Categorized | the branding notebook

At Burt’s Bees, the recession never happened

I have been following Burt’s Bees closely as a marketing professional since 1999 and, I’m happy to say, did a biz analysis of the company in 2004. Today’s LA Times is the first newspaper outside of North Carolina to realize that the recession seems to have had zero effect on the company’s sales and it’s superhuman growth (25% annual compounded growth since its inception 25 years ago). But, when trying to figure out just what makes this company keep ticking when everyone else is taking a licking, the Times doesn’t have a clue:

Burt’s Bees hit on its recession-proof formula years ago. It went natural before natural was cool. And it made specialty personal-care products before such items went mainstream. No matter how bad the economy gets, “it’s the small luxuries, the small indulgences, that people are reluctant to trade off . . .”

I guarantee you, platitudes do not a successful company make. So, without going into a McKinsey-style report, what can entrepreneurs and small biz owners learn from Burt’s Bees?

Branding is a marathon, not some arcane MBA or design-school secret
I have been — both here and elsewhere — rather facetious about entrepreneurs and small business owners who are all serious about their brand. Why? Because developing a world-class brand is a remote possibility; in the world of small business and startups, the integrity and success of the business lies in other strategic capabilities. In the off-chance that a small biz or startup brand does make it big, it’s not about doing the brand right in the first place, it’s about staying true to the brand’s values (which is what builds a brand, anyway).

Consistency, not doing it “right” or “by the book,” allows you to complete the branding marathon successfully.

I could spend the next 10,000 words telling you exactly what was “wrong” and “right” about Burt’s Bee’s branding. We can talk about how good the color (yellow) is as a shelf differentiator, how confusing the brand line extensions are, the instant identifiability of the mezzotint image of Burt Shavitz on the product (good) as well as its limited applicability (bad), the “busyness” of its packaging (no self-respecting design firm in 2009 would ever design packages like this — despite the fact that they’re all “wrong,” they’re phenomenally successful as packaging), the uniqueness of the name (proving that you can name a product or brand anything you want). But why waste time?

Who cares what I have to say? Or any other branding, marketing, or design expert? It’s just an exercise in fatuous self-indulgence.

What matters is that the company has stayed absolutely committed to the brand and its identity. The overall brand, including its name, has the sterling virtue of being instantly identifiable and is nearly impossible to confuse with any other brand. That, all by itself, is a design and marketing success beyond compare. However, as the company ha grown, it has not veered one single step from the original brand vision, value proposition, or design. A Burt’s Bees package looks exactly the same as it did fifteen years ago.

You can bet more than one branding, design, or ad firm has come to Burt’s Bees with a proposal to “rebrand” it. And then been shown the door.

I constantly advise clients that they will make mistakes as they theorize, design, and implement their brand. But they should, above everything else, remain committed to it in all its aspects. Change your brand and you throw out everything the brand has done for you.

You never finish the branding marathon by starting the damn thing over. Here’s my secret to running a marathon: “When the gun goes off, start running. Don’t stop until you cross the finish line.” Now you know it; that’s how easy it is to run a marathon. The branding marathon is no different.

Rebranding (and redesiging) simply discards the progress you’ve already made as a marketer. Burt’s Bees is one of the only marketers I’ve encountered in over a decade of marketing, writing, and design that has stayed immovable in its brand.

Premium pricing ain’t a premium when it’s counted in dimes
As the LA Times doesn’t hesitate to point out, Burt’s Bees is a premium-priced product (our book, Shoestring Venture, outlines various pricing strategies, including how premium pricing works and why). A knuckle-sized container of ChapStick will set you back about a buck, but the same-sized Burt’s Bees container will set you back about three bucks.

Everything we know about consumer behavior overwhelmingly tells us that consumers cut back on premium-priced products in a recession. That’s not just empirical data . . . it’s unassailable common sense.

So, why has Burt’s Bees been increasing its market share across all its product categories in a deep and psychologically crippling recession?

Don’t believe the crap about “giving up little luxuries.” The Burt’s Bees premium pricing model is actually very shrewd and has two components:

  • The “premium,” although 200% greater than its biggest competitor, is a relatively trivial amount. So what I call the “premium bite” is smaller.
  • The product as a consumption item is a slow-turnaround product, so the premium bite is less frequent.

    Look at the difference when the premium bite is bigger and more frequent. Say, bagels. Safeway is selling them for $4 a dozen, but Panera sells them for $12 a dozen (again, a 200% premium). The Panera bagels are better, but the premium bite is $8. Now, suppose you buy a dozen bagels each week. The premium bite is now $32 per month. That’s nothing to sneeze at if you’re learning frugality the hard way.

    But lip balm? The premium bite is $2. And how often do you buy lip balm? Once per month? So the total monthly premium bite is $2? $4?

    If you’re going to give up a “little luxury,” which will it be? The Panera bagels (saving you $32 per month)? Or the Burt’s Bees lip balm (adding an extra $2 in your pocket)?

    In a recession, consumers start looking at pricing in terms of trade-offs. If a price difference is high enough and paid frequently enough by a consumer, the consumer will start calculating what they’re sacrificing by paying the price premium.

    In a recession, consumers don’t calculate by thinking, “I’ll save $8 by buying my bagels at Safeway.” Rather, they calculate by thinking, “If I get my bagels at Safeway, that will leave me more money to go out to lunch some time this week.”

    The premium pricing on Burt’s Bees has successfully weathered the recession because it is never a sacrifice (of something else) for the consumer.

    That’s a major insight if you’re considering premium pricing for your product.

    Ignore what Burt’s Bees says about people willing to pay more for natural ingredients and no “bad” ingredients. While that’s true to a degree, the reality is this: if the premium bite were bigger (more dollars, more frequently), the good ingredients-bad ingredients value proposition would not hold up against the sacrifices consumers have to make to buy the product.

    Burt’s Bees hasn’t been seduced by the dark side
    Burt’s Bees has rigorously pursued a POS (point-of-sale) marketing strategy. Sure, they have a Web site, and they’ve taken on competitors with print advertising, but they’ve never really veered from their focused, determined, consistent, and successful POS marketing. They started as a POS marketing company (back when it was only Shavitz and Quimbly travelling from farmer’s market to craft fair to farmer’s market) and they’ve only enhanced and perfected their ability to communicate the brand values and market the product on the store shelf.

    I have spent years in design, marketing, and now high-end business consulting. In all that time, I have encountered startups and Fortune 500 companies who have almost universally neglected POS as the lowest priority on the pole. Largely because media marketing sucks up so much money and Web marketing sucks up so much intellect and creativity, little oxygen is left over for a strong, consistent, muscular POS marketing campaign.

    Consistent, year-over-year product and brand performers are those for whom point-of-sale marketing is their number one strategic and marketing capability.

    Be Sociable, Share!
  • One Response to “At Burt’s Bees, the recession never happened”

    1. Adrianna says:

      Hi there,

      I was greatly interested in this article – very well written, to boot. Do you happen to know if they marketed and distributed themselves in-house, or if they hired a company (if so, whom?) to market and place their products practically overnight in such a massive amount of retailers, large and small?

      And did they work with a branding company to develop/refine their unconventional yet appealing look-and-feel (if so, whom?), or did they perhaps also develop this themselves?

      So much can be learned from studying this amazing company. Thanks in advance for your help!

      Sincerely,

      Adrianna

    Trackbacks/Pingbacks


    Leave a Reply

    Shoestring Book Reviews

    Shoestring Venture Reviews
    Richard Hooker on Jim Blasingame

    Shoestring Fans and Followers


    Categories

    Archives

    Business Book: How to Start a Business

    Shoestring Book

    Shoestring Venture in iTunes Store

    Shoestring Venture - Steve Monas & Richard Hooker

    Shoestring Kindle Version # 1 for e-Commerce, # 1 for Small Business, # 1 for Startup 99 cents

    Business Book – Shoestring Venture: The Startup Bible

    Shoestring Book Reviews

    Shoestring Venture Reviews

    Invesp landing page optimization
    Powered By Invesp
    Wikio - Top Blogs - Business