How Abercrombie's CEO Defied Startup Norms and Succeeded
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Chapter 1: Rethinking Startup Strategies
For years, the entrepreneurial ecosystem, including business schools and venture capitalists, has championed a few well-known principles for launching successful businesses. Concepts like "create a product that addresses a need" or "offer what consumers desire" have been commonplace. But what if I told you that a former CEO, despite his prior failures, disregarded this advice and built a multi-billion-dollar company that no one was clamoring for?
Mike Jeffries, the former CEO of Abercrombie & Fitch, faced a barrage of criticism, yet his approach to brand-building could astonish even the toughest critics. While you might not admire him, there's much to learn from his strategies. Remarkably, it is feasible to replicate the tactics that led to Abercrombie's success without inciting a public relations disaster or facing costly lawsuits.
Instead of simply creating what people want, Jeffries demonstrated how to cultivate a desire for products—even when potential customers aren't aware they want them.
Section 1.1: The Power of Targeted Marketing
If you've been keeping up with the Abercrombie saga, you may have encountered a notorious quote from Jeffries, which helped seal his fate as CEO. He unapologetically stated, "Are we exclusionary? Absolutely… companies that are in trouble are trying to target everybody… then you become totally vanilla. You don't alienate anybody, but you don't excite anybody, either."
Jeffries made an astute point: targeting a broad audience often results in bland branding and a lackluster response. For essential goods, this generic approach might suffice. However, for luxury items or non-essential products, generating excitement is crucial, which is where focused targeting plays a pivotal role.
Jeffries wasn't just a designer; he had a keen ability to identify a specific customer profile. He understood everything from their hobbies to their pet preferences, and his marketing reflected this insight. If you aim to establish a brand in the luxury or discretionary markets, having a precise understanding of your target audience will help craft marketing that truly resonates.
Subsection 1.1.1: The Unmistakable Brand Identity
A&F's marketing had a striking irony: they sold clothing, yet their advertisements predominantly featured scantily clad models. This peculiar branding strategy made Abercrombie unmistakable—shirtless men adorned store entrances, shopping bags flaunted six-pack abs, and the in-store imagery often overshadowed the clothing itself.
Some might perceive this emphasis on branding at the expense of products as misguided, but it had a remarkable advantage: it created a unique brand identity that decoupled customer loyalty from specific products. Consequently, Abercrombie could explore new offerings or even missteps without losing its devoted customer base. They became a brand influencer long before social media influencers existed, using aspirational imagery to make consumers aspire to be associated with "Abercrombie."
Section 1.2: Creating Intrigue to Drive Foot Traffic
If you've ever encountered an ad for a free e-book and exchanged your email for it, you've experienced a lead magnet. This strategy is common but Abercrombie took it to another level to boost in-store visits compared to competitors.
While most retail stores have transparent displays showcasing their products, Abercrombie opted for a different approach. They covered their windows with shutters and black-and-white images, obscuring the view of their merchandise. This tactic forced potential customers to enter the store to discern whether they wanted what A&F offered, generating intrigue and reinforcing the exclusive atmosphere of the brand.
You might wonder how this applies to your business. The key is to employ a unique, brand-specific marketing strategy that sets you apart from competitors. If everyone else is offering free e-books or webinars, consider alternative methods that will capture your audience's attention.
Chapter 2: Selling a Lifestyle, Not Just Products
Years ago, I attended a marketing meeting led by the CEO of a successful online coaching brand. Her company offers services ranging from $2,000 to $20,000, targeting regular consumers rather than the ultra-wealthy. You might expect her to focus on the cost of her offerings, but her pitch starts with "imagine…" and culminates in the outcomes her customers desire.
This approach emphasizes that she isn't just selling coaching or courses; she’s selling a lifestyle. While this may seem superficial, it mirrors the strategies used by perfume brands and life coaches. Customers buy into the outcomes they envision, not just the products themselves. Abercrombie marketed not just clothing, but a lifestyle—creating an aspirational image that made consumers yearn to be part of "the cool kids."
The takeaway for you? In a crowded market, appealing to customers' emotions can be more effective than merely solving a problem. You don’t necessarily need to create a product that meets a demand; instead, you can generate a desire for your offering.
Section 2.1: The Misconception of Problem-Solving
One of the most significant hurdles for struggling founders is the belief that their startup’s success hinges solely on the quality of their product or service. More often than not, this is a flawed assumption.
If you’re addressing a need, your target market likely already has alternatives. How will you persuade them that your solution is superior? If your instinct is to focus on features, pricing, and specifications, you may have already lost the sale.
Customers typically don’t seek you out. As an entrepreneur and marketer, it's your role to find them, demonstrate why they want your offering, and highlight why no competitor can match your value. While good entrepreneurs create products that people want, exceptional entrepreneurs inspire people to desire what they offer.