Driving Uncommon Growth for Digital Native Brands

As successful early-stage founders and investors would agree, building with a product-market fit focus is one of the top priorities in launching a company (perhaps second only to raising capital to enable the prior). Once a company has reached organic growth and reach with a product-market mindset, the priorities need to quickly shift towards strategic growth and scale.

As the digital marketplace continues to become further saturated and competition has become too numerous to name, we are helping digital-native brands focus on a few strategic objectives to help them reach uncommon growth.

6 Strategic Objectives to Help Digital Native Brands Reach Uncommon Growth

1. Build an irreplaceable, valuable brand

The digital marketplace is now an unbelievably crowded space packed with digital natives as well as droves of large consumer product brands investing in direct-to-consumer initiatives. (According to a recent Salesforce study, “despite all the criticism CPG companies receive in regard to their retail and commerce strategies, at least 99% say they’re investing in direct-to-consumer strategies.”) With such a competitive marketplace all vying for much of the same customers, the value of a meaningful brand is higher than ever.

For many digital natives, growth curves flatten quickly before they can truly build an enduringly valuable brand position. But for those that have a relevant story to tell with their brands (Dollar Shave Club, Everlane, Airbnb), strategic growth comes in the form of growth-stage capital, acquisition exits and IPOs. For traditional CPG companies and the financial market, effectiveness and success in brand building and amplification have become a clear differentiating growth indicator for targeting digital-native brands for inorganic growth.

2. Create a strategic customer targeting strategy to posture for growth

Customer acquisition is VERY difficult at the growth stage for most organizations. It takes additional capital and sophisticated growth techniques for digital-native start-ups to achieve scale without burning through profits. The question we most often hear from our growth-stage,  digital-native clients is, “Now that we have figured out our initial entry market, how do we grow with new, unidentified targets and geographies?”

The first step is in taking a comprehensive look at the market landscape and executing market and customer segmentation mapped to the company’s value proposition. The strategy will be followed with a cohesive roadmap with savvy demand gen and acquisition techniques. However, this poses a chicken/egg dilemma. Many will say that they need strategic capital in order to reach these new customers. But it is very difficult to raise that capital unless you have a strategic plan in place. We’ve found that completing an expeditious, yet effective, customer targeting strategy provides investors a plan they can buy off on, which forms the basis for an immediate plan of action once the capital comes through.

3. Take customer data to the next level 

Digital native brands are rich in data. However, we often find the abundance of data untapped and under-utilized in driving strategies and operational execution. Sophistication comes from not solely basing strategies on historical data, but driving current data into actionable insights that drive the execution of the product and user experience (most often through machine learning).

“Despite all the criticism CPG companies receive in regard to their retail and commerce strategies, at least 99% say they’re investing in direct-to-consumer strategies.”

Customer expectations are driving companies to think about next-gen data strategies. It’s not just about the tools and technology used to access and manage data; It’s the deeply human insights to understand and implement behavioral data-driven retention and acquisition strategies. Journeying through the landmines of data value exchange, ethics in AI and overall customer data privacy become even higher stakes with global expansion.

4. URL to IRL. Getting physical with the brand experience

With the rising cost of digital customer acquisition, many successful growth-stage digital-native brands are finding growth in brand awareness and customer acquisition with offerings in a physical retail experience (Warby Parker, Casper). However, going physical without considering the customer journey with a brand will often come up short.

It is critical to have a customer-centric approach in understanding and meeting the customer’s journey with the brand toggling in the metaverse of both digital and physical.

5. Expanding with a brand portfolio

Perhaps the market assessment tells you that an unserved market will require a different brand identity or positioning. Too many razor options for facial-hair growing men? Grooming products and supplies? Razors for women? Will the master brand be sufficient or stretched too thin? Should there be a sub-brand to capture additional opportunities among adjacent consumer segments?

Prophet vice-chairman and master brand guru, David Aaker, writes about innovating with new brand subcategories in his book coming in 2020 titled, “Achieving Uncommon Growth in the Digital Age: Own Game-Changing Market Niches.” In it, he’ll discuss how game-changing market niches create growth, how digital drives and enables new market niches to win, and how to find, evaluate, manage and build barriers around these game-changing market niches.

6. Growing together with your employees and brand advocates

In reaching out to new targets and markets, it’s easy to lose sight of the early-stage magic that created traction with customers and employees in the first place. Accelerating the speed and scale of growth without alienating the core consumer group takes extra care and caution in brand management disciplines.

The often unforeseen challenge in strategic growth is in paving the way for organizational growth – keeping the best talent, training existing talent for skills required for the next generation of growth, and luring new talent to fill resource gaps and needs. With a competitive market, it’s more than free food perks at this stage. Start-up culture is part of the secret sauce – so how do you grow without losing sight of the most important ingredient of success – employee culture?

Due to the nature of the start-up hustle, most digital-native companies have not prioritized professional development support and are not the best positioned at cultivating talent. Where speed to market is a constant drumbeat, work-life balance and communication are often weak. And as the fight for talent increases, companies need to rethink team growth. Another clear differentiating growth indicator is how companies are leveraging employee/team optimization to help with growth.