Wednesday, July 06, 2005

Love-Hate Loyalty

A brand that constantly eliminates products proves that turning customer frustrations into gold can be as simple as listening to them.

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My wife just sent me this snippet, and the story amused me very much. It’s an excellent example of loyalty techniques that define a brand. By systematically antagonizing its customers, Lush Cosmetics manages to earn their undying loyalty, reports Lucas Conley in Fast Company (July 05). The potential for ticking off its customers happens because Lush dumps unusually large numbers of weaker-selling items from its line to make way for new entries. That can make customers mad because some of them may have really liked certain of the dropped items, even if most other people didn’t. But the disappointed customers end up loving Lush because the company then periodically sells limited quantities, or “personal batches” of some of the discontinued items online, which makes its customers feel extra-extra special: “There’s this exclusivity,” explains Simon Nicholls, who manages the Lush website, <a href="http://www.lush.com">http://www.lush.com”</a>. Only 300 people around the world will have these products.” Lush’s love-hate marketing strategy is actually a function of its larger vision to stay on top of ever-changing consumer tastes by ruthlessly replacing fading items with fresh ones. In fact, about “one-third of Lush’s entire product line” is dropped each year in favor of more offbeat and tantalizing ...goods.” The strategy is possible mainly because Lush stays so close to its customers (a.k.a. “Lushies") who swarm the company’s forums by the thousands to chat online” with ceo Mark Constantine, who clearly relishes the give-and-take. “We are far more challenged by our customers than we are by our competitors,” he says. Lush has gone as far as flying in some of its forum members to help manufacture products, although sometimes products will “start merely as words suggested by customers ... and they inspire products to match.” At the moment, some of the words in search of a product are “smitten,” “whoosh,” “aurora” and “flitter.” Mark also has one of his designers working on taking toothpaste in “unbelievably wonderful and frightfully weird” directions, like “green apple, salt and charcoal,” for instance. “We reserve the right to make mistakes ... I believe that’s a great privilege,” he says. A certain quirkiness does seem to suit him. Back in the late ‘80s, when Mark was product-designing for Body Shop, he proposed “Bath Bombs—fizzing, aromatic balls that disintegrate in water.” Body Shop rejected the idea, but today Lush “turns out as many as 60,000 Bath Bombs a day, and they’re 40 percent of sales.” Having started out with just “one store in 1995, Lush has 320 today (21 stores in the United States and growing), doing $100 million in annual sales in 35 countries, with plans to triple in size by 2008.” http://www.brutalclarity.com/index.php/56/
 

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