Reading the weekend edition of The Wall Street Journal, I came across a piece on Liquid Death…the water company.
The premise of the story is that Liquid Death, Athletic Brewing, and other beverages are innovating in an area where people that don’t want to drink alcohol still want to have a cool drink.
In the case of Athletic Brewing, having met the people at conferences for sports business and events-based professionals, I know this is a fact. For Liquid Death, I’d have to see their research to know for sure who they are targeting, but the idea is compelling.
Even if the article takes a little liberty with Liquid Death’s target market, the aspect of the story I latched onto was the importance of Liquid Death’s brand to their success.
From my POV, there are three key ideas to hold onto:
Distinctive Brand Assets: The can. The logo. The way they look mimics alcoholic beverages and allows people to feel a little “punk” or wild while they are drinking a non-alcoholic beverage are all powerful tools in helping to establish Liquid Death’s brand.
Position Power: In positioning, you can be for something about yourself or against your competition. The best positioning does a bit of both and that is on display here.
First, you see that Liquid Death positions itself as a healthy option for people that are worried about their health, need hydration, or don’t want to drink alcohol.
Second, you also see that Liquid Death through their choices clearly positions itself against other brands that come in clear plastic bottles with pretty standard logos that don’t have a feeling of fun.
In other words, they walk the line of being both for themselves and against the competition.
Picking the Correct Segment: Most segmentation is done poorly. People segment based on meaningless attributes that are easy to come up with like “generation”, “age”, or “zip code”.
This doesn’t mean that these are bad attributes to use, but if you look around and listen to most marketers talk, these attributes are used instead of doing the proper work of segmentation where you focus on what is driving behaviors.
Liquid Death’s actions in the market point to a more sophisticated version of segmentation and targeting, one that focuses on a few key attributes of a successful marketing strategy effort:
- Focus on a segment of the market where there is great opportunity like the market for folks that are looking to go out and don’t want to drink alcohol because they don’t drink, are driving, or just don’t want to drink at the time.
- Target market segments where there is overlap. The example of the school kid drinking a Liquid Death on his class Zoom call is an example of how overlap can power your growth. Smart marketers look for segments where there is serious bleed over into other segments like this example.
- Build the segmentation on behavior. To me, this is the most important aspect of segmentation. You build your segmentation based on behavior because that’s what drives sales. Again, demographics, education level, or zip code might end up being meaningful, but you shouldn’t start with that assumption. Focus on the behaviors.
How would I suggest my clients or partners use these ideas in their own businesses?
Here are three steps:
- Start with your research. You need to know what is going on in the market. As Mark Ritson says, “The first step a marketer takes is a step back to see the market.”
- Segment your market based on behavior. Why are people acting the way they do? What is driving their purchase decisions? Find this out ASAP.
- Invest in your brand. Distinctive brand assets and brand codes should be two ideas about branding that you invest a lot of thought into because they can drive sales, profitability, and insulate your brand from competition.
What do y’all think after reading the article?