Social marketing and yogurt moved a start up to $1 billion in sales
Chobani is a company which has grown from startup to a staggering US$1 billion in annual revenue in less than 10 years based not on the sales of a new software or app, but on yogurt. And what’s most surprising is that the company has achieved this success with no private equity investment, and with a marketing strategy that was based solely on social media marketing until 2011.
So here's some tech marketing tips from a fast growing startup that's - surprise - yoghurt, not software.
HOW DID THEY DO IT?
In 2005 Greek-style yoghurt was uncommon in the US, with consumers more familiar with thinner, sweeter varieties. With a high protein content and low in fat, you might think the market would be restricted to health-conscious buyers, But Chobani’s CEO and founder, Hamdi Ulukaya was adamant that his product was for everyone, and not just a speciality item.
This attitude led to one of their early successes, with distributors reluctantly agreeing to place Chobani yogurt in the standard dairy aisle, rather than in specialty cases giving it a much wider audience. And from the beginning the yogurt was priced at an accessible US$1 per cup, a price point intended to suggest quality and good taste, without pricing itself into a small a niche market.
This distribution is replicated in Australia where Chobani sits amongst more familiar brands. Australian consumers are regularly offered ‘buy 4’ discounts, which encourages multi-purchases as well as trial of new flavours and packaging options with promotional items like ice cream moulds and online recipe ideas helping to demonstrate other uses for the product.
With a focus on maintaining a quality product and through the support of a passionate fan base - the Chobaniacs - Chobani spearheaded a new market, and by 2010 the US Greek yogurt market was experiencing annual growth of 203%, compared to just 3% for traditional forms of yogurt.
Since then they have consolidated their positioning as real, authentic and simple with sponsorships of the Olympics, and some recent TV advertising building on their down-home brand, built on a platform of a great idea and a lot of hard work.
And some smart real-time marketing during the 2014 Oscars saw their Twitter feed filled with reminders that special effects are only good in the movies.
So as a SaaS or tech business, what lessons can you take from Chobani?
1: Do what you know.
Ulukaya had already established a feta cheese factory and was making Turkish-style yogurt on a small scale for himself when he came across an old Kraft factory and realised there was an opportunity to introduce this product into the US. Taking inspiration from a personal insight or problem you've noticed is the fastest way to be sure you're building a solution for a real problem - which is half way to solving that tricky product-market fit.
2: Make the product great.
One of the first things Ulukaya did was to hire a master yogurt maker from Turkey, knowing that the secret to success would be having a great product. Pay attention to the details; start with a great user experience, ensure customer service a number one priority and focus on making your products simply beautiful to use (Xero anyone?)
3: Use your marketing to create desire.
Think about what makes what you’re offering special. While being aware of possible substitutions is important, don’t market your product as a substitute - use your marketing to make people want it for itself. But don't forget to encourage reviews, testimonials and envangelists (who will be trusted more than anything you say about yourself anyway).
4: Use social media to bring your values to life.
Taking advantage of the independence offered as founder, Ulukaya has created a company with strong brand values which are reflected both in their business activities (donation of 10% annual profit to charity), as well as wider social activity including involvement in a government program to improve school meals. What actions can you take to bring your values into the real world?
5: Take help when it’s offered.
While Ulukaya turned down private equity investments and buyout offers, he did take advantage of small business loans and government grants to assist with funding the growth of the business, giving him the financial power not only to invest in facilities and machinery, but provide for an amount of working capital.
6: Take advantage of social media.
With a mantra of offering each customer the best possible experience every time, Chobani actively engages with its fan base through social media. Chobani was able to deliver high level customers service, build a brand and personality and reach a mass audience by taking advantage of social channels as their only form of marketing.
People love to feel like they're part of something special; pay early adopters special attention, offer signup waiting lists to creat buzz, engage with fans with in-joke or back-of house content.
And finally, listen, listen listen. Because it's not only yoghurt that can grow a great culture through social media.
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