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This week, we look at famous brands that built their companies without advertising. It's so rare in this world to build a multi-million, or multi-billion dollar company without relying heavily on advertising. But several companies have influenced millions of customers by doing just that - with enormous success. Instead of ads, some took a stand on social issues, some gave back to their communities, all relied on superlative customer service that would generate word-of-mouth, and each one stayed passionately connected to their customers.
It's a rare and remarkable strategy.
One day, in 1997, a retired judge named Wayne Gould was vacationing in Japan.
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He wandered into a bookstore, and was drawn to a display of puzzles that stood out because they were independent of any language.
It was a Sudoku puzzle.
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Judge Gould picked up the puzzles, brought them home, and spent the next six years developing a computer program that could mass-produce Sudokus.
Then he decided to market them, went to The Times newspaper in London, and offered them Sudoku.
For free.
But here's the genius. Gould offered the Times an endless supply of Sudoku puzzles at no cost, providing they run a tiny credit on each puzzle that listed his website. Soon, 400 newspapers around the world carried his puzzles.
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That resulting free publicity created a worldwide phenomenon and drove people by the millions to his website, where he sold Sudoku software and books. One year later, Gould had generated over a million dollars in revenue. One year after that, he had sold over 4 million Sudoku books.
And he achieved it all without spending a penny on traditional advertising.
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Costco sells $3.9 billion dollars worth of meat a year.
$3.4 billion dollars worth of produce.
$1.15 billion in wine.
$1.8 billion worth of TVs.
It fills 33 million prescriptions per year.
It has 60 million registered customers who pay $55 dollars per year, or more, for the privilege of shopping there.
And they do it all without any traditional advertising.
Costco's no-frills, low price mantra helped them reached the $1 billion dollar milestone in only their third year of operation. A company the size of Costco would normally have a $100 million dollar plus advertising budget.
Instead, Costco depends on word-of-mouth.
They take their relationships with their customers very seriously, spending lots of time talking to them. And in particular, they create a close, personal relationship with small businesses.
$90 billion in sales, and it spends exactly zero percent of its budget on advertising.
That philosophy has made Costco the 7th largest retailer in the world by sales.
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Dennis "Chip" Wilson was a good swimmer in school.
But, when he played football at the University of Calgary, he had constant trouble maintaining his balance.
One day, someone suggested he try a yoga class.
He did, loved it, and his balance improved. As well, he noticed that people left yoga class on the same physical high as they would get from surfing or from a day of snowboarding.
He also noticed two other things:
One - that the yoga classes were overflowing with women.
And two - how there weren't any clothes made for the specifics of yoga movement.
So, he opened a single store in the Vancouver neighbourhood of Kitsilano, that became a yoga studio at night to pay the rent.
He called it... LuLuLemon.
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His philosophy was simple: Become the expert.
In each new market, the company sends LuLu missionaries out to attend yoga and exercise classes to find and befriend the most influential instructors.
The relationship became mutually beneficial. The yoga teachers get free apparel and big billboard-sized portraits of themselves hung up in their local LuLuLemon store, which generates students for them. In return, LuLu wins a devoted - and self-propagating - clientele.
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Wilson's marketing isn't done with traditional media. He believes what makes LuLuLemon successful is that everyone in the organization works in the stores at least once a week.
He maintains that there is no substitute for talking to customers eight hours a day to know what's really going on. That also means you can fix a problem Monday morning, instead of six months from now when research rolls in.
The experience of a LuLuLemon store is its advertising.
Does it work?
In just over 10 years, LuLuLemon has grown to over 140 stores, with revenues of $452 million.
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"Put a Ferrari in the dark," says North American Ferrari President Marco Mattiacci, "and just by touching the car, you will recognize it as a Ferrari."
Ferrari is one of the world's top brands, and it has never spent one penny on advertising.
The brand attracts people who have a passion for speed and design. The company cultivates exclusivity as its marketing strategy. You are selected to buy one.
Yes, you heard right.
Dealers select buyers. They seek those who are passionate about Ferrari. Why? Because their customers are their marketing. Ferrari does no mainstream advertising whatsoever. No ad campaigns, no flashy billboards, no glossy pages in Vanity Fair like its competitors.
Instead, it relies on word-of-mouth, presence at special events and a growing social media presence.
But, still, it's an extraordinary decision NOT to advertise. Wealthy clientele have many choices, especially in the world of cars. Wouldn't advertising keep Ferrari top-of-mind? Possibly, but passion is its only marketing tool.
How do they measure the effectiveness of that unorthodox strategy?
They sell every car they make.
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Anita Roddick started The Body Shop for one compelling reason: To simply create a livelihood for herself and her two daughters.
She had no training or experience, but she was well-traveled, and spent time with pre-industrial peoples. Roddick was exposed to the body rituals of women from all over the world who rubbed their bodies with cocoa butter and had magnificent skin, and who washed their hair with mud, with striking results.
She was also influenced by the frugality her mother exercised during the war years: Why waste a container when you can refill it? Why buy more of something than you can use? Why not recycle everything you could?
So she took out a small loan, and opened the first Body Shop in Brighton, England, on March 26th, 1976.
The Body Shop has always been recognizable by its famous "green" logo and product colour, but that wasn't brilliant strategy.
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It was, in fact, the only colour she could find that would cover up the damp, mouldy green walls of her first shop.
Initially, she sold just a handful of creams and hair-care products, but it proved an unexpected success, and she opened a second location within six months. By 1982, new shops opened at a rate of two per month.
Anita Roddick was a vocal opponent of animal testing, and that crusade became one of her biggest calling cards. As a result of her very unconventional stand on world issues, The Body Shop started to get an enormous amount of attention from the press.
While she rejected conventional marketing, Anita Roddick's wild hair, bold public pronouncements and her very unbusinesslike demeanor made her the best advertisement The Body Shop ever had.
The company was then doing business in 39 countries, just 14 years after opening its first store.
And to that point, it had never advertised. It chose, instead, to declare its purpose and demonstrate a deep, deep commitment to important issues. In other words, it stood for something, and stood against something.
The company had no marketing department, just a clearly stated purpose that the public could align their values to.
By doing that, the company's ethical values created financial value.
The Body Shop went public in 1990, and was sold to L'Oreal for $1.4 billion.
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Back in high school, Ben Cohen and Jerry Greenfield were having a tough time in gym class.
They weren't exactly jocks. What they were really good at was eating food. So, 12 years later, they decided to try a $5, ten-day correspondence course.
The topic: "How to make ice cream."
Armed with that knowledge, they opened their first scoop shop in an abandoned gas station in Burlington, Vermont called Ben & Jerry's.
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In 1980, they rented an old sewing warehouse and began packaging their ice cream in pints, and one year later, the first Ben & Jerry's franchise opened in Shelburne, Vermont. Soon, they were expanding across the United States.
Their humour was a huge part of their success. It was evidenced in the names of their flavours: LIke Chubby Hubby and Cherry Garcia.
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Remarkably, Ben & Jerry built their company without any advertising. As Jerry explained, "Most companies hire advertising firms to try and come up with an image they think will sell their products. We decided in the beginning to be real and honest about who we are. We relate to the average customer because Ben and I are average people."
That philosophy paid off in unprecedented word-of-mouth advertising. They created a foundation that distributes 7.5% of their pre-tax profits to over 140 philanthropic social, environmental and political causes, including the Children's Defense Fund.
They simply took a stand on issues.
It's a fascinating lesson. Most companies want to be seen as bold and unusual, but then choose safe, broad messages. Ben & Jerry weren't afraid to be who they are - knowing half the people would love them, and half would hate them.
But as Advertising Age said, maybe more marketers should take their cue and instead release their inner Chunky Monkey.
All the companies we've discussed here today subscribed to the theory that word-of-mouth is the best advertising. Each were also all built on a clearly articulated, burning mission at their cores. A mission that came directly from the founders.
A few of these companies now advertise. But I have a hunch why that is.
The founders are gone.
That burning core has gone cold.
Jerry Greenfield summed it up best when he said that most people want a relationship with the products they are buying. When you find a company that you actually feel good about, that's rare.
Because, in the end, your values become your advertising...
... when you're under the influence.