Last week, our Chief Mark DiMassimo went AdAge’s Ad Lib Podcast to talk with host Brian Braiker about building brands and businesses in a direct-to-consumer world, why traditional advertising is less important today, how behavior change marketing can be used to help fight the opioid epidemic, and much much more. Full transcript and podcast below!
Mark: What experience do you want them to have? Like when you think about this thing?
Brian: What experience do I want my listeners to have?
Mark: Yeah, why should they tune in?
Brian: I want them to be entertained and informed, inspired, possibly scared. I think they are already probably a little scared.
Mark: So they feel like they need to listen, might be dangerous not to listen.
Brian: If they miss a single episode of this podcast, they’re doomed.
Mark: Alright well, I wanted my brief, so I gotta be entertaining and interesting.
Brian: And who are you? You’re Mark DiMassimo, Chief of DiMassimo Goldstein. Welcome to Ad Lib podcast
Mark: Great to see you and be here. And we are literally seeing each other across this card table.
Brian: It’s a shoestring budget here and you can change that with sponsors. First, let’s start with the basics. DiMassimo Goldstein, what is that? You’re an independent agency that’s 22 years old.
Mark: You know a lot about this business and you know a lot about my business. We are an independent agency in New York that I founded in 1996, 22 years young. Even though we’ve been around for 22 years, we have not had the same year over again because we work with growth-stage turnaround state of businesses so our clients are constantly driving us to embrace change.
Brian: Well I don’t think you have a choice in the matter when it comes to embracing change. So who are these clients?
Mark: Let me give you a few because right now, this is not about being self-promotional…
Brian: Yes, because this is not the DiMassimo Goldstein hour.
Mark: We believe in a direct-to-consumer, choice-filled world, and that people are actually out there in the marketplace trying to get inspired to do great things, and the right things. We want them to do that so some of our top clients right now are Salesforce.org. So Salesforce is one of the big tech companies in the world. And Salesforce with Salesforce.org they really help drive the not-for-profit economy and really help a lot of people so we’re really proud we’re working with them. TradeStation is a fantastic company that went from small competitors to Charles Schwab, to now the fastest-growing programmatic trading, very excited about them. I should mention the Bronx Zoo and Wildlife Conservation Society.
Brian: What a cool client. So you said the words direct-to-consumer, you say those words a lot? I’ve heard those words a few times before we turned on the mics. What do you mean, really, what does that look like?
Mark: So when I founded the agency in 1996, I had this thought.
Brian: Were you a holding company refugee?
Mark: Right before I started DiMassimo Goldstein, I was Creative Director at Kirschenbaum, which was an amazing experience, and we were challenging the holding companies; but before that, I was at J Walter Thompson, YNR, started at BBDO and I went on to be this integrated guy who was working with the brand and advertising. But I had this early experience with direct-to-consumer and I saw technology making everything more and more direct-to-consumer all the time and I thought, man, when they turn to agencies, they always get the folks who don’t know brands, who don’t know how to build brands. I thought, wow, we could be the agency that builds brands for this direct-to-consumer world. For twenty years, I couldn’t really say that, because agency people always heard direct marketing, performance marketing, and it isn’t that. It’s building brands and businesses in a direct-to-consumer world. Dollar Shave Club, for example, all these platforms, Uber, Airbnb, I could go on and on.
Brian: So how does that work? Direct-to-consumer means knocking the agencies out of the way.
Mark: Look, absolutely. We are also agents in the middle and about 10 years ago, Google got together and talked about if it was time to get rid of the agencies and, thank god, they decided to work with us for now. But any middle professional can ] be pushed out of the way. We have to find how we add value.
Brian: How do you add value?
Mark: In a world where everybody has these expectations, I want instant, I want choice. In order to respond to that, you need your agency to understand those expectations. Those people are choosing an experience, but they’re also choosing what club to join. Thats why its also a subscription world, right, we’ve heard that with Amazon and Netflix. It’s people piecing together their own service world. So what inspires me? What clubs do I identify with that I want to make part of my life? You need agencies that can think those things through. Business and brand experience delivered through product service and then marketing, that’s the hierarchy today. So I think one thing that large agencies that grew up and built large factories for advertising, one thing they’re suffering with are these legacy agencies that were built for a world where the advertising drove the brand positioning. That’s not the case anymore.
Brian: The case today is agencies help build the brands themselves; is that where you’re going with this?
Mark: Exactly, I see it again and again, your CCO better be promoted to chief marketing officer and service content and brand or else someone else will. Then, your CMO will be reporting to a chief growth or product officer. Everybody has access to the opinions of others through consumer reviews and rating sites in every category. So product experience that you give and the story you tell around it through content, PR, social media, has to all hang together so advertising is a lot less important than it used to be.
Brian: So this need for brand building at holding company level has made room for consultant agencies to move in.
Mark: When I look at the independents that like us are thriving, they are brand consultant agencies at the core, but then activating through social or an integrated way like we are, or they’re innovation shops. That’s why innovation shops have grown up, because what are we gonna be has become a much more important question than what are we going to say about it.
Brian: So the traditional advertising agency as you see it, the writing’s on the wall?
Mark: Look, I think there are massive global companies that have all the problems of scale and they probably need ways of dealing with those scale problems. I don’t claim to be an expert on that, I believe those worlds are troubled both on the client side and the agency side. It’s really hurting now. I love that Martin Sorrell and I agree for the first time.
Brian: That holding companies are broken? Now that he’s on the other side?
Mark: Right! Now that I’m on the outside, I realize it. No, you were part of the problem, you profited from the problem, you understand the problem really well because you were on the inside and now you know how to compete.
Brian: That’s what George Soros did in a way, too.
Mark: Hell yeah.
Brian: What do you think is going to happen with WPP and the holding model? Pure speculation, obviously.
Mark: I think they compete as public companies, their stories aren’t great, compared to tech companies driven by pure tech stories. They’re holding a lot of what they used to consider cash cow assets, that are actually weighing them down now; they’ve also got a lot of new models. They’re buying independents, they’re trying to integrate them, make them matter for scale. I will not be surprised if we see some divestitures of mature assets. Meanwhile, I hear all the time from folks who would love to get people like me and agencies inside in order to get clients the experience they’ve been leaving for. What they keep telling me is that there are fewer and fewer things to buy.
Brian: Would you sell?
Mark: If the answer was yes, I would already be sold. Wherever I am, the next three years of my life are always too important to me. I’m not going to be the richest guy in the cemetery, but I’ve done well enough that if I love my job, I’ll be OK and that’s my priority to keep growing this place. I’ve given other people this experience in working in a focused, inspiring, less-problematic environment and I’ve seen what it means in their lives, too. We’re not for every client, but we play an important role in the lives of our clients as well.
Brian: Talk about then what you’ve learned at BBDO, JWT, that you saw there that you chose not to replicate. You said you did see a need for that kind of brand building skill set. What did you see that you didn’t want?
Mark: Great question. Without fail, the people at the top of the large agencies I work for, I’m forever grateful I got to work closely with these people. They were really smart, good and the same people that were running small independent agencies before. I won’t name any names but a lot of them at the top are the result of acquisitions, so at that level, there’s similar thinking. But I’ve seen people go into those situations and see problems they have to solve and the genius they go in with thinking about brands, orchestrating teams, really innovating through creative, they get worn down by the problems of how do I keep people out of this meeting. Everybody wants to sell their thing in the meeting. It becomes a how do I keep this all from going south then try to be a little bit better than other people who compete. The other thing I found, and my experience is a little old, but everybody tells me that the beautiful, pure brand planning that I worked with at Kirschenbaum was never really replicated very well at large agencies. As a creative director at J Walter Thompson, I was really a better planner than a creative director. That was true with just about every creative director there. We didn’t have planners. So we had to be right about the brand and therefore, the creative suffered. Whereas in independents, you have strategic thinkers working in lockstep with creatives and media people. But you don’t have to be your own strategists. You can connect your creative mind with somebody who’s really focused on that and it’s in a team where people who aren’t adding to the conversation are not in the conversation. That’s what I mean by the problems of scale. We have to find some way to engage all these people all over the world, even though that’s going to dilute the quality of this conversation. We don’t have that problem. We have it on the client side to some extent as our clients get bigger, but we help create these works that then help and inspire the rest of that team.
Brian: What are your clients’ pain points right now? What are they coming to you looking for help on?
Mark: I’ll say how they define the problem, then the changes that come from that. Without fail, the client needs to both build revenue and do it in a way that builds the brand at the same time. There are all kinds of pressures to sacrifice the long term of the brand for short-term sales. Different kinds of organizations have different pressures, so they own this problem. If they don’t solve this revenue problem in the short run, they’re out. They don’t get to build the brand. If revenue doesn’t actually build the value of the brand, it’s gonna stop working; then they’re gonna be out. With very few exceptions, when they turn to agencies, the agencies all wanna own one side of that problem or the other. So they need someone to step in and say, yes, I will own the integration. They got performance marketing agencies that are all about, let’s personalize, let’s automate. We don’t really care when customers get together if they speak the same language as us. We just need to maximize the amount of sales. Then we got brand people, who often don’t know how to create a brand platform that actually combines all of that stuff in an experience product promotion. The client has to be the orchestrator. When they come to us, they want somebody to sit with them at the table and be an expert in integrating those aspects.
Brian: Talk about your work in partnership with Drug Free Kids, which I think is interesting. Using advertising to fight the opioid epidemic. Why that cause?
Mark: Well, if I go back to the 90’s, when I first got involved with them, the woman who would become my wife and I got involved in the organization at the same time. She took a job there working with all the great agencies developing what has become the largest, single-subject public service campaign ever. She was on the inside working with agencies; I learned a lot how agencies present through that.
Brian: Can you give an example?
Mark: We don’t pitch. We’re one of the fastest-growing private companies in America in the last five years, and we do not do creative pitches. Back then, BBH entered this private market and I got to meet John Haggarty, they would say we don’t pitch. That was a mystery to me; what did that mean? Well at the partnership, I joined the creative review committee, which is now creative development board and I’m the chairman of it as of this year. I saw several times BBH present what they pitched and what I saw was, when you focus on ideas, not execution, you focus the client on the highest leverage you can bring, rather than all these distracting images and pictures. You’re allowing them to imagine whatever they’re going to imagine. You’re going to work with them for months to figure out how to execute. So they didn’t bring in nothing. They brought in strategic thinking and platforms. They said it wasn’t creative. So what I realized is, first off, clients are buying experience and a lot of agency experience is really awful. We’ll basically say you’re just buying one campaign, if this goes, well we’ll work on many things together. So let’s start with a project. We need to commit that much, so you need to commit that much. We’re never going to tie your hands and ask you for a two-year contract because we’ll earn our way; but let’s start with an initial project that assumes it is going to go on. Let’s talk about ideas and how it’ll be to go together, and we find that works. Meeting all these other agencies while working on anti-drug advertising gave me a window into the different cultures. I got to see folks from Crispen present when they were the hottest agency in the country and they set up their work less, they defended their work less, and they were so cool when they got direction. I would see these people come in and talk and talk and defend, and they were like, oh yeah, cool. Later they would decide if they would integrate. They gave you the feeling of confidence. Jill went on to become a client, one of the heads of marketing at Tommy Hilfiger, and I’d say, what do the agencies that work for you really give you? She’d say that as a client, you’re afraid. You can’t do it, you can’t force the agency to do it, and you don’t know how to make it work, even if you’re smart and good. A confident agency, confident enough to listen and support, is so reassuring. How would they be confident? And she’d say well there’s this one guy who will say this is our 7503 commercial, we’ll get this right.
Brian: That’s great that you have somebody on the inside feeding you pro tips.
Mark: Listen to the clients, I care about creative, I care about brand planning.
Brian: What about data?
Mark: We are very teched up and data-oriented because, in the direct-to-consumer world, our mix is 75% digital, including email. How do you integrate what you’re learning from your data with what you’re trying to build for your brand and experience? That’s the challenge your client lives with, and compromise is ultimate failure. Agencies that are either data-or brand-focused tend to sell what they do. They pull in their direction against the other guys and clients are stuck in the middle. It’s super uncomfortable and it makes them feel more responsible and less confident than they want to feel. We’re deeply into the data, and we have to translate it into insight and explain how it fits within what you’re trying to build as a brand. Not all data should immediately trigger a computer to pull a trigger, because that could undermine the brand. There are other ways to sell that will work better.
Brian: Back to fighting opioids.
Mark: Back to fighting opioids. Those guys back in the 80’s it wasn’t about opioids. But those guys who got together from Johnson & Johnson and media companies from the big ad agencies, they had this perfect storm of society is really worried about drugs, the government gets that they’re worried. Industry could really come together because the media landscape meant that advertising could really do something about it. They created the partnership and they did amazing things. They slayed crack, then ecstasy; they went out there and created effective campaigns.
Brian: How do you create an effective campaign to fight drugs? A human behavior that is never going to go away and kids are not receptive to advertising, less so now than ever before.
Mark: Yeah, exactly right. That’s what’s changed. That worked for the media environment of then, but that doesn’t work for today. Before it was media agencies and ad agencies, now its the core digital firms. The Googles, Facebooks, Twitters and the rest of media plus agencies and deep integrated digital agencies. It’s a deeper coalition in the world today. Now, what we’re focused on is the partnership for Drug Free Kids and what that means, is helping parents who are on the front line with their kids. We’re not up there advertising to kids saying stay away from drugs. What we are is providing services in a direct-to-parent way. Leveraging these partnerships with Google and Facebook. It’s working, and the government isn’t spending money on getting help for parents. They’re not spending money right now on prevention; maybe they will. But if you’re in a tech firm, media firm or agency, my message is this is our generation’s problem, and I know you’re working with guns, add that, too. This one of the biggest social behavior problems of our generation and step up, it’s a whole new thing now. If you’re interested, a lot of folks have had personal experiences, reach out to me, I’m not hard to find on social media. We need people to step up and be a part of this, and we have some great people on this creative review board now, amazing thinkers, a top innovation guy from Apple, great CCO’s from agencies. It’s a great thing. I don’t think it’s just me. We found through our research that folks are having trouble with technology addiction.
Brian: We saw that in Apple’s keynote.
Mark: Tim Cook is right again. How many of us are working on attracting people’s attention and distracting people from paying attention, engaging them for as long as possible. Getting them to click for as long as possible. We’re all out there mastering the art of diverting people’s attention and casting a spell over their behavior. There’s an enormous amount of choice and my belief is that values have to come above business. I think values will drive business success, but you have to align. I believe we can help people solve this choice problem. We can help people control themselves a bit more, so they can get more satisfaction out of life. If we do that, the brands that do that are ultimately going to do better. This is why we focus on inspiring action brands and help people form more empowering habits and make more inspiring decision. That’s what we do.
Brian: I’m sure that’s hard to monetize.
Mark: Because people are desperate in situations like this, now because of what’s happened, I really believe that is what’s driving us into a direct-to-consumer marketplace. I think the brands that give you a better experience feel better afterward. This is why Facebook and Apple are doing this. They realize that there’s a limit on just pure behavior if people feel miserable, if they don’t feel empowered, they’re going to go elsewhere and there will be competition. Talking about the benefits of scale, the benefits don’t extend to be able to make people miserable forever. Government will rise up, too. I’m a challenger, but I don’t want to challenge through government. I want to create alternatives that give people incredible experiences. And I also would love to help brands like Apple and Google do that as well. But I think we have to give people better experiences of themselves, feeling empowered.
Brian: That’s an empowering place to leave things. This was excellent. Sounds like you’re doing good work. Thanks, Mark, appreciate you being on the show today.
So now you’ve redesigned your website, reinvented your platform and unleashed an entirely new pricing structure. How do you get the word out about your brand’s new logo, voice and everything in between? If you’re TradeStation, an award-winning fintech company and brokerage, then the answer is simple: dye people’s hair blue in the middle of one of New York City’s busiest commuter hubs.
Video captured by TradeStation
“TradeStation just got a fresh look and now it’s our turn to give people one,” said Kevin Karp, Creative Director. We created the TradeStation Barbershop, located in the heart of The Oculus, a stone’s throw from Wall Street and in the shadow of One World Trade Center. The pop-up barbershop gave away free haircuts, blowouts and blue hair dye and extensions while hosting trading competitions, trivia challenges, market-themed meditations and photo ops with blue wigs. Why all the blue? Why not? (And it’s the brand color.)
“It was completely unexpected in the fintech world,” said Nehal Beltangady, Brand Director. “So was engagement. Over 400,000 people go through the Oculus every day. Partnering with LiveGauge, we were able to track 87,000 unique impressions at our barbershop over the course of three days. And we recorded over 4,600 repeat visitors, too.”
TradeStation is highly regarded in the trading community for its powerful tools, winning numerous best-in-class awards yearly, but isn’t as well-known as other mainstream discount brokerages. “Competing against bigger budgets and bigger names, the brand was struggling to stand out in traditional TV,” said Alessandra Pinho, Director of Strategy and Planning, “At DiMassimo Goldstein, we look to find new ways to find solutions for our clients. Live events create memorable brand experiences. You’ll see hundreds of commercials every day, but you won’t forget the trading platform that gave you a blowout.”
Like most advertising agencies and fintech companies, DiMassimo Goldstein didn’t have a lot of experience running a barbershop. “It really was a big cross-disciplinary effort,” said Claudia Mark, Design Director. “We had people working together, some in completely unfamiliar territory, across different fields. From the project’s inception, we had people from every discipline work together.”
“TradeStation’s offices are in South Florida,” said Matt Peters, Senior Designer, “So we wanted to bring those vibes to New York City.” It wasn’t enough to just create any old barbershop, but a modern one that felt like TradeStation’s hometown. Our bulls had sunglasses and our bears carried surfboards. It’s Wall Street meets beach culture.
“The client was happy, we were happy and we left a lot of people with blue hair,” said Mark DiMassimo, Chief here at DiMassimo Goldstein. “What’s amazing is that we raised brand awareness and none of it looked like a traditional advertisement. Lots of brands want something out of the box but lose their appetite when it comes to actually doing it. We found a novel, engaging way to take an online-only brand and bring it face to face with their consumers. That’s what Inspiring Action is all about.”
A call to action to people everywhere to direct their attention to the ecological challenges facing our environment. To use this day as an opportunity to adopt new behaviors and habits that benefit our planet, and to ensure that those actions become part of our daily routine moving forward.
No action is too small. No action is insignificant. It is our collective responsibility as humans to be advocates for the protection of our environment, to continue to push the dialogue, and to commit to lifestyle changes that ensure the safety of our planet.
Brands, too, share this responsibility. With large audiences and the ability to captivate, influence, and inspire movements, it is vital that brands create purposeful actions to raise awareness around the many challenges facing our environment, and to implement alternative eco-friendly methods to help solve these issues, in all aspects of their business.
Here are some brands that inspired us by stepping up to the plate on Earth Day this year, reaffirming their commitment to make this planet a better place.
Apple debuted Daisy, a robot that can disassemble iPhones to recover valuable materials, getting one step closer to its goal of making products with only renewable or recyclable materials. Apple is one of the most innovative companies of our time, and inspiring action with inventions like Daisy further stamps their commitment to use technology toward protecting our world’s resources.
Republic Services, the industry-leading sustainable waste disposal company, encouraged its staff, the communities it serves, and its customers to commit to “#1More” action each day to become better at recycling. They released a series of tips to help educate, build awareness, and inspire action in people to recycle properly.
Staples expanded its Electronic Recycling Program to include coffee brewers, and for this entire week, Staples Rewards members who recycle an old coffee brewer at the national retailer can get a $10 coupon for any purchase above $30. Since starting its Electronic Recycling Program, Staples has collected more than 400 million pounds of electronic waste, including ink and toner, which is the weight of roughly 13 Brooklyn Bridges.
Popular outerwear brand The North Face partnered with the National Park Foundation to clean up waste in parks by pulling over 160,000 pounds of single-use plastic bottles and recycling them into “The Bottle Source Collection.” One dollar of every purchase made will be donated back to the parks.
With its new campaign, “Earth Day Every Day,”1 Hotels announced a year-long initiative that will include activations across all properties focused on raising awareness of environmental issues, specifically around saving our shores.
Though not yet an action, ride-sharing service Lyft announced its plans to become completely carbon neutral. If the direct-economy brand can follow through on its promise, millions of metric tons of carbon dioxide can be offset, which would be the equivalent of planting tens of millions of trees or taking hundreds of thousands of cars off the road. It’s a lofty goal, but one that would protect the environment and prevent the continuation of mass pollution dramatically if achieved.
As reported by CNET, home automation producer Nest used Earth Day to make an inspiring promise: to install one million smart thermostats at little or no cost to low-income homes over the next five years. The pledge is part of Nest’s “Power Project,” an initiative aimed toward raising awareness around energy efficiency and consumption.
At DiMassimo Goldstein, every member of our team plays an important role in bringing our clients’ ideas to life and helping them inspire action.
“A Day in the Life” is a new blog series that shines a light on the many faces behind our agency and the different roles that we each play, showcasing the creativity in every corner of our office.
This week’s post provides a glimpse into the daily routine of an Assistant Brand Manager at DiMassimo Goldstein. Matt Zani brings unrivaled enthusiasm and energy to every account he works on, including TradeStation, Sallie Mae, National Jewish Health, and Starr Companies. To learn more about a day in Matt’s life, read his story below.
Having spent exactly a year at DiGo, the five images below accurately represent my every day at the leading Inspiring Action and Behavior Change Agency.
Stepping into this beautiful world isn’t bad every day. The agency aesthetically reflects its inner soul which can be seen clearly through the walls teeming with award-winning work. A glance at the décor and a cup of coffee from the DiGo kitchen is all I need to get my day going.
DiGo breathes strategy. The agency’s process and work are strategically infused, bringing insights and measurements into creative work that allow it to work harder.
Don’t even get me started about the eats. I don’t know what I like more: Salad Wednesday, Bagel Friday, Friday happy hours or Mimosa Mornings?! Not to mention, we have some of the best snack-sharing in the ad agency game. A bowl of Cocoa Puffs is never more than 10 steps away.
DiGo is a culture designed for growth. The employees inspire each other to achieve and tease the most out of the work. The leadership team has instituted structures and programs that allow for employee transparency. There is opportunity for development and learning for whoever is hungry and willing to seek it.
The people are truly what bring this place to life. At the end of the day, DiGo is filled with bright and beautiful minds infused seamlessly to create campaigns, branding and work that hit home in the universes they aim to reach.
– Matt Zani, Assistant Brand Manager. Photographs by Will Jellicorse.
John Foley, the CEO and founder of Peloton, joins Rebecca Jarvis of ABC for an interview on May 5, 2016.
Calmly and confidently, he says the following.
“I think that the Peloton brand will be bigger and more influential than Apple in 10 years.”
Now, maybe you’ve heard of Peloton, the all-in-one stationary bike and at-home cycling class platform, and maybe you haven’t. Either way, you’re probably wondering how, or why, the founder of a stationary bike start-up, then just four years old, could make such an ambitious claim.
The company has already proved Foley’s inspiring idea to be true: that people would pay to re-create the cycling class experience at home – but to have more influence than the most influential brand of the past decade? That is a different beast entirely.
I’m not here to say that his prediction will be true, but what I can say is that the Peloton riders, all 600,000 of them, likely believe it to be.
On the surface, it’s easy to think of Peloton as, well … a stationary bike company.
And from there, one might assume that they compete with other cycling and fitness-based brands SoulCycle, Flywheel and Barry’s Bootcamp.
But ask Foley and he will adamantly tell you that Peloton is not a stationary bike company and instead considers his competitors to be Tesla, Amazon and Apple.
To understand this line of thinking, you must first understand Foley’s philosophies. There’s no goal too grand, and no vision too wide. Later in that very interview, he goes on to say:
“You hear that goals should be achievable. I don’t think that goals should be achievable because you don’t want to set yourself up for failure. I think that if you hit every goal that you set out for yourself, you will never know how far you could have gone.”
In the two years since saying that, he has taken the company very far. For the second year in a row, Peloton tops the list of New York City’s fastest-growing companies, as subscribers tripled this past year alone.
Today more than ever, consumers are going to market to become more of who they aspire to be. They are constantly searching for brands that will help them change their behaviors for the better. They have a natural desire to change and improve. Peloton does just that, innovating an outdated category with a fusion of revolutionary software and masterfully designed hardware, they have inspired audiences in ways that benefit their well-being tremendously. Riding Peloton becomes a part of your weekly routine. It’s a lifestyle.
So, if Peloton isn’t a stationary bike company, then what is it?
It’s a great question, and one that Foley gets often. Peloton transcends so many categories, and because of that, it stands in a category of its own.
Yes, the company became popular for selling its own state-of-the-art bikes, but Peloton is far from a hardware company.
That bike comes equipped with a 22-inch tablet computer, one that Foley claims, in addition to being three times the size, is even better than Apple’s. If you don’t want to purchase the bike, you can still enjoy Peloton’s classes through a monthly subscription via its award-winning app, and although they recruit software engineers from the likes of Google, technology is only a part, albeit a very large one, of what they do and offer.
On that tablet, Peloton streams cycling classes led by professional instructors to its legion of subscribers live from its television production studio in New York City. It’s an aspect of their business that has people labeling them “the Netflix of fitness,” turning instructors into celebrities with hundreds of thousands of social media followers and giving its riders over 8,000 on-demand classes to choose from – uniquely positioning Peloton as a media- and content-production company that’s attracting executives from Netflix and HBO.
And with 31 showrooms nationwide, a number that’s expected to grow to 50 by the end of 2018, Peloton is also an e-commerce and retail company. When purchasing the bike, whether online through their website or through one of their showrooms, you can pay an additional $250 for the bike to be delivered in one of their Peloton-branded Mercedes Sprinter vans by Peloton employees, who then install the bikes into your home, which also makes Peloton a logistics company.
It’s not the most economical way to deliver the bikes, but it’s an important differentiator for Peloton, as it gives them 100 percent control of the consumer experience end to end. Uncompromising in their direct-to-consumer approach, the deliveries are made by brand enthusiasts who are equipped to deliver a high-touch, on-brand experience. They can answer any questions the consumer may have, give the brand a voice and build relationships. Most importantly, they know how to get them set up and riding in no time.
So, if you’re following along, that makes Peloton a part hardware, part technology, part media, part logistics, part e-commerce and part retail company, all while not truly being any one of those.
“At Amazon, they make the Kindle Fire, and they make it for $250 and they sell it for $150. That disrupted all the Dells and HPs and IBMs and Acers who also tried to make tablets, but they were hardware business models. When you make a tablet, and you make it for $250 but sell it for $500 because your business is making money on hardware, you can’t compete with Amazon, who makes their money on the digital content after the fact.”
For Peloton, it’s not about the hardware, as the company primarily has a subscription digital content business model.
That’s not to say the bike isn’t the best bike in the world, because it is, but what truly differentiates Peloton from anything else is the content, community motivation and software it provides its consumers.
The bikes are suited with an electronic dial that displays your exact resistance from 0 to 100. It shows your cadence (pedaling speed), calories burned, distance ridden and total power output (a combination of your speed and resistance). The tablet constantly compares your current ride to your personal record, minute by minute, pushing you each time to reach new milestones. The tablet also shows you where you rank among others who have taken the same exact class, giving you incentives to climb the leaderboard.
If you take a live class, the instructor will often shout out your achievements, like breaking a personal record or riding your 100th ride. This make the Peloton experience immersive, entertaining and interactive. You become a true virtual member of the class, giving you the magic of being in the room all from the comfort of your home. You can even video chat with other riders and friends while the class is in session.
With over 8,000 classes to choose from, there’s something for everyone. Rides vary in length, difficulty, music genre and by instructor. Some combine riding with an upper-body workout, and Peloton has even added yoga, ab workouts and stretching classes to their library as well. Skip a trip to the gym and enjoy the rush of your favorite classes at the tap of a screen, on your terms.
Everything at Peloton has been designed with intention. That intention is a bit of a tongue twister.
Peloton wants to make you want to want to work out more.
And they’ve succeeded. Through a synthesis of social marketing, word-of-mouth advertising, persuasion design, behavioral science and design thinking, Peloton has mastered the art of behavior change marketing. Proving that emotion leads to motion, they’ve inspired their audience, increasing their commitment to improving their health. Sprinkling in behavior change ingredients into every brand touchpoint, they have created a cult-like following that has become the envy of brands everywhere.
Ninety-six percent of riders would buy the bike again if they could go back in time. On average, riders ride eight times a month, or twice per week.
But more impressive than that is their Net Promoter Score, an index that measures the willingness of customers to recommend a company’s products or services to others. Peloton has an NPS of 91, which, per Foley, is the second-best NPS in the world and far ahead of Amazon, Apple and Netflix. Foley has stated that his goal is to make Peloton the first company ever with an NPS of 100.
This brand loyalty makes word of mouth a powerful acquisition tool, as over a quarter of Peloton’s customers first learned about Peloton through a friend or a family member.
So what’s next for Peloton?
Earlier this year, they announced their entrance into the treadmill market with the Peloton Tread, a $3,995 Internet-connected treadmill with a 32-inch HD screen, so that if you step off the treadmill to participate in any of the guided core exercises, you still have a fully immersive view. The Peloton Tread will be available this fall.
The treadmill market is five times bigger than the stationary bike market.
Peloton is already working on a third product, and it won’t be their last.
“We want to build the biggest consumer-products brand in the world. We’re going to make Apple look small-time,” Foley tells Bloomberg.
As for taking the company public, Foley has stated that he eventually will, but not for financial reasons. Instead, he looks at an IPO as a marketing event – a way to generate awareness and get the word out about Peloton to the masses, helping as many people as possible improve their health and fitness.
That’s why Peloton is our inspiring action brand of the month!
Starting out somewhere new is never easy. You’re tasked with figuring out a boatload of new information for yourself: what those acronyms stand for, which conference room you’re supposed to be in, or what your coworker’s name actually is because you’re pretty sure it’s Pat, but maybe you misheard him and it’s Matt, but it’s too late to ask now so you just decide to play it safe and avoid calling him anything at all.
It can be tough to navigate these new waters – unless that place is DiMassimo Goldstein.
I’ve had the privilege of being DiGo’s Client Fulfillment intern since December, and I can honestly say this transition has been seamless. From day one, I’ve been met with nothing but warm smiles, welcoming coworkers, and great opportunities to get to know them better. Perhaps the greatest opportunity of them all has been the Buddy Lunch.
I realize that this is not a widespread term, as I’m lucky enough to be at the company that’s at the forefront of the Buddy Lunch Revolution. To better clarify this DiGo terminology for our readers, I’ve created a definition:
Buddy Lunch (noun): a midday meal paid for by your company during which you get to better know one or several of your coworkers, and thus, make new friends.
Example: “Hey, John. You seem like a really cool guy. Let’s go to Panera and chat it up!”
This might not sound typical, but keep in mind that nothing about DiMassimo Goldstein is typical. This is the same company where within my first two weeks, I experienced things like team karaoke, meditation, cats and dogs in the office (and no, that’s not a metaphor). So, a free lunch during work as a way to make new friends? That just seemed like classic DiGo – and I was all over it.
Unfortunately, my execution was not as effortless as my excitement. After several drafted emails later, I still couldn’t think of the right words. How exactly is the best way to say “Hey, you probably don’t know me, but that’s why I’m emailing you. Should we get some lunch so that we can learn each other’s names?” Didn’t exactly work. Luckily enough, some kind soul in the office saved me from my own awkwardness and invited me out to lunch. If you know anything about DiGo’s employees, you’ll know that this display of kindness is par for the course. To no surprise, it was a great time: flowing conversation and plenty of laughs over a pizza that was definitely fit for more than two people. Was I sure this was the dreaded “work” that all my employed friends were warning me about?
After that, I felt comfortable. I had a friend in the office, and I had the momentum to make some more. With every Buddy Lunch I went on, I felt like I became more a part of DiGo because I got to know the people who made it so special. Each person imparted their wisdom on me, wanting to give me the best possible advice on how to succeed at this company. Though I valued their input greatly, it was their willingness and enthusiasm to help others that most resonated with me.
I quickly realized that everybody at DiGo wanted the best for their peers, and the feeling was contagious. Whether it was pizza with someone from Studio, dumplings with the Account team, or salad with someone from the Marketing team, I felt such a strong sense of support from the people I was surrounded by, and it made me want to do the same for others. To me, that defines success at a company.
If that isn’t #InspiringAction, I don’t know what is. Power to the Buddy Lunch!
“Five years from now, people will say, ‘Remember when we had to wander malls and find our own things? That’s crazy!’”
That’s the behavior change that Eric Colson, the Chief Algorithms Officer at Stitch Fix, is betting on.
It may sound like a drastic change, but in today’s digital world, drastic change is the new normal. Small, smart, and disruptive brands with fewer resources and nothing but a powerful and inspiring idea are, almost overnight, transforming our behaviors in ways like never before. We’ve seen it with the likes of Airbnb and Dollar Shave Club. We’ve seen it with Casper and Betterment.
And now we’re seeing it with Stitch Fix, the online personalized styling service that is reinventing the fashion shopping experience.
Let’s go back to Colson’s prediction. The timeline he provided was five years.
Five years ago, Stitch Fix was hardly more than just an idea in founder Katrina Lake’s head – combine innovative technology with the personal touch of seasoned style experts to change the way people find clothes.
During those five years, she received funding but not much. With less than $50 million raised in the company’s history, she was able to grow the company at an unprecedented rate, raking in nearly a billion dollars in revenue at the end of 2017 – creating what has been dubbed the most cash-efficient e-commerce company of the decade.
Five years was all it took for Katrina to turn that inspiring idea into a billion-dollar company.
OK, OK … maybe it was six years (Stitch Fix was founded in February of 2011), but you get the point!
So, how did she do it? What is Stitch Fix’s secret sauce?
Like so many other disruptors, they thought differently. They did differently.
In an era where technology is all the rage, brands everywhere are competing in a race toward lower costs and convenience in nearly every industry. Stitch Fix took a different route.
Since its inception, Stitch Fix has always been focused on the consumer, understanding that the technology itself is less important than the customer experience of the consumer through the technology. That’s not to say Stitch Fix isn’t a tech-led company, because it most certainly is, but that technology is harnessed and focused toward a different goal: personalization.
Behavior-Changing Data Science
Here’s how it works: Consumers fill out a survey, or a “style profile,” indicating their style preferences. Questions range from size, price point, and preferred colors to how often a consumer dresses for certain occasions. On average, each client provides 85 meaningful data points. Clients are even encouraged to link their Pinterest boards to their profiles. Clients then schedule a date to receive their “fix,” which can either be a monthly subscription or a la carte, an important distinction that makes Stitch Fix different from competitors.
That information is then run through a list of algorithms, which you can tour on Stitch Fix’s website here. The data then matches the customer with a human stylist, who, with the information provided, creates his or her “fix” of five items and then sends the box directly to the customer.
Once received, the customer has three days to either keep the items or return them. If the customer keeps an item, an additional styling fee of $20 is given to the stylist. If the customer decides to keep all five items, he or she receives 25 percent off the total cost of the items.
This strategic use of data is what makes Stitch Fix so unique. Merging fashion with technology, Katrina can leverage that data to make the business much more efficient. She can forecast purchasing behavior and merchandize optimization. On the consumer side, the data is used to create complex algorithms that help match customers with styles and stylists they love, and Stitch Fix has even begun experimenting with designing new styles specifically for consumers.
Stitch Fix employs over 80 data scientists with doctorates from a variety of disciplines, including astrophysics and computational neuroscience. That team is led by, you guessed it, Eric Colson. If there’s anyone who knows how to change behaviors, it’s Colson. Prior to joining Stitch Fix, Colson was the VP of data science and engineering at Netflix, where he fueled the company’s recommendation and targeting engine, helping us discover our new favorite shows and forever altering the way entertainment companies operate.
In a digital landscape that has already forced traditional brick-and-mortar retailers out of business, Stitch Fix sits in an enviable position, with an unmatched wealth of data on the changing behaviors of consumers. Stitch Fix knows what consumers like and what they don’t like, and each sale or return makes the company smarter. It’s a business model that thrives off engagement. The more feedback a consumer provides, the better suited the “fix” will be.
Stitch Fix is capturing the future. It is changing the way people shop, offering a more personalized, curated, and delightful experience and making the try-on room a thing of the past.
What you wear is an extension of your own personal brand, and consumers more than ever are going to market for guidance and help in shaping that brand. Stitch Fix delivers the type of clothing you didn’t even know you needed. It stays up on the trends for you. It takes the hours of browsing or reading up on fashion tips out of the equation and delivers it all to you in a personalized way that no other e-commerce outfit can compete with.
But it’s not all algorithms and numbers. It’s the Stitch Fix stylists that build trust and loyalty with the consumers. They take time to get to know their consumers on a personal level, leaving handwritten notes and creating the type of emotional connection that makes an otherwise digital experience feel human.
In a letter to investors, Lake said, “I founded Stitch Fix to take on a very human problem: How do I find clothes that I love? Spending a day at the mall, or devoting hours of time sifting through millions of products online is time-consuming and overwhelming and neither effective nor enjoyable. I knew there had to be another way.”
Today, Stitch Fix is another way, but in five years from now, it may be the only way.
Tony Hsieh, the CEO of Zappos, once said that “a great brand is a story that never stops unfolding.” And while Stitch Fix’s story is still very much being written, the first few chapters alone have already built a story worth telling. We can’t wait to see where it goes next.
That’s why Stitch Fix is our Inspiring Action Brand of the Month!
The year 2017 was the year of behavior change marketing. Here is our list of marketers who changed our behaviors for good, for bad, and maybe forever. If there are any brands you think deserve to be added to the list, tweet us here and let us know!