← Making It with Jon Davids
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John Davids
There's this guy named Danny and he sells jackets. Last year he made a billion dollars doing it. He runs a company called Canada Goose. And you've probably seen these coats if you've gone anywhere in the cold or if you've watched movies or looked through tabloids because a lot of celebrities wear them, and that's no accident. This is an amazing story of brand success and I'm going to tell you all about it, exactly how it happened. That's coming up in just a sec. Welcome to the podcast. My name's John Davids. You can call me JD if you don't know me. I'm the CEO of Influic, where we help companies build brands that drive a lot of revenue, and I mean a lot of revenue. Well over 500 million for our clients in the last decade. And I like to share stories of my favorite businesses and the people behind them. So today, let's talk Canada Goose. You're listening to Making it with John Davidson. So rewind. In 1957, there's this little company in Toronto, Canada called Metro Sportswear, founded by Sam Tick. And they're selling heavy duty coats to people who are living in the cold. They specialize in woolen vests, raincoats and snowmobile suits. And they're selling to people who are living in the cold. Think about oil riggers, Arctic explorers and just recreational buyers. People who like to ski, maybe they like live in cold places and do winter activities. And these people don't really care how they look. It's not about style, it's about trying not to freeze, just staying warm in cold climates. So the business grows and grows kind of slowly and over a few decades it gets to about $2 million in revenue. So in 1982, Sam's son in law, David Reese, becomes the CEO. And then in 2001, his son Danny Rees becomes CEO. So we've gone through the family three gener of men, and the company sales again are about $2 million a year by 2001. So it's gotten, I guess, to a decent size, but frankly, over decades and decades, it's kind of plateaued. So Danny comes in and he's got plans to shake up this family business. And he doesn't wait very long at all. So he moves pretty quick. The first thing he does is he rebrands the company. We're changing it from Metro Sportswear to Canada Goose. It's got a better ring to it, I think. And then Danny realizes something. He starts to look at who are the customers, you know, Obviously we said there are people wearing these coats and they're oil riggers, they're Arctic explorers, they're people living in the cold. But it's actually more glamorous than that. You see, there's this subset of customers, movie crews and people from Hollywood that are shooting in frigid locations. And they're wearing the coats too, a lot of them. And they have been for quite a while, since the 90s, so over a decade. And they won't wear anything else. Cause they could wear North Face, they could wear Columbia, but Canada Goose seems to be the go to. So Danny leans in. He wants everyone to know that Hollywood loves this jacket. He starts seeding them to celebrities and making sure that they're seen wearing them on screen and off screen. All of a sudden in the early 2000s, you start to see this happen. Jake Gyllenhaal, Kate Upton, Emma Stone, Rihanna, they're all seen wearing the coat. Probably one of the most famous people wearing the coat is Drake. Of course, Drake is from Toront, so obviously Canada Pride. Drake loves wearing this coat. In 2004, Diparka is featured on the big screen in the Day After Tomorrow, a feature film. And this thing starts blowing up. But we are just getting started on the Canada Goose story. So Danny's playing hard to get. He's doing everything he can to keep this coat sizzling hot. So first off, there is no mass retail Canada Goose in the early 2000s. If you were seeing this coat on the tabloids and you were seeing it on the big screen, you wanted to go out and buy one. It wasn't that easy to do. It was only available in high end stores. It's still only available in high end stores. Think Harrods, Saks, Aspen ski shops. Places where things are a little more expensive because you want to be around other products that make your product seem like it's kind of hard to get. There's also no logo overload. You'll notice the code is actually very simple. It's just that one iconic patch on the sleeve. It's a very subtle flex signaling status without really trying too hard. There's also no discounts. These coats don't go on sale. You'll pay sticker price and you will like it. Within a few years, sales surged to $14 million. So it took decades and decades just to get to $2 million. And within about 10, 12 years, sales were at $14 million. This brand is going global fast. It's selling in Scandinavia, Japan, Sweden, the UK, all over the United States and Canada. In 2016, they opened their flagship stores in Toronto and New York. People are lining up outside for the Privilege to drop $1500 on a parka. Then in 2020, sales skyrocket. They hit a billion dollars. Hey, guys. It only took 63 years. Canada Goose went big by actually thinking really, really small. A specific product for a specific customer at a specific price point, resisting all temptation to give into the hype, and instead growing at their own pace, slowly and intentionally building a world class team to execute relentlessly. I know a lot of the people on this team. I've known them over the last couple decades. These people are the best at what they do. Today, Canada Goose has expanded into clothes, shoes, eyewear and a lot more with room to grow, frankly. But it all started with that really warm jacket and that's still the icon today. So I shared this story on social media. Instagram, LinkedIn, TikTok, Facebook, Threads. You guys know I'm growing on threads. Make sure you're following me on there. And millions and millions of you saw it. A lot of people love this brand. They feel a lot of heritage and a lot of pride in the brand, especially people from Canada. You know, it's really iconic. Not only that it's a Canadian brand that's iconic across the world, but it actually has the word Canada in it. And I want to talk about a few of the principles that go into the brand because there's a whole lot here to dissect. When you think about building a product, a very simple product, we're talking about a coat. After all, you can buy a coat in lots and lots of places. But let's look specifically at what was done here to make this brand so desirable and so big. So the first thing, and probably the one that's most obvious, is what I would call the principle of association, which is so important in brand building. As soon as Danny noticed that there were all these celebrities, well, first, before even celebrity, it was just movie crews. So people that were wearing the coat for functional reasons. Directors, producers, cinematographers, and then of course people who were on the camera, also the actors themselves. But it was really for the function of it. And then he went ahead and started to seed it with them. Seeding is the practice of actually sending your product for free so that an influencer or a celebrity or a thought leader will wear it or showcase it in some way and then other people will see it. So you notice that this group of people like your product, you then seed it with them so they'll wear it more and be seen wearing it. And now all of a sudden you have the power of association. Here's one thing you like and here's something else that we hope you'll like. The celebrity and the jacket. And this principle exists all over marketing. I use it myself. I mean the fact is, the reason I make so much content and put out so much valuable stuff is because hopefully you'll see all the stuff, you'll get value from me. Maybe you'll be a fan of mine on social media or on the podcast or on YouTube or the book or wherever. And therefore you will have that same feeling towards my brand and fluocity. We see this all the time in business and brand building. So the power of association was really, really important early on. Then we have the power of distribution. Distribution should not go overlooked. It's not just about what your product is, but where it is sold, how it is sold, what's the nature around all that. So in the case of Canada Goose, we have high end stores, then we have company owned stores. These days they have these immersive stores. But you'll notice you'll never find Canada Goose in Walmart or Target or at a place next to things on the shelf that aren't quite as high end. Now why couldn't you sell it at Walmart at a higher price point? Or why couldn't you sell it at at Costco? Maybe Costco has it off the gray market, but the point is you want to make sure that where your product is sold is a place where people think about you in a higher end light. It would be like going to an Italian restaurant and buying a wine and you would expect to buy that wine at a higher price point than you would if you bought that off the shelf at retail. What if it's the exact same bottle of wine? Well, we all know we're conditioned that the bottle of wine just costs more in a restaurant, especially when you're getting it with a nice bowl of and a high end steak, you know you're going to pay a little more for it purely because of the ambiance of the distribution channel that you're in business owners and marketers. Honest question for you, is the money you spend on social media worth it? Can you point to sales you've made from Instagram or TikTok or LinkedIn? If the answer is no, I've got something for you. It's a playbook I wrote called how to Build a Social Media Selling Machine. It's a nine step formula designed to turn your social media into A true sales channel, one that produces revenue at scale. Get it now@johndavids.com playbook. If you're spending more than $100,000 a year on marketing, you can't afford to miss this. Grab it now@johndavids.com playbook. The other thing is price point. And this is probably the one that entrepreneurs and business builders get wrong the most. Because they want to price it based on what it cost them to make and then some. So it's like cost plus profit, that's what I'll charge for it. Or maybe they think to themselves, I'm going to be a value brand, so I'm going to come in lower. People have perception based on price and you shouldn't fight it. You should actually use it to your advantage. If I'm trying to sell a Rolex and I say, hey, here's a Rolex, you can buy it for $85, the first thing you're going to say is not, oh, awesome, I'll take that Rolex. The first thing you're going to say is, what's wrong with that Rolex? So if I'm trying to sell something high end, whether it's a jacket or a watch or a car or an educational program or whatever it is, and I'm trying to say, hey, it's very, very good value, it's a great product, but I'm going to sell it to at a discount price that just doesn't compute in the mind of the consumer. If you want to sell a high end coat, in this case, you don't sell it for 200 bucks, 300 bucks, 500 bucks, you sell it for $1000, you sell it for $1500 or even more. Because the perception of the value of the product is based on the price. There are other elements of this brand too. There's the heritage of it, the fact that it's been around for so many years. It's a family owned brand. The scarcity, the exclusivity, the perceived popularity. If you look at the stores, the physical stores, if anytime it's a weekend or if there's any kind of event going on, there's always a lineup outside these stores, the Canada stores, because they keep it artificially small inside. So the number of people that can actually go in at any one time, they keep a limit on that and they want to see a lineup outside. Why do all the most popular nightclubs have lines outside? Is it because they're full inside? No, it's because the lineup outside creates the desire for more people to come. So what do they do? They create a longer line. Why are the best restaurants hard to get reservations at? Because they make sure that they only leave so many reservations available and they want to leave room for walk in traffic. But they also want to let you know it's not that easy to get a reservation here. I actually cover a lot of these principles in my book Marketing Superpowers. And if you go to section seven of the book, this is where I talk about the product ladder and how to add more value to your product and your brand. I talk about the four Fs, flavors, frills, fillers and functions. You can grab the book to dig into all the four Fs, but I'll just talk about number two here, which is frills. So some of the frills I talk about are things like convenience. So how much convenience can you add to your product? People will pay more for convenience. Great example here is airlines. So if you want to charge more for a ticket, one thing you can do is you can say, hey, you can bypass the line. You can go to the first class counter rather than the regular counter. Your bags will be check in quicker. So people are willing to pay more for convenience. That's a frill. Access is another one. We're gonna give you access to this better thing that most people don't have access to. Status will put you in the VIP program, put you on the higher floor, put you on the better version of whatever it is. You give people a sense of status, comfort, exclusivity, priority, peace of mind. People will pay more for all this stuff. And there's also the concept of scarcity. And I talk about this actually in my workshop marketing that sells. You can go to my website, JohnDavids.com and grab that workshop marketing that sells. And the whole idea of scarcity really is that people want something that they can't really have. The whole idea of making this coat and selling it for $1,500 and they probably have different styles and different versions and different seasons. They have different styles that are available. And all this stuff is what I call manufactured scarcity, which is different from natural scarcity. So in the case of manufactured scarcity, what you're doing is you're saying we're going to make that. There's only so much of this stuff available. In the case of natural scarcity, you're also creating some scarcity, but it's happening naturally. So here are some examples. Manufactured scarcity would be, we're only going to make 50 of these jackets, which is something that Canada Goose does. You see this all the time in high end stores like lvmh, we're only going to have three of these bags available in the store. We only have one wallet like this. I think LVMH does like 8 billion or 7 billion dollars of wallet sales. And if you go into a Louis Vuitton store, they only have like two or three wallets available at any given time. I know, I've tried. And they never seem to have mine in stock. Why is that? Because they make sure that they create scarcity. Could they create more of that product? Of course they could, but they want to create scarcity. Natural scarcity is the same concept, but there you're dealing with things like time bound scarcity. So we only have this available this weekend. This offer is valid until a certain date. So you're still having scarcity, but you actually have it in real life. You're not having to create anything there. Whereas in manufactured scarcity, you have to think about how you can make scarcity around your product that wouldn't exist otherwise. The next big learning that I get from the Canada Goose story is the idea of just watching and listening to your customer. There is no better way to grow your business than to find your best customer or at least a segment of customers that you want to sell to more, or a segment of influential customers and seeing what they're doing, why they're doing it, how they're doing it, and then just asking them, right. If you are doing anything, you want to grow your marketing, you want to grow your sales, you want to just do more of what works, Just ask your customers why they're doing what they do. Hey, why do you guys wear this coat when you're shooting movies? Oh, because it's super warm. Okay, cool. So if we gave you more coats so that your whole crew could have the best coats and stay warm on set, would that be something that you'd want? Of course. Okay, great. If we gave you coats that you could wear on camera to illustrate that you're in a really cold environment, help you tell that story better, would that be okay? Sure. And all of a sudden they have this relationship now with Hollywood that exploded the whole business. Because think about the pop culture value of just understanding your most influential customers better. Look at how Canada goose grew between 2001 and, let's say, 2010. You could even go up to 2020 when they became a billion dollar revenue company. But just look at what they did to grow. It's not like they launched a whole bunch of new products. They just understood the customer better and built better front ends. A front end is a way that people get to your product. So if you think about the back end, the front end and the back end here. So the back end, let's say, is the product itself. The back end is, I'm trying to sell more coats, end of story. Nothing else. Doesn't get any more fancy than that. I have these coats, I want to sell more of them. The front end is how you get people in. Look at all the ways Canada Goose did that. Number one, they figured out we have this great front door with Hollywood. Let's make sure celebrities are wearing this coat. Cool. Then let's make sure that it's getting onto the big screen. Cause the celebrities already wear it. We have those relationships. Now we can get onto the big screen. And they got into a movie. Awesome. Then they figured, hey, let's make sure we're available in high end stores. Great. We did that. Then let's make sure that we are available globally. So they went into places like Scandinavia and Japan. Then they figured, let's create our own branded flagship stores. Let's pause here for a second. They got to hundreds of millions of dollars in revenue and then eventually a billion dollars, basically selling one single coat. Now guys, how many business owners and business builders do you know that get to like 2 or 3 million dollars in sales? And then their instinct is to say, okay, cool, let me go and create a new product. Let me go ahead and start a brand new business. I've maxed out this business. Instead of trying to think about building a new business or launching new products, think about new front doors. The front door to get to the product you already have is way better use of your time than trying to build a different backend. Okay, I'm now going to sell these people something totally new. Just bring in more people and think about new creative ways. The biggest companies out there with product lines that do hundreds of millions of dollars or even tens of millions of dollars, or frankly even over a billion. A lot of the time it's a single product with like dozens and dozens of front doors. Now I'm calling it front door. You could call it marketing, you could call it offers, you can call it specials. There's different words to describe this, but fundamentally what you're doing is just thinking of new ways to put people into the machine. Because that's all a business is. It's a machine. It's a thing that you figured out that people Want to buy. So now you got to have all kinds of ways to sell it and all kinds of ways to bring them in. Different markets, different segments, different offers, et cetera, et cetera. Focus on the front door and keep your product as it is instead of trying to think of new products and new businesses and all kinds of complications. Simplify, zoom in. Just like Canada Goose. Isn't it funny that after 50 years, a new set of fresh eyes came into the business and was able to flip this whole thing around? Isn't it amazing that this was effectively the same company? And Danny comes in in 2001 and says, we're going to give it a new name, Canada Goose. We're going to understand our customers better, and we're going to essentially remarket and refocus our marketing on a different segment of the market. Like three things. That's all he did. And he was able to take the exact same company and just create explosive growth. Same brand, Fresh Eyes. So ask yourself this question. If you were coming into the business with zero relationships and zero history and zero affinity, what would you do different today in your business, what would you do different? It's very hard to do that and to ask yourself that question because you have relationships. I've been selling to Sally for the last four years. I don't want to change anything because she likes it the way it is or. Well, we have this person. Steve has been our longtime employee. Here's how he likes to do it. If you cut all ties in your mind, cut all ties and say, if I was coming into this business with fresh eyes, what would be the most important thing to do? Now, that's, of course, tough to do yourself. In this case, it took a new guy with fresh eyes. He had come into the business. It was already a family business, so he had been in it for 10 years plus. But he effectively came in and ripped out all the stuff that had been there and started something brand new. Oftentimes, the biggest blocker in your business to growth, and I say this with all sensitivity and all sympathy and, frankly, empathy to business builders, is you. It's you. It's that you have a certain way you want to do things. And I've been there. Definitely I've been the biggest blocker in my business. And I have to take a cold, hard look in the mirror and say, why aren't we able to grow? Why aren't we able to get past this? It's because of me. It's because I'm stuck in my way of doing it. And if you come in with a fresh set of eyes. And again, you don't think about the relationships, you don't think about how you've been doing it, and you just say, okay, I'm starting from zero. What could I do today to make this business better? You'd be amazed at the different decisions you'd make and all the explosive growth that's ahead of you. And if you need the inspiration you want to see how it actually happened, look no further than Canada Goose. That's the story, guys. Let me know what you guys think. Go over to JohnDavids.com while you're there, get on the newsletter if you're a fan of this podcast, make sure to leave a rating review on Spotify, Apple, wherever. You're listening to this Share with a friend. Talk to you all next time.