It’s 2016. You stroll into your favorite coffee shop excited to get your morning latte.
You get to the cash register and say, “Can I have a medium latte, please?”
The barista smiles and asks, “What type of milk would you like?” Your mind goes blank. “Umm,” you say, “What are the options?”
They reply with cow’s milk, almond milk, or oat milk. You ponder for a second but realize you have no idea what you’re doing.
You decide to leave it to the expert. “Which is the best plant-based option?”
“Oat, for sure,” the barista replies.
What type of milk do you end up choosing?
In today’s special edition of Why We Buy, we’re analyzing a well-known company to see how they use buyer psychology principles in their business.
This week, we’re diving into—this one’s tricky—Oatly.
Let’s get into it.
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A Look Inside Oatly 🤑
While Oatly may seem like a hot brand, it’s actually a very established company. Starting in Sweden in 1994, the company spent 20 years trying to make oat milk mainstream.
But when they finally made it, they were like the TikTokers in 2020. They became a worldwide sensation.
Using oats, the company makes different flavored milk and frozen dessert (like vegan ice cream).
They made $166.2 million in the first quarter of 2022, increasing profit by 18.6% in just one year.
Forty percent of their revenue comes from the Americas, and 15.3% comes from Asia.
They’ve even snagged a deal to be the oat milk at Starbucks.
Oats have taken over the world—including your favorite indie coffee shop.
And you’ll never guess how Oatly pulled it off.
How Oatly Uses Buyer Psychology 🧠
The best way to describe Oatly’s success (and the reason why you’ve *probably* tried oat milk before) is one word: purposeful.
Oatly invested heavily in interviewing buyers to better understand who to target and how to position their product.
If they can use these strategies to make oat milk cool, you can use them to add a little froth to your brand:
Oatly strategically created a barista blend of oat milk that was easier to froth than the other plant milk on the market. They went to indie coffee shops and showed baristas how great their formula was.
When a customer came in asking for the barista’s opinion on the best type of plant-based milk for their latte — it was beneficial to the barista to say oat milk.
People are naturally inclined to trust an expert’s opinion. Oatly put their product in the experts’ hands and let those “influencers” do the promoting for them.
Mere Exposure Effect
The more we see something, the more we come to like and trust it. The first Oatly ad probably whizzed right by you as you barely noticed the poster at the bus stop. But, you noticed the fifth one.
Oatly plasters cities, like Los Angeles, with advertising at bus stops, benches, walls, and billboards. When the Oatly campaign is in town… you know it. They understand the importance of repeated exposures in advertising. And here’s the best part. They’re totally open about it.
The milk aisle is a chaotic place — and Oatly knows this. The options are seemingly endless (including other oat milks!) and Oatly has to compete. To make its brand stand out and connect with its customers on a deeper level than the competition, Oatly’s created a distinct brand voice. (Check out their copy in the above ad!)
The distinction of their clever, slightly snarky, and sarcastic brand makes their customer base connect with Oatly over the other options at the store. When customers are overwhelmed with options, Oatly stands out because of its distinctiveness, which inspire customers to reach for Oatly.
Oatly used Authority Bias to get their products into the world. Nowadays, they rely on the Bandwagon Effect of like-minded coffee drinkers hyping up their plant milk over others. If your group of friends meets up for coffee and everybody orders oat milk but you (and you haven’t tried it before) — how curious are you to see what the hype is all about?
Oatly’s customers became their referral base creating a free marketing flywheel (GENIUS!).
Noble Edge Effect
People love brands that have the same values as them. They love brands even more when they push the initiatives that drive the change people seek. It makes people feel confident spending their money with THIS brand over the one that’s not making the change they want to see in the world.
Oatly’s taken the stand that plant-based milk should be an option at school. They’re using their social media content to talk about how they’re pushing this initiative forward.
Thinking About Your Business 🤔
Oatly’s success is not an accident. It was a strategic plan that helped move the market from unaware that oat milk even existed to feeling disappointed when their local coffee shop ran out.
Take their strategic planning and apply it to your business.
Q: Who’s an authority figure that could help legitimize your products?
Influencer marketing works because of the Authority Bias. It’s more powerful when people with clout in your industry talk about how great your products are than when you write a Twitter thread tooting your own horn. Look for the authority figures in your industry and see how you can get them to talk about your products.
Q: What is distinctive about your brand vs. the competition?
Your product is special—but do your customers know? People remember distinction. It sticks out in their minds and makes them connect with the distinct brand over the cookie-cutter competition. Find what makes your brand and product unique and yell it from the rooftops.
Q: How can you turn on your referral program?
The ultimate business flywheel is a referral program. People trust their friends, family, and favorite online influencers more than they trust the brand trying to sell them something. Turn your customers into salespeople that happily share their positive experiences with your products.
The Short of It 💥
Sometimes businesses get lucky. They have a viral moment and experience lightning in a bottle.
99% of the other time, it’s a well-thought-out strategy that turns an obsolete brand into a household name. If Oatly can make people excited about drinking milk made from oats—you can use the same strategies to get your customers excited about your products.
Until next time, happy selling.
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