Breaking down the three pillars of marketing—awareness, nurturing, and trust—with Erik Huberman

Anna Shutko:
I’m your host Anna Shutko, and today, our guest star is Erik Huberman, a founder at Hawke Media. In this episode, you’ll learn what the Hawke Media is all about and which three principles of marketing it consists of, what kind of activities marketers can work on during the awareness, nurturing, and trust stage, and how the success of marketing campaigns should be measured during each of the three stages. I hope you’ll enjoy this episode.

Hello Erik, and welcome to the show.

Erik Huberman:
Thank you for having me.

Anna Shutko:
I’m really, really happy to have you here. Today we have yet another exciting topic, which is all about Erik’s method of finding, capturing, and nurturing customers, called the Hawke method. So my first question to you here would be, first of all, what is a Hawke method and what three core principles of marketing does it consists of?

Erik Huberman:
Yeah, no worries. And it’s the Hawke method. It just has an E on end. It’s just H-A-W-K-E. But, after growing over 3,500 brands, we found that there was a consistency around how we analyze these brands, what we found to be the best way to get an overview of marketing and dissect where they’re having problems, where there’s an opportunity, where we need to measure. And so those three principles are awareness, nurturing, and trust. Awareness being, how do you introduce a new potential customer to your product or service? Nurturing being, what do you do from when you first introduce yourself to a new potential customer to when they buy and post-purchase, and how do you keep them coming back? And then trust, how do you build trust with your audience? Over 75% of people won’t buy from a brand they don’t inherently trust. So early on, before you’ve built a brand, it comes with third-party validation. So PR, influencer marketing, testimonials, reviews, things that other people are saying, you can trust these guys. And yeah, that’s the three principles in a nutshell.

Anna Shutko:
All right. Sounds very, very interesting. But at the same time, I want to dig a little bit deeper. So let’s start with the awareness stage. So can you please walk me through all the core activities that are included in the stage and unpack how a marketer can measure the success of their campaigns during this first stage?

Erik Huberman:
Yeah, so again, the awareness part is how do you introduce yourself to a new potential customer? And so what most people think of marketing is what we call awareness. So it could be advertising, it could be PR, it could be word of mouth. And so, when you’re figuring out how to create awareness, it really comes down to your individual product or service and what context people need to be in to buy it. And what I mean by that, my favorite way of explaining this is Google vs. Facebook because both have been great marketing channels for a long time, but they’re very different. And what context means is when you think about Facebook, what is your audience doing on Facebook? It used to be that you had to find your demographic. How do I reach my target customer, my demo? And now, you can reach them on any platform.

Reaching a demographic is kind of table stakes. It’s not hard to do. And if you hear marketers talking about demographics, maybe run because that’s not hard. That’s easy to figure out and to reach. The hard part is understanding in this sea of the noise of all these platforms that allow you to advertise, where are you getting the most effective advertisements placed? And so, again, back to Facebook vs. Google, with Facebook, the users 99.9% of the time are doing absolutely nothing productive on Facebook. They’re bored. And that’s the most important thing to remember is how are they using it? So they’re bored, they’re scrolling through their newsfeed, they’re doing nothing productive, and you can target your exact potential customer, which you can base on your existing customer base, or if you’re really early, you can make some guesses of that and test some different audiences. You can do that at a time when they’re super bored, using copy and creative that you’ve tested to get the most attention out of that target.

And so you can be very iterative. You can grab them at a time when they’re basically saying, I have nothing to do. Show me something cool, and get their attention. So that’s why Facebook and Instagram together have been so powerful is because you’re really grabbing someone when they’re telling you, I’m bored, show me something. And you can show your exact potential customer something that you’ve tested that gets their attention. And so that’s a great place to create awareness. And it’s also a great place to create demand if it’s a product or service that people don’t even know exists, that they don’t even know to look for.

On the contrary, on the other side of this is Google, where Google is really based on someone actively looking for something. They’re looking for a solution to their problem. And so, when you’re trying to decide between the two, eventually, you generally want to do both because as you build awareness for your brand, people may start Googling for things similar to it too. But in the beginning, if you’re trying to create new demand, meaning people don’t know you exist, you’re not answering a problem. You’re more of a lifestyle company like a running shoe, let’s say, that no one’s ever heard of. If you go on Facebook, you can target runners and target people with healthy lifestyles. Tell them why your running shoe is so great. But if you go on Google and someone Google’s running shoe, they’re probably going to go with Nike or Adidas or Asics. One of the big ones. Not go with your random shoe. Though you might spend money on them, checking it out because they’re interested, they’re not going to buy.

On the other side, let’s take a DUI attorney as an example. If you’re a DUI attorney [inaudible 00:06:04] on Facebook, targeting based on someone’s interest becomes really impossible. What are you going to target? Someone that likes Jack Daniels and Mercedes? It will be really hard to find someone who needs your services right now. So timing is a problem on Facebook because you don’t know if someone needs me right now. Whereas on Google, if someone’s searching for a DUI attorney, they need a DUI attorney generally, and it’s okay to show up there. And so that’s really the difference between those two is Facebook, you create new demand, Google, you answer existing demand.

And then if you look at the other channels, YouTube, again, back to context, with YouTube, you’re generally looking at specific videos, and you’re watching videos. And so the advertising side actually becomes interruptive and kind of annoying. And so, most people don’t do well the advertising on YouTube. And I’m speaking in generalities here. There are people that have individually done well, but as a general statement, YouTube advertising hasn’t done well for companies because, again, you’re just interrupting what they’re trying to watch.

Now the only way to leverage that can work is through influencer marketing. So let’s say you’re a car part company, and there’s a great car YouTube. If they incorporate your car parts into their YouTube channel, sometimes that can work really well. But generally, you’re not going to get as much return on just the mid-roll ads they have, or the pre-roll ads as they call them, where those are the ads that show up before you watch the video because that’s just annoying to people.

Twitter, again, the user base is generally talking back and forth to each other and or just watching someone’s specific tweets. So you’re throwing Twitter ads up. Twitter has not done well with its advertising platform. It’s really hard to get people to care because they’re not just leaning back and scrolling through their feed.

The only other platform that I’ve seen that has done this really well recently is TikTok. In fact, it’s done better than Facebook and Instagram, in my opinion, because Facebook and Instagram are still based on your social graph. Meaning, who are you, friends with? Who are you following? Whereas TikTok is really based just on your current interest. It watches through its algorithm. What are you interested in right now? And it shows you things you might be interested in. And so as they build out their advertising platform, that’s incredibly powerful because if right now I’m really into snowboarding and you’re showing me snowboard videos, and then you show me a great snowboard I can buy, I’m going to have a high propensity to buy. And so yeah, that’s really the awareness side again. Then you have word of mouth. You have PR, you have other influencer marketing, and you have other things that do overlap with other categories too, that allow you to get the word out about your brand.

Anna Shutko:
All right. That sounds really, really interesting. And I really, really like the Facebook vs. Google example. Now another question related to the stage. So imagine a marketer is running a set of ads. So they can be on Facebook, they can be on Google. There might be even how-to articles on Google if somebody looking is looking for a specific solution. So with this whole array of different campaigns, how can marketers measure success? Are there any specific metrics that you should pay attention to?

Erik Huberman:
Yeah. So the end metric that actually matters is CAC to LTV. Meaning, what is your cost to acquire a customer? And then what is your lifetime value as a customer? And I didn’t get into nurturing yet, but that’s a critical part of this because what people forget is when you make someone aware of a product or service, that doesn’t mean they buy right away. In fact, they almost never do. It usually takes weeks to months for someone to buy a product or service. And so, during that period, you have to be doing things like email marketing, SMS, content, chatbots, and all sorts of things to keep them engaged. And so that’s a really critical part of this.

But in terms of what to measure, during the period before you can actually measure your cost to acquire a customer, which takes time, measuring your immediate return on ad spend, measuring your cost per click, your cost per impression, your conversion rates, looking at all these different metrics that are leading indicators are really important to optimize the ads a little faster, because you may not be able to wait for that entire purchase cycle to begin optimizing.

But the mistake I see people make is they start measuring these metrics, and they look at them shortsightedly. For example, if you spend $10,000 today on advertising, again, you’re not going to see the returns on that for somewhere between, let’s say, three weeks and three months. And so if you decide to measure what your returns were tomorrow, one day instead of three weeks through three months, it’s not going to look good. And you might say, oh well, this isn’t working, and shut it down, which happens all the time. And you’ve just cut off your nose to spite your face. You have no idea what you’re doing to shut it down.

And so the other side of that’s to start watching what people are engaging with. Which ads are getting a higher click-through rate, et cetera? Those are good ways to understand where to optimize your spending but don’t shut it up or down because you haven’t had time to actually see how it’s going to play out with a CAC. That’s really critical.
But yeah, at the end of the day, all companies need to remember CAC to LTV. I actually think the worst thing to measure is ROAS. I think people are really shortsighted when they’re measuring their first purchase and return on ad spend, again, for optimization purchases. You’re sitting in a competitive landscape is the biggest problem here. You’re competing against other people that are willing to pay more for an ad because they’re measuring their returns correctly. And so if you, on average, sell products to the same customer four times in a year and you’re only running your numbers based on the first time they purchase, you’re just telling yourself a worse number than is actually reality, which means you’re going to be less willing to invest in it, which means you’re going to basically lose to the competition because they’re willing to invest more because they’re looking at their numbers properly.

Yeah. That makes perfect sense. And now, let’s go into the nurturing stage a little bit more. So you’ve already mentioned that there are also a number of activities, and in addition, there is CAC and LTV as the metrics marketers should pay attention to. So my questions here would be what are the core activities during the nurturing stage? And are there any other additional metrics markers should pay attention to as indicators, kind of like in addition to LTV and CAC?

Yeah. So with the nurturing stage, the biggest indicator is the purchase cycle or consideration period, and then obviously LTV. So why purchase cycle or consideration period, same stat. It’s really the period between when they’re first introduced to your brand and when they actually buy. And as I mentioned, that can be anywhere between weeks and months. What we’ve found in terms of our stats is with ecommerce, a $50 purchase usually ends up around a three-week purchase cycle. $100 around five weeks, $200 around six weeks. And then again, it trails off between two and three months from there. So knowing that you need to be doing things during that decision-making period that allows people to stay engaged with your brand and continue to reinforce your brand so that you can get them to buy. You can increase both. You can actually decrease the length of the purchase cycle, increase your conversion rate and then eventually increase your LTV too.
So the way to do that, number one, and I mentioned some of these tools, but email marketing. It’s actually increased in effectiveness since the pandemic hit. And for the decade before that, it hadn’t changed, meaning it hadn’t gotten worse, it hadn’t gotten better, but it was still very powerful. We see a drive of around a quarter of ecommerce revenue. And it’s really just setting up automation around the person’s behavior that you’re targeting. So when I say behavior, if they came to your site recently, when did they actually sign up for your email list? All these different things that you can do to automate who is this person, and how can I talk directly to them? Eventually, after they purchase, it’s a lot more about what are they purchasing? When’s the last time they purchased? What kind of products are they interested in? Those kinds of things.

But before that, it’s really just getting them down the funnel by reinforcing different parts of your value proposition. Here’s why we’re great. Here are other great things about us. Here are the people that love us. Again, third-party validation. Trust is super important. Here are our top sellers. People want to know what they should be looking at. You basically have to make it easier for them to buy and help bring them along. And so that’s really what you do with email marketing.

SMS, text message marketing, is also super powerful. In fact, it’s more powerful than email marketing. We’ve seen on the email side about an average 15% open rate and 3% click-through rate. And on SMS, you see about a 98% open rate and a 30% click-through rate. So it’s 10 times as effective. It’s slightly harder to collect a phone number than it’s an email address, but not that much harder. So that’s a whole nother part of nurturing as well as chatbots and making it easy for people to quickly get answers when they’re on your site. Again, it’s all about getting them through the funnel. The same thing with having a fast website that loads quickly that’s easy to navigate. These are all part of nurturing.

And then the last piece that’s actually overlooked a lot is content. So actually creating content for your audience that actually fits the same sort of aspiration that your product does. So back to the running shoe example, if I’m going to buy running shoes, it’s probably because I want to be healthy. So if you’re a running shoe company, why don’t you make a bunch of content on how to be healthy? It could be diet tips. It could be running tips. It could be all sorts of things. It doesn’t actually have to be focused on exactly the product service, meaning running. It could be just the overall aspiration of, why am I running? Well, I want to be healthy, I want to be outside maybe. So let’s talk about more outdoor activities. All sorts of things that you can create content around.

The reason this is important is it allows you to engage your potential customer above and beyond just a purchase decision. They’re only going to come back and look at the product a couple of times. They’re not going to sit here and just dwell on it. And few people will but in general. Whereas if you create a bunch of content, they’ll keep coming back to your site and checking out your content. You’re building more of a relationship with that customer. You’re actually building trust with that customer. And inherently, by coming back to your site more and more, they’re going to have a higher chance of buying. Also, back to word of mouth. People are a lot less likely to share your product page with their friends than they’re to share your content if it’s compelling content. They feel way more comfortable sharing content. So it creates even more awareness too. So it’s a really powerful tool.

But back to your measurement question, it’s very hard to measure the efficacy of content unless it really does just go huge, but it is something that I’ve seen over and over again benefit companies in an indirect way. So the way to measure that, I look at the number of views each piece of content is getting, and the amount of engagement amount of shares, and that should educate you on what type of content to create, but not necessarily whether you should just do content or not because almost every brand should be doing content. And yeah, that’s really the nurturing piece.

Anna Shutko:
All right, perfect. That does make a lot of sense. And now, let’s move to the trust piece. So again, what are the core activities within this stage, and then how can the marketers ensure they’re measuring the right metrics here?

Erik Huberman:
Trust is a hard one to measure. I’d say it’s just something that you just constantly want to do and try to make sure that the sentiment in the market is positive. And again, the ways to do this are to get referrals, references, testimonials, reviews, PR, and influencer marketing. And these are all, again, borrowing trust from third parties until you’ve built your own brand. Because eventually, trust becomes synonymous with the brand, and whatever you’ve delivered consistently becomes your trust. Means you take McDonald’s, they’re consistently unhealthy, but they also have a consistent taste that anywhere in the world you want a Big Mac, you know what you’re going to get. So depending on what your priorities are as a customer, you might not care that it’s unhealthy and you want that taste, and you’re going to get it.

Same thing with a Coca Coca-Cola. Everywhere in the world, a Coke is a Coke, and you know what you’re getting. So I don’t need someone else to tell me what the Coke is, I know. It’s built enough brand equity. It’s built enough consistency that I’m confident I’m going to get what I’m going to get. So consistency is really important with the brand. And the way to deliver this, actually isn’t just about being consistent, but it’s also talking about it. And that’s a sort of weird psychological part of just humanity is if I tell you we’re the best marketing agency in the country, and I say it over and over and over again, as long as I can deliver close to that promise that we’re going to do really good work. When we say we’re the best at what we do, but also very cost-effective, nimble, and flexible. That’s our pitch at Hawke Media. We’re month to month, à la carte, really nimble and flexible, but we’re the best at what we do.

Now, as long as I deliver that, people will have a confirmation bias to see that that’s true. So they’re going to believe that if you say it repeatedly, we’re the best at what we do. And as long as we deliver well, they’re going to go, oh yeah, of course, they’re the best at what they do. Vice versa, if you get a bad reputation, a bad brand like Cox and Comcast, and customer service, the moment you have a bad customer service experience or even a slightly negative one, you’re like, well, of course. They’re the worst customer service. They’re known for it. And so confirmation bias plays a huge part in brand, good and bad, and what you deliver consistently. Because once people start talking about how good or bad you’re, people start looking for it.

Anna Shutko:
All right. That does make a lot of sense as well. And here my next question would be about the mistakes part. So you’ve mentioned marketers who shouldn’t calculate ROAS basically, and you’ve elaborated on why. Are there any other metrics marketers should pay attention to ensure they’re focusing on the right things during any of these three stages?

Erik Huberman:
Yeah. So how we look at it, there are many. What I try to do is first off discern where is the lowest hanging fruit. And benchmarking is important because I see many marketers also operate in a vacuum. “We don’t like our conversion rate. We think it’s low.” And then you look at the market, and they’ve got double the conversion rate of anyone else in the market in their space at their price point. And you’re like, “I’m glad that you subjectively think it’s low, but this is a really good number.” So knowing what the metric should be is important. And I mentioned conversion rate on your site is incredibly important. How many people are converting to a customer based on traffic? But again, you have to look at the purchase cycle with that, too, because if I dump a bunch of traffic on your site today, your conversion rate will look terrible. So you have to play it out over the time of your purchase cycle.
So again, the purchase cycle comes into almost every one of these metrics, but lifetime value, we mentioned back to nurturing. I talked a lot about getting someone to a conversion, but then post-purchase, you want to stay in touch with them, keep creating content, keep emailing them, keep sending them text messages, and keep them coming back. Repeat purchases are a critical part.

One that I didn’t talk about that goes with word of mouth is called a K-factor or a viral coefficient. How many customers does each one of your customers bring with them? That’s a great metric because if you have to buy every one of your customers, your business will be really hard to sustain. What I mean by buy is every customer comes from advertising. None of them came from someone else telling them. Word of mouth is a small one. So these are all critical parts of this.

And then traffic is important. I’d say that if you have a great conversion rate, then traffic becomes critical because you know that you’re converting well. So now it’s just open up the top of the funnel and watch how much you can scale while keeping that conversion rate. If your conversion rate’s where it should be and your margins on your product… This is another good one that many marketers forget that products cost money. So when you’re selling them, you need to know what the margins are. Because that ROAS or the revenue you’re reporting to generate isn’t profit. There’s a cost to that product too that you have to understand. And then you take that cost. You understand what it costs to drive people to the site. And if you’re doing that profitably because your conversion rate’s good, then great, scale it. Now just drive more traffic, fill that top of the funnel correctly, and you’re going to get a lot of benefits out of it.

Anna Shutko:
Okay. That sounds great. And thank you so much for elaborating on all of these key metrics that follow. So my next question here is, where can the audience find you? Because I’m pretty sure many of our listeners would love to learn more about you and the book.

Erik Huberman:
Yeah. The book’s easy. It’s just The Hawke Method. So you can get it at hawkemethod.com, but you can also get it on any Barnes & Noble, Walmart, Target, Amazon, et cetera. And then finding me is easy as well. It just adds a slash of Erik Huberman on any social channel.

Anna Shutko:
All right. Fantastic, Erik, and thank you so much for coming on the show today.

Erik Huberman:
Yeah. Thank you for having me.