As an outsourced CMO working with food and beverage clients, I am often called on to help design packaging and plan the go-to-market strategy for new products. I recently had the pleasure to work on the design for a line of kombucha beverages. Kombucha is a fermented tea sold in most grocery stores as a ready-to-drink product. It is praised for its health and digestive benefits. In this product category, one dominant brand has 80% of market share and the category is growing quickly with many new customers trying the product every day. My challenge was to help my client design packaging that would appeal to new customers while also enticing the leading brands regular customers to try something different. We started where all packaging projects should start, with research.

I set out to build a customer profile of a typical kombucha drinker. We asked for vital lifestyle data as well as factors that drove the brand selection: such as age, income, gender and education levels as well as health behaviors and lifestyle. I had a theory that if we could capture the health benefits of kombucha in the packaging they would sell like crazy . . . I was dead wrong. In fact this assumption could have ruined the packaging if I had acted on it without soliciting customer input. In our discussions with customers, what I learned was that taste, not perceived health benefits, were the deciding factor when selecting a brand. It turns out, kombucha drinkers have already accepted the many health benefits. What they want to know most is what this particular bottle is going to taste like.

A recent study of eye tracking on product packaging indicates that customers are spending fractions of seconds reading labels and making buying decisions. In many cases, as little as 1/20 of a second is spent on packaging. I have also learned from recent studies that nutrition labels have little impact. Many of your most compelling nutrition facts, such as low sugar or vitamin content is presented near the bottom of a nutrition table and therefore overlooked by customers. Given that busy customers are not reading nutrition and packaging narratives, getting packing design right is mission critical.

My client’s product was saved by the research. My team and I avoided a costly mistake. Starting the packaging design with strong assumptions is common error, made most often when a company designs product packaging without an outside perspective. Without this due diligence I might have put the wrong facts on the packaging. A well-designed survey that didn’t convey any bias benefited the client. A poorly-design survey could have simply confirmed my bias and led us down the wrong path.

An outside team will have fewer biases and more experience eliciting valid and useful customer feedback. If you are not sure if you are asking the right questions in your research look for outside advice.

Below are six steps you can follow when designing new product packaging.

1: Determine where your product is in the category’s evolution. This will help determine the strategy and impact how much time the customers will spend learning about your product.

2: Build a customer profile by gathering voluntary information from your customers and soliciting active feedback. There is some basic information that you need such as, age, gender, ethnicity, income ranges, education levels and geographic location. Other questions will need to be customized based on what the product is.

3. Determine what motivates buying preferences. If this is a new food category, many customers will read the labels and nutrition information, but only for fractions of seconds. If this is a mature category, expect customers to spend even less time reading packaging or nutrition information.

4. Determine your top 3 buyer motivating factors and use them, front-and-center on your packaging. Remember, you have fractions of a second to make an impression.

5. Work with the best design firm you can find. Once you sort through the first four steps you are way ahead of most companies trying to bring a product to market, especially if you have avoided your own biases. Now you need an amazing designer to translate that research into a design that connects you’re your customers and conveys the critical information in 1/20 of a second. Your designer speaks the language of the subconscious. Trust her. She is translating knowledge into a language you don’t speak.

6. If you are a small to mid sized company with more limited product launch budget, work with a design firm to develop the most compelling packaging you can. Plan your go-to-market strategy and launch it. New packaging if done well should give you a sales lift out of the gate.

Optional: If you have the budget, I suggest testing the new packaging with consumers using the latest eye tracking technology and comparing this to tests of your competitors packaging. In doing this, you will have some certainty that your product will gain market share.

Most new products fail due to poor marketing and packaging – follow these steps and you are on the best footing to succeed. I am happy to say Herbucha, the best kombucha ever, is selling like crazy and expanding distribution to new cities as we speak.  Good Luck!

Earlier this week Portland based Giftango announced it was being sold to InComm.  Giftango's technology facilitates the sale of gift cards for major brands online, via Facebook and mobile devices.  InComm, based in Atlanta, provides a similar service selling prepaid cards and facilitating online transactions.  The merger creates a nice synergy for both companies of both technology and respective clients.  As part of the merger the combined company is increasing the size of the workforce and management team in Portland.  Seth Miller, who has been with CMO Strategy Group for the last three years, is joining InComm/Giftango as a Vice-President.  

This merger is also a win for the Oregon Angel fund who were early investors in Giftango.  According to the Oregonian story about the merger, OAF expects to get a 6x return on its initial investment.  Congratulations to all the parties involved and especially Seth Miller.  We wish him the best on the new adventure ahead.  

11 years ago, I was living in the suburbs of Washington, DC. I was home on paternity leave marveling at my newborn daughter and what it felt like to be a father for the first time. I got up a little later than usual, feeling tired and groggy as new parents so often are. I turned on the radio and started the shower . . . and then I heard the news. I along with everyone else I know, spent the day watching some of the most heartbreaking images I have ever witnessed.

One member of the sales team I managed was giving a tour for an executive who was considering expanding from the UK into the region. The tour happened to be in Northern Virginia near the Pentagon when the plane hit. The client watched the attack occur and left in his car to parts still unknown to me.

My job at the time was to market the Washington DC region and manage the region’s brand image. Not a great day to be a brand manager. Shortly after the attacks, an emergency board meeting of Washington area CEO’s was convened to discuss how best to help the region recover economically. In addition to the tragic loss of life, we were very concerned about the economic impact of the attacks on the Washington, DC region and the nation.. After all, who would want to live and work in a place where terrorists want to fly airplanes into the buildings? How many jobs would be lost? There was so much fear, along with military Humvees with anti-aircraft missiles parked on many downtown Washington, DC corners.

National Airport was closed. The plane that hit the Pentagon had taken off from DCA. Any planes taking off or landing at National had fly down the Potomac River passing near the White House. There was talk of keeping the airport closed permanently. This would have had a huge economic impact. Most regions rise and fall based on the strength of their air service. Losing a major airport would cause most regions to suffer a major economic setback and DCA was/is central to quality air service in the region.

Over the coming months we had many hard decisions to make as we helped the region rebuild the economy and rebuild its reputation. We ran ads politicizing the airport closure and reframing it as a loss of freedom for the region’s residents. Once the issue was moved from the Secret Service, who would have like to close all of Downtown, to a political desk in the White House, we were able to get the airport re-opened over two months after the attack.

Part of my job was to recruit companies to expand and relocate to the Washington DC region. After 9/11, thousands of companies had lost office space in New York. I had to decide how best to reach out to them and offer help finding office space in the region, without seeming to profit from the dark misfortune of others. In many cases the executives I had listed in my database had died in the attack and no new address information existed for many of the companies. I was in the twin towers for business meetings weeks before attacks and had to come to grips with my own fear and survivor guilt.

Prior to 9/11 the regional marketing strategy had been to focus on the growth of the telecom sector, internet providers like AOL and other .com companies, as the technology sector in Washington DC became the largest in the United States. Post 9/11 we flipped our marketing strategy to refocus on the Federal government as a consumer of technology goods and services. The U.S. Government is the largest consumer of technology worldwide and each cabinet agency is the equivalent of a Fortune 500 company. We organized “How to do business with the US Government” conferences across the U.S. and in Europe to refocus peoples perceptions of the government from that of a regulator to a potential consumer of goods and services.

This switch was highly successful. The brand of the Washington DC region evolved and the region grew significantly over the next five years, attracting headquarters and companies looking to sell to this important customer. Throughout this five-year period we conducted polls and focus groups of executives outside of the region to understand their fears about a Washington office location and developed marketing and advertising to address what we learned. This was my training in crisis communication. I also learned important lessons about long-term brand management. I learned how to pivot a marketing strategy and how to turn a perceived weakness into a strength. I learned how to keep moving during a crisis and how to keep living when so many didn’t have the chance. I still remember.

According to a recent study by CMOSurvey.org, Marketing Outsourcing - outsourcing of marketing is growing fast.  (Click the link to read the original post, including the downside of outsourcing.)

This study, by Christine Moorman, Director of The CMO Survey and the T. Austin Finch, Sr. Professor of Business Administration, The Fuqua School of Business, Duke University, wanted to determine how much marketers were outsourcing. “I asked top marketers to report how much they expected their companies to outsource marketing in the next 12 months.”

The findings were interesting.

This percentage has grown over time as shown in Figure 1. In fact the last measurement, taken in August 2011, grew by over 100% over the prior year!

Figure 1: Percentage of Company Outsourcing of Marketing Expected in Next 12 Months

Wow! In just 6 months, the percentage of companies saying they were outsourcing marketing grew from 1.8% to 9.3%. What will 2012 hold? Will it grow to 25% or more?

The author pointed out some reasons companies choose to do outsourcing.

Why do companies outsource marketing?

1. Companies don’t have the expertise to perform key marketing tasks.
2. Companies don’t think the benefit of building knowledge and skills is better than the value they get from an expert partner performing that same task.
3. Companies can’t produce the same function at the same low price as they can buy it in the open market because the provider has scale, scope, and experience (and perhaps cheap labor?).
4. Companies prioritize other strategic areas more highly than doing marketing internally.
5. Companies want a new point of view. It is easy to stop learning when you are stuck listening to the same colleagues every day. An external partner can offer important insights.
6. Companies don’t understand the value of marketing.

This is a good explanation for why we formed CMO Strategy Group.  We help companies rapidly grow revenue by transforming the ways they attract, engage and win new customers.  Let us know how we can help you!