Product Features Alone Won’t Win in Today’s Market
“A great product is only the entry fee to compete in today’s functional CPG market.”
You’ve likely heard me make that statement countless times, but what’s at the heart of it?
The hard truth is that there has never been as many functional CPG brands and products as there are today. The easiest way to experience this reality…do a quick non-branded search query on Amazon within one of the sizable functional CPG categories like pre-workout powders. It’s overwhelming, right? Next, imagine how that endless shelf of interchangeable substitutes feels to the casual categorical shopper…
We Live in a Fast-Follower World
Regardless of the increasingly higher barriers to entry, it’s still relatively easy for entrepreneurs to enter almost any functional CPG product category, which ultimately creates extreme levels of competition. Those low barriers to entry are a double-edge sword for entrepreneurs. The same ones that likely helped your functional CPG brand get products made with less investment or seen by more consumers with less investment or offered for sale nationally with less investment are also the same ones that competitors are now using against you. A fast-follower strategy is one that relies on quickly imitating innovations pioneered by others. Having a unique product used to give you at least a few months of competitive lead time over other players, but that advantage seems to matter less and less.
Strategic Narrative > Product Features
So, how do you stay ahead of your competition when you know it’s only a matter of time before they copy your best product features?
The solution is having a solid strategic narrative. This is what I mean when I say, “it’s what you build off that great product that determines the long-term winners.” A strategic narrative is a concept that enables brands to create a unique story that guides all business activity. It isn’t the boring mission and vision statements that business school teaches you about…it should inspire the organization, excite outside stakeholders, and attract customers.
In my opinion, a functional CPG brand should work on its strategic narrative from the start. In fact, just as you seek product-market fit initially, you need to consider strategic narrative-market fit at the same time. Unlike product features that can be copied and commoditized, a strategic narrative can be a long-term advantage.
It is necessary to structure the strategic narrative around the change your functional CPG brand proposes to the market, how the consumer benefits if they are engaging with this idea, and what the future looks like according to what is presented to the consumer. Because the strategic narrative has the role of showing the future to the consumer, its a stronger foundation of differentiation against competitors than product features alone.
“Why” Matters
Have you heard of Simon Sinek’s “golden circle”? It’s a principle that essential states “people don’t buy what you do, they buy why you do it.” The main superpower comes from its ability to tap into the limbic brain that’s responsible for emotions, feelings, and decision-making. That’s why it’s so powerful when messages communicate with that part of the consumer’s brain first, before they engage the rational part of the brain. If you get them feeling something first, it’s more likely this feeling will influence decision making or at least get a positive response.
This is why the smartest functional CPG brands are focused less on product-based differentiation, as they know that competing on that battlefield alone will provide a transient advantage. It’s an insufficient moat and too easy to copy. If the category leader has X amount of product features, you can’t expect to win long-term with X+1.
Be Boldly Unique
Meanwhile, having the right strategic narrative can give you a long-lasting advantage. The right strategic narrative is one that needs to be bold. If you’re perceived as a close substitute to the category leader, you are in for an uphill battle. Sameness is a losing strategy…though its also the most common one, so that’s an opportunity. It’s likely where the phrase “fortune favors the bold” originates from.
You want to compete by taking a fundamentally different position in the market. Position yourself differently and triple down on that differentiation.
Feature Parity + Sameness in Strategic Narrative = Category Leader Wins
Feature Parity + Boldness in Strategic Narrative = A More Even Battle
How To: Strategic Narrative
A strategic narrative is a system of stories that you intentionally build and the easiest way to do that is to ask a series of questions…
What opportunity did you see that others ignore?
How do you inspire your community?
How do you challenge the common wisdom?
How do you position your functional CPG products, so you drive customers into acting?
That system of stories creates a set of guidelines in the mind of the consumer. When you craft a strategic narrative, you're thinking in a downward and upward direction. It spells out how your functional CPG brand resonates with customers within the context of your specific product, as well as how it resonates within the larger culture your customers belong to. You will also use this strategic narrative to bring alignment across your company and ultimately shape organizational behavior. The strategic narrative should be used by the leadership team to create a sense of unity of purpose, direction, intent. It’s kind of like the business North Star. Therefore, developing a highly relevant and consistent strategic narrative is such an essential exercise.
Final Thoughts
It’s important to remember that a strategic narrative isn’t necessarily a set it and forget it kind of thing. Your strategic narrative can at times need to evolve, so ensure you’re listening to available feedback loops from the market.