Zag Ep. 40 – Marketing’s role in an squad team structure, How Otherland sells candles on design (not scent), and launching a challenger telco brand Inbox

❓Should marketing be a core part of an agile squad?

One of our core beliefs (and something that we consistently see in successful challenger brands) is that the best strategy or the newest technology doesn’t matter if you don’t have the right people set up in the right way to get the jobs done. At the end of the day, it’s a people game – win or lose. Everyone loves to talk about frameworks and models, but the rubber meets the growth road in the minds and hands of the people in your company. How you hire, structure your teams, and manage your people is the biggest factor to your growth (or lack thereof).

We do a lot of work with tech start-ups, especially in the financial services space. And it’s been interesting spending time with founders and CEOs who don’t come from a marketing background. They’re usually engineers or product-types, and view marketing as a secondary priority at best or an afterthought at worst. And that shows. It will show over time, as sustainable long-term growth comes from a strong product AND a strong brand, but it also shows in how they structure their teams.

Many of these tech start-ups structure their businesses around the agile model for tech and product development. Which is great – for tech and product development. And some do add a product or growth marketing to the squad, but not all and not most. Marketing does not have a core role in these org design models – and it should.

The role of marketing is not just to take a product to market, it’s to connect a product to the consumer. Marketing is customer-centricity in team form. It’s the function that should be closest to the customer and should be tasked with bringing the customer into the product development roadmap and process.

Marketing should have a role as a core part of an agile squad, it shouldn’t be separated and centralised. Additional reading on this topic:

🕯️How Otherland sells candles on design and community, not scent 

Otherland is a challenger brand in the candle market started in 2018. There are 2300 candle makers in the US alone, and the $17B market is dominated by two major incumbents. So, it’s not an easy industry to break into…

But Otherland has taken a different approach. They (until recently) were online-only, which would make sense for most DTC categories, but not when you’re selling smells! Most people want to smell a candle before they buy it. The way that Otherland overcame this challenge was by focusing their point of differentiation on design, not scent.

Their founder was interviewed by Retail Brew recently and talked about how they’ve taken a different approach to differentiating themselves:

“Otherland’s differentiator is being visually stimulating and creating stories around scents that it hopes evoke a memory or an emotion in a buyer.”

She also talks about how they built a connection and community with early customers:

“Having a strong feedback loop with your customers is really critical, and I think [it’s the] basis of community formation.”

Their community, Otherland’s “First Flames”, started out on Instagram’s “close friends” feature and is now hosted on Slack.

“It’s been interesting to see that evolve beyond just one-way, brand-customer relationships.”

🛫 Launching a flanker brand in the telco space

This article from McKinsey last year is an interesting read on how incumbent telcos can successfully launch their own challenger brands.

Some of the highlights from their research and recommendations include

  • Digital flanker brands can acquire customers at 49% the cost of incumbents
  • 70% of the gross adds are new, not cannibalised, customers
  • NPS is typically 30 to 40 points higher

There’s also a section on “what it takes to launch a challenger brand”. We agree with some of it:

  • Create a radically simplified and differentiated product.
  • Adopt customer-tested design and create an ultra-easy user experience.
  • Use digital marketing and advanced analytics to drive digital sales.

But there’s nothing about culture and capabilities. As we wrote about above, people are everything. You can’t build a brand in a textbook.

 

Plus, we’ve covered our thoughts on why innovation groups don’t work in big incumbent businesses. That’s entirely a people problem, not a strategic one.

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