How Coca-Cola hacked their chicken-and-egg problem by inventing coupons.

How Coca-Cola hacked their supply/demand problem by inventing coupons.

Today, Coca-Cola is the role model of brand marketing.

Everyone wants to copy them. And build as strong of a brand as them.

👉But people don't know, that Coke wasn't building a brand for decades when it started out.

Instead, they were after direct measurable results.

They even revolutionized performance marketing by inventing coupons.

💡Here's how and why.💡

Around 1887, when Coca-Cola was still struggling with recognition, adoption, and demand (they were also a weird new product once).

They needed people to try it out.

And they needed more pharmacists to stock the drink.

Because it was hard for people to try it if they couldn’t do it anywhere.

🚩But the pharmacists didn’t want to do it, because the demand was so low.

On average, a coke fountain sold just 9 glasses a day.

👉A classic chicken and egg problem.

So Coke guys figured out a way to boost demand.

Something that the world hadn’t seen before.

Coupons.

For free glasses of coke.

😈They distributed the coupons in areas, where some shopkeepers already had the fountains.

So the people flooded the stores to get their free hit.

The shopkeepers saw that there is demand. Decided to hone in on the fountains.

People got to try the drink and fell in love with it(or got addicted - it still contained cocaine & a lot more caffeine).

Word spread.

👉More store owners wanted it. More people tried it. And the bubble just grew and grew.

They repeated this playbook across the country, in thousands of towns.

By 1895, Coca-Cola reported that the beverage is sold & drunk in every U.S. state and territory.

By 1913, Coca-Cola had redeemed 8.5 million "free drink" coupons.

Well, we don’t need to say how the rest of the story played out for Coke. Or coupons.

👉For the start of a more brand-focused, we could count 1916, when the famous coke bottle was invented.

Some 30 years after founding the company. By then, Coke was a global brand.

Even then, they carried on with the long-form ads, coupons. But they started adding more “brand ads” in their mix.

✅So yeah, building a brand is a must-have. But it isn’t something you can rely on at first.

There might not be enough demand for the whole category. There definitely isn’t demand for your brand.

And distribution might be skewed (physical availability - it must be easy to find you, buy you).

You need to drive performance and figure out creative ways to hack growth at all costs.

💡A similar story applies to so many “BRANDS” everyone wants to copy.

🚩Apple, Nike, Patagonia, etc.🚩

They all got started in a very direct response/performance marketing way.

Writing long-form ads, hacking the distribution, selling-selling-selling, etc.

The *brand* part came years later.

Cuz creating a brand takes years to pull off.

Meanwhile, you need to pay the bills, you need the money to invest in the brand, and you have a shit ton of problems to solve.