The Story of ‘The Five Levels of Marketing’
I was listening to an outstanding interview with Shaan Puri and Sam Parr and they shared a fascinating theory they dubbed ‘The 5 Levels of Marketing’. First and foremost, Marketing and Branding are not ‘hard-sciences’, as many of us know, yet the ‘rules of marketing’ are deeply rooted in psychology, which very much does have solid scientific underpinnings. I preface this topic this way because we already know Marketing isn’t a ‘hard-science’ and someone is going to say ‘I think there’s a 6th or 7th level to Marketing’…and that’s OK - this is an idea and it’s open to interpretation. The point of the concept is that it expands one’s mindset as they explore their own Brand, as well as the Brands of those they might support if you’re in a position like ours at TDC.
The 5 Levels
So what are Shaan and Sam’s ‘5 Levels of Marketing’? Let’s break them down, then we’ll unpack each level with examples. After that, I have a few questions to pose to the audience reading this, namely - what level are you at, what level do you think you can reach, and what do you need to do to get there?
You Sell A Product
You don’t sell a Product, you sell a Solution
You sell a Lifestyle
You sell a Feeling
You sell an Identity
1. You Sell a Product
Ashley Home Furniture - “We sell furniture at an affordable price”
That’s pretty much it. Ashley Home Furniture sells products most everyone needs at one point or another in their lives. They aren’t unique or special in any possible way. They are exactly what you think they are - perfectly adequate products at affordable prices.
Simply Orange - “We sell fresh squeezed Orange Juice at a premium price”
Orange juice is pretty much a commodity - people drink it, it gets added to mixers, you can use it in recipes, and…that’s about all. I actually selected this one as an example to illustrate that it isn’t really about price that keeps you at this level, it’s the category + the product/service. Whether it’s priced high or low, Simply Orange is still just orange juice - it’s just a product.
2. You don’t sell a Product, you sell a Solution
Head and Shoulders - “You’re tired of having dandruff on your shoulders, we solve that problem by offering a shampoo that gets rid of dandruff once and for all”
Now we’re getting somewhere. This product doesn’t exist to simply be another product on the grocery store shelf - it doesn’t appeal to everyone, it only appeals to those who have a very specific problem, and they have just the solution: Head and Shoulders. By niching down, they start to dominate the category of dandruff shampoos. This is a really good example of problem/solution category design and Marketing.
Dropbox - “You need to backup/sync a large number of files and share them with people without really putting too much thought into the technical components of how it all works”
Solutions aren’t limited to products, it can just as well be a SaAS company like Dropbox. They know their product isn’t for everyone, but rather everyone who has a specific problem. Dropbox has positioned itself as a solution to those who need a backup/sync solution who have no intention of fully understanding how it all works. Interestingly enough, backup/sync is where they started and where they are, but it’s not where they are going - they’re moving in the direction of team collaboration for work. But even where they’re going, they are still playing the same game of ‘Problem/Solution’ Positioning and Marketing.
3. You sell a Lifestyle
Rivian // Keep The World Adventurous Forever. “People who want to be adventurous and want an EV should own a Rivian”
Rivian doesn’t dominate the headlines like Tesla (probably a good thing considering most of the headlines appear to focus on the negative), but EV enthusiasts know about Rivian and what they stand for. Effectively, they aren’t here to ‘to accelerate the world's transition to sustainable energy’, they are here to ‘keep the world adventurous forever’. Rivian’s Marketing is all about adventure. And honestly, it’s a brilliant move. Most EV Brands are busy communicating about the tech, how it works, and why it’s better than everyone else’s tech. Not Rivian. They communicate adventure first, tech second, even though it’s a very, very tech-y Brand.
Lululemon // Creating components for people to live longer, healthier, fun lives. “People who see the benefits of yoga should have the best gear, and that’s Lululemon”
Yoga pants and Lululemon practically go hand-in-hand (leg in leg?). Look at levels 1 and 2, do they sell products or solutions? Kinda and no. What they sell is a Lifestyle. Just as Rivian is to adventure, Lululemon is to Yoga, trying to connect the activity to the Lifestyle to the Brand. And they have succeeded. When people think ‘premium yoga clothing’, they immediately think of Lululemon. They have done an incredible job of dominating their category by connecting their Brand to a Lifestyle.
4. You sell a Feeling
Disney World - “Don’t ‘come ride our rides’, instead, ‘come experience magical moments with your family.’”
Disney doesn’t sell products, solutions, or even a lifestyle - they sell feelings. Specifically, they sell the feeling of ‘magical moments’. Their media portfolio is deep, but their following wants to experience more than just what’s on the screen, they want to live it and feel it as a shared experience with their friends and family. Disney is a terrific example of a company that’s true value in the lives of their customers is providing the feeling of magic - it’s an intangible sentiment that is ultimately priceless (which is probably why it costs so much to go to Disney with your family…)
UFC - Dana White: "People always ask me what I do," White told reporters at the post-fight presser. "I sell holy s** moments for a living. That was the ultimate holy s*** moment of all time. If you were at home, if you were in a bar, or if you were here live tonight, there's no bigger holy s*** than that."*
So this quote was the impetus for Shaan’s ‘5 Levels of Marketing’ piece in the first place. UFC, similar to Disney, is about selling feelings, and those feelings are really hard to capture (which is the competitive moat that keeps everyone else away from their businesses). Unlike Disney, UFC doesn’t sell magical feelings, they sell ‘holy s*** moments’ that keep their audience coming back over and over and over again. The same can be said for just about any sport whether it’s football, basketball, soccer, etc. - it’s about the excitement, not knowing what the outcome is going to be, and getting an irreplaceable feeling from just watching the event.
5. You sell an Identity
Apple - “I’m an Apple-Person”
There are ‘Apple-People’ and ‘Everyone Else’. I guess that’s a little bit of an exaggeration. But I think we get the point. It’s not that ‘Apple is better’, it’s that ‘Apple is better for me’. Every Apple product one acquires makes their existing products better. So the more people stay in the ecosystem (walled-garden), the better their experience, the deeper the connection they have with their devices and the Brand. If Apple does their job well, they create more and more ‘Apple-People’.
AirBNB - “We don’t stay in hotels unless we have to, we much prefer to stay in an AirBnB”
This is an identity that didn’t exist 20 years ago! I have friends who, when they go on vacation, only stay in AirBnB’s. They want a completely different experience than what a hotel has to offer. The only time they would stay in a hotel is if they were on the road and absolutely had to find a place to crash that night. Otherwise, they now tie their vacation plans to the asset-light platform that is AirBnB because it better matches their lifestyle, which is so important to them that the choice they make when planning a vacation impacts their identity.
What Level is Your Brand?
So now let’s be honest with ourselves. What ‘Level’ is your Brand? Do you sell a product, solution, lifestyle, feeling, or identity? Is one better than the other? Do you need to be a massive multinational Brand to achieve the ‘next level’? How did our examples above get from one level to the next? Is it category-specific? Is it even possible to jump from one level to the next?
These are all valid and somewhat answerable questions.
Somewhat Answerable
Yes, you can jump from one level to the next, but it requires rethinking what you’re actually selling
Lululemon began by selling a product and graduated to selling a lifestyle through very careful, calculated Brand management
Disney always wanted to sell the feeling of Magic
Apple really sells solutions, but it does it so well, repeatedly, that it graduated to selling an identity
Rivian knew if it simply offered a product in a very crowded space without differentiating it and incorporating it into its Marketing, it would be lost in the shuffle
At the end of the day, orange juice is still just orange juice, no matter how you slice it (pun intended)
Achieving the Next Level
Be honest with yourself about your Brand and figure out which level you’re at now
Think critically about what you actually want to offer and ask yourself “If I offer products, can I actually position my organization to offer something deeper?”
If so, how can you actually influence that change?
Do you need to offer better products/services?
Do you need to reposition ourselves?
Do you need to further develop our Marketing strategy?
If so, how?
These questions are answerable. I encourage anyone reading this to look over these questions, reflect, and think about if/how you can take your Brand from one level to the next. **For the full listen, go to My First Million’s The Wild Story Of ‘Mr. Tull’ - From Laundromats To $3.5B Hollywood Production Company. It’s a terrific listen, definitely worth your time, and hopefully it spurned some deep thinking that will lead to some choices that ultimately benefit your organization’s Marketing and Branding strategy.
