I was once VP Marketing for a retail chain in the bath and beauty category. We started in Seattle and grew to over 300 stores nationally, with comp sales increasing as much as 60% over the previous year. We had a successful public offering and the sales growth continued. I truly thought I’d found the place to spend the rest of my career.
Then, it all hit the proverbial fan and today the company no longer exists. I believe what happened to that brand then, is a real lesson for all brands and marketers today.
How to Position Your Brand to Stand Out in a Growing Category
At the time this story begins, bath & beauty was a growing category, particularly in the higher end segment. The most desired brands were generally found in the better department stores, situated in top-ranking malls around the country.
Our brand was a true vertical company, producing the product and offering it for sale in branded stores located in the best malls. Our positioning was to offer the same quality and personalized service as those products found in the department stores, but at a more affordable price. We believed we embodied the full promise of affordable luxury.
The products were displayed in a way that invited customers to indulge their senses through look, smell and touch, with store associates helping them choose the perfect product for their skin. Sales increased monthly and new stores opened throughout the country.
How to Deepen the Connection Between Your Brand and Your Customers
To ensure the good news continued, we initiated a comprehensive consumer research effort, beginning with focus groups.
We fielded a national study, going to markets around the country and inviting consumers to talk about the brand and what they felt about it. And we learned a very interesting thing: it appeared women tended to have one drawer in their house where they keep the various bath & beauty products they buy. But the ones they loved – the ones they felt best reflected who they were and how they wanted to look and feel — were out in the open, displayed on their counters. And that’s where ours were almost always found.
In fact, the findings were so positive that the researcher’s assistant, sitting in the back room with me watching the conversations, had a piece of advice: don’t screw it up. But, of course, we did.
How to Lose Your Most Loyal Customers
While all this was happening, the head of the company saw that the majority of bath & beauty sales were in drugstores. So, he decided, to better compete with drugstores, we should drop our prices and then watch the products fly off the shelves. Unfortunately, that’s not what happened.
What the decision ignored were our customers. In effect, by dropping our prices, we were telling them they had been paying too much, making them feel embarrassed and used.
Additionally, the decision ignored the brand itself, which was all about quality and personalized service to help customers find the best product for their specific need. This was in direct contrast to a drugstore environment, where the customer knows exactly what product they want, has no need of personal service, and expects to pay less.
How to Lose Your Brand Reputation
The effect of the pricing decision was almost immediate: our customer base began deserting us and the drugstore purchaser did not come into our stores. We also lost our brand reputation as customers felt that, if we could cut our prices that drastically, then the product quality must not be as high as perceived.
Within a matter of months, stores started closing and our stock price spiraled down. Today, the brand no longer exists and our customers have moved on.
A Quick Marketing Lesson for Today’s Brands
Honestly, the lesson is Marketing 101:
- Know your customer and the role your brand plays in their lives. Then ensure you deliver on that with every thing you do.
- Know your brand and ensure every touch point reflects what you stand for.
It’s not that hard: Make sure you keep your brand aligned with customer perceptions and needs – that you have a brand promise you deliver on each and every time – and you will always have a chance of success.