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How To Avoid the #1 Brand Building Mistake
Aaron Shields
April 30, 2024 • Reading Time: 15 minutes
In 2007, Nike flew out performance coach Alan Stein, Jr. to work at the Kobe Bryant Skills Academy.
Alan had heard Kobe’s workouts were insane. And he wanted to take advantage of being at the Skills Academy to see if the workouts lived up to the hype. So, he worked up the courage to ask Kobe if he could watch a workout. Kobe said, “Sure, I’m working out at 4.”
4 AM.
Alan showed up 30 minutes early to impress Kobe. But Kobe was already there, warming up before his workout. For 45 minutes, Kobe just practiced the basics. The fundamentals. The same moves Alan taught to middle-school players.
When he asked Kobe why he was practicing the basics, Kobe said, “Why do you think I’m the best player in the world? Because I never get bored with the basics.”
In business, it’s easy to get bored with the basics. And when you get bored, you ignore them.
But the basics are basics for a reason. They’re fundamental to success.
This week’s newsletter focuses on some fundamentals that every business should always keep in mind.
Just because something is basic, it doesn’t mean that it’s easy. If it was easy, everyone else would be doing it.”
Click here to watch Alan Stein, Jr. recap his Kobe experience.
This Week
Marketing: 3 Killer Marketing Strategies From the World’s 4th Most Valuable Company
Branding: The #1 Brand-Building Mistake Most Companies Make
Advertising: “I Don’t Know How To Begin on This”
Three Other Things I'm Paying Attention To: Headlines, YouTube, and Leadership
Marketing: 3 Killer Marketing Strategies From the World’s 4th Most Valuable Company
ChatGPT isn't winning AI.
NVIDIA is.
If you don't know, NVIDIA is the chip manufacturer powering the technology behind generative AI. NVIDIA has been around since 1993. But in the last four years, it has gone from being valued at $179 billion to $2.2 trillion, making it the world's 4th most valuable company today.
Last month, their CEO, Jensen Huang, gave a keynote at Stanford University. He spoke about becoming a market leader and the future of AI.
Here are three big marketing takeaways from Huang's talk:
1. Create the Future by Driving Down Costs
Figure out what customers could do if your product became significantly cheaper to make and service. Then, work to create that reality.
Making your products cheaper isn't about selling them for less. It's about decreasing current costs to change behavior so that you can charge for something else.
NVIDIA's chips aren't cheap. They're complex and cost a lot: they have 35,000 parts, weigh 70 lbs, and cost $250K. But they replace a whole data center.
Driving down the cost of computation enabled them to create their chips. That enabled a new type of computing—accelerated computing. And that enabled the large language models that power generative AI like ChatGPT.
In another example Huang gives, people regularly travel long distances because airplanes decrease the monetary and time costs associated with travel.
Change like this doesn't happen overnight--NVIDIA started working on it ten years ago. But you can plan for it. And create it.
In Huang's words:
[A]bout a decade and a half ago, we saw it coming. And we took the whole company, and we shaped our computer, which was already driving the marginal cost of computing down to zero, and we pushed it this whole domain. And as a result, in the last ten years, we reduced the cost of computing by one million times; the cost of deep learning by one million times. And a lot of people said to me, "But Jensen, if you reduce the cost of computing … by a million times, then people buy less of it. And it's exactly the opposite. We saw that if we could reduce the marginal cost of computing down to approximately zero, we might use it to do something insanely amazing: large language models. To literally extract all of digital human knowledge from the internet and put it into a computer and let it go figure out what the the knowledge is. That idea of scraping the entire internet and putting it in one computer and let the computer figure out what the program is an insane concept. But you wouldn't ever consider doing it unless the marginal cost of computing was zero.
2. Prove You're The Best Solution, Even if It Means Giving Your Ideas Away
Customers need to believe you're better for them.
They won't just take your word for it. And sometimes that means giving some of your secrets away to prove you are the best choice.
NVIDIA lets people see everything they do. They even let potential competitors see the future products they're developing in detail.
In Huang's words:
We have more competition than anyone on the planet has competition. Not only do we have competition from competitors, we have competition from our customers. And I'm the only competitor to a customer, fully knowing they're about to design a chip to replace ours, and I show them not only what my current chip is, I show them what my next chip is, and I'll show them what my chip after that is. And the reason for that is because … if you don't make an attempt at explaining why you're good at something, they'll never get a chance to buy your products. And so we're completely open-book in working with just about everybody in the industry.
3. Create Value With the Whole Experience, Not Just the Product
Think about the whole customer experience, from buying your product to using it and maintaining it.
Then, think about how to create value for your customer from that whole experience, not just the product.
NVIDIA doesn't win on just its chips. It wins by also being able to help its clients implement the chips and maintain their data centers better and cheaper than any competitor.
In Huang's words:
When you see computers these days, it's not a computer like a laptop. ... It's a Data Center. And you have to operate it. And so people who buy and sell chips think about the price of chips; people who operate data centers think about the cost of operations. Our time to deployment, our performance, our utilization, our flexibility across all these different applications in total allows our operations cost … [to be] so good that even when the competitor's chips are free, it's not cheap enough. And that is our goal: to add so much value that the alternative is not about cost.
Click here to watch the full Jensen Huang keynote.
If you're wondering, the three most valuable companies today are Microsoft, Apple, and Saudi Aramco.
Branding: The #1 Brand-Building Mistake Most Companies Make
Branding is a lot like gardening.
They're both investments in the future.
Unfortunately, most companies and agencies don't approach branding that way. They think they can create a brand through a strategy process. And then immediately roll it out.
They do this:
And then immediately treat it as if it's fully formed, like this:
Customers aren't naive. They don't believe you are what you say you are.
They believe what they experience. And that doesn't happen suddenly, all at once. It happens over time.
If your customers don't experience your brand over and over again, and if that experience isn't consistent, you don't have a brand in their minds. You're just another company with a clever slogan.
You're replaceable.
Brands drive preference. And driving preference is a long game. It's a marathon, not a 100-yard dash.
Many people erroneously think of brand-building as a journey or sprint to a finish line of brand-achievement.
Customers have to experience your brand for it to be a brand.
You can't come out of the gates by marketing your brand like Coca-Cola and claiming you create happiness. Coke can do that because it spent over 100 years getting its products into customers' hands in places where customers were happy.
Customers don't associate Coke with happiness because Coke told them to.
Coke earned the ability to advertise happiness.
Associating with happiness just reinforces what the customers are already doing and puts it at the top of their minds.
So don't start by pretending your brand exists in its ultimate form. Don't pretend that you have a garden immediately after you finish planting it.
Branding is a lot like gardening. They're both investments in the future.
Start by proving that you can solve your customers' problems. Do it over and over again. And do it for a lot of customers.
You need to spend a lot of time watering your plants before you can claim you have a garden.
Only then can you jump to advertising big ideas like happiness.
Advertising: “I Don’t Know How To Begin on This”
He didn't know where to begin.
But he sold $63,998.40 worth of Beanie Babbies in ten minutes.
I'm talking about master pitchman Don West.
He sold $63,998.40 worth of Beanie Babbies in ten minutes.
I spent many late nights in high school glued to my TV, watching Don when I should've been sleeping. But the enthusiasm he threw into every pitch was pretty mesmerizing. I'm pretty sure he could've made a video of paint drying exciting.
In 1998, Don gave a masterclass in advertising fundamentals when he sold 32 units of a 94-piece Beanie Baby Set for $1999.95 each.
In just 7 minutes, he:
This deal is so good that I could hardly wait to read the net tomorrow to hear what people say about what we did.
2. Demonstrates Value
Literally, there are 28 Beanie Babies in here. When you consider retirement, they can literally pay for everything right now.
3. Frames the Most Valuable Item as a Free Bonus
And we're gonna do something special … we're gonna give you the $400 Maple Bear free.
4. Proves Scarcity
Here's the problem. Are you ready for this, folks? Now, here's the problem. Number one, we only have a few of these. … Rest assured, I'm looking at it right here; according to this, if I'm reading this right, it's 32. … We're going to double-check on that. We may only have 32 of these.
5. Creates Urgency
But let me explain something: The retirement is coming up either on September 1st or October 1st. We've been hearing rumors all the way around the board.
6. Stacks Value
So here's the deal. Are you ready? You are going to get every single current American Beanie Babie release. …. 65 Beanie Babies. Actually, that's wrong: we're gonna throw in the Maple that was only released in Canada. That's a $400 Beanie Baby by itself. We sell it out at $399.95 by itself. Right now, we are going to give you this one. Are you ready for this? That's 66 current Beanie Babies. … All the 14 new releases. … Plus, every current Beanie Babie that there is in America. Every single current Beanie Baby in America. And then, here's the part that's unreal … we're gonna give you all 28 of the May retired Beanie Babies. … Today, we would have to sell out all 28 May retired for around $1699.
7. Reframes Value
Oh my gosh. Now folks, ya gotta think about this. Think about this right now. $21 a piece. You're getting 28 retired Beanie Babies. … Zip the Cat is now bringing in over $100, and it just retired in May. In fact, almost all 28 of the retired bring a minimum of $50 apiece. Minimum.
8. Makes It Seem Stupid Not To Buy
[T]here's a possibility something could happen September 1st with the Princess bear. We're hearing that everywhere. Do you know if that retires, that bear alone will cover the price of everything? That's no joke. That bear alone will cover the price of everything.
9. Summarizes the Biggest Benefit
If you call right now, you are guaranteed the Maple Bear every time you order. You are guaranteed 94 different Beanie Babies. And the best part of this deal is no matter what retires, you've got it. … For the next three retirements, you have every single Beanie Baby that retires.
You can learn a lot from Don West about creating offers that thrill your customers.
You can—and should—watch the video by clicking here.
Be warned: you may start searching eBay for a Maple Bear.
Three Other Things I’m Paying Attention To
Headlines: Last week, I came across the best description of an ad headline I've read. It comes from How To Write a Good Advertisement by Victor Schwab: "It is obvious, therefore, that there are two principal attributes of good headlines. They select, from the total readership of the publication, those readers who are (or can be induced to be) interested in the subject of the advertisement. And they promise them a worthwhile reward for reading it."
YouTube: YouTube is huge. But it's underutilized by businesses. It's the world's second-largest search engine—behind Google and ahead of Amazon. And here's the kicker: you can get paid to advertise on it. You can drive traffic to your own products in your videos while you get paid to let YouTube run ads on your video. Then, you can use that ad income to drive down your net spend in other advertising. You can get your advertising to pay for itself. It's a pretty crazy idea that companies should at least explore. You can learn more about it on the "CRAZY! They Will Pay You To Drive Traffic To Your Own Funnels…" episode of Russell Brunson's Marketing Secrets podcast. It's a 19-minute listen.
Leadership: This is another gem from Jensen Huang's Stanford keynote. He outlines his process to get excellence from his team of 55 direct reports—yes, 55! In his words:
[M]y management team—my direct reports—is 55 people. I write no reviews for any of them. I give them constant reviews. And they provide the same to me. My compensation for them is the bottom right corner of Excel. I just drag it down, literally. Many of our executives are paid the same, exactly to the dollar. I know it's weird. It works. And I don't do one-on-ones with any of them unless they need me. Then, I'll drop everything for them. I never have meetings with them just alone. And they never hear me say something to them that is only for them to know. There's not one piece of information that I somehow secretly tell E-staff that I don't tell the rest of the company. And so, in that way, our company was designed for agility, for information to flow as quickly as possible, for people to be empowered by what they are able to do, not what they know. And so that's the architecture of our company. … The answer to that is my behavior. How do I celebrate success? How do I celebrate failure? How do I talk about success? How do I talk about setbacks? … Every single day, I'm looking for opportunities to keep instilling the culture of the company and what is important, what's not important. What's the definition of good? How do you compare yourself to good? How do you think about good? How do you think about a journey? How do you think about results? All of that, all day long.
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