The 3 Marketing Metrics To Rule Them All [Part 2]: How To Market Category Potential, Whether You Are Creating A New Category Or Redesigning A Legacy One

When you have the ability to create demand, you have one of the greatest superpowers in business.

Dear Friend, Subscriber, and Category Pirate,

In marketing, there are three metrics to prioritize above the rest:

1. Marketing that drives revenue

2. Marketing that drives category potential

3. Marketing that drives market cap

Some marketers fail to realize that #2, category potential, is the single largest arbiter of your future growth.

It’s hard to grow a company at 20% in a market category that’s growing at 5%.

That's why successful category potential marketing is less about Brand vs. Brand and more about Category vs. Category. For example, Brewster & Company was an iconic American custom carriage builder that served customers for 113 years. It was the Category King of fine carriages and attracted notable clientele like Alfred Gwynne Vanderbilt, J.P. Morgan, and William Rockefeller.

But in 1923, the company dissolved. 

That’s because the carriage category (Brewster & Co.) could no longer compete with the new automobile category (Ford Motor Company). 

Here's the thing: The Ford brand didn't put the Brewster brand out of business. 

The automobile category moved demand from an old way (horse and carriage) to a new way (motor car). Ford devalued and deflated the custom carriage category, not the Brewster brand. On top of that, Ford also introduced an innovative method of production—the assembly line. This is exactly what Netflix did to Blockbuster. Movies by mail (a new category) and then streaming (a new category) sank the entire retail movie rental category.

A similar category battle is taking place right before our eyes.

The “Generative AI” category—currently dominated by OpenAI and Microsoft—is facing off with the “Search” category, currently dominated by Google.

Most people view this as a battle of products, technologies, and brands. But that’s not the entire story. What’s happening is not competition, as most people mean it (companies fighting over customers in a market). What’s happening is not disruption, as most people mean it (a new, innovative product taking market share from an old legacy product).

So what is happening? 

Something new is emerging—a new idea, a new way of thinking about a problem, a new framing of an opportunity—that’s driven by the introduction of new technology and a new business model. In reality, the product or technology is not what gets most people excited. Instead, what captures people’s imagination is the potential outcome that the product and technology make possible. And this kind of potential is the spark that creates new market categories and radical new value.

It also proves an important point.

A category’s potential is more significant than a category's past.

This is why legendary marketers do not merely play a game of “catch demand.” 

Instead, they create demand to drive new category potential—which helps produce increasing demand for their product and the whole category. Said simply, Category Kings and Queens make the category bigger. Because the more people in the space, the larger and more valuable it becomes.

As a marketer, being the first to create that demand is crucial. 

Remember, all customers assume the first brand that educates them about the category must be the leader. So when you market the category, you are actually expanding the category’s potential, building your brand, and cementing your place as the Category Queen. That’s a win-win-win.

So, in this mini-book—Part 2 of our 3-part series on marketing metrics—we’ll explain how to focus your marketing around category potential and share why it can exponentially change the course of your business.

(If you didn’t catch Part 1, The 3 Marketing Metrics To Rule Them All, we recommend reading that first.)

Let’s jump in.