How Exactly You'll See Success From Brand Building Show Up In Your Business

For a long time, Chubbies was not profitable. Therefore, a turnaround of sorts was essential in order to have any chance of getting acquired or going public, both of which happened. HOW to do the turnaround wasn't clear, however. We didn't use some kind of McKinsey consultant 'top-down' decision-making process of "well, we've been around for X years, we're seeing headwinds w/ DR, and we're now selling in a bunch of retail locations. After studying 150 comparable brands and all strategic alternatives, the objectively superior next step is to shift marketing budgets from 100% DR to a balanced mix of DR and brand building"

Nope.

Our decision-making process was, shall we say, less MBA-like


It was more of a "well, holy sh*t, we can't raise any more capital at accretive valuations, we've got all this inventory, great people, and we deeply believe in the brand's mission. let's figure out wtf to do so we don't go out of business."



it wasn't obvious at the time that "brand building" was the thing to do

We didn't even know what brand building meant.


We simply needed to generate more contribution dollars at stable or increasing contribution margin in order to survive.


We just worked back from that need.


so how'd we get there?


we explored a variety of the obvious things:

1) ⬇️ marketing spend
2) pull more out of existing customers
3) ⬇️ discounting
4) ⬆️ prices


we did all of it in varying degrees at varying levels of success

however, one of the realities was the fact that we had inventory we needed to turn into 💰 to stay in biz.


We found that the best way to generate more contribution profit dollars at stable or increasing contribution margin was this:


Do stuff that would drive more people to purchase from us without needing to get convinced by a direct response ad or have to justify their purchase with a discount.


Since we had no idea what that stuff would be, we needed a way to measure our success or failure as we tried stuff


We needed business metrics that were a reflection of the above behaviors actually happening.


We found 2, and they had to grow together:

1. ⬆️ new customer acquisition 💰 coming from unpaid traffic sources (e.g., owned, organic, etc)

2. ⬆️ % of new customer $ coming from unpaid traffic sources as a percentage of total new customer $


What we ultimately learned is that one of the main keys to do this was to create a certain kind of video content and distribute it in a certain way


I'm running out of characters, so we'll continue tomorrow


takeaways:

1) Brand building wasn't the obvious move

2) We were just trying to stay in business

3) We just kept hacking away at stuff to find things that work

4) we did that by maniacally focusing on:

a) ⬆️ contribution profit 💰 AND % margin

...which comes from more people purchasing without needing DR or discounts
...which manifests in

b) ⬆️ new customer 💰 and % NOT coming from direct response

5) and "brand building" ended up being that thing
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