Brand Loyalty – Kristen Van Nest

As published on branchannel on July 5, 2013.

Founded in 2004, Thrillist started as a guide to New York City for recent male graduates. Today, Thrillist Media Group generates over $40 million in revenue , 45 percent of which comes from its e-commerce site, JackThreads, which it acquired in 2010 to complement its content offerings on its Thrillist and Crosby Press sites.

Unlike most media companies, Thrillist has over half a million credit card numbers on hand. The seamless shopping experience, where men can discover and purchase product on the same site, means that the user is more engaged and more likely to have intent to buy. “They’ve got their wallet in hand. They’re looking for recommendations and what to do and what to buy,” Eric Ashman, Thrillist Media Group’s strategic advisor told brandchannel. “Reading GQ, your feet are up on the coffee table, you’re leaning back. And when you’re [on Thrillist], you’re leaning forward and looking for ideas and looking for recommendations and things to share with your friends.”

Refinery29, like Thrillist, is also at the forefront of seamlessly joining content and commerce. With 5 million visitors per month, Refinery29 focuses on building brand loyalty for the brands advertised on its site, but without a major complementary online store.

Whether it’s driving sales or driving loyalty, both sites utilize and prioritize content over commerce. “At the Thrillist Media Group, we’re talking about dropping people into a full e-commerce experience, where we run everything from buyers on one end making product and curating product, all the way through to a warehouse where we do fulfillment,” Ashman told brandchannel.

Both sites support the same strategy: content drives users to the sites and engages them to buy, whether its directly or indirectly. Understanding this relationship, the sites focus on content-based metrics such as audience engagement, audience growth, engagement growth, and time on site to measure their success as opposed to solely focusing on direct purchase metrics.

With regular display advertising, a 1 percent click rate is impressive, but on Thrillist, most of the site’s content has a 25 to 30 percent click rate as users seek to learn more or purchase a product. The products highlighted on Thrillist come about through a unique and tested approach that sees the site’s editors choosing which products they want to write about. The process allows for a more natural feel to the curacted content. Through this content focus, brands highlighted on the site receive benefits across the purchase funnel, impacting awareness through loyalty.

Refinery29’s CEO Philippe von Borries said at a recent NewsCred event that, “Famous brands are 50 percent merchandising and 50 percent inspiration. Borries also spoke of the tricky balance faced by e-commerce sites in which online shops seek to minimize time on the site (pre-purchase) while fashion content sites try to maximize time.

Unlike Thrillist, Refinery29 focuses more on brand loyalty without the emphasis on direct purchase. For example, an article on Alice + Olivia’s ‘whimsical’ office has little to do with showcasing the clothing company’s products and yet, develops a relationship with the brand. The site subtly advertises the boutique Nasty Gal in the article, “20 Crucial Fashion Lessons We Learned From Arrested Development”: “All of Rita’s outfits are just amazing, and we’re only about 40 percent joking here. The heart-shaped glasses, smiley pin, Clueless-inspired beret—these are all things that have populated Nasty Gal and more of our favorite downtown-cool shops in the last few seasons.”

Here, unlike what you might find on Thrillist, there is no link to Nasty Gal’s site, only a reference. The upshot: readers may feel they’re getting the insider scoop. The only section of Refinery29 devoted to direct purchases is discount giftcards and small boutiques highlighted as “Vintage Across America,” which clearly differs from Thrillist’s full e-commerce experience.

While both sites have different end goals to monetize their content and communities—Thrillist Media is looking to launch shops on Thrillist and Crosby Press that leverage Jack Thread’s e-commerce platform, while Refinery29 doesn’t alude to any retail expansion—both remain to be trendsetters in a space that aims to marry the disjointed worlds of content and commerce.

For original, click here.

As published on brandchannel on April 17, 2013.

Last year, Starbucks declared its support of same-sex marriage, which resulted in a boycott by the National Organization for Marriage. The coffee chain hasn’t backed down one bit, however, as CEO Howard Schultz continues to blur the line between business and the personal lives of his millions of customers.

At a recent annual shareholders meeting, Tom Strobhar, a shareholder and founder of the Corporate Morality Action Center, an anti-abortion, anti-gay marriage organization, suggested the boycott had a negative impact on first quarter sales and earnings. The ever-outspoken CEO swiftly responded, “Not every decision is an economic decision… The lens in which we are making that decision is through the lens of our people. We employ over 200,000 people in this company, and we want to embrace diversity.”

Schultz then told Strobhar he was more than welcome to sell his stocks and take his money elsewhere. While the remarks seem brazen, Starbuck’s outspoken stance on hot-button political issues and support of equal rights for its employees has been a part of the brand’s long-term strategy to increase internal brand engagement and decrease turnover. What’s more, taking a stance on causes that affect its workforce has had a positive impact on its bottom line.

Historically, Starbucks has been a leader in prioritizing employee retention. It was the first American company to offer comprehensive health insurance and equity in the form of stock options to every single employee. Its pro-social, pro-diversity human resources policy has put it on Fortune‘s annual “100 Best Companies to Work For” list ever since it launched in 1999.

The strategy also has decreased costs and differentiated the company from its competitors in an industry where turnover rates are a major issue. According to the National Restaurant Association, there is a 75 percent turnover rate within the service industry, with the average cost of replacing an employee ringing in at $3,000.

John Richards, President of Starbucks North America from 1997 to 2001, aided in the company’s growth from 500 to 3,000 retail locations and worked closely with Schultz in the development of the company’s early-stage core strategy. Richards told brandchannel that the company consciously developed policies to not “churn and burn” employees through a strong benefits package and creating a place where employees were proud to work.

This included, he told us, a “comprehensive compensation program” for its “partners,” the company’s term for employees. The program includes: “competitive base pay, comprehensive health care for eligible full and part-time partners, with an average of 20 hours per week, equity in the company in the form of Bean Stock, a 401(k) savings plan with employer match, tuition reimbursement, short-term disability, paid vacation time, and product discounts,” according to ABC News.

Since its implementation in 1988, the company’s employee benefits package has been enhanced by ‘social benefits’ — a big retention tool for a workforce where the typical employee is around college-age.

“The company pays a lot of attention to causes,” Richards told us. “When you are in the middle of it, different things come and go, it seems like there is always a new cause, but for the typical employee who is college age or somewhere in that area, [Starbucks] seems like a place that from a spiritual and commitment perspective is kind of a better place to be. If they are going to work for a place, it is more consistent with their value system than some other corporate retail company that doesn’t pay attention to stuff like that.”

The most recent decision to support gay rights is an example of aligning with its employees’ core values. Nonetheless, the company still faces criticism for not supporting all causes, such as the negative publicity it received from a false email circulated online claiming that Starbucks would not provide troops with their coffee because the company does not support the Iraq War.

The company’s focus on going the extra mile to care about what matters to employees stems from Schultz’s experiences as a youth growing up in public housing in Brooklyn, NY.

When he was 7-years-old, Schultz’s father, a truck driver, fell on ice at work and was promptly fired, with no benefits or workman’s compensation. In an interview with CNN’s Mallika Kapur, Schultz said, “I think what I was trying to do early on was build the kind of company that my father never got a chance to work for.”

That lesson is part of the company’s DNA today, Richards told us. “Starbucks, in part, has proven that taking better care of employees can eventually help them, particularly in a very competitive business,” he said.

While the focus on employee retention is both a part of Starbucks’ core values and business plan, and the good vibes have extended well beyond its famed baristas to the legions of loyal Starbucks customers that believe the brand to be more about lifestyle than just coffee.

Despite stiffer than ever competition from the likes of McDonald’s and Dunkin’ Donuts, Starbucks remains a leader in brand loyalty, internal and external. The company’s mantra is best described in Schultz’s book Onward, where he says, “Starbucks never set out to be cool. We set out to be relevant!” Clearly, if it’s relevant to employees, it’s relevant to Starbucks’ senior leadership — and relevant to the brand and its stakeholders.

To read the original, click here.

Tag Archives: Brand Loyalty

Content Meets Commerce: How Thrillist and Refinery29 Turn Brand Loyalty into Sales

Starbucks Former President: Why Same-Sex Marriage Support Matters