Food brands focused on owning their categories online are transforming the way they approach customer acquisition.
This not only applies to digitally-native brands but traditional retail brands who have made the jump to ecommerce, as it currently drives 82% of the food and beverage sector’s growth.
The truth is, grocery stores have not yet fully figured out the best online grocery experience according to consumers…
…and food brands at the top of their categories are not waiting.
A Bain & Company and Google study found that of the 8,000 US grocery shoppers surveyed, only 26% of those used an online grocery service a second consecutive month.
There are winners and losers online.
Some have mastered direct to consumer sales, while others are still struggling with CAC (customer acquisition cost) being higher than their ROAS (return on ad spend).
This all means a negative ROI.
So whether direct to consumer or a hybrid model (traditional retail and ecommerce), there are five strategies these top food brands have in common.
Let’s see what they are…
1. Make Brand Deposits
Steve Jobs coined the term “brand deposits”, meaning he believed a brand works like a bank account.
When you delight customers, you make a brand deposit. When you disappoint or ask for a sale, you make brand withdrawals. Brands that have a surplus in brand deposits acquire and retain customer loyalty over the long-haul.
It’s this same concept that has allowed other sectors to dominate ecommerce and it’s the same framework food and beverage brands should implement.
Here are three ways:
Tell your story. Consumers today want to know who they’re doing business with and that you stand for something they too believe in, so tell them.
Also, include them in your story. Make them the hero in yours, how are you transforming them into their ideal selves?
Create unity. Building a strong brand means appealing to people’s identities. Make them feel a sense of belonging. Welcome them to the club.
Educate and Entertain. Become the authority in your category by producing blog posts, videos, podcasts, and other forms of consumable media that educates, demonstrates, and entertains.
What better way to make a brand deposit than offering free value up front? So go long-term on brand building, not short-term selling.
Brands doing this well: Athletic Greens, Bulletproof.
2. Focus on Your Customer
Great food brands don’t define themselves by the products they sell, but by who they’re serving: their customers.
Build relationships. A good offer can kickstart a relationship with a customer. Online brands use intro offers that pave the way to their core products. Make sure you engage the full funnel.
Want to sell them a monthly subscription? Try offering them a discount to try your product first before they commit long-term.
Put on your uniform. The image you put out into the world is a magnet for attracting “your people”. This can come in the form of the way you package your products, the images on your website, and the perks of being your customer.
How is the overall experience your customers get when they engage with you?
Leverage data. One of the biggest perks of selling direct to consumer online is the data you can collect to better serve your customers and grow your brand.
Directly calculate the ROI on what channels serve you best, what ads resonate most, what offers work harder for you.
Brands doing this well: ButcherBox, Brandless.
3. Send the Right Message
Messaging matters. Deliver the right message, to the right people, at the right time or your marketing will land on deaf ears because it won’t be relevant.
Send a message. Your target customers are in different stages of the customer’s journey. Don’t forget to create awareness to the solution your products solve before you ask for the sale.
Be different. Food and beverage is flooded with the same products, but the food brands that really own their categories create new categories through differentiation. They have something different to say or something unique to offer an already crowded space.
Show proof. Promote user-generated content and reviews to show your audience who are on the fence that you’re a legitimate solution. People by from people, not brands.
Brands doing this well: Black Rifle Coffee, FlavorGod.
4. Choose Your Channel
Deliver your offer. Test different channels to deliver your message and offers to your target customers.
Own the traffic. Leverage paid channels such as Google or Facebook ads to drive traffic to your shop that you own from start to finish. Using your own website means you own the experience and the relationship.
Use a giant. Amazon is not your competitor, it’s a sales channel and should be seen as an opportunity to drive awareness and initial purchases that can then be brought to you website.
Expand channels. Once you’ve successfully mastered owned and outside marketplaces, expand to other channels such as partnerships, traditional retail, and niche online marketplaces.
Brands doing this well: Soylent, California Olive Ranch
5. Fulfill Your Promise
You’ve successfully made the sale. Now it’s time to fulfill your promise to your customer and continue the relationship. New customers are more expensive to acquire than retaining previous customers.
Therefore your business model should revolve around acquiring new customers and retaining previous customers.
Remove all risk. Your potential customers have a lot of questions running through their minds before making a purchase. Remove the risk by including a money-back guarantee, free shipping, or other incentives.
Keep the relationship. The relationship with your customers shouldn’t end after a purchase. Create ways to bring them back through coupons, loyalty programs, email marketing, and retargeting ads.
Plan from beginning to end. Your entire business model needs to be built around the ABC Formula. That is, increasing average order value, buyer frequency, and customers.
In order to do so, you’ll need to create brand awareness through content and offers that get the initial purchase, increase order value, then have a way to continue future purchases such as a subscription model, and continue acquiring more customers through your marketing.
Brands doing this well: KIND Snacks, Onnit.
The Big Advantage vs. Traditional Retail
These 5 strategies require major changes to your brand. The big advantage to ecommerce vs. traditional retail and grocery is:
- You own the complete brand experience from beginning to end.
- You own the consumer data with or without the purchase.
- You own the relationship with your customers before and after the purchase.
Are You Ready to Dominate Your Category Online?
These are 5 success strategies of successful online food brands. But in order to dominate your category online, you’ll need to transform your marketing in order to connect with your audience, convert traffic into customers, and create brand advocates.
If you’re ready to dominate your category, but aren’t sure where to begin, I might be able to help you. Reach out to me at SparkPPC – Specialty Food & Beverage Marketing & Consulting to schedule a free call. Let’s dominate your food and beverage category.