Are You Agile and Flexible in Delivering for Your Customers (and Employees)?
There’s a rule of thumb at LUSH cosmetics, and that’s to fearlessly retire one-third of the product line every year. Change is the magic behind the suds at LUSH. Rather than waiting for customers to tire of products, LUSH imposes a rigorous process to get rid of the old to make way for the new. It is what keeps LUSH fresh, and it is what keeps pulling customers back. LUSH grows because customers fuel its growth. Remember when you were a kid and couldn’t walk by a candy store without going in, because of the lure and the scent of the candy? That’s how LUSH lures people into their stores. It’s hard to walk by without going in to see what’s new, and it’s hard to walk out of a LUSH store without a bag full of its fresh cosmetics.
Offer the Freshest Products
“If anything, as businesses mature, they get more dull,” says founder Mark Constantine. A major product development guru in his previous life at The Body Shop, Constantine had developed products that, by the 1980s, made up about 80 percent of that chain’s sales. As The Body Shop matured, Constantine felt the fizz leave the business, and so he departed with his concept of the “bath bomb” and eventually founded LUSH. Irreverently calling their bath bomb “A Giant Alka-Seltzer for Your Tub,” LUSH has stayed true to its core of creating natural products with surprising ingredients and off-the-wall names. To stay constantly fresh, LUSH brings together an annual meeting of senior managers for what it calls the “mafia meeting” because they decide what products to kill during this meeting. Their goal is to offer “the freshest products in the history of cosmetics.” The company is making it happen by NOT sitting still. “Innovate like mad, then start over again” is the mantra LUSH lives.
Word of Mouth Grows the Beloved Companies
Every day, LUSH sells nearly 60,000 bath bombs, the concoction that created the LUSH fan base. LUSH spends little on advertising (customers spread the word) and packaging (they use less material to stay green). Because of this combination of customers’ word of mouth growing the business and LUSH’s enviable low margins resulting from minimal advertising and packaging, a new LUSH store can break even in as little as three months. In fiscal year 2007, 462 LUSH stores in 46 countries had a combined revenue of $292 million, up 28 percent over fiscal 2006. And has kept growing from there—reporting over $338.4 million in recent years.
What do you do to stay fresh for your customers? As customers’ needs change, do you commit to understanding what they need? What should you consider retiring? A service, a practice, a product?
Are you fearless in dismissing the old and bringing in the new? How do you keep customers enticed and interested?
Want to learn about other tools to help you earn customers who drive the success and growth of your business? Pick up a copy of: “I Love You More Than My Dog: Five Decisions That Drive Extreme Customer Loyalty in Good Times and Bad.”