The Three Marketing Principles That Scaled Over 3,000 Brands – A Conversation with Erik Huberman

The Three Marketing Principles That Scaled Over 3,000 Brands – A Conversation with Erik Huberman

Ever wonder how the biggest brands in the world make it to the top? Here’s a hint: it’s more than just a well-placed billboard or a TV ad. According to Erik Huberman, the Founder and CEO of Hawke Media, there’s a common framework behind every successful marketing strategy. After helping over 3,000 brands find success through his holistic approach, Erik has distilled the art of marketing into three core elements: awareness, nurturing, and trust. Without all three, the system fails. Erik details this method in his new book, The Hawke Method.

Erik Huberman launched Hawke Media in 2014. Now valued at over $100 million, Hawke Media is the fastest growing marketing consultancy agency in the United States. Prior to its launch, Erik successfully founded, grew, and sold two eCommerce companies by the age of 26.

In this interview, I speak to Erik Huberman about The Hawke Method, and how awareness, nurturing and trust come together to become the most powerful marketing tools you will ever use.

Q: What is marketing?

[Erik Huberman]: A good definition for marketing in my view would be the engagement and communication with a customer all the way from when they first find out you exist to the entirety of their relationship with the company.

In the book I define marketing as awareness, nurturing, and trust. It important to reflect on the how do you create new awareness for your brand or product and let people know you even exist? Followed by how do you nurture that awareness to create customers? The process to analyse how do you get the customers through that decision-making period, or what’s called the purchase cycle to buying and then post-purchase is key and then to be able to keep the customers coming back? Lastly how do you build trust with the customer which over time eventually constitutes a brand through third-party validation as well as consistency of delivery? All these are defined as marketing.

Q:  How did you create the Hawke Method?

[Erik Huberman]:  My journey started when I built and sold to e-commerce companies before this, and I say the first one, I was a lot scrappier. We were bootstrapped and I just learnt how marketing worked, really hands on and had to be careful. So I was, like, very diligent about how everything was performing. The second one, I had a huge amount of funding and I just got to go do everything I wanted to do. That worked well because I’d spent so much time being so detail oriented and swag of the month that when I went to Elle, the activewear brand, I had a list of things I had wished I could do, but I didn’t have the money to do it with my first company. And so, when I could do it all, and then it all worked incredibly well, we skyrocketed. It was like, OK, got it. That’s when I sold that.

Then I started Hawke and I basically started running that playbook for my clients at Hawke meetings. That’s kind of how we got our start. And then it worked for a bunch of brands. And then about a year in, I started getting asked to speak about marketing. And how do you do marketing? Start talking about it. And over a few talks, I started honing this talk about awareness, nurturing, and trust. And that’s how I think about marketing. And I started articulating…fast forward after, well, what was it like five years of doing those speeches …. I’ve been doing the talk for five years, so it was something that at that point we had worked with over 3000 brands.

Q: What do you need to get right in that foundational part of your marketing journey before getting started on everything else?

[Erik Huberman]:  The foundational part of any marketing journey would honestly first and foremost be a good product or a service. This may not be the answer that people are going to be looking for right away. Marketing is not going to solve a bad product, but it will be an easier and smoother with a good product, with repeat purchases and word of mouth as being the two things that are critical.

The role of marketing is what speeds everything up, gets you to scale faster, gets that word-of-mouth flywheel going faster but you really need to focus on creating something unique.

At one point there was a huge craze for a few years about Drop-shipping and buying bulk products from China and starting your own Amazon store and just selling ‘crap’ and starting your own little business. This resulted in getting too expensive and people failed. It does not make sense as you can’t just market your way out of a bad product.

Q:  Can you unpick a business and put those foundations in if they’re missing?

[Erik Huberman]: Yes, absolutely. If the core of it is good, which is good product, good service, that’s table stakes. Once you have that, if you launch and you don’t do a great job on how you launch, you miss your Facebook ads or you don’t do email marketing right or something’s missing, it’s just about playing triage and that’s the entirety of marketing a business. Because things shift. Facebook a year ago had a massive shift in the platform and you had to adapt.  You must continue to shift and adapt as these platforms change, as the world changes. Obviously Covid changed a lot in marketing too.  Consumer purchasing went from 13 percent online to 30 percent during COVID in the United States, like big shifts happened right away. And so that’s not the last time. Russia is going to affect things and the war there, and how people think about purchases.  Like everything that’s going on in the world and individually in your company, there’s always going to be something you must work through. But that’s frankly what the book tries to help with, is how to triage that and how to quickly decide where you need to be focusing your efforts and your attention.

Q: What is the role of marketing agility for founders?

[Erik Huberman]:  There are two different types of founders. A wartime founder – when things are tough, they act and a poor peacetime founder – it is really fun or nice to work for.

When things are tough, they kind of turtle and stick their heads in the sand. In USA the number of restaurants that failed in a particular state during COVID in the United States was astronomical. The main reason being they did not adapt to try delivery. Making changes is an essential part of any business and those restaurants failed as they didn’t try anything to survive during Covid. They just gave up and went ‘Oh, we’re shut down. That’s it’.

In contrast you have other restaurants who’d go …let’s start seven restaurants…. let’s figure out all these other things we can do’. Now those are the types that do well and that goes to the business model. A positive mentality is important to get through those tough times.

Q:  How do awareness, nurturing and trust fit together?

[Erik Huberman]:  The first pillar – awareness is all about how you fill the top of the funnel or how do you create awareness your company exists. You need awareness to then nurture that awareness. You need all those people coming in the top of the funnel, because then nurturing is communicating with those people and how you engage them from the time, they become aware it exists to the time they purchase, which can be weeks to months.

From there, what you do to engage them after that purchase to keep them coming back. So you need awareness to create nurturing, but without nurturing awareness is just people that know you exist, but none of them end up buying.  A lot less end up buying and those customers don’t just come back on their own either. The connection is lost for good.

Trust – 75% of people won’t purchase from a brand they don’t inherently trust. To build that trust works in hand with nurturing. You need both. You need to stay in touch with them. But if I’m just staying in touch with you and you don’t know who I am and haven’t built any trust, it doesn’t mean anything. So, you have to build trust as well. So, they all work together.  It’s like a tripod. Without one of the three, the whole marketing strategy collapses.

Q:  How does resilience build trust?

[Erik Huberman]:  It is consistency and it’s also the evil little hack when it comes to trust is it’s also what you say you stand for. Whole Foods has built a brand on healthy food, even though they carry Ben & Jerry’s ice cream, which I guess when it comes to ice cream, is not that bad, but like, it’s ice cream! So, when you say it a lot, people believe it, and that’s just part of it. It can only go so far, but it’s a big part of marketing.

Part of it is stating what you stand for, as well as then actually delivering on it and consistency becomes that, and trust can go good or bad because people can also trust you to be an awful experience.

My favourite example of this is Comcast and Cox. People have a low expectation of our cable companies in the U.S. to be just awful, awful, awful customer service experiences. That’s part of trust, too, because they have consistently been awful. Then you get one of the most powerful tools and psychology, which is confirmation bias – if I know you’re going to be awful the moment you show a hint of being awful, I’m like ‘there it is. See, I knew you were awful’. They’re looking for it, to confirm that bias. That goes positive or negative.

It happened with Honest Company which was building this brand around their great healthy products for babies, and they are honest. Then they were found to have a certain chemical. They literally had dust in their products, and they were able to say it was a supply chain mistake, etc, sorry, they fixed it. It hurt a little bit, but it didn’t devastate the brand because people believed that that was what they stood for, and this was a mistake and it’s going to happen.

Q: How do you think that digital influence culture has changed the game when it comes to trusted marketing activities? 

[Erik Huberman]:  It’s another tool in a long-standing list of tools for third party validation, which is the way you build trust early on for a company before you have this ubiquitous brand that everybody knows, like a McDonald’s or a Nike or a Red Bull.  To build trust, you need other people to say they can trust you. Therefore, reviews and testimonials and references have been around essentially to validate that trust. Endorsement deals with celebrities have been around for a long time, and so the ‘influencer’ basically made endorsements more easily accessible as these influencers are less expensive but still creating that trust and that validation required for the marketing to succeed.

Before the regulations that came in post Fyre Festival (Fyre co-founder Billy McFarland tapped 400 influencers on Instagram for a coordinated influencer marketing campaign, the over-marketed lead it to disaster and a huge embarrassment), it was the Golden Goose. Influencer marketing was incredible because you could just get this trust with their audience immediately.  Once it became obvious that these were all paid partnerships, it became a little less impactful. But it still has an impact even today.

Q: What are some of the consistently useful pieces of advice that you’ve been able to give companies in terms of crossing that chasm? How do you fill the funnel for a new product or new service?

[Erik Huberman]:   Advertising is the most controllable way to do it and this would be my advice on focusing on that aspect so you can do things like make word of mouth because that’s the biggest driver out there as it makes it really easy to talk about your company. Give everybody three to five words they can remember, seven words that it’s like ‘this is what we do, this is what we are’, so that they can go talk about it. For us, it’s ‘we’re you’re outsourcing CMO marketing team’. So, when people go around saying, like, ‘who’s Hawke Media?’, they’re like, they’re this outsourced CMO and marketing company. Like at least, they get it close, they feel comfortable talking about it versus if they don’t know how to talk about us, they don’t feel comfortable talking about us. You get way less word of mouth, so you want to make it as easy for people to talk about you.

With the advertising side, it’s figuring out where to advertise that you’ll reach the people that will be in the best context to receive your advertisement. So, people up until a decade ago had to talk about demographics, ‘where’s my demo?’. And there’s still a lot of, you know, frankly, marketers that have fallen behind that don’t understand that that’s changed because you can reach your demo anywhere now. And so you still hear about it. Don’t listen to it. Those are table stakes now.

What you need to look at is what is a context where they’re in, when they’re receiving your advertising. The example I give is Google versus Facebook. Facebook, someone’s just scrolling through their newsfeed.  99.9% of the time they’re bored, telling you ‘I have nothing better to do than scroll through my News Feed. Show me something interesting’.

You can target exactly your demo and psychographic data and all these things that say this is exactly your potential customer at a time when they’re telling you they’re bored with hopefully copy-creative advertisements that you’ve tested so you can test to figure out what best engages your potential customer.  And you’re targeting your early adopters to be clear, because most people purchase once they’ve heard it from a friend, which is why word of mouth is so critical. But you want to find those advertisements, those early adopters that will buy without that, you target them again on a time when they’re bored, and you can get them. And that’s a great way to create new demand for your product for people that weren’t even looking for it. It doesn’t work great for timing. If you’re a DUI attorney and you must get someone when they’ve just been a drunk driver, going on Facebook won’t help you, what, are you going to target people that like Jack Daniels or Mercedes? It’s like, you can’t get it. So that’s where Google comes in. Google can answer existing demand in a timely manner where it’s like ‘who’s looking for this right now?’. But there are products like if you’re selling brand new running shoes no one’s ever heard of, someone Google is running shoes. They’re probably going to buy Adidas or Nike. They’re not buying yours.

If someone Googles T-shirt. no-one Googles T Shirt and finds a new T-shirt brand. It’s not how they use the platform, so that’s what I mean by context. How is someone receiving this and will that make sense to get me a customer? And that goes across all the channels, you must think about how this platform is used.?

Q: How do you maximise your marketing ROI?

[Erik Huberman]:  You just named the two most important numbers. It’s CAC and LTV is exactly it – the (CAC) Customer Acquisition Cost (LTV) Lifetime Value. You need that ratio to be as high as possible. You need the LTV to be as high and CAC to be as low as possible. So sometimes bringing the LTV down and the CAC down is OK. But what you need is the number one thing. And again, this is not really a marketing thing, but it’s critical in merchandise.

You need to make sure that your company is built in a way that people have other things to buy. This is where Casper is having a ton of problems. People buy a mattress once every 10 years, and their first new product with dog beds. They weren’t thinking through how we can really monetise it to get a real lifetime value of a customer. Dog beds didn’t have that much lifetime value, so it was like, you know, because what percentage of people bought them and then what was it? And I don’t remember the price point, but it was like not enough to really offset what they were trying to do here. And so that is critical. And then from there, it’s that nurturing part of marketing – staying in touch with email and simple things like chat bots.

Creating content. Content is the unsung hero of marketing, creating content that serves the same value as your product. So, if I’m buying running shoes, going back to that, if I can create content around getting healthy and places to run or trails you can go to or whatever it is that still engages my customer above and beyond a purchase decision, they’re going to be coming back inherently more. And if I have merchandise properly, they’re going to buy other things. Whether it’s if you’re running a company, your socks, and shorts and whatever else they’re going to need, you can get more of a share of their wallet. Your marketing is going to be more robust because you can afford it to be.

Entrepreneurs start companies because they want to start a company, not because it’s a needed product or service, and that’s when you run into problems. If you’re going to start a company, I think you must be doing it because it serves an audience that’s underserved, or it solves a problem that’s not solved. Its creating a purpose or something that can grab a niche and that’s the key – figure out what you are serving?

Q: What are some of the key entrepreneurship learnings from your journey?  

[Erik Huberman]:  Product is everything. You’ve got to have a good product or service because you can’t market your way out of that. So that’s got to be a focus. An eye to gross margin, having enough margin that you make off your product so that you can afford to have scale, to have other expenses, marketing overhead etc., that come out of that. Then the biggest one is being a business owner, your job is inherently to solve the biggest problems at a company, and they’re always going to be there. It’s all the problems no one else can solve. And so, know what you’re signing up for, because you must have a mind set for that, you have to basically have the resilience for that because I hear a lot of people talk about entrepreneurial burnout, stress, all that, those kinds of things, and it’s like, this is what you signed up for.

When you go to start a business, it never ends. Never, ever, ever, ever, there’s no finish line.  It obviously ends if you sell the company and retire. But while you’re running the company, it never ends. I mean, you look at Tim Cook, Jeff Bezos. They’re dealing with massive problems. So, it’s not like the biggest companies in the world aren’t dealing with them.

It’s a mistake to assume at some point your company is just going to be good, it’s just going to grow and everything’s easy, it’ll never happen…because something’s going to hit, whether it’s internal, whether it’s a lawsuit, whether it’s again COVID, whatever it is, it’s going to happen and it’s going to happen consistently. Knowing that, preparing for the adaption, and accepting is important with running a business.

Thought Economics

About the Author

Vikas Shah MBE DL is an entrepreneur, investor & philanthropist. He is CEO of Swiscot Group alongside being a venture-investor in a number of businesses internationally. He is a Non-Executive Board Member of the UK Government’s Department for Business, Energy & Industrial Strategy and a Non-Executive Director of the Solicitors Regulation Authority. Vikas was awarded an MBE for Services to Business and the Economy in Her Majesty the Queen’s 2018 New Year’s Honours List and in 2021 became a Deputy Lieutenant of the Greater Manchester Lieutenancy. He is an Honorary Professor of Business at The Alliance Business School, University of Manchester and Visiting Professors at the MIT Sloan Lisbon MBA.