Seth Godin “The Marketing God” Unpacks the Winning Strategies of Global Brands

0:00Seth, so lovely to see you, mate, as always. It's an absolute pleasure. Your book, This Strategy is Insane. I absolutely loved it. What I'd love to start with, I believe, sort of the original gangster, the original gangster strategist, probably the original gangster challenger brand. Someone I've also read lots about is Napoleon. Are we talking about the dessert or the general? The general Napoleon. Okay, got it. Slightly different things. um given that given that it's a food podcast it could just as easily have been the dessert what's what's what's the napoleon dessert is that like a american brand no no it's a french dessert it's um many many many layers of stuff with some cream filling inside it's like a donut yes okay no no they sell a lot they sell a lot of them in the united states i have no idea if they're popular in Europe.

0:59Right. Now I'm talking about the general and then we can apply it to food. But I've sort of read a lot about Napoleon and one of his things is speed and flexibility. And so when he'd go into war, he'd sort of did the cops or arms. He could split his troops into different sort of segments and he could move relentlessly fast, but also be super adaptable. Now in the book, you sort of say, you know, hastiness undermines strategy. And I'd love to sort of explore with you the tension between being steadfast in what you're trying to do and not changing versus moving relentlessly fast and sort of pivoting as you bounce.

1:45And we can use any food brand example to kind of explore that. Okay. So this is, I've done a fair number of conversations about my book, and this is the first time someone has brought up a general and military strategy. And that's fine with me. I am not an expert on military strategy. But what I will tell you is this. Napoleon had a tactic that in its era was a game changer. And the tactic was speed. But it wasn't a strategy. The strategy was take over Europe, right? He had a philosophy of where he was trying to go and what it would feel like to go there. And then once you decide that your strategy is to use warfare and other things to dominate and gain more power, now you need tactics.

2:38And one of those tactics was speed. So let's not get confused about them. Okay. Okay. So speed. So let's go to concrete examples because this confuses a lot of people. What is Starbucks's strategy? Their strategy is to offer a luxury brand experience to a certain group of people who are in a pre-caffeinated state so that in a way that elevates their sense of status, gets them what they want. Now, there are lots of tactics, opening stores and airports, coming up with a brand of ice cream, coming up doing this and doing the other thing, working with United Airlines. These are all tactics to reinforce their arc of standing for luxury in a small payment for people who are looking for a caffeine fix.

3:39And when they try to go outside of that, like get known for their egg sandwiches, they fail every time because those tactics don't support their strategy and they don't have another strategy to go with we're going to feed people who are hungry the only strategy is we're going to caffeinate people who want to be caffeinated so when so i totally get that so speeds downstream from strategy the when should strategy change because say like like for example dyson started as a wheelbarrow and then actually it's probably blasphemous if i call it a hoover but a vacuum cleaner he that would be yeah blasphemous but he started there and then he then he went to something different so where does that fit into things the reason i'm asking this is because a lot of our listeners have brands and i think there is we'll get really into sort of the difference between strategy and tactics but they may start with an idea a lot of the people i have interviewed start with an idea and then it ends up there as something completely different and i think what i customers pick your future like don't don't change what you're trying to do but then at some point you do need to change if that makes any sense yeah so okay dyson's strategy dyson's strategy as long as i've been aware of them and i was one of their early u.s customers is right for a certain small group of well-off customers be engineering forward in selling people at a high price something that is demonstrably different and even better, where the engineering leads the way.

5:20And there are plenty of other vacuum cleaner alternatives, hairdryer alternatives, et cetera, that don't lead the way Dyson does by showing off just how light the portable one is, just how much wind comes out of the hairdryer, et cetera, et cetera. Yes. Okay. Every time he does that, he does better. But when he did things like they came out with a line of headphones, I believe. And the headphones couldn't compete with Sennheisers in terms of the quality of the audio. Because he pretended to be engineering forward and driven, but it didn't blow everything away. If he doesn't blow you away with his engineering, you're going to pick a cheaper alternative.

6:05do. So that strategy eventually is going to peter out because sooner or later, your vacuums can't suck any more than they do. And now you don't stand for something. Whereas Apple has a different strategy. Their strategy is create a luxury good category based on digital experiences and give our users ever-growing desire to have good taste about digital interaction. That's what they do. The fact that there's a phone or a watch is a tactic. It's a tactic. So products are sometimes tactics as well in the grand scheme of things. Yeah, because what I need from your strategy is the more you do it, the better it works.

6:46And you need to be able to tell the people who work with, you don't want it to be a secret. This is our strategy. The more we do it, the better it works. Now I'm going to trust you to come up with tactics. You say, I want to run through some of the quotes that I highlighted because they're delicious. So small companies ask me about a marketing problem. I respond by saying you probably need a strategy first. What's the difference between marketing and strategy? So some people use the word marketing to mean promotion. How do I get the word out about this great podcast? How do I get the word out about my store that sells donuts and Napoleon?

7:20How do I get the word out? I just got to keep interrupting people. That's promotion. Marketing is the work we do before we do the hard work. Marketing is building something like a fax machine because you can't send a fax to yourself. So built into the fax machine is the engine of it spreading, which is the more people have fax machines, the more people have to have fax machines because other people want to send them a fax, right? So that's a strategy. When I think about brilliant marketing choices, Patagonia made the marketing choice to stand for the earth, to be the brand you buy, to prove you can afford it, and to prove you care more than everybody else.

8:09So every time they come up with a new tactic, jackets made out of recycled plastic bottles, a process where you can sell them back or use clothes, right? Every time they come up with a tactic that supports their marketing strategy, they do better. And most people I know in the food business think that being more delicious is sufficient. And it's not. You need a different kind of marketing strategy. More delicious is the cost of doing business. You have to go beyond that. What's an example of a brand that in your eyes that has done that has gone above and beyond? Well, so if you name a food business that has rabid followers, I think I can tell you that the reason it has followers has more to do with the story they tell themselves about what they're buying as opposed to whether in a double blind taste test they could tell the difference yes yes it's the state like the thing that sort of burn in my synapses since doing this like our podcast conversations and and reading the book is this sort of the three levers the status affiliation and freedom of fear like you kind of i see that and i now sort of observe brands and i'm like there's a brand over here uh called bold bean co amazing brand she's pasty amelia she's a good friend of mine she's taking the commodity of beans like not baked beans but like um beans you get in a supermarket dried beans yes yeah exactly so it's typically like a tinned um crappy sit or jar she's put in a glass jar she's got all these big like i don't know if you guys know nigella lawson she's a massive food uh person over here that's elevated the status she's done all these cool recipes she's created this whole community around it and then that's the sort of the affiliation and i think you're so right is it's like the delicious is the benchmark and then everything above that is status affiliation freedom of fear um and i love that but in the book you do sort of talk about some other levers i think those are sort of the base so those are like you see that everywhere um and what are some of the other ones that say say you've got those covered like what are some of the other ones we could talk about so i think you talked about luxury convenience um and are there any food brands that sort of play into those other levers i suppose okay so let's let's go back to the four principles we started with all right which are systems and games, empathy, and the fourth one.

10:48But I'm focusing on games right now. A game is any situation where there's scarcity and human beings involved. So if I need shelf space for my cola, Richard Branson has a problem because Richard Branson says, in order for me to get Virgin on the shelf, I got to get Coke to give up some shelf space. It's a game, right? How do I make a move here so that the merchant who's between me and the customer will take some Coke off the shelf and put some virgin in its place? That's a game. Okay. It is a game to figure out, leaving the distribution aside, how to get people to decide once a week to serve their family spaghetti instead of serving their family pork chops.

11:41because they're not going to serve them both. So let's do the spaghetti example because it's right on the top of my head. So if you grew up in the Northeast United States, you may be familiar with a brand of pasta called Prince. And what Prince needed to do was make it so that people didn't feel like they were poor if they served their family pasta for dinner. Because in the 1970s in Boston, if you were a working class family, you didn't want to serve the breadwinner a bowl of spaghetti for dinner. What are we poor? Where's the meat? So what they did was they came up with a great hook, which is lots of people in their target market were Catholic.

12:24And in those days, Catholics didn't eat meat on Fridays. And that was just a given. Friday, we're having fish because the Pope said so. So what Prince did was they came up with a marketing strategy and their marketing strategy is in their slogan, Wednesday is Prince Spaghetti Day. That's it. People like us do things like this. We're not having pasta on Wednesday because we're poor. We're having pasta on Wednesday because it's Wednesday. That's what we do. And so what they did, that strategy move, increased the amount of pasta consumed by a factor of 30. Because you went from almost nobody having spaghetti for dinner to a whole bunch of people having it for dinner once a week that's a game they made a move and once they make the move they can continue the move because now you go to a friend's house it's wednesday they're going to serve you pasta now you go home and they the more you do it the better so strategy strengthens the more you do it essentially correct okay with you are there any other examples of that where it like this the compounding of the strategy makes it stronger.

13:33Well, so let's just understand that tactics can be exhausted pretty easily. Spamming people, hustling people, the more you do it, the worse it works, right? Yeah. Lowering your prices, the more you do it, the better it works until it stops working because now you're losing money and then you go out of business. Yes. So in Walmart's case, low prices is a useful strategy because they can scale, build more efficient warehouses, get better deals. The more they do it, the more they leave the competition behind. It's a strategy for them. For everybody else, it's a dead-end tactic. But let's go back to this idea of food.

14:10In the wine business, in restaurants, for a very long time, the more you raised your price, the better you did. Because if wine is a luxury good purchased by people who can't tell the difference, someone's got to have the most expensive wine on the menu, and it might as well be you. And if you keep defending your position as the highest status, most expensive wine, like Rothschild or whatever, you can live with that for a very long time. If we think about Rolex, which makes billions and billions and billions of dollars, selling something that does not keep time as well as the thing on my wrist or yours, what are they selling?

14:51Well, Well, they have to spend hundreds of millions of dollars on partnerships and promotion to keep their status as the one who wins that category. And if you're going to make a run at them, you better be prepared to outspend them because coming in second isn't going to do you any good. You don't want to have to apologize to your girlfriend for not buying the ring at Tiffany's. Tiffany's is where you buy the ring because then you don't have to apologize for it. If you've got a better deal or a better diamond, it doesn't matter. You have to explain it. You don't want to explain it. Just go with the one who has the strategy that's working.

15:28So then in terms of those other levers, in terms of, so you've got the status, the affiliation, freedom of fear. So what would you say that two of those are or some of those are? Well, there are things we do to support those, but those are pretty much all there are. Right. So convenience. But convenience, if you can win, is terrific because it gives me time to spend on things I'm afraid of. It gives me time to invest in the other things that I care about. But convenient brands aren't beloved brands. They're just brands that might do a lot of sales. Is that something like Costco? Would Costco be convenience because you're getting it in loads of bulk so you're not having to…

16:17Or even just getting an end cap for your brand of bottled water at the supermarket. People grabbed it because they could see it, not because it's one they would go out of their way to get. With you. Right? So if you can figure out how to add convenience to what you're doing, it's a plus. But convenience alone doesn't build you something for the ages. You said another quote, you can't step in the same river twice because your footprint the first time turned the river into a different world. river and it changed you as well. Right. Amazing. I kind of get it, but I'd love to sort of explore that, go a little bit, pardon the pun, but deeper into that.

16:57Okay. So let's talk about systems now. Yeah. Systems are invisible. They hide. We build culture to hide them. Systems don't want us to examine them. So how much should a wedding in London cost? Probably it's averaging now 120 ,000 pounds. Why does it cost so much? Because it's exactly as much as your best friend spent, plus a little more. The wedding industrial complex is a system. You don't want to have to apologize for the fact that you're serving pizza at your wedding, so you don't. You have a normal wedding, which wasn't normal 100 years ago, but it's hiding. There's a system. There's a food distribution system.

17:35We tend to go to the supermarket to buy food. Well, the supermarket's pretty new. In small villages in France or Italy, you still don't go to the supermarket to get food. And where I live, people go to the gas station to get food because the system of food distribution is changing. So if you see the system, here's a food example. You say, well, how can I break that open? There's no way I'm going to get my dog food into the supermarket when Purina has so much money to spend to keep me out. Oh, but the internet is going to change things. So I'll sell dog food by subscription by the mail and I won't sell it in the store because you know you're going to need food for your dog forever so you sign up for food coming to your house by mail I know I don't have to cut in the supermarket I can offer a different kind of convenience I can offer a different kind of status and and and so now we have these multi-million dollar dog food brands that deliver direct because they played a different system I swear it's hard one of the things I've picked up from the book is it's hard to know you're in a system it's like that i don't know if you listen to that david foster wallace speech where it's like the two fish swimming along what's water yeah what's he goes how's yeah how's the water today boys or boys and girls and the fish like what's water it's like i feel like a lot of people don't know we're in a system one of the things i think you're amazing at seth is like observing kind of from from like an ancillary thing like what is the what's the art of that and like how do you how do you kind of observe say you walk down the street in New York to get a bagel, for example, or whatever, fill in the blank.

19:11But how do you observe and then use that to sort of see things and understand things? If you see something that doesn't make sense, that's new, you got to have an explanation for it. And the answer is probably that's what the system was. So if I go to a vineyard in Italy, I can buy a liter of the best olive oil I've ever had in my entire life for 10 euros. When I was growing up, there was no olive oil in the supermarket. And now I can go to a decent supermarket in New York and spend 60 euro on a bottle of olive oil. Something changed. The distribution method changed. If I'm going to start an olive oil company, I got to realize there's a system at work here, a system that begins with either differentiated or undifferentiated olives.

20:03They cost different amounts. A system that's different kinds of processing, different kinds of packaging, different kinds of distribution. And lots of people come before me and lots of people make choices about what they're going to buy based on elements of what I just described. Sure. Okay. Right? So there's a guy I know. He's an author. And he and his wife started an olive oil vineyard or whatever you call it, Fatoria, in California. And fat gold olive oil is sitting in my kitchen. How did I end up with that? Right? Well, what Robin did was he said, look, I got 100 ,000 people read my newsletter.

20:42I'm going to start telling stories, not about my stories, but about the olive oil and give people a chance to subscribe. that's a strategy with tactics built in because now i've got olive oil with a story i got olive oil that when i serve it i can tell other people about it it gets me a certain kind of status because how many other people have olive oil that they're one of their favorite authors made right so when we're going to the publish who has enough food with food we have to give them a reason to buy it other than this is food because they already have food and it has to be more than i think it's more delicious because they don't know if it's more delicious they haven't tasted it yet so you have these cycles that you have to see as you seek to gain traction bringing your brand to an ever larger group of people it's the it's fascinating i think one of the ways to do that in in oh see you guys call it cpg we call it fmcg but like it's changing packaging and that's what what the olive oil i sent you citizens of soil one of the things they've done to change the system is you can buy it um in like you know the things you do wine like yeah you sent me one yes sorry yeah exactly you got exactly and it's like just changing the packaging there's another brand over here called innocent who do orange juice yeah they literally just changed.

22:06They put it in a cart. Their sales were bombing. I've interviewed the founder. And they just put it in a carton that looked like this. And they just kind of just looked at the system, changed it. And then, bosh, this huge eruption of sales. And that's what I love from the book is just observing and they're just having these little tweaks to things. Right. So let's talk about the refill of the olive oil. Yeah. Okay. So the refill of the olive oil ostensibly is going to be cheaper than buying the bottle. that's probably not enough incentive to overcome the inconvenience of finding the refill and then doing the refill, spilling it on my counter, et cetera.

22:49I need a better story than that if I'm going to buy a refill. And the story that a refill tells could mean lots of things. It could be you're a better person because you don't want to throw out a perfectly good bottle. it could be that the only way to get a refill is to prove you have a bottle and our refills are going to be a varietal of all you can't get any other way right it could be that you're getting a subscription to this refill thing and what you get out of that is the knowledge that you're a patron because every time we get 300 subscribers we're going to be able to go to a new vineyard and do a new thing.

23:35So let's think about this company called Garagist. Garagist, and I don't remember the statistics because it's been years since I talked to them. Garagist is a newsletter. And what you get is an email. It used to be once a day describing this insane bottle of wine. And it described it in beautiful prose. If you were a member of Garagist, all you had to do was click a button and they would take as many bottles as you asked and put them in your vault in their warehouse. And then four times a year, they would ship you all the wine in your vault. So you could just collect one bottle at a time and then you'd get 48 bottles all at once.

24:16And the thing about the way Garagiste worked is it was a delight to read the copy. The copy was about half of what you would expect. And the fact that they didn't ship it to you all at once meant you weren't paying very much for shipping. It was more convenient. And when you serve the wine to other people, you got to tell them this great story of all the things, how smart you were to obtain this wine. And once Garagiste has scale, now the system kicks back in because now they can go to a vineyard, a vineyard that might be struggling, and say, we'll buy all your wine right now. Here's money. Right?

25:00And when I talk to people about this, I say, how many people do you think are buying wine from Gauragista on a regular basis? And someone says 3 ,000, 5 ,000. If I remember, it's 150 ,000. So if you've got 150 ,000 people who are one click away from buying wine because you wrote a good essay about it. You have a new system for everything in wine, except for the growing of the grapes, everything about it. You've got the power to change. Hi, I'm Kieran, co-founder of Northstar. Accelerator Lab is where data insights and deep commercial experience collide to create real action. There's two real areas that were making a real difference.

25:39The first is helping you really craft that retail selling story. How do we bring that category element up front? If the buyer doesn't care about your brand but does care about the category how do we help you nail down that category first approach the second thing is with range reviews so for your product to go in something has to come out you can either leave that to chance and let the buyer work it out or you can walk into that meeting having really done your homework we believe real change in retail comes from the challengers and we're all in to help them win making world-class insight and commercial firepower affordable accessible and downright effective it's um the the story that comes with it is is is fascinating i think that olive oil company well on the podcast citizens of soil they said they had they 10x their d2c revenue overnight but they changed it was subscribed to olive oil they just literally changed it to join the olive oil club suddenly you have a story suddenly you have affiliation suddenly you have status because they do these sick yoga nights in London.

26:40Yeah, it makes total sense. Another one, time flies like an arrow. If I break an egg and scramble it, it can't be unscramble and put back in the shell. Talk to me about that, Seth. Okay. So that's the fourth of the four pillars, which is today is not like tomorrow or yesterday. And if we think about how strategy unfolds, Somebody at Arm & Hammer comes up with this idea, dubious science, but they make baking soda. Okay. The most boring product in the entire supermarket. Yes. They come up with this idea. You should put a new box of baking soda in your refrigerator every three months because it absorbs all the smells.

27:31Is this baking soda that baking soda you need to eat as well? Don't eat baking soda. No. It's baking soda you cook with. Okay. Sorry, I meant you cook with, but is that not going to get all the fumes in and stuff? Well, it absorbs all the fumes. You never use it to cook. You just leave it there and then three months later, you throw it out. With you. Sorry. Sorry. With you. Don't be sorry. It's amazing that I guarantee you that if I went to 20 of my friends' houses, 19 of them have a box of baking soda in their fridge. Wow. This is from scratch. It's everywhere. Because your status as a homekeeper, home whatever, maker, goes up if you're taking care of the smells inside of your fridge.

28:13It's only$3. Just put the box in there because people like us, we have a box inside of us, inside of our fridge. So if you're the Arm & Hammer people, some brand manager comes up with this idea, and you got to spend a few million dollars in advertising to do it. This is scary. because no one knows about this yet, putting it in the fridge. But a year later when it's working, okaying the ad campaign is easy because it's a new world. And if you want to compete with Arm & Hammer in 2025, you've got a big problem because the kind of baking soda you're supposed to put in the fridge comes in an orange box.

28:51You can't persuade me to switch to another kind of thing unless you do a new thing to show me that it's going to even be better at absorbing the odors in my fridge, right? Maybe you come out with a box that's shaped in a different way with holes in it. I don't know. But time changed. It's not fresh anymore. It's not a new idea. So, you know, we keep seeing when Howard Schultz started with Starbucks, he had to explain to people what an espresso was. But tomorrow, he won't have to because he explained it today. So you have to keep evolving your tactics and sometimes your strategy. because the world keeps changing.

29:32Talk to me about scaffolding. I loved that as an idea. And it kind of is just a beautiful way of describing things. One thing, so like your smallest viable audience and like, I totally get that. And like, you're going for this niche and it's like, give them the story to create the evangelists. How does the scaffolding and the story have to change as you move along that adoption curve? Like, how should brands think about that? because ultimately you have to go, there's a few people who love it now, but you have to change and go for mass market eventually. And I'd love to know how you do that without losing your brand's soul because that sometimes happens as well.

30:10Yeah, I'm sorry. I don't think brands have a soul. I think people have a way they are in the world. And I think that we are here to serve other people. And if we can change what we do to serve other people better, then I think that's okay. So let me explain what we're talking about here. This is the product adoption lifecycle for people who are just listening. I'll describe it. It's a bell curve. And what we see is that at the beginning, the only people who buy what you sell are buying it because it's new. And over time, it spreads through the curve to people who buy it because it's popular. And then finally people who buy it because everyone else has it So if I think about remember that ai pin that you main came out with two years ago They sold a hundred thousand the first day I bought one because I buy things that are new.

31:09I don't buy them because they work I don't buy them because they're proven. I buy them because they're new when it comes to Tech when it comes to sneakers. I'm never buying anything new. I have six pairs of the same thing in my closet So different people want different things. And so if we go and think about this curve, when you come out with a new thing, you say, hey, it's new. We have whole wheat hot cross buns, gluten-free or whatever it is. I don't know. The only people who buy it the first day are people who want it because it's new. And a lot of food entrepreneurs get in trouble because they think that if they just succeed when it's new, it's automatic that it's going to keep spreading because it's delicious.

31:50But when we look at the curve, here's an example of the curve with trucks. The Scout is an electric car, that truck that went on sale in the US three months ago. They sold 50 ,000 of them the first day with a$500 deposit. People who put down the$500 deposit won the new truck. Then there's the worst truck ever made, the Cybertruck. We'll talk about that in a second. Then there's the Ford F-150 pickup truck, the most popular vehicle of all vehicles in the United States. And then there's a 1942 Dodge. Okay. It turns out the curve doesn't really look like this. The curve has a hole in it, a chasm, a hole between things that are popular because they're new and things that are popular because they work.

32:35And so when we think about the Cybertruck, the reason the Cybertruck is a failure is because after the people who bought it, oops, after the people who bought it because it was new got it, they stopped telling their friends about it because it's junk. So what scaffolding is, is how do you support the new people long enough and deep enough that they stick it out when it's hard to tell their friends? That scaffolding is the hard work the brand does to get from the early adopters who are looking for something fresh and new to the masses who don't care as much as those people. And over time, you probably are giving up some of, quote, your soul, right?

33:23That if you want your rock group to have a top 40 hit, you can't keep making edgy, speed metal, reggae music that only a few people want to hear. That once you give the fans who are like the new thing something, then you start broadening it. because you've got to have something that works for the masses. So some food brands should consistently ignore the masses. They should say it's not for you, right? That a magnificent vineyard should not come out with a low-priced wine for the masses. That will hurt them. They should say, no, this is just for people who understand the difference between 1969 and 1970.

34:04We're way over here. and it's surprising but true how many food brands have figured out that you don't need a huge audience to make something great and a brand that stands for something and that's the opportunity yeah i i love the idea of that that chasm or casim have you say it as and i think what do most people get wrong about that bit i know you talked about like really supporting those people to share the story like why doesn't the story share like if someone really likes it so i'm just trying to think for example like how did tony's chocoloney cross that chasm i think that's a good example because it's a great example yeah it was the one i was about to tell okay great okay so none of my books have crossed the chasm not one i have 21 bestsellers and yet i've never reached more than 1 % of any population.