? When you see that, you get to this definite place at which you understand what the criteria for doing something or not doing something is. We call it the design criteria. The design criteria might have sourcing criteria, manufacturing criteria.
It’s a big host of different levels of criteria, quality criteria, there’s a whole bunch of decisions that happen. It’s something that we establish at the very beginning of a project. It is so much easier when a company knows who they are and that’s what brand is. It shows that you know who you are. I want to talk a little bit about that because there’s two different ways you might know who you are. Your brand might be what I would call a parent brand, a global brand. You may have a brand that is your company.
Maybe your company is about all products that make life easier, that save you time. It can be that broad. It could also go the other way and be something like Dyson, a good example. Dyson knows who they are in that they are making very technical, detailed improvements, but they’re improving everything to the minute detail. They have a style and look that resonates through their brand. They have both things going for them. They want everything to look synergistic and they want everything to follow their brand message of function, form and style; all those things together.
Superior function being the big thing and also serve breaking paradigm to me. When they entered the market with their vacuum, they went and pitched that back into all the existing vacuum manufacturers in the world. None of them wanted to do it because they didn’t have bags that were used in a vacuum. Those companies thought that a huge part of their sales every year are replacing bags. If they put a product that didn’t have bags, that was going to be a bad move for them. Just announced their new hairdryer. $400 for a hairdryer, which is high, but I’d pay for it. Their unique function proposition that I saw online was that the handle is thinner. It’s what a fingertip grip. In other words, for a lot of us, the handles are huge. That means that the hairdryer’s heavy too and the weight of the motor is up above that. It’s above your hand, which means that it’s always doing this in your hand and it’s flipping away from you. It makes it difficult to move it around. It’s bulky, it’s big. This one reengineers the way the air moves so that you get more power, which is everything that they do.
They’re giving more power with probably less energy, more efficient power. This is part of their mission across all products. It’s why they did a fan. It’s how their vacuum works, it’s all of that. That works but by moving the motor into the handle, they changed the balance point on it, which means that they had to make a very small motor. You’re talking about a lot of reinvention and redesign here, but at the end of the day, it’s worth it. Women, especially, who buy these hairdryers, we use it pretty much every single day of the year. Does $400 sound all that much money for something that is going to save me time every morning and how fast I blow-dry my hair? Have a better effect and do a better job of keeping it from being frizzy? All of those things mean something. Is it worth that amount of money? I’m baking on the fact that this is going to be a category killer for them. That’s their MO. Certainly this company knows what their market is. They know their brand and they know their customer.
If they know what brand promise is, then it is not below into the market. It is the high end. It’s still attainable. While a $400 hairdryer is expensive, most people can afford that at some point in their lives if they make that a priority. They’ve already proven that because people would pay twice as much money as your average vacuum. That’s not something you use every single day, at least not in our house.
The point is you’re buying a vacuum for most of your life with the company that’s also standing behind with superior technology and all this. You’re saving money not buying bags. The point is they know their market and they’re an established company so it’s maybe different for maybe a startup or a new entity. The point is knowing your market, knowing who you’re marketing to will save you time in product development. It will make sure that everything’s done more efficiently and you achieve success faster, ultimately saving you money. The next aspect of this is the marketing dollars spent. When you know your market and you’ve developed the product specifically to go after a certain market, your marketing dollars spent are less. It’s more effective because here’s what happens. You do it the other way. You develop a product that you then discover later what the market is for it. How do you discover that? You discover that after a lot of trial and error and a big spend.
That’s what happens. The reason why companies have such huge advertising budgets and marketing budgets is because they don’t understand who they are. Those are the ones who throw more and more money. That’s the only option you have is to throw more money at it because at that point, redesigning your product is not an option.
[Tweet “Knowing who you’re marketing to will save you time in product development.”]You end up doing the shotgun approach of general marketing, marketing all over and not focused, targeted marketing to who you know wants to buy it. You’re spending all these dollars trying to figure it out. Where is the market? What is the sweet spot? The reality is you waste a lot of money doing that.
For a couple of product people, we think brand needs to come first, but it’s not about having to do all the graphics involved in your brand. People confuse brand with website graphic work, a packaged look. That’s not brand. Brand is the understanding of who you are, what’s your promise that you’re going to deliver, what that feels like and does look like is a subset of it. It’s an execution of that. Don’t be confused by that. This is something that I feel very strongly about and we talk about this all the time. There are five key resources that we always say that you should spend money on unless you are an expert in one of those areas. One of those five key areas is branding. It is hard to brand yourself. I can do it for other companies and clients and help along with their product promise and all of those things.
Doing it for yourself is extremely difficult. You must take the time to bring somebody in. It doesn’t have to be a $10,000 huge expense for someone to come up with a tagline for you. That’s not what I’m talking about. It’s a good idea to spend a couple of thousand dollars at minimum and get a couple of hours of somebody educated in branding’s time to talk through your ideas with you. See if they resonate because you’re going to spend so much more money later on website re-do’s, packaging re-do’s, design changes, all of those things and a ton of marketing and advertising dollars. All of those things are way worth the investment to get that foundational piece in place. It informs so many decisions. It’s a hard lesson for inventors to learn. I include myself in this early in our career. Product-focused people who doesn’t have to be inventors.
Anybody who’s developing a product, whether you’re inventing it or you have a product idea you’re going to source something and bring it to market that you think will resonate and add value. We did it early in our career too, when we started ttools we had clearly a product idea first. We developed it, we patented it and we brought it to market thinking, assuming what the right market was for it. It was our ttools Stylus Pen for the PalmPilots, handheld computers at the time, which was a huge economy in 1998, 1999, 2000. We brought it to market and we thought the big market was selling directly to end consumers who were buying PalmPilots and using them, these early adopters at the time and then it became a bigger economy and we’re like, “How are we going to market to them?” “This catalog, it ships in the box with their PalmPilot, let’s give them that.” We did. We paid advertising dollars to be on the cover of that. These were not inexpensive, expensive. It was quite costly at the time. We used many thousands of dollars to get that position and then there was the beginning of email marketing campaign. We thought we were doing well because these things get out there and you get a lot of sales for that. We would have a 2% conversion rate, which at the time was still good because it wasn’t visual at all. It was all text at that time.
A single date would go out and had thousands of individual orders to a single person of a single item. We thought, “We’re doing great,” so here’s where you can realize that it’s not just through a failure that you realize that you’ve got the product that’s going to market but you’d think you’d have success, but there may be bigger success to have that you didn’t realize. What we ended up discovering by consumers trying to pull us and drag us into a different market was that there was a commercial market for businesses that want to buy those products and have their logos printed on them, to give away at trade shows for promotional purposes, ended up being the lion’s share of our business for years.
The reality is if we had intent, if we had designed our pen for that purpose at the time, we would have made a bigger area to imprint and we would have made it easier to do that. Instead, we had to come up with all sorts of jerry-rigged fixtures to hold it, to print on it properly. We had to go find a special pad printer to do it. There was a whole bunch and we had this high texture on our pen which made it difficult to print on it and have it adhere to. All of those design choices, we were stuck with at that point.
Even though it was a very lucrative market, we went from selling hundreds of these pens a day and when we did a big promotion maybe thousands of them in a day to selling at first it was 10,000, then it was 50,000 pens, then it was over 100,000 pens. Our biggest order was something around 250,000 pens, I think we sold them to FedEx Ground for them to use because they had a full fleet of people. We’re selling this on a regular basis. You can imagine. We went from selling thousands of dollars to a company that was selling over a million dollars. It was like a couple million dollars a year at the time, I believe, at our highest for that commercial market. While we succeeded in that, we would have made more profit had we developed product properly. Instead, we developed the processes and systems around the product we already had and it was less efficient.
To be honest with you, we probably didn’t close as many orders as we could have at that time because the product couldn’t be priced cheap enough. If we could have gotten the price probably another 20% down and by making it more efficient in the way that we printed on it and having less labor to set it in a fixture. Doing all of these things, we could have easily cut 20% out of it, if we had design changed it, if we had designed it for that purpose.
We had the printing process that was slower that we designed the pen so it could be silk screen printed and there are automated machines that did that, but because of the way we designed the pen, we had to use a slower printing process which was less, the labor is more and the profit margin was less. That’s a good example about that. It’s an old story but it’s applicable to the discussion. My point is saying we learned the hard way doing that and we’re here trying to help you learn from our past experience.
Here’s the other thing that I want you to seriously think about is that a brand does not have to be all things to all people. When we watered down our brand to the point that we think, “We wanted to appeal to everybody, we don’t want to offend anyone. We want everyone to buy it because my market is everyone.” I can’t tell you how many inventors tell me that. I’m going to tell you, your market is not everyone and you can’t reach everyone and you will never get to the kind of impact and volume you want unless you focus it. You have a starting spot who are going to become your raving fans about your brand. You must make them love you. You must be everything to those people. Your brand should resonate there.
Brand or Product?: Brand is the understanding of who you are, what’s your promise that you’re going to deliver.
I had this question come up that we address. Maybe we addressed it on WTFFF?!. It happened that I was at an event and someone asked the question saying that they had a name for their company or their product. They were worried that the name was too cheeky, it was targeted at college students who were supposed to join this group to do something. I don’t remember what the product was. Educators wanted them; the educational administration system wanted them to have this group. It was beneficial to the school for it to be happening but their brand sounded a little too cheeky and they were worried that the education administration was going to balk at it. My answer to them was that sometimes we think too much about it.
If our brand is resonating with millennials and they like that cheeky name you gave it. We have the name WTFFF?! on our podcast and for six months, my mother thought I was swearing. Maybe she was a little offended, maybe it’s why she never listened to a whole episode. My mom wasn’t my target market. It was somebody who knew enough about three 3D printing to know that that was an inside joke. You knew enough to know that, but not enough to be so technical. That’s what it was about. It works for our market. Whether or not schools are offended by it, we know for sure because we have a lot of educators and a lot of students who listened to it and they all think it’s funny. It’s not offensive unless somebody is complaining it. I had an interview with a company that changed their name. They’re originally something like VLHC Fans or something like that. Very low currency something or rather. The fan operates quietly, but it’s big. It has a lot of power.
Did their market even care that it was low currency? They thought it did because it was going into more commercial installations and with facility managers stuff. They thought that it did, but they kept getting phone calls that would say, “Are you the company that makes those big ass fans?” About a year and a half later, the president of the company, to his credit, changed the name to Big Ass Fans. It’s a huge gutsy move and they’ve done extremely well in the marketplace. Every time they bring in a branding expert, the branding expert says, “You need to change that name.” Every time they do, they fire that expert and they move on. The reality is that it’s not a problem if your core customer base is happy with it. It’s what they’re going to call it anyway. You might as well not create trouble. You borrow trouble, that’s the term you always use, Tom. Don’t borrow trouble. It’s perfectly fine the way that it is.
I want to take a moment to talk about a new invention of ours that has been around. Tracy and I are sitting opposite each other on different sides of the table to use our microphone sound system here and produce good quality audio, but it allows us to be using one computer to be showing both of us to you. Last time we did this, we had us on different computers. There were a lot of things to coordinate and this is a little simpler. It’s a camera hack. It’s quite hacked. It’s held together with a little foam tape.
I’m going to turn this into a product and we can use this as a case study going forward. There are lots of people although probably small percentage in the market, who broadcasts and live stream things online where they have multiple people and it’s a tricky thing. How do you show multiple people on the same camera without sitting next to each other in front of the camera on your actual little computer? It needs some fine tuning, some refinement I will admit but it’s working. That’s why there’s this little funny thing down the center. Necessity is the mother of invention. That’s a good example.
This is where we hope we’re attracting the kind of people like us who see an opportunity and or see a problem and say, “This is not acceptable that there’s not a solution for this.” That’s what we hope our group is about is taking that because not every one of these, this idea, there may be such a small market, it’s not worth making a product over. It may be totally worth as posting up the hack on Lifehacker or YouTube or something and showing everybody how we did it so you can do it too.
Make a downloadable model to 3D print your own with some instructions, some instructable type of form. I don’t know if it’s going to be a commercial, sellable product. I certainly want to improve it for us because it’s probably going to be even better. I agree with you, it’s a great example.
It’s a great example of where there’s an idea, you saw a problem, we said, “We’re not going to accept there not being a solution. We can’t find a solution out there,” so we’ll create one ourselves and then you go through our process. You test it and you check and see if there’s a market. You check and see if it’s worth doing. Even if it’s a low market but this is still such a cool fun thing and we still want to offer it up. We just find a different way. We find a method to design and development rather than go for it. That’s what so many of you guys do that were here when we go to the inventors groups, the forums and other things like that. You just go full force into making this thing and producing it and then saying, “The thing’s $100 and because I’m only going to sell twenty of them, I still got to make back my money.”
The webcam that we use was $79. It doesn’t make sense for an accessory to cost more than camera. I tried and research for a long period of time to find a tech way to solve this problem through. Let’s hook up two webcams to one computer. Does that work? Nearly wasn’t the way it had that work for a live streaming broadcast or we used two computers last time. It was a bandwidth drain and a delay because you and I are not sitting at this table having a conversation that’s very timely and fluid like this. It was a little delay over the network and then the camera would switch to me and you and me.
It was annoying to everybody. Here’s the other thing about it and this ties back into our original topic here of brand versus product. This product does not fit our brand. We’re not out there. We don’t have a brand that sells this. A very technical market isn’t our normal audience of people who we talk to everyday. For us to start marketing a product that doesn’t fit our daily brand is an issue. That requires a whole new, “I’ve got to get a new list of people. I’ve got to get a whole new setup for marketing. I’ve got to start a new webpage because it doesn’t fit in the web pages I have. I have to start a whole new brand on private label Amazon.” You do all of those things and they end up costing you so much more money. It’s a lot easier to say, “This product fits or doesn’t fit my brand,” and if it doesn’t fit your brand, find a way to use it. Use it via social media. Share the idea freely. Just put it out there and do whatever you want with it at that point but don’t spend money. That’s where you stopped at when your brand, your market and the product don’t all fit together. Your chance at success is slim.
[Tweet “A brand does not have to be all things to all people.”]In some cases, the choice might be, “I think this is a great product idea, but not for my company. Maybe I’ll go and see if I can license that to another company, that it’s a good fit for their brand, their assortment of products, and make a small licensing percentage,” instead of trying to be the hog and keep all the theoretical gross margin or net margin to yourself. That’s a whole conversation. That’s a whole other webinar all in and of itself because that’s definitely a big issue that you’d have to go into because do you have enough time to license? Licensing is not speedy. Licensing versus bringing it to market on your own is a great topic. We’re going to definitely cover that.
Let’s talk about our next topics. We posted out a couple of topics into the big group. There’s a little bit of confusion about how the site works and how things work. If you’re at the Facebook page with our picture up at the top and it says Mentors and Inventors Network, you’re in the timeline technically if you’re not in your own feed reading that. You’re in our timeline. You want to click on the thing that says Join Us Live and that’s where the video archives are contained in everything.
Unfortunately, that’s where this comment stream is too. If you want to comment, that’s where you need to be commenting. I had posted it in there not realizing that you guys didn’t see it unless you were in the video. We have to put it into the regular feed, the regular timeline. Some of the top contenders for the next topic are competitive research, nondisclosures, design and quality specifications, market versus cost basis pricing, which Tom touched on. We’ll put that one off for a little bit but we will definitely go into more detail. Build a strong manufacturer relationship, which is a great topic and we also wanted to talk about something where we’re looking at doing in the fall and that is a special trip to Asia. You can go along with us and be mentored and understand all the ins and outs of sourcing in Asia.
It’s a special trip we’re looking at doing in the fall. We’ve got to get some time schedules on it and I’m working with an agent to try and figure out all the arrangements of what we do. If you are sourcing yourself and you want to make factory visits and you want to contact us in the meantime, we can look at coordinating the right cities in for you. We’re going to take a very select few people, probably only up to six. That will be interesting and fun and no one does that and you can learn all about exactly how we do the quality control, how we set our systems in place, how we audit a factory and plus have some fun time and eat some great food with our team there, which we love. There are such wonderful people there.
Those topics are still there. Love you to vote on them, suggest other topics that you’re interested in. Go ahead and do that at any time on the Facebook page. I’m going to circumvent next topic and our next topic’s going to be a big issue that’s coming up with Amazon doing a lot of direct sourcing and taking away the private labelers product line. This is something that happens at mass retail as well. You get this direct sourcing competitions, where your channel, where your retailer is your competitor. That’s what we’re going to circumvent and I’m inviting Brenda & Steve Crimi from AMZ Alliance to come in. We’ll invite them to come in and talk about it and what that means for a lot of people. Some of you could be out of product.
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About The Authors
Tom Hazzard
An inventor with 37 patents and an unprecedented 86% success rate for consumer product designs, Tom Hazzard has been rethinking brand innovation to design in success for over 25 years. Tom’s patented innovations provide entrepreneurs and businesses of all sizes a system to spread their brand, grow valuable consumers, and diversify into higher converting revenue streams without a lot of time, cost or effort. Tom is co-host of the Forbes-featured fast growth WTFFF?! 3D Printing podcast as well as host of two new podcasts, Feed Your Brand & Product Launch Hazzards borne out of his core business, Hazz Design, where he has designed and developed over 250 products that generate $2 Billion in revenue for retail and e-commerce clients.
