In my hometown, there are currently three BBQ restaurants.  New ones come and go on occasion.

But there is one that owns the market.  They draw in 80-90% of locals going out for BBQ.

Today, they don’t advertise much.  They don’t have to.  Everybody in town knows who they are and what they serve.  Their main source of marketing is people talking to other people.

Facebook started in a dorm room at Harvard with just 100 users.  Then it became popular throughout the campus.  Soon, it jumped to the entire Ivy League, and eventually to just about everyone on Earth.  They could never achieve this reach with just direct marketing.  Facebook spread the way a virus does.  Every person who discovered it spread it to dozens of others.

These businesses are examples of two important marketing concepts.  Market share and minimum critical mass.

 

Minimum Critical Mass

Critical mass is not a traditional marketing term.  It’s a term from physics that describes the minimum amount of fissile material needed so a nuclear reaction becomes self-sustaining.

Seth Godin puts it into marketing context:

Once enough people start driving your new brand of motorcycle around town, it’s seen by enough people that it becomes accepted, and sales take off from there.

Once enough people who know enough people start talking about your new app, the touchpoints multiply and organic growth kicks in…people talking to people are the engine for your growth.

The hard work of marketing, then, isn’t promoting that thing you made. It’s in building something where the Minimum Critical Mass is a low enough number that you can actually reach it.

Minimum critical mass is a tipping point where your product becomes popular with a target audience and the buzz from that audience creates its own buzz.  Use creates more use and popularity more popularity in a way that becomes self-sustaining.

Facebook and the BBQ restaurant hit critical mass in their markets.  They offer a product worth talking about, where its value increases as more people use it.  People feel like they’re doing others a favor when they recommend it.

His point is that marketers need to be hyper-aware of what the minimum critical mass is for their product.  You need to target a moment when it becomes possible for your product to start marketing itself.

 

Seed Audiences

When you start a marketing campaign for a new product, you need an initial target audience.  In the context of minimum critical mass, this is a seed audience.

The group at Harvard that lit the Facebook spark was a seed audience.  The science-fiction enthusiasts who first sat through a new film called Star Wars were a seed audience.  A small group of homeowners who try a new local landscaper are a seed audience.

A seed audience is an initial group you reach that becomes evangelical about your product.  They are the innovative consumers that start the trend which leads to majority adoption.

One of the most important tasks to complete when you develop a marketing strategy is to target your seed audiences (you’re like to segment this into more than one group).  When you target an audience, you want to choose one with the lowest possible critical mass.

The ideal seed audience is one that quickly recognizes the value of your offer.  Often, you want it to be a connected community that is fairly easy to reach.  This group will feel good enough about using your product that it becomes a cultural imperative to recommend it to others.

As recommendations spread, a positive viral effect begins.  For every person in your seed audience you win, you also win more than one additional customer.  As the cycle scales up, you reach critical mass and the growth becomes self-sustaining.

 

Reputation and Reviews

So how does your seed audience spread the word?

Word-of-mouth is a great start, but there are few cases today where that will get you to critical mass.

For a viral effect to take place, you need your seed audience to spread the word via online reviews and social media platforms.

For many businesses, online reviews on product pages, review sites, and social media are imperative.  These reviews are literally the word, which is spread online.

Likewise, social media activity, from liking posts to following pages, is another huge recommendation engine.  In fact, Facebook has a specific feature where a post asks for a recommendation.

It’s clear that today you need a seed audience that is active online and has the means to spread the word about your product digitally.

This not only gets you to critical marketing mass, it moves you towards market share.

 

The Ultimate Goal:  Market Share

The point of making hitting minimum critical mass is to get to maximum market share.

The Harvard Business Review did a report explaining why businesses that have a higher market share also get a greater return on investment from marketing.

The authors discuss why market share is profitable…specifically, as market share increases, a business is likely to have a higher profit margin, a declining purchases-to-sales ratio, a decline in marketing costs as a percentage of sales, higher quality, and higher priced products.

They also outline something that directly relates to hitting critical mass, where a “bandwagon effect” starts to take place:

In addition, leading brands of consumer products appear to benefit to some extent from a “bandwagon effect” that results from the brand’s greater visibility in retail stores or greater support from retail store sales personnel. For example, Anheuser-Busch has for some time enjoyed lower advertising costs per case of beer than its smaller rivals—just as the advertising expense per car of General Motors is significantly lower than that of other competing auto manufacturers.

As you hit critical mass and the popularity of your offer leads to more popularity, the ROI on the marketing you did to get you critical mass increases.  As word spreads and your brand becomes recognizable, you gain market share without having to out-spend your competition.

Seth Godin finishes his post with several important points about what the best marketers do:

1. They engineer the product itself to be worth talking about. They create a virtuous cycle where the product works better for existing users when their friends are also using it, or a cultural imperative where users feel better when they recommend it.
2. They choose their seed market carefully. They focus on groups that are not only easy to reach, but important to reach. This might be a tightly-knit group (like Harvard) or a group that shares a similar demographic (like the early readers of Fast Company) or a group that’s itching to take action…
3. They’re hyper-aware of the MCM and know whether or not they have the time and the budget to reach it.

That last point is one many businesses miss.  They don’t create a marketing strategy or engineer a product designed to market itself.

At Marketing 360®, we talk a lot about how marketing is an investment, not an expense.  The goals of minimum critical mass and market share drive the point home.

Investors are people who get their money to make them more money.

Smart marketers are investors as well.  They get their marketing to grow into more marketing.

It’s that exponential growth that lets a business shoot for 100% market share.