Marketing Against The Grain Episode: The Marketing Tactics I Used to Build & Sell a $100M Brand
Release Date: November 14, 2024
Host/Authors: Kipp Bodnar & Kieran Flanagan
Guest: Preston Rutherford, Co-Founder of Chubby's and Creator of Marathon

Introduction

In this compelling episode of Marketing Against The Grain, hosted by Kipp Bodnar and Kieran Flanagan from the HubSpot Podcast Network, special guest Preston Rutherford joins the conversation to delve deep into his journey of building and selling a $100M brand, Chubby's. Rutherford also introduces his latest venture, Marathon, a startup designed to revolutionize brand performance measurement for modern marketing strategies.

Building Chubby's: Overcoming Traditional Marketing Constraints

Preston Rutherford begins by sharing his experiences in building Chubby's, a lifestyle clothing brand known for its fun and inclusive approach. He emphasizes the challenges of balancing brand performance with traditional performance marketing, highlighting the struggle to measure brand impact in a way that translates directly to revenue.

"We've been trained on this short-term feedback loop that has worked extremely well for many years, but it's becoming problematic when we can't justify brand investments because the metrics don't connect to immediate financial returns."
— Preston Rutherford [01:28]

Key Strategies:

• Alternative Measurement Methodologies: Rutherford discusses the development of new measurement techniques that replace traditional surveys with digital engagements, allowing for a more tangible connection between marketing efforts and future revenue.
• Balancing Brand and Performance Marketing: He underscores the importance of not solely focusing on short-term metrics like ROAS (Return on Ad Spend) but also investing in brand-building activities that drive long-term customer loyalty and revenue.

Lessons Learned: Major Mistakes to Avoid

Rutherford candidly shares the three major mistakes he made while building Chubby's, offering invaluable lessons for marketers and entrepreneurs:

1. Underestimating Fixed Costs:

   • Impact: Early overcommitment to fixed costs like hiring and office space created financial pressure, forcing a short-term focus to ensure rapid cash turnover.
   • Insight: "If you have more cash, you can spend more, and if you have more buffer, you don't need the cash to come back right away. This need for immediate returns leads to chasing short-term ROAS."
     — Preston Rutherford [10:53]

2. Reacting to Increased Marketing Friction:

   • Impact: When faced with rising customer acquisition costs, the instinct was to optimize existing channels rather than expanding the total addressable market.
   • Insight: "We spent 100% of our marketing dollars evaluated by how it drove short-term revenue, neglecting to reach a broader audience with memorable content."
     — Preston Rutherford [10:53]

3. Neglecting Brand Marketing:

   • Impact: A singular focus on measurable performance marketing left little room for brand-building initiatives, limiting long-term growth potential.
   • Insight: "Acknowledging that zero awareness of your brand means no long-term business potential is crucial. We failed to balance short-term revenue with building a memorable brand early on."
     — Preston Rutherford [10:53]

Innovative Marketing Tactics: From Organic Growth to Paid Scaling

Preston elaborates on Chubby's initial success through organic social media strategies before transitioning to paid advertising:

"Our early marketing was about creating content that felt like a conversation among friends—fun, humorous, and authentic. This approach built a community that believed in the brand without heavy reliance on paid ads."
— Preston Rutherford [28:00]

Key Tactics:

• User-Generated Content (UGC): Leveraging genuine user interactions and authentic content to build trust and community.
• Adaptive Use of Advertising Platforms: Early experimentation with Facebook Ads, taking advantage of the platform's detailed data and high ROAS to scale rapidly.
• Content as a Differentiator: Focusing on creating exceptional, memorable content that stands out amidst the noise of traditional ads.

Navigating the New Era of Digital Marketing

As the digital landscape evolves, Rutherford addresses the shift from the "golden age" of Facebook and Meta advertising to a more competitive and fragmented environment:

"Today's internet is much more competitive, making it harder to find buy low, sell high opportunities. The opportunity lies in creating exceptional content and building a loyal community."
— Preston Rutherford [29:47]

Advice for Modern Marketers:

• Content Creation: Emphasizes the importance of in-house content creation over outsourcing to agencies for better context and cost-efficiency.

  "Don't use agencies. Have a creative content machine in-house where you're consistently producing quality content. Virality is a vanity metric you should ignore."
  — Preston Rutherford [30:20]

• Platform Focus: Recommendations on prioritizing platforms like Instagram and LinkedIn based on business goals and target audiences.

• Long-Term Mindset: Advocates for a long-term approach, stressing that brand building is a sustained effort rather than a quick win.

  "Imagine a five-year timeline instead of orienting around a 12-month exit. Focus on building a brand that will endure and scale over time."
  — Preston Rutherford [46:07]

The Power of Constraints: Staying Focused and Creative

Rutherford highlights how financial constraints can drive creativity and focus, enabling startups to innovate without the pitfalls of resource abundance:

"Not having money forces you to be focused and thoughtful about the work you're doing. It drives creativity, as seen when we relied on simple, authentic content instead of expensive photo shoots."
— Preston Rutherford [34:26]

Key Takeaways:

• Maintain Optionality: Keeping options open by avoiding early over-hiring and excessive fixed costs.
• Embrace Creativity: Utilizing limited resources to fuel innovative and genuine marketing efforts.
• Avoid Sloppiness: Recognizing that abundance can lead to complacency and inefficiency in marketing strategies.

The Biggest Win and Worst Mistake

When reflecting on his journey, Rutherford identifies his biggest win and worst mistake:

• Biggest Win: Transitioning from a sole focus on performance marketing to a balanced investment in both brand and performance marketing, using measurable methodologies. This shift enabled Chubby's to re-accelerate growth and break through natural business ceilings.

  "The transition to balance brand and performance marketing was transformative. It took years, but it moved us from breaking even to accelerated growth, proving that brand investment is crucial."
  — Preston Rutherford [41:13]

• Worst Mistake: Failing to make the transition early enough, maintaining an overemphasis on short-term, data-driven marketing without investing in brand-building initiatives.

  "Not making the transition early was our biggest mistake. We were so focused on short-term revenue that we ignored the long-term brand investments needed to sustain growth."
  — Preston Rutherford [41:51]

Essential Conversations for Founders and Marketers

In concluding the episode, Rutherford offers pivotal advice on the conversations that CEOs and marketers should be having:

1. Reality Check on Current Trends:

   • Discussing current market conditions, such as rising discounting strategies and increasing customer acquisition costs.
   • Evaluating the sustainability of ongoing marketing trends and their impact on long-term viability.

   "Let's be real about the current situation. Are we discounting more? Are customer acquisition costs going up? These need to be openly discussed."
   — Preston Rutherford [44:24]

2. Long-Term Time Horizon:

   • Shifting focus from short-term gains to a five-year growth plan, emphasizing sustainable brand building over immediate exits or acquisitions.

   "Orient around a five-year timeline instead of thinking about selling the business in 12 months. Brands are built over years, not months."
   — Preston Rutherford [44:24]

3. Exceptional Content Creation:

   • Prioritizing the creation of outstanding content that resonates emotionally with the audience, fostering deeper connections beyond transactional interactions.

   "Be exceptional at creating content. Exceptional content works, whereas mediocre content does not. Focus on content that makes people feel something about your brand."
   — Preston Rutherford [44:24]

4. Right-Sizing Fixed Costs:

   • Maintaining flexibility by keeping fixed costs low, enabling quick pivots and adaptations without the burden of excessive overhead.

   "Keep your costs low and avoid hiring too soon. This maintains flexibility and optionality, allowing you to adapt your strategies without being tied down by fixed expenses."
   — Preston Rutherford [39:40]

Final Thoughts and Takeaways

Preston Rutherford's insights offer a blueprint for modern marketers and entrepreneurs aiming to build robust, sustainable brands in a competitive digital landscape. His emphasis on balancing brand and performance marketing, maintaining financial and operational flexibility, and fostering authentic, exceptional content creation provides actionable strategies for long-term success.

Notable Quotes:

• "If you have more buffer, you don't need the cash to come back right away. This reduces the pressure to chase short-term ROAS."
  — Preston Rutherford [10:53]

• "Virality is a farce. It's a vanity metric that you should ignore."
  — Preston Rutherford [31:16]

• "We are taking leaps of faith here, but it is the right thing to do. Separate your ego, separate your short-term KPIs, and focus on what truly builds your brand."
  — Preston Rutherford [46:07]

Conclusion

Preston Rutherford's journey with Chubby's and his insights into the evolving landscape of digital marketing offer valuable lessons for anyone looking to build and scale a brand. By embracing a balanced approach to marketing, prioritizing long-term brand building, and maintaining operational flexibility, entrepreneurs can navigate the complexities of modern marketing and achieve sustained growth.

Listen to this episode of Marketing Against The Grain to gain deeper insights and actionable strategies from Preston Rutherford's experience in building a $100M brand.