Trading Places With the Big Guys
How to get other people to do your marketing for you
Hitting the lottery
Being reassigned to Bermuda
Listening as George Steinbrenner comes down with laryngitis
Getting rid of your marketing headaches (and costs) might not rank in the top three fantasies of all time -- but it's close.
Think about it. You wouldn't have to spend bushels of money on advertising. Or worry about promotional literature. Or salespeople. Or product support. It would be almost as wonderful as being stranded on a desert isle with . . .
But it's impossible, right?
The models for this fantasy are just down the street.
Every time you walk into McDonald's and order lunch or dinner, the teenager behind the counter asks: "Want some fries with that?" Not only does that question boost the amount of the average purchase, but it also reduces the french-fry suppliers' marketing costs. They don't have to convince you to buy. McDonald's, by suggesting the purchase, does it for them.
OK, you say, but suggestive selling -- as it's called -- is as old as dirt. Salespeople have always asked if you need ties to go with that new suit, or software for your new computer. How can this help you sell your particular brand of french fries, ties, or software?
It's simple. The people doing the suggestive selling can make specific recommendations. For example, if you've looked at the care label on a Bill Blass dress recently, odds are you saw a tag that read: "We recommend Woolite cold water wash." That label means American Home Products Corp., which makes Woolite, can spend less on ads.
Now none of this comes as any surprise to Gus Blythe. Like most people his age -- 29 -- Blythe has spent a lot of time at McDonald's, and although a bachelor, he has ac-companied more than one young woman as she went searching for the perfect dress.
And Blythe figures what is good enough for McDonald's and Woolite is good enough for SecondWind, his small shoe-care company. In fact, he's copying them. Blythe is letting other people -- specifically shoe manufacturers and retailers -- do a good part of his selling for him. He markets to them, and they in turn take his message to hundreds of thousands of potential customers.
It's the perfect solution for companies that have little money for advertising, because it allows them to leverage their limited marketing budget. Blythe believes it's the only way to go, but it took him a while to reach that conclusion.
At first Blythe, who is president of SecondWind, tried advertising his line of athletic-shoe-care products. He bought space in running magazines and waited for customers to come jogging into their local sneaker store to demand his products. He's still waiting.
"I've come to the conclusion it takes $20 million worth of advertising to get any attention at retail," he says. That's a good guess. Experts say it takes at least $10 million just to break through the clutter of competing messages, and Blythe -- whose company recorded $4 million in sales last year -- doesn't have that kind of money. He had even less money seven years ago when he started his company in Paso Robles, Calif., about halfway between San Francisco and Los Angeles.
The more he thought about the problem, the more frustrated Blythe became. He knew his product was better than the competition's, yet he had no way of letting consumers know that. Advertising would help, but he couldn't get the money to advertise until he had sales. And he couldn't get sales without advertising.
Blythe kept thinking about this catch-22 while he stared at the care tags on sneakers, and finally the light bulb went on. Why couldn't the manufacturers recommend Second-Wind? If Bill Blass could recommend Woolite for his dresses, why couldn't Pony, Converse, New Balance, and the rest endorse him?
Well, for the shoe manufacturer, there are several potential problems.
First, the product has to work. In granting its endorsement, the shoe company puts its reputation on the line, and if something goes wrong, the consumer is going to blame Pony, not SecondWind.
Second is a more fundamental question: what's in it for the manufacturer? While the recommendation helps SecondWind, how does it help the company giving it? Since Blythe won't pay for the endorsement -- figuring correctly consumers wouldn't believe it if they knew it was bought -- why should the manufacturer give SecondWind the plug?
And finally, there remains a subtle, but substantial question. Do manufacturers really want consumers caring for their shoes at all? Wouldn't they rather people buy a new pair instead?
Good questions all, Blythe concedes, but he had answers standing by.
Since the product works, there was no risk for the manufacturer.
As for "what's in it for me," Blythe was willing to trade.
If a shoe company gives him an endorsement -- out of the 10 largest sneaker companies, only Reebok, Nike, and Adidas don't recommend SecondWind -- he puts pictures of their sneakers on his shoe-care product. And as an extra inducement Blythe says, Give us the recommendation, and you can put our address on your shoe tags so consumers can contact us to learn about shoe care. Either Blythe or Tracy Biller, his vice-president for sales, answers those "handful of letters a week," ensuring the manufacturer that its customers' questions -- and therefore its customers -- are being handled well.
And manufacturers should want consumers to care for their sneakers, Blythe adds. "If you have two pairs of shoes in your closet, one clean and one dirty, which are you likely to wear?" asks Blythe, who like the other 14 people at SecondWind always wears (clean) expensive athletic shoes. "The clean ones, right? If you wear them more, they wear out faster, which means you have to buy new ones."
The manufacturers bought his arguments. But Blythe wanted to go further. He wanted to get retailers to push SecondWind as well. To get their support, Blythe appealed to their competitiveness -- and pocketbooks.
"By having a product like SecondWind to offer, the person on the floor goes from being just a clerk to being someone who can provide customer service," Blythe says. "That service gives a customer another reason for coming back." Blythe even provides the sales pitch.
"Think about what happens when you buy a pair of shoes. You tell the clerk what you want, and he goes into the back room to get it. While he's gone, you have nothing to do." Blythe's suggestion to retailers: Why not have the salesperson hand the customer a box of SecondWind before heading to fetch the shoes? The salesperson can give a five-second pitch before departing: "Here's something that will help you take care of shoes. It really works. We sell a lot of it. I think you'll like it." And the customer can read about the product's benefits while the salesperson is gone.
Another inducement to the retailer is even more basic: money. SecondWind products, on average, yield margins that are 10% higher than sneakers, plus they take up less room -- both on the selling floor and in the back room.
The result? Blythe argues that if retailers will give him just 1% of their floor space, SecondWind could account for 6% of their profits.
Marge Cusick, accessory buyer for Lady Foot Locker, the 300-store chain owned by Kinney Shoes, is a believer. "Before we had SecondWind, we had trouble selling add-ons. Of 100 customers who bought a pair of shoes, the number who didn't buy an accessory was in the 90s. Since we started carrying SecondWind, that number is down in the 80s."
How strong is her support? Cusick is in the process of phasing out the Lady Foot Locker brand line of shoe-care products from the chain. "By the fall SecondWind will be the only shoe-care product we carry."
If such retailers as Foot Locker are promoting his brand, then Blythe doesn't have to. He's taking the money he would have otherwise spent on marketing and using it to buy other shoe-care companies. Already he has added a sneaker-repair product and a laces concern.
"At some point we may be big enough to advertise," he says, then pauses. "But you know what would be really neat? If we could get the athletic-shoe companies to mention us in their ads."
If the strategy worked twice, why not three times?
TIT FOR TAT
If you want somebody else to do your marketing, you have to give them a reason
What Gus Blythe, of SecondWind, realized early on is that he needs the Ponys and Converses of the world a whole lot more than they need him.
So like Tom Sawyer (of whitewashing-the-fence fame), he had to come up with at least one reason why they should do his marketing work for him. He came up with four:
* Higher sales. This is the most basic argument of all. For this strategy to work, you must convince the manufacturer and/or retailer that promoting your product will increase their sales. If you plug SecondWind, Blythe told manufacturers, people will wear their clean sneakers out and buy more. If you promote SecondWind in your stores, he told retailers, you'll have a better chance of selling expensive sneakers. If people know there is an easy way to keep their running shoes clean, they'll stop worrying about what their $100 purchase will look like in two weeks. continued)
* Fewer headaches. Endorse me, and I'll make your life easier, Blythe promised. He answers shoe-care questions for manufacturers and has developed training tapes for retailers to show their salespeople the best way to sell.
* Happier customers. Blythe persuaded both manufacturers and retailers that promoting his product would increase their customers' loyalty. Customers feel good about a manufacturer -- or retailer -- who tells them the best way to take care of what they just bought.
* Money (indirectly) never hurts. While buying an endorsement destroys credibility, you can go about increasing your endorsee's bottom line in subtler ways. Retailers can make more on SecondWind than they can selling sneakers. And Blythe puts pictures of the manufacturers' products on his SecondWind boxes, which supplements their ad budgets.