The proven 4-step methodology behind building a successful consumer product company
The Retail Band STAR Index™ System is a 4-step methodology proven to grow consumer product goods companies. It all started with NewAir Appliances: a fast-growing housewares brand with a range of products for the home. Over the course of 15 years, the company focused its digital strategy on eCommerce, both D2C and online retail.
Retail Band modeled the STAR Index™ System after the core tenants that help NewAir Appliances continue to thrive after over a decade in business. The team behind NewAir Appliances is now sharing the company’s same methodology with likeminded businesses in the housewares, home goods, and hardware industries to help other business owners find success.
This article is the first in a series and lays down the foundation of the first 2-steps of the digital strategy behind building a successful consumer product company: strategy and trust.
After outlining what these two core tenants stand for, this article gives insights and examples into common trends found amongst businesses looking to develop a digital sales and marketing strategy (possibly for the first time ever).
Strategy: Do you have a measurable digital strategy that will help you win?
Do you have a step-by-step plan—or, are you just doing things to do them?
Michael Porter defines strategy as both plan and position. There are 4 types of, what he calls “Generic Strategies”, that your digital sales and marketing strategy can fall into.
- Cost Leadership: target a broad market and offer the lowest possible price point on the market
- Differentiation: target a broad market with a unique product or service
- Cost Focus: target a niche market and offer the lowest possible price point on the market
- Differentiation Focus: target a niche market with a unique product or service
The first step of the STAR Index™ System is evaluating which Generic Strategy a company falls into. This initial analysis allows business owners to see an honest review of their current process and approach, from an unbiased, professional perspective. Porter’s Generic Strategies is a quick insight into where a company is investing its resources. Without this first step, it’s nearly impossible to know how to build and grow. Consider the following examples:
Company 1 creates beautiful products and has partial ownership with a Chinese factory, which gives them a low-cost advantage. Amazon is its strongest sales channel. It also happens to be the only sales channel. Company 1 doesn’t have an in-store or marketplace presence. The Company 1 strategy can be summed up as follows:
• Low Cost
• Focus on Amazon sales
Company 1 is strong on Amazon, which puts them in a narrow market segment. By labeling Company 1’s sales strategy we are able to see a quick overview of where company resources are going to and from there create an actionable plan to help Company 1 grow its bottom line by entering into other sales channels and opportunities.
Some company strategies are more all over the place, possibly from a lack of initial planning or foresight. Let’s examine another scenario:
Company 2 works with 5 different factories and doesn’t have any of its own ownership. It creates and develops IP and products with a competitive advantage. Company 2 has a strong in-store presence in mass retail and a strong design team, but that team is focused on in-store marketing and not on digital marketing. The Company 2 strategy can be summed up as follows:
• Diversify factories
• Grow and diversify SKU’s and categories
• Focus on in-store sales
• IP protections on product designs
Once again, we encounter a company with a narrow market segment. It can be hard to self examine as a company, especially when growth is continual, sporadic, or sudden.
No two companies are the same. Each company needs a personalized strategy to meet their current needs. When evaluating a company, the Retail Band team asks the following questions to develop a personalized digital sales and marketing strategy built solely on a company’s unique needs.
- Do you live and die by their products, but fail to have a basic product roadmap?
- Do you have a digital strategy? In other words, do you have a strategy for each sales channel, all marketing opportunities, and the potential business threats your company faces online? Do you have an Amazon Strategy? Do you have a website strategy? Does your strategy include how to handle reviews, PR, influencers, channel conflict, pricing, etc.?
- Is your brand completely dependent on Amazon sales? Are you building your brand outside of Amazon?
- Do you own your customers? Or, does Amazon and other R-commerce retailers, like Home Depot and Wayfair? Do you see your own D2C website as pointless?
- Do you want to excel in digital, but overlook the importance of having an instore team and DNA?
- Are your marketing campaigns and assets flat, uninspiring, and don’t differentiate the brand?
- Is anyone talking about your brand? How do you drive people to your product listings?
A deep-dive analysis of your business gives you the starting point in which to develop a step-by-step strategy. A strategy allows you to recognize your areas of strength as a business. It also allows you to evaluate your weaknesses. When you pull together your strengths—combing the best assets from your entire department and people—you get a strategy that helps you gain a competitive edge over the competition.
Trust: What do customers think of your brand and products?
Jeff Bezos famously said, “your brand is what other people say about you when you are not in the room”.
Trust is a feeling. When you work on trust, you work on the heart, not the head. So, how does a business work on trust, a feeling no easily captured or earned?
The STAR Index™ System, once again, starts with an evaluation, to get a sense of where a company currently stands with its consumers. From there, the STAR Index™ System can pull from a robust amount of services to serve up exactly what will help develop trust for a company.
One tried-and-true way to do this is Influencer Marketing. People trust what third party influencers and friends say about a brand, much more than what a brand says about itself. If you can get people talking about your products, then you are relying on a network of influencers, friends, and community members to build trust around your brand.
It’s important to ask: how much of your marketing and content is driving third party conversations about your brand versus how much is driving a one-way conversation for your customers? Here are some additional questions to ask in order to figure out if you are creating trust with your consumer:
- Do you have a content marketing strategy?
- Do you have the right team to execute a content marketing strategy?
- Do you drive influencer traffic to product listings on big-box retailers?
- Do you leverage influencer relationships and loyalists to get more reviews on products?
- Do you understand how YouTube works within the entire sales funnel?
Retail Band has worked with a handful of clients on developing trust between brands and consumers. Here are common trust issues found within brands:
• Small online presence
• No content marketing plan
• One-way blog communication
• Bad reviews on products and glass door
The STAR Index™ System evaluates reviews on product listings and a company’s overall online presence across social media and retailer sites. From there, it helps you build back any lost trust between the company and its consumers.
SWOT Analysis: A Trusted Third-Party Review of Your Company
A SWOT Analysis gives you a 360-degree view of your company: its strengths, its weaknesses, potential threats, and potential opportunities—from the perspective of a professional third-party set of eyes.
The STAR Index™ System uses the SWOT Analysis as one tool to evaluate a business and get a broad overview of its current state of welfare. Retail Band takes things a step further with the STAR Index™ System by also evaluating the strategies, or lack thereof, that are driving or inhibiting a company’s growth. It also offers up tailored steps to take advantage of any growth opportunities.
Take Advantage of The STAR Index™ System to Increase Sales and Trust
To get a solid introduction into the STAR Index™ System, a business simply needs to opt-in for an evaluation. This evaluation involves an onsite visit with the team, as well as background research into a company’s online profile. But Retail Band doesn’t stop there. Once the evaluation has been completed, strategies to build trust and a digital marketing and sales plan with be outlined in full detail.
There are two more steps to the STAR Index™ System: Reviews and assets. The next article in this series will take a deep dive into these two steps, both of which are critical components to a sustainable marketing and sales strategy.
To get an expert evaluation of your digital sales and marketing channels, email firstname.lastname@example.org. You will get the recommended strategies to help you reach your untapped sales potential.
Also, don’t forget to check back in for the second part of the STAR Index™ System series on reviews and assets.
I began my own brand, Newair as a B2B side hustle out of my garage 17 years ago, so I know what’s like to try growing a consumer brand from scratch. Now that my company made it to the elite 15 year mark, now my focus is on interviewing other successful CEO’s in our space to share the knowledge with others.