Positive Power of Principled Profit
Volume 1, Number 9 - May, 2004

Positive Power Spotlight: Patagonia

One challenge for companies that produce very high quality products is that their customers don't need to buy as often.

As a child, I only had one pair of shoes that lasted long enough for me to outgrow them—and when I went to get another pair, the company was out of business! I would still be buying them, decades later, if they'd managed to survive. Yet product quality and durability can be a real brand-builder. It's just that companies have to get their customers to spread the word, rather than waiting perhaps several years for repeat sales.

Patagonia is a popular maker of outdoor clothing and equipment, and from day one it has focused its communications as much on a message of outdoor enthusiasts taking environmental and corporate responsibility as on pushing product. And its products are made to last.

The company gets a lot of word-of-mouth referrals. But those referrals take a while to get rolling, because new customers don't realize how well-made the merchandise is until they see how much longer it lasts than competing brands.

This has helped drive Patagonia's marketing toward a very interactive approach, very much in keeping with the ideas in Principled Profit. It actively develops relationships with customers, and those communications emphasize the company's (and its JV partners') role as a steward of the environment.

And to some degree, its customers self-select. For instance, the depth and breadth of environmental information on the Patagonia website attracts a customer who recognizes the value of supporting a company where environmental responsibility is a core principle.

And the company uses multiple marketing and communication channels to create that interaction. As an example, customers in retail shops were given gift certificates to use in the online store as a reward for letting marketers monitor the website's usability. All of it is focused around the relationship with the customer, the broader environmental issues, and making every interaction with the brand a positive experience.

Patagonia actively builds word-of-mouth, achieving recommendations from fully half its customers, with a seven-step process that creates a positive perception of the company, fosters (and tracks) referrals, and integrates a low-key, consistent message across its retail stores, mailed catalogs, the website, and e-mail.

As I write this in mid-May, 2004, the Patagonia home page highlights three equally sized color pictures: two catalog lines on either side of another graphic labeled "Read an Enviro Report: Life's Deep Kinship by Richard Manning." Another link, text only, goes to a vivid experiential narrative of swimming in the Galapagos, being threatened by sharks, and being saved by dolphins who chased the sharks. Though very brief, it's one of the best pieces of travel writing I've seen—and at the end of the article, there's a link to more narratives. If you're receiving this by e-mail, paste this link into your browser to see for yourself: http://www.patagonia.com/culture/fieldreports/blue_edge.shtml Of course, there are also links to shopping, an e-mail newsletter signup, customer service (including an 800 number listed right on the home page), applying for a job—even a place to send gift cards. Clearly, these folks understand that making it easy to get what you need is part of the brand experience-and so are both hearing tales of exotic adventures and protecting the earth so that those adventures remain possible for future generations.

(Note: Much of the raw material for this article is taken from an article by MarketingSherpa.com).

Another Recommended Book: Ideas Are Free: How the Idea Revolution is Liberating People and Transforming Organizations By Alan G. Robinson and Dean M. Schroeder (Berrett-Koehler, 2004)

Empowering employees to do the right thing is a key idea in my Principled Profit philosophy.

This principle can improve every aspect of a business, as Robinson and Schroeder demonstrate.

In an empowered organization, employee ideas—especially those from front-line workers—are a currency with the capability to slash costs, boost morale and productivity, and in some cases yield enormous actual-dollar profitability.

But too many organizations go about idea collection all wrong. Either they have no systematized method of collecting, analyzing, and acting on ideas—rapidly implementing the good ones—or they saddle their idea system with an unworkable and counterproductive monetary reward system that results in the opposite of what's intended.

Still, companies that encourage—even demand—ideas from their employees reap many benefits. Interestingly, most of the big improvements come from very small ideas—that piggyback and replicate into a powerful snowball of change For instance, one idea from one employee might save a few thousand dollars a year in a single location, but multiply by 10,000 locations and the savings are enormous. Too, the little incremental changes are often site-specific and harder for competitors to spot, leading to long-term competitive advantage.

From massive corporations like Toyota to single-locations such as a guest ranch in Arizona, companies with good idea capture systems enjoy higher morale, higher productivity, lower costs—and a fresh climate where going to work is actually fun.

And after reading this book, any company ought to be able to put such a system into place.

If you'd like to buy this book, please follow this link to buy from a BookSense independent bookseller:
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