Orabrush's story was how its tongue cleaners made their way onto
Walmart shelves nationally via quirky unpaid YouTube videos and a
smattering of Facebook ads aimed at Walmart buyers.
Terracycle has both a great story and a social movement at its
core, founded as it was by a Princeton University dropout who
launched a business selling worm-poop compost in refurbished Coke
bottles. It has built an eight-figure brand largely by leveraging
the marketing power of far bigger brands, either through a bit of
PR jujitsu or marketing partnerships with such big marketers as
Coca-Cola, Kraft Foods, Walmart and Target , VP Global Media Albe
Zakes told the ANA in October.
The jujitsu part came when Terracycle used a
trademark-infringement suit by Scotts Miracle-Gro to unleash a wave
of publicity. The partnership element involved enlisting major
brands in its school-based recycle and reuse programs where the
brand turns such things as old CapriSun pouches into new products.
Terracycle also has gotten top retailers such as Walmart and Target
involved in merchandising and advertising events around its compost
products in recycled containers around Earth Month in April.
For brands ranging from Starbucks in its early days to Lululemon
more recently, investment in a strong retail presence is key. The
expense may not show up on the advertising line, but the stores
Hence, when former Procter & Gamble Co. Chairman-CEO Durk
Jager in 1999 mused publicly about how he admired the Starbucks
model of building a brand without big media outlays, Scott Bedbury,
a former Starbucks marketer turned consultant, responded that
P&G would be advised to open a couple thousand really nice
retail outlets before turning off the gross rating points.
His retort turned prophetic in a way. When P&G in 2008
launched a new-age version of Tide called Swash, aimed at
millennials and based on the concept of freshening clothes between
uses rather than washing them, it backed the launch not so much
with ads but with a store near the Ohio State University in
Columbus. There it had lounges where students could watch DVDs,
play video games and hopefully buy Swash fabric refreshers or lint
rollers on the way out.
Ultimately, after trying to sell Swash in conventional retailers
and online, P&G pulled the plug on the brand earlier this year.
That points to another reason why it's hard for big players to
borrow the scrappy strategies of small ones: They generally have
shorter time frames and higher hurdle rates for success than
But of all the factors that let some marketers build brands
without big media spending, the most important ingredient may be
treating and compensating employees well, said Mr. Bedbury. He made
the journey himself in 1995 from global advertising director at
Nike , where he had a $150 million media budget and another $600
million-plus in global sponsorship spending to become CMO of
Starbucks, then with only 350 stores.
At the time, founder Howard Schultz promised him a "fairly
substantial" media budget, Mr. Bedbury said. But a frost in Brazil
that sent coffee prices soaring quickly reduced it to $2.5 million,
half of which went to salaries.
One lesson Mr. Bedbury learned quickly from having almost no
media budget was the value of the store experience in building the
brand. But one real key behind the experience, he said, was Mr.
Schultz's determination to add dignity to minimum-wage jobs at
"By providing health-care benefits to halftime employees to even
paying out bonuses in Starbucks stock to all employees, no matter
how many hours they worked, was nothing short of revolutionary,"
Mr. Bedbury said. "By treating the employees better, they in turn
treated the customers better."
At the time, he said, McDonald's had about 220% annual turnover,
Burger King 300% and Starbucks only 55%, with store-manager
turnover a mere 12%. "We created the familiar stranger dynamic," he
said, where people were familiar with the faces of their baristas
at least, if not necessarily the names.
Though the temptation to take advantage of employees trapped by
a bad economy is great today, Mr. Bedbury said keeping them happy
is even more important in the age of social media. Not only can
employees or ex-employees spread negative buzz fast, but satisfied
employees can be a brand's strongest defenders and advocates.
Mr. Bedbury sees a similar tack in a far different business --
Costco. The $87 billion club-store giant compensates its workers
far better than such rivals as Walmart and Target and has less
turnover and far better top-line results than either through the
recession. And Costco, like some of the small-fry marketing success
stories, spends almost nothing on paid media other than its
direct-mail magazine and coupons. Given overlapping board
membership among Seattle-area-based Costco and Starbucks, it's an
approach Mr. Bedbury dubs "the Cascadian way."
All things considered, though, Mr. Bedbury has discovered one
secret: It's still nice to have money. "If we'd had more money to
spend on communications at Starbucks," he said, "I think we could
have grown even faster."