With over 3.6 million viewers per season, Shark Tank is undoubtedly one of the most intense and exciting reality shows in the USA and across the globe. Watching aspiring entrepreneurs pitch their business models to a panel of investors with the chance of securing million-dollar deals is definitely an entertaining experience, and each episode is very unique.
Today, we will take a look at Shark Tank from a Marketing perspective. What are the most important lessons that all businesses can learn from and apply to their own strategies? Without further ado, let’s dive right into our Shark Tank Marketing case study:
Shark Tank Marketing Lessons
1. Don’t sell a product, sell a solution
People don’t want to buy products or services. They want to buy a solution to an existing problem or need they have. Whether you are pitching your product to investors, potential customers, or even your friends and family, don’t tell them how great it is and how awesome you are for having thought of it.
Instead, focus on what problem it aims to solve, and how it can make people’s lives better. This is exactly what SparkCharge did when they came to Shark Tank looking for a 1-million-dollar deal.
The company’s founders started their pitch by presenting an actual, real-life problem that electric car owners have – what happens when their car runs out of charge? Quite often, there isn’t a charging station nearby, or owners have to wait for a long time before they can use the vehicle.
Shark Tank Marketing Lesson #1: Focus on solving a problem
The solution? A portable charger that people can easily use on the go. The company not only ended up getting a deal from Mark Cuban and Lori Greiner, but they also taught everyone a valuable lesson.
2. You can set any price if you are able to justify the value
Have you ever looked at a $300 Gucci T-shirt thinking how outrageous the price is for a simple T-shirt? And yet they manage to sell thousands of them for even higher prices by justifying the value through brand exclusivity. You can read more about this in my article Why People Spend $500K on a Purse: Hermès Marketing Strategy.
The company Larq did an amazing job proving this theory during their pitch in Shark Tank. They asked for the whopping $500K for a 1% share in their company for their revolutionary self-cleaning and self-purifying water bottles. The price of a single bottle? 95 dollars!
It made Daymond John realize that he already had one, and he exclaimed “I paid $95 for this?”
Shark Tank Marketing Lesson #2: The problem isn’t the price, it’s the value
The point us, people don’t mind paying a ton of money for something if the company is able to prove its value. This is the reason why Apple sells much pricier products than other companies and yet this doesn’t stop many people from buying them.
Even though they know that they can find a product with a similar functionality for a lower price, they find value in Apple’s electronics because of their unique ecosystem, beautiful design, etc.
So, as long as you are able to justify the value of your product, you can really set any price you want for it.
3. Adapt and ride the trends with style
Next we have Numilk, a company that decided to give us a valuable lesson on adapting to new trends efficiently and elegantly. In Season 12, the founders pitched an awesome product in front of the sharks – an easy and convenient machine to make all your favorite plant-based milks.
They even started the pitch with “Sharks, milk today means something totally different than what the milkman used to deliver to our homes”. Numilk decided to target a relatively new market – vegans and other non-dairy consumers. In fact, according to Morning Consult, roughly 1 in 3 US adults drink non-dairy milk at least weekly.
Shark Tank Marketing Lesson #3: Being able to adapt quickly is a key skill that many should master
Today’s world is extremely dynamic and new trends come and go in the blink of an eye. Of course, some are here to stay. But the point is, companies should always be aware of what’s happening around them and have the ability to adapt as fast as possible to avoid staying behind in the game.
The PESTEC model is one way to keep an eye on external factors that could have an impact on your business.
4. Good Marketing can’t outrun a bad business model
You have probably heard the phrase “You can’t outrun a bad diet”, and this not only is true, but can also be applied to other aspects of our lives as well. In business, it doesn’t matter if you have a lot of exposure and a great Marketing strategy if you don’t have a good product or a business model.
It may work in the beginning, but sooner or later, it will come back to bite you. This is what lead to the fail of Toygaroo, a company that came into Shark Tank claiming to be the “Netflix of toys” offering a subscription-based toy service.
The company had a brilliant idea that people (and sharks loved), and the exposure on the show lead to a lot of orders in record time. Two sharks – Mark Cuban and Kevin O’leary – invested $200 000 in it for a 35% stake in the business.
However, the company wasn’t able to meet the demand both in terms of time and human resources. In fact, only three people were working on preparing the boxes and shipping the orders! At the end, bad organization and time management, as well as the inability to scale fast in order to meet the demand, made them file for bankruptcy.
Not having a clear and sustainable plan for growth can kill a great business idea.
5. Be careful when identifying and targeting your audience
Identifying the right target audience is often challenging for many businesses, but it is one of the most important steps to do before your product even comes to life. And, once you’ve managed to identify it, the next step is to address it adequately.
Cougar Limited came to Shark Tank seeking $150 000 for 30% of equity in the company for their Cougar Energy Drink. Their main target audience was the so-called “cougars” – a slang for women in their 40s (or older) who date significantly younger man, typically with a 10-year age gap or more.
Shark Tank Marketing Lesson #5: Focus on understanding your target audience before anything else
On one hand, their target audience was extremely specific, which means that they were setting themselves up for failure in terms of scaling to a potential market size. Another issue that sharks had with the product and the brand was the derogatory approach they had towards their audience.
After all, most women in their 40s who are looking a younger partner don’t really self-identify as cougars, and they won’t purchase an energy drink just because a brand calls them this way. On top of that, they are not a primary demographic for energy drink anyways.
According to a research published on the National Library of Medicine, the young adults between 18 and 34 years old are the biggest consumers of energy drinks.
In summary, our 5th Shark Tank Marketing lesson is that failing to identify and address your target audience properly may end up ruining your business.
6. Creativity can get you ahead in the game
Our list of Shark Tank Marketing lessons continues with Vengo Labs, a company that came to Shark Tank looking for $2 million for 12.5% equity. Their product? Compact, high-tech vending machines with a twist – you can convert the screens into digital DOOH screens to display advertising on them for extra revenue.
I couldn’t find a video that contains only this Shark Tank pitch, so here is a trailer that gives some more information about the product.
Shark Tank Marketing Lesson #6: Don’t be afraid to unleash your creativity and look at your product from different perspectives
The key takeaway here is creativity. The company didn’t stop at simply inventing a product that’s really great on its own – they managed to take advantage of it in different ways to maximize their revenue.
Apart from being vending machines, Vengo machines allow brands to deliver interactive content, collect actionable marketing data, track conversions and sell products exactly where people need them. Awesome, right?
The company ended up accepting a deal made by Kevin O’Leary and Lori Greiner – $2 Million For 3% To Be Repaid Over 36 Months At 7% Interest.
7. Have a unique selling proposition
Next on our list of important Shark Tank Marketing lessons that we can all learn from is the importance of having a unique selling proposition, of figuring out what’s unique about your product compared to competitors’.
Keidy and Gene came to Shark Tank looking for an investment of $150,000 for a 10% stake of their company XTorch. All Sharks were amazed by the product, but they wanted to know – what is so different about XTorch from regular torches that you can buy at the retail store?
In other words, why should people buy XTorch, which retails for $49.95, and not a regular torch for $19.99?
Shark Tank Marketing Lesson #7: Highlight what differentiates you from your competitors
Having a unique selling proposition is a must for every business. If you don’t know or can’t explain how your product differs from your competitors’, how are you going to convince others to buy it?
The unique selling proposition of XTorch is absolutely on point from a Marketing perspective: “The only rechargeable, solar powered flashlight-lantern-phone charger you can count on”. Although they walked out of Shark Tank without a deal, they definitely taught us a valuable lesson.
And that was all from me for today! I hope you liked my article on some of the most valuable Shark Tank Marketing lessons, and I hope to see you in the next one!