The "Inside Scoop"

Consumers frequently encounter asymmetry of information in the marketplace, and they suffer because of it. As the term suggests, one side ("the producers") has more information than the other side ("the consumers"). Case in point: Dietary supplements.

A large fraction of my clients manufacture dietary supplements, particularly those of the bodybuilding variety. These are chiefly marketed to consumers interested in building muscle or losing body fat. Having worked behind the scenes in product development (e.g. research, formulation, manufacturing) and marketing (e.g. branding, creative direction, copywriting) since 1991, I can tell you that the bodybuilding supplement marketplace is filled with products touting exaggerated if not patently false claims.

Sometimes the problem is that important ingredients are present in product formulas in inadequate levels. In other cases, none of the ingredients are capable of producing the implied results, regardless of dose. Whatever the case, despite their impotency, many bodybuilding supplements command high prices and the companies marketing them enjoy thick profit margins. The products often fail to live up to expectations, yet consumers continue to buy them. From an economical standpoint, I've often wondered "Why?"

Clearly, consumers have less information than do the supplement companies or consultants like myself. While this asymmetry of information lowers the average quality of the products being offered, as noted above, consumers continue to buy them. Product quality hasn't shown much signs of improving, furthermore.

The lack of effective industry regulation plays an important part in this phenomenon, to be sure, as does consumer psychology. Having been a bodybuilder since I was 15 years of age, I can attest that this type of consumer is perpetually dissatisfied. He (or she) is always trying to get leaner and build bigger muscles. As such, even if the last dietary supplement he purchased produced unsatisfying results, he may well take a chance on the newest supplement to be offered, provided the story used to market it is compelling enough. (He may be much less likely to take another go at the last supplement he tried, on the other hand.)

For additional insights, I recently reached out to Dr. Dan Ariely (PhD), the James B. Duke Professor of Behavioral Economics at Duke University in Durham, North Carolina and author of Predictably Irrational. Here's what he said:

"Hi Rob. This is indeed a puzzle and I wish I had a good answer for you. One aspect of it is of course human hope and the desire for improvement, and it turns out that it is hard to turn this off.

The second aspect, that I think might be important -- is the role of random reinforcements. In the process of trying different things our weight changes over time and these random reinforcements end up providing a lot of motivation (see Las Vegas). One speculation is that people that have more randomly fluctuating changes will become more addicted to these products."

I asked Dan for some further clarification:

"By "random reinforcements", do you mean something like this... A consumer begins taking a new bodybuilding supplement hoping to increase his muscle mass. Random physiological changes result in him gaining, say, 1 kg of muscle mass, which he (incorrectly) attributes to his use of the supplement, thereby (incorrectly) reinforcing the claims made by the company that markets the product?"

Dan's response:

"Yes, this is exactly the point -- think of it as gambling -- people think that there is some logic between what they do and the outcome..."

Lack of regulation, perpetual dissatisfaction, random reinforcements -any one or more of these is bound to play a role in explaining why bodybuilding consumers continue to pay large sums of money for products that are frequently incapable of delivering the results implied in glossy pages of advertising.

As I've said before, eventually the truth about your product's functionality -or lack thereof- will reveal itself. It is far better to provide consumers with as much truthful information as they require to make a prudent purchase decision than it is to leave them to their own devices (e.g. the Internet).

Ask the risk of stating the obvious, the less information you reveal about your brand, the more difficult it will be to differentiate it from the maddening crowd. All it takes is for one brand to step above the crowd and change the balance of information.

Imagine, for instance, that bodybuilding supplement brand called "Inform" suddenly appears on the marketplace. Its business model involves devoting considerable resources to revealing the "inside scoop" about the manufacturing and marketing of supplements -the good, the bad and the downright unattractive. The revelations that Inform makes -all truthful- are so startling to consumers that they only feel comfortable purchasing supplements from them.

Why wait for a brand like "Inform" to appear? Why not step above the crowd and be that brand yourself? The world could certainly benefit from a little less asymmetry in the marketplace.

How to charge $250-$300 per hour

How do you get paid $250-$300 per hour or more as a brand detailer? You earn it. One of the secrets is preparing detailed quotes for your clients.

Use some empathy. Imagine yourself in your client's shoes. If you were to hire a high-paid consultant to help you detail your brand, wouldn't you want to know how they determined their fee in detail?

I've developed a reputation for preparing highly detailed quotes for my clients. It's not unusual for me to spend 2-3 days preparing one. While this may sound like a lot of time, it is worth it. Indeed, if I didn't put as much effort into my quotes, I seriously wonder if I'd be able to charge as much as I do as a consultant. Even if a client decides not to hire me, my efforts pay off: At the very least, I've impressed them with my attention to detail.

What you don't want is to leave the client looking at your quote scratching their head as if they were trying to ascertain the contents of a "black box". I've seen this happen repeatedly. For instance, a client who I worked with in the past recently told me about a consultant who gave them a quote consisting of nothing more than an email bearing the hurried message "I"ll do what we talked about on the phone. Wire the funds into my account within 14 days."

In this case, "what we talked about on the phone" needed to be regurgitated in no uncertain terms on paper. Oh...and "the funds" consisted of $30,000 for about 4 weeks of work. A project worth that kind of money deserves a little more explanation, don't you think? Not surprisingly, the client chose not to work with this consultant. Furthermore, they admitted that I had "spoiled" them by preparing quotes of exceptional clarity.

My example is admittedly an extreme one. Still, the fact remains that many brand consultants fail to give their clients as much clarity as they deserve in their quotes. The end result is that they don't get as much work as they could be getting.

If your quote raises questions in your client's head, then there's a good chance you've got some unanswered questions of your own. Before you can accurately determine your fee, you need to get them answered...and share the answers with your client.

The Decision is in the details

It's not going to get any easier. As our ability to transmit information around the globe improves, the need to uncover the details about your brand and present them to consumers in a compelling fashion will only intensify.

Sometimes consumers will uncover details for a brand. The Web has made this extremely easy to do. Web sites like Trip Advisor allow consumers to share their hotel "horror stories" before they've even checked out. Such sites have become highly effective at uncovering details (e.g. pricey Internet service, bathrooms without fans) that can make or break the sale.

To remain competitive you can't wait for consumers to uncover the details about your brand. You need to flesh them out yourself. What kind of things matter? Anything that (1) makes the consumer's life better and (2) is different is a candidate. Note that one detail may not be enough to convince consumers to buy into a brand, though occasionally it can be.

"To remain competitive you can't wait for consumers to uncover the details about your brand."

My clients overlook the details about their brands all the time. I find this to be particularly true in the case of technical products. I uncover the details about such products, dust them off and polish them up. Often times, the information I reveal is something the client never knew about or thought was "irrelevant". Not only are the details I uncover relevant, but some of them can result in millions of dollars in additional sales. Indeed, the consumer's decision to buy really does lie in the details.

"The consumer's decision to buy really does lie in the details."

Low on function. High on fiction.

I've lost track of how many times, behind closed doors inside some of the world's fastest-growing and most profitable sports nutrition companies, I've heard high-level personnel claim that making products that work effectively is "unrealistic" and admit that their dubious marketing practices are intended to sell consumers "hope in a bottle".

Hope is fine. But whether you are trying to sell a "muscle-building" dietary supplement to young men or a presidential candidate to the nation, you need to be transparent about the product's functionality -how well it works- in your marketing. Otherwise you are only encouraging false expectations. Eventually the truth about your product's functionality, or lack thereof, will reveal itself. The more efficient we get at transmitting information around this planet, the sooner the revelation will come.

"Eventually the truth about your product's functionality, or lack thereof, will reveal itself."

The sports nutrition sector of the consumer packaged goods industry is heavily dependent on marketing -the clever use of words, in particular- to get consumers to buy its products. I spent nearly 20 years working in this sector. I used words with surgical precision to build companies, their brands, their products, and the people associated with them. I've held job titles up to the vice-president level. I've written and provided creative direction for several hundred ads. I've talked to raw materials suppliers, contract manufacturers, university research scientists, medical doctors and other qualified sources along the way. What I've learned is that there is an inverse correlation between function and fiction: The lower the functionality of the product being marketed, the more fiction the marketing tends to consist of.

"There is an inverse correlation between function and fiction: The lower the functionality of the product being marketed, the more fiction the marketing tends to consist of."

Protein powders, "fat burners", pre-workout formulas, post-workout formulas -these and many other sports nutrition products frequently fall far short of the functionality implied (if not stated outright) by the marketing used to sell them. It's because of this lack of functionality that so much effort is spent on fictitious marketing practices intended to sell consumers "hope in a bottle" -in other words, create anticipation.

In contrast, when your product offers a high level of functionality that your consumer can benefit from, then marketing can be fiction-free. You don't have to spend tens of thousands or millions of dollars on "creative storytelling". Fiction-free marketing is often far easier to develop. It can also be much less expensive. [Filling product labels and advertisements with half-truths (or worse) isn't easy!] You simply have to tell your consumer the functional facts. Often, the more details you provide, the better -something I'll discuss on another occasion.

"Fiction-free marketing is often far easier to develop. It can also be much less expensive."