How Lip Balm Became the #1 Beauty Product

Summary

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The Art of the Brand

Episode: How Lip Balm Became the #1 Beauty Product

Hosts: Camille Moore & Phillip Millar

Release Date: September 10, 2025

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Brief Overview

In this lively episode, branding experts Camille Moore and Phillip Millar dissect how Summer Fridays—a skincare brand—secured the top spot in the beauty industry with their lip balm, a product far from their original hero offerings. Using this unexpected pivot as a case study, the hosts explore essential lessons in branding strategy, gateway products, scaling, marketing psychology, influencer effectiveness, virality, and industry trends in consumer behavior and pricing. The episode is rich with tactics, strategic frameworks, and memorable examples relevant for established businesses and new brand owners aiming to scale and differentiate in saturated markets.

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Key Discussion Points & Insights

1. The Summer Fridays Lip Balm Pivot (02:32–06:18)

• Context: Summer Fridays, a leading millennial and Gen Z skincare brand, shifted into lip balms—a category adjacent to but not synonymous with their main skincare line.

• Key Takeaway: Introducing a new, low-friction, high-rotation product (lip balm) greatly expanded their brand universe and engagement.

  • Camille: “They introduced, effectively, a product that wasn't their hero product and owned the number one spot.” (00:00)

• Psychology of Gateway Products:

  • Face wash used to be the classic gateway product—consumers are least loyal here, often “cheating” on brands.
  • Lip balm is now the new gateway due to low loyalty and high collectability among consumers.

• Lip Balm as Beauty’s “Lipstick Effect”:

  • Small purchases satisfy the need to “buy something,” and lip balms blur the line between skincare and makeup.
  • Camille: “I have so many lip balms, I have zero loyalty. I’m [...] on the quest for the best lip balm...convinced that a better one is out there.” (05:18)
  • Such products create more entry points: “What is the entry point that you can tap into from buying psychology to allow less friction and more people to try your brand?” (06:09)

2. Strategic Framing: Lip Care as Skincare (06:18–07:55)

• Positioning: Elevate lip balm as essential skincare to justify premium pricing and differentiation.

  • Phillip: “Lip care is skincare. And then you can do a higher price point, because people don’t see it as skin care...our lip balm is skin care for your lips.” (06:18)

• Consumer Price Sensitivity: Most buyers prefer variety over a single high-priced product, reflecting the irrationality (and opportunity) in consumer behavior.

3. Lessons on Brand Entry Points & Buyer Psychology (09:00–10:05)

• Adapt Lessons Beyond Beauty:

  • Every brand should consider what friction-less, highly shareable entry product or “breadcrumb” can “trap” (entice) consumers into the brand universe.
  • Camille: “Marketing is warfare...if you’re not making it easy for someone to come in and try your brand...you are setting yourself up to fail.” (09:00)

• Asymmetric Strategic Thinking: Seek non-obvious pathways to scaling by focusing on overlooked market segments or consumer needs.

4. Virality, Portability, and Influencer Dynamics (10:05–17:01)

• Portability Drives Virality:

  • Lip balms’ on-the-go nature makes them “micro-billboards”—users advertise whenever they apply in public.
  • Contrast with private-use products (e.g., face cream): Higher friction to “viral” evangelism.

• Diminished Trust in Influencers:

  • Authenticity is now key—consumers are less moved by obvious paid placements, more by organic, “found in the wild” content (e.g., a celebrity’s bag contents).
  • Phillip: “Best picture is if some paparazzi got a picture...you could see a Summer Fridays in there. Like unintentional use disclosure.” (10:56)

• Influencer ROI: Don’t expect immediate sales; influencers build cumulative brand recognition (rule of seven), not instant conversions.

  • Camille: “If you’re stretching yourself too thin...to use an influencer to make back money on that launch. You’re not ready for the role of the influencer.” (14:05)

5. The Rule of Seven & Building Touchpoints (13:24–16:40)

• Repeated Exposure is Critical:

  • Seven touchpoints are needed before consumers truly recognize and form an association with a brand.
  • Touchpoints can come from diverse tactics: influencer campaigns, billboards, retail activations.

• Marketing Spend Advice:

  • For new brands: Invest 20–25% of gross projected revenue into marketing and execution; mature brands: 15–18%. Brand-building costs (e.g., logos, sites) are separate, sunk costs.
  • Camille: “If you're a new brand...putting aside 20 to 25% of the projected gross...If you're an established brand...15 to 18% roughly.” (27:00)

6. The Importance of Good Strategy over Budget Alone (27:28–31:11)

• Quality > Quantity: Poor strategy wastes any budget, regardless of size.

  • Phillip: “All these numbers don't really mean anything because most people executing strategy are just so bad at it…” (29:10)

• Actual Results: Don’t blindly follow industry “best practices” or allocate funds based on what’s commonly done; rigorously review conferences and marketing line-items for real impact.

• Top-of-Funnel Investment: Many businesses are too focused on bottom-of-funnel sales rather than long-term brand building.

  • Camille: “Most businesses where they falter is...comfortable spending on the bottom of the funnel than investing in growing their brand.” (31:11)

7. The Science & Psychology of Scaling (32:38–35:07)

• Scaling Requires New Thinking: What got you to one milestone won’t get you to the next; requires accountability, new strategy, and willingness to discard ineffective habits.

  • Phillip offers practical sales linguistics: “Ignore everything before the word ‘but’ and pay attention to everything after.” (33:07)

• Word Power in Sales: Use “because” to get buy-in (“the reason you should buy this is because...”). People instinctively lean in after hearing because—it signals logic and rationale.

8. Realities of Big Brand Operations & Tariffs (36:00–42:16)

• Tariffs are Reshaping Margins: Large companies are projecting losses, forecasting which brands will first pass costs to consumers.

• Brand Loyalty Shields: Brands with strong loyalty can be transparent and weather price increases; those relying solely on price are vulnerable.

• Agency Spend Scrutiny: Wasteful marketing spends at large companies (e.g., Cracker Barrel’s $700M rebrand) show the stakes of bad strategic decision-making.

• Global Sourcing & Margin Ethics:

  • High-margin brands relying on cheap overseas labor are now exposed; hosts predict a necessary margin correction, more local production, and less public sympathy for complaints about tariffs.

9. Product Sourcing, Copycat Culture & the TikTok Shop Era (42:16–43:59)

• Rapid Product Iteration: Brands replicate products overnight by reverse-engineering popular items. Margins can be immense, leading to inflated marketing budgets and questionable product quality—“a bra that they sell for $135 costs them $2 to make.” (39:42)
• Short-term vs Long-term Strategies: Big launches may yield viral sales, but lack substance for long-term loyalty.

10. Brand Loyalty and Relative Deprivation (43:59–46:18)

• **Only price-driven brands become obsolete and disposable; those with passionate advocates survive downturns.
• Beware Relative Deprivation: Comparing success on social media fosters dissatisfaction and undermines business focus.
  • Phillip shares a story from his peacekeeping days illustrating how “relative deprivation” can turn joy into resentment. (43:59)

11. Critiquing Brand Strategy: Alo Yoga’s $3,000 Bag (47:15–56:27)

• Alo Yoga’s Move Deconstructed:

  • Camille and Phillip dissect the rationale and risks behind Aloe Yoga’s launch of a $3,000 leather bag—a move they call “delusional” and brand-incoherent.
  • Camille: “If they wanted to get into luxury goods, they should have created a sister brand...it makes zero sense.” (47:52)
  • To compete in luxury, a better move would be incremental price steps or collaborative collections, not a leap.
  • Phillip suggests perhaps it’s a calculated scarcity play, but agrees risk of ridicule is high; the hosts doubt true “rich people” are the customer.

• Brand Cohesion and Category Authority:

  • Brands succeed when they maintain coherence. Wild price jumps or incoherent product offerings can confuse or repel even loyal customers.
  • Phillip: “It almost exposes you to ridicule...it's a risky thing.” (53:23)

12. Brand Expansion Lessons from Designer Brands (56:27–60:01)

• Camille references the book "Deluxe," recounting Louis Vuitton’s successful mass-market strategy: “They wanted Louis Vuitton to be the proverbial McDonald's of luxury fashion.” (56:58)
• Accessibility can dilute or enhance status, depending on execution; brands must choose their “McDonald’s” moments with care.

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Notable Quotes & Memorable Moments

• “People are the least loyal to face wash historically, so they would cheat on their array of brands with face wash. But the new gateway product in beauty has become lip balm.” – Camille (04:56–05:08)
• “Marketing is warfare. Like you're at war in your category. And...if you're not making it easy for someone to come in and try your brand...you are setting yourself up to fail.” – Camille (09:00)
• “You have to think out of the box...What I consider asymmetric strategic thinking. You essentially want to...put breadcrumbs to lead them to where you want to go.” – Phillip (09:34)
• “I came up with a new slogan. Lip care is skincare.” – Phillip (06:18)
• “If you’re stretching yourself too thin...to use an influencer to make back money on that launch, you’re not ready for the role of the influencer.” – Camille (14:05)
• “Seven touch points with a brand to form an association between the logo and what the brand does slash represents.” – Camille (14:57)
• “If you don't spend enough, you might as well spend zero.” – Phillip (15:38)
• “Our job as the leader is to understand your brand strategy so it's done properly. Think of Cracker Barrel. They spent $700 million on that rebrand...insanity.” – Phillip (29:10–29:13)
• “What strategy is, is using a limited amount of resources, focusing on the thing that produces the best results.” – Phillip (30:48)
• “You have to make them care based on what's going on in their lives. Right? So when you look at an influencer. Their job, like a Joe Rogan, is just to educate on mushrooms. This is what I’m using.” – Camille (23:07)
• “It can't be under the name Aloe, right? Aloe has become ubiquitous...It's best worn with another brand. So they should collab...Opposed to trying to be all the different brand pieces.” – Camille (54:34–56:03)

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Important Segment Timestamps

• 00:00 – Introduction to Summer Fridays and the lip balm pivot
• 02:32 – Summer Fridays case study and “gateway products” in beauty
• 06:18 – Lip care as skincare: Positioning and pricing logic
• 09:00 – Buyer psychology: Reducing friction, entry products, and marketing warfare
• 10:05 – Product virality, portability, and influencer trust issues
• 13:24 – The rule of seven: Building touch points for brand recognition
• 27:00 – Marketing spend recommendations for new vs. established brands
• 29:10 – The waste of bad strategy (Cracker Barrel rebrand example)
• 31:11 – Brand-building vs. sales-driven marketing investment
• 33:07 – Sales psychology: “Ignore everything before ‘but’...”
• 36:00 – Tariffs, brand loyalty, and the realities of global sourcing
• 43:59 – Relative deprivation and psychological pitfalls for business owners
• 47:15 – Discussion: Alo Yoga’s $3,000 bag and luxury brand strategy
• 56:27 – Lessons from Louis Vuitton’s “mass luxury” approach

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Final Thoughts & Actionable Takeaways

• Select a strategic gateway product to invite customers into your brand universe.
• Don’t expect influencers to deliver single-campaign sales; view them as cumulative brand-building touchpoints.
• Commit to a significant, strategic marketing spend, especially as a new brand, but ensure it is well-invested with a sound overall strategy.
• Regularly review for true ROI—retire ineffective activities and avoid “just because” spending.
• Ensure new product or price moves are coherent with your brand’s category authority and audience expectations.
• Avoid relative deprivation: Focus on your unique audience and brand goals, not on industry comparisons alone.

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Transcript

[A]

And the reason why the Summer Friday's lip balm being the number one beauty product is interesting is because this was a skincare brand and they pivoted to launching lip balms. So they introduced, effectively a product that wasn't their hero product and owned the number one spot.

[B]

Your job as the leader or the owners is to understand your brand strategy so it's done properly. Think of Cracker barrel. They spent $700 million on that rebrand. $700 million.

[A]

Insanity on that rebrand actually makes me cry.

[B]

And then they turned it around.

[A]

All of these large companies have already had to do their cash flow forecasting for basically projecting how much money they're going to be losing based on the tariffs.

[B]

I don't disagree with you, but whenever you're having a conversation with a customer in the sales process or an employee, ignore everything before the word but and pay attention to everything after.

[A]

But Alo Yoga is launching a $3,000.

[B]

Leather bag for $3,000. I should have somebody come to my home and do yoga with me for a year.

[A]

What a brand, what a brand, what a brand, what a mighty good brand. Say it again now. What a brand, what a brand, what a brand, what a mighty good brand. Welcome back to another week on Art of the Brand.

[B]

Yeah, lots of things going on in the world at the moment. Happy to be back in the recording studio amongst all the other distractions.

[A]

Oh, my gosh. In our world, it's crazy right now, but we've actually had a really interesting podcast that's going to be kind of all over the place today, guys, so buckle up. But in a good way.

[B]

I think in the end, they're going to learn a lot about strategy, totally A lot about content and how to scale, which I think a lot of people are missing. Most people who come in and are looking for this information, in the end, they want to scale their business, but they really don't have any idea how to do it.

[A]

Well, that's what's so interesting about what we do. Like, we really are scaling experts, right? Like, well executed branding is in an effort to scale your business, but it's complicated because. And that's actually what makes our job so hard, because so many people that come in, they want an outcome, but they're not prepared to do the work of what's needed in order to have that outcome. Like, they just want the viral launch. They just want a Labuvu type product. But you can't have those pieces unless you have a really solid brand. Unless you have really solid standard operating procedures, the right team, the right leads.

[B]

Leadership, and the plan and strategy. They look at who's successful and then say, I want to be like that. But they don't see all the people who failed. Yeah, they don't see why they failed. And they don't see a lot of the stuff that's hidden to get to that point.

[A]

Totally.

[B]

And then they have this relative deprivation. As you know, they're always judging themselves.

[A]

Well, we've got a lot to touch on scaling today, and I also have some interesting things that I want to touch on as well. So I think let's kick off with Summer Fridays. Summer Fridays is, I mean, I think everyone listening will know it's a skincare company, it's a leading skincare company. But if you don't know.

[B]

Well, I would say that there's probably a bunch of us who aren't that familiar with Summer Fridays.

[A]

I'm just trying to make you seem like you're still a part of the group. If you were like, no idea what you're talking about, Camille, But Summer Fridays is like a leading millennial and now becoming like a Gen Z skincare brand sold in Sephora, owned by two influencers that if you, you and I ever get coffee Listener. I've got some inside scoop that I cannot put on the podcast. But anyways, the what's interesting is that this week they put out the, like, top 10 number one selling products and number one selling beauty brands. And number one was summer Friday's lip balm. And the reason why the Summer Friday's lip balm being the number one beauty product is interesting is because this was a skincare brand and they pivoted to launching lip balms. So they introduced effectively a product that wasn't their hero product and owned the number one spot. But I have some interesting intel from what your brand can learn from this business move in that I've been working with beauty companies for a while now, and when we were working with a huge drugstore company, they explained to me that the data, the reason why so many beauty brands launch multiple skus of face wash is because it's a gateway product. So it's very difficult and very expensive to get people to switch their day cream or their night cream. Right. There's more loyalty, there's more education bucks, friction to drop.

[B]

Right. So, like, you need to be convinced. That level of convince to get people to put their hundred dollars there as opposed to where they're used to is difficult.

[A]

And it's also there's just so many friction Points. So much randomness that goes into it.

[B]

And we've talked to people. It's. It's ironic that samples is like this big bait and switch, because you can't tell if. If the product works in skincare by one sample, like, you know, one daily application. If it feels silky smooth, it works, but you can't tell if it's actually good for your skin until you've used it three to six months.

[A]

Well, based on the. Well, that's why they tend to put, like, tons of silicone and tons of perfume. They need to give you something that your brain can like right away be like, this works.

[B]

Oh, my God. This is amazing.

[A]

Yeah. But what's interesting is people are the least loyal to face wash historically, so they would cheat on their array of brands with face wash.

[B]

I could see that.

[A]

But the new gateway product in beauty has become lip balm. And for a bunch of reasons. One, it taps into the lipstick effect. Like, people can have, like, 20, 30. I have so many lip balms, I have zero loyalty. In fact, I'm, like, perpetually on the quest for the best lip balm. And I don't know what I'm looking for in the lip balm, but I'm just convinced that a better one is out there.

[B]

So I just bought a perfect market condition for people who need to buy something.

[A]

Yes.

[B]

There's just so many people who need to buy something because you don't know, like, lips are skin.

[A]

Yeah.

[B]

Right. So it is skin care. It's just. It's just, you know.

[A]

Well, the best, too, was when it's, like, tinted a bit because it's like, it's makeup and it's skincare. Right. So it's. That's. But that's what made it so intelligent, is that they've owned. They basically have become a leading beauty brand because they. They were able to introduce a better gateway product into their brand universe. So they. What's really interesting about this piece is even if you're not in beauty, thinking about how do you get customers into your brand universe? What is the entry point that you can tap into from buying psychology to allow less friction and more people to try your brand?

[B]

I came up with a new slogan. Lip care is skincare. And then you can do a higher price point or something, because people don't see it as skin care, but by getting them. That's why it makes sense for me, just for summer Fridays, to get into lip balm, because it's not just a candy, you know, like those red chapsticks. It was like more like a candy, right? They're. Now they're kind of saying, hey, our lip balm is skin care for your lips.

[A]

But they're not even like the actual. It's funny what you just said. It's actually like elevated candy because they like are super scented, they're like pigmented and then they kind of like look like candy. The only thing that's interesting when you talk about like charging the higher price point, I would sooner buy seven from seven different companies at the 20 to $25 than I would buy one lip balm at $50. Like, I just wouldn't do it. And it's, it's actually a really interesting conversation because the human brain is obviously imperfect. The idea of like that treat economy of like buying into something that you like. But my brain also understands rationally that there isn't like a $30 Delta for improvement of like what's possible. Unless it's like literally got like retinol and stuff. And it's more skin care than lip care.

[B]

That's just an angle I would take because we all know that when we have a lip crack, it's like a two week pain process that we don't want. You know, that lip, that, that's totally different.

[A]

That needs to be more like. That's like Carmax. That's why I have so many of the yellow Carmaxes everywhere. It needs to be medicated. It's actually like the beauty brands are.

[B]

More superficial, but to prevent it, you know, that's just the angle I would use on lip balm. It's like, if you don't want to have this, then use our lip balm. It's skincare.

[A]

It's a complete aside. Fun fact. I learned this when we were in Austria and I just, I need to share the wealth. For anyone that's listening. I have like in the past year and a half, like in major climate changes have started to get like dry on the sides of my mouth. And when I was in Austria, it's all a mess. It's. Shut up. It's the language, the language barrier. She was like full blown German. I'm like, full blown, can hardly say good morning in German. But she, when we were like pointing at each other and I'm like, this and my dry. She understood right away. She goes, she actually gave me this like eye silicone product. And she goes, this eye lubricant is actually the best thing for that. I put it on. In an hour, it was gone. And this is something that usually like Will haunt me for weeks.

[B]

Okay, well, why aren't we approaching that company and encouraging them to launch a new product line? That we launch it.

[A]

You know what, Pepe? We're cutting this out. No kidding. We're kidding.

[B]

No, we should reach out to them because that seems the way you just told that story is spectacular. And if a chemist or a pharmacist.

[A]

Yeah.

[B]

Knows it, to me that smells like opportunity.

[A]

It does. It reeks of it. So I just thought that was really intelligent. And I think that a lot of brands can. They need to start thinking in terms of buyer psychology, thinking outside the box like you are. Marketing is warfare. Like you're at war in your category. And that's the biggest problem is that business owners, you're sitting on your own little island and you obviously think your product is great. You have so much passion, you love what you do. But if you're not making it easy for someone to come in and try your brand because of the limitations that exist within that industry, you are setting yourself up to fail.

[B]

Our clients want to scale. And when you're trying to scale, you have to think out of the box. Or what I consider asymmetric strategic thinking. You essentially want to entrap somebody. Now, it's got a negative connotation in policing, but in your business, you want to entrap somebody, you want to ensnare them, you want to. You want to put breadcrumbs to lead them to where you want to go or trick them into trying your product and liking it. So you have to think out of the box. Ways to get the attention of your potential customers, to get them in the door so that you can then get that loyal customer year over year.

[A]

Well, and this perfectly segues into something else I want to talk about today, which is the recipe for virality. The other thing that makes lip balm brilliant is it's a built in viral product. It's portable. So anywhere that a woman goes with that lip balm, she's signaling to everyone that sees her putting it on a small summer Fridays billboard. Right. And it really has that virality because it takes you outside the home. Like, it's harder with the friction points for evening cream when it's like the intimacy of like you, your partner and your dog who can't tell anybody that you're using that evening cream. And, and there's such a big. And then that's the other issue too, is like, we don't trust influencers anymore. So, like, it's for someone to post about truly using the product like it has like one, there's so much trust there. But two, it's just it. There's so much friction to get that like that evangelism with that product. That lip balm is so intelligent.

[B]

Yeah. It's so interesting you say we don't trust influencers anymore. Like I think a lot of marketing agencies are a little behind that they don't like. So there's, we see all the time people who are paying influencers to do their stuff. But to me, when I think of it, the best picture is if some paparazzi got a picture that looked into the purse of somebody famous and you could see a summer Fridays in there. Like unintentional use disclosure. Do you know what I mean?

[A]

That's a content from it that works really well. Like what's in my bag? Because it's. Even if it's like some of the stuff is like paid stuff thrown in, it's at a price point where it doesn't annoy you. But I even analyze my own behavior like there's so many. Because I'm in branding, I am a purveyor of the best. Not the best by meaning most expensive, but like the most well executed. So I just have really great shit in every category. But I even hesitate myself to post about it when even it's authentic because I don't find that there's an authentic moment to be like, here are the four products I'm using right now. Like, I don't spend my life thinking in terms of like influencer content. I don't even find an authentic way for me to share the products that I'm using. So it's just, it's a very difficult way to convert somebody.

[B]

Maybe it's a good time for me to say what's in my bag? What's in my bag is always a self defense pen, which I could teach, I think every female I bought it for, all the daughters, everybody around me just go on Amazon and put in self defense pen. This is a rudimentary one, but there's a lot of good ones. But a good self defense pen held like this could really take an attacker and put them back if they come at you and it goes through security. But it's good to have something on you that you can use.

[A]

I think we should do a segment and upcoming like, you know, like self defense by Philip Milan. Branding and self defense.

[B]

I always have sugar for the type 1 diabetes. I always, whenever I travel, have cash. Not too much, but always cash. Because whenever you're In a crunch. And there's. You can often get yourself out of situations with a US Hundred wherever you go in the world. And I have my little Chanel money clip thing that you got me that I've had for years. It's Gucci. Sorry. It's my only piece of branded stuff.

[A]

That I wear and at least two sets of my AirPods that you. He steals all of my effing AirPods. It drives me nuts because I'm going.

[B]

To be honest, we'll be on calls.

[A]

In the office and it like, oh, my God. There's no other anger than that. You also always have my cords in your bag. Like my MacBook cords.

[B]

Anyhow, great point. You should know what's in your bag at some point.

[A]

Well, my Mary Poppins bag of tricks, I mean, it's literally enough for a John and Kate plus eight. Like, they're eight kids. But another thing, too, that I really like about the summer Fridays thing I want to touch on is the rule of seven. So I had a really interesting conversation this past week with a really large CPG company. They're in the beauty space, funny enough. And we were having a conversation about influencers. And they're doing this huge launch into brick and mortar. And we want, really want to set off a splash with like a big name. And the conversation, it's, it's funny when you have these conversations at the highest level that it reminds me that wherever you are on your journey, whatever size your business is, that we should, we should be discussing this conversation and that influencers have a role and they have a place within, a very special place that you reach usually within the. Having a tipping point in market, right? There's a point where people know about you, but you really become like a name when you have an influential person that makes sense to be tied to your brand with, like a big activation moment. But the most relevant point to this is when you talk about, like, roi, right? Because you have to pay someone who has a notable name to leverage their platform to connect your brand to it. But the big piece that most business owners miss is that you're not spending for that campaign. If you're stretching yourself too thin in an effort to use an influencer to make back money on that launch. You're not ready for the role of the influencer because you have to understand the rule of seven in marketing and that you have to have a minimum of 7, 7 touch points with a brand to form an association between the logo and what the brand does slash represents. So that's why McDonald's such a powerful brand? Because it's one of the first brands that children associate golden arches with chicken nuggets. Right. They understand that association of a place that looks like this, serves that and has a play place and like, isn't.

[B]

Happy Meal Happy Meal? That's why they had toys.

[A]

Yes.

[B]

It brought them in. It got them associated at an early age.

[A]

Right.

[B]

As a happy space. You know, from an influencer perspective, you're right. And the rule of seven, even when we've done billboard campaigns, like, there's just a hard science that I can't explain it, but there's a hard science that if you don't spend enough, you might as well just spend zero. You have to get over the threshold. So you can't just buy one billboard, leave it up for four weeks. You might as well just throw your money away. And that's just a psychological reality. I don't know if it's true, but that's just what the industry says. I was thinking the other day about influencers and, you know, remember the dose key? Right.

[A]

Yeah.

[B]

I don't often drink beer, but when I do, I drink dose Equi. I love that kind of concept in terms of how I would be moving towards influencers, you know, as opposed to them pretending like there are influencers who are paid to promote products. And then there are influencers that you respect as a customer or consumer and that you want to mimic them. And then there are influencers that create an aspirational element. You know, the dosy key guy kind of guys want to be that guy. So cool. And so then they think, hey, I don't drink beer all the time. I'll do. But not seeing strategy in the use of influencers from a lot of agencies.

[A]

These days, you're not wrong. But you're also not often the target for influencers and celebrities at this point. Right. So you're also kind of not really the right person to be.

[B]

Well, but I get influenced to buy, but there's. There's a dominance of influencers who are the popular people as opposed to influencer or the powerful people.

[A]

But that's also what makes this complicated. And I kind of want to move past this, is that it's like every conversation we have, everything we're talking about, has to be done by someone that knows what they're doing, you know, because there's. There's so much room for spending money without effect because there's no college on the line. Like, people don't have anything on the line. Like they can spend people's money and not know what they're talking about. So it has to be strategic. But when you talk, it's interesting that you bring up like the DOSA key guy, because when I'm explaining this to clients and we're having this conversation, the larger question you have to ask yourself is you're now changing the position of your brand and the real estate that it owns within your potential customer's mind. Like, what is it worth to you and your brand when someone says beer? And the first three names that come to mind are Corona, Dosa Keys, and Coors Light. Like, when you're competing in that category, what is that worth to you? Because that is literally everything. Like, if you're a brand that's sitting in that mushy middle that we talk about where people don't think of you when they name your category. Like, you don't have category dominance, you're fighting a very different battle than when you're up against the top three or four names. So when you move into doing things like having influencers or celebrities or you're doing like these larger activation campaigns, it's actually almost like a, it's almost like a type of quantum phenomenon physics that I want to define where it's like when you put, when you're like overanalyzing it and you put too much pressure on. Doesn't work. Opposed to when you understand the role it plays in the larger universe you're trying to build.

[B]

Yeah, but remember, marketing is warfare. As you're scaling, you need to capture ground. So you don't capture ground by going up against the strongest player first. You find a segment of the market that's unattended where there's not a lot of resources or focus. And then you go in and you become the name of that small niche. You capture territory and then you can expand from it and hope you can expand before they pay attention to you and come and crush you.

[A]

And great point. What I'm trying to underscore though is like for example, like the David's Protein and Cod example. Right. You can, they're an intelligent team that, that is going to go far because they didn't put all their eggs in one basket to launch that campaign. Like, they understand that that's a longer term brand play that they're, they're building to earn respect, reputation and awareness with their customer over time. Right. Like it's. The idea is you're trying to, you have to think about it like you're building up a condo building. Right. To your point, you're going up against skyscrapers. You're trying to build up each floor by floor so that eventually you're competing with the big guys. You have to see these branding moves as you're like, you're adding on more flow floors so that you still have a lot of more floors to go. You've got space, you've got time, you're growing into being this tall brand. But you have to make these decisions that have asymmetric upside that, that bring you more floors and increase your value.

[B]

There's a lot to unpack there. I just, I was working with a larger corporation last week and I want, I want like entrepreneurs who are scaling to keep in perspective because I find a lot of them want to be touchy feely, which is good. I'll share this. This big company literally uses the term that they create kill teams. So they have people who look at the market and they look at anybody that is starting to encroach on market share. And once they get over a certain part of 4 to 6%, they will go in and kill that product by undercutting them at a loss for two years. Right. So if you're in the business and you want to scale and take on the big boys, it's not the time to hang around people who are just giving you positive affirmations all day long. You can think the secret all day long unless you're in the right category alone. But if you're competing against a really rich family, but if you're competing against big players, big organizations actually have kill teams to go out and destroy competition. So you need strategy to make things work.

[A]

You're correct. I would though also say that a lot of the people that are listening to this are just complicated, are competing in like very saturated industries and you're just doing like, you're just literally doing more of the same. Like you're just moving around the same stuff. But what's interesting about that conversation I had with the client that I had last week too is it led into the conversation about they were analyzing the cost per influencer for, for the launch. So they were comparing the influencers cost versus how much they anticipated to make. Right. Like they were comparing one for one. And I'm like, this is a broken way of looking at it because you're putting way too much pressure on an influencer to sell your products when that's not your goal. Their goal is they're a person of influence. They're increasing your awareness in market. They're giving you More touch points. They're creating more opportunities for randomness. Of all the things that are, like, think about, we're all ants, right? Like, we're all living our solo lives. We all have our own problems. We just need to have these products pop up. Like, Philip just bought literally, so much. This brand called Mud Water. I don't know how they got you on, like, seven tins of.

[B]

It wasn't seven. It was three, four tins.

[A]

It was, like, crazy. But my point is, like, you're. You're an ant that has, like, that's facing your own things right now, your own problems, and they were positioned as a guide that you bought it in that instant, right? Like, there's a. There's a randomness to the universe.

[B]

Can I tell you how. Why I bought Mud Water? It's an interesting. When I think of it, I haven't thought about it. I didn't know you're going to bring it up, but obviously, over the last few years, you've heard a lot about the value of mushrooms, right? So you're kind of Rule of seven.

[A]

Oh, my God. That episode on Netflix where they're, like, they're all interconnected. They're, like, all buddies.

[B]

And so we've just heard, like, that Chaga lion's mane, these are all good. Like, Rogan has been doing it. But then there's so much choice out there. It's, like, hard, and it tastes like crap for the most part. But this Instagram, Mudwater, check it out. It's curated beautifully on Instagram, and something about the presentation made me listen to it. And I like the name Mudwater for some reason.

[A]

It's a great name, right?

[B]

And it's branded. Well, but it brought me in and because I knew that, like, it just. It had a beautiful sales funnel to get me to take a shot, right? And I just bought it right from Instagram within five minutes of seeing the first ad.

[A]

You're also primed for it, right? Like, you got some big things coming up. You're focusing right now more on health and wellness. You're consuming less books right now. You're consuming more podcasts. So of your Aunt Journey. I know, but. I know I'm oversimplifying it, but, like, that's what people. They don't. Business owners, like, have so much ego, right? You're sitting there waiting for people to come and buy your product. You have to realize that, like, nobody cares about you. You have to make them care based on what's going on in their lives, right? So when you look at an influencer. Their job, like a Joe Rogan is just to educate on mushrooms. This is what I'm using. You may or may not be ready to receive that information, but regardless, if you're ready to buy and you consumed it, that's a data point. That's a. That's a. That's a move in the role of seven. Right. And the reason why it's. It's relevant to speak about this bigger picture is you need to be looking at these investments based on creating a yearly budget so enough businesses don't think about these activations as part of a larger whole. How do you analyze at the end of the year your overall success by. Of all the small things you did? And I've got. We've got so much data on this. But even selfishly, from the content we create, we. I'm constantly asking speaking opportunities, clients that come in, like, what made you decide? And they're like, you know, I don't know. You know, it was eight or nine months of consuming content. I really trust you. I really like you. Like, it wasn't one video. But it's the accumulation of the investment in totality that changes your brand's position.

[B]

I think what most people say is that nobody is saying what we're saying in this space online. Like, it's. It's just full of pablum. And so when people listen to you, you're inspiring because you're saying things that other people like. But that's. That's what you're given. And businesses have to think, what is their special sauce like? I think too many businesses want to say, all of my stuff is great. Yeah, right. And what summer Fridays kind of did is said, okay, well, we'll just make the coolest lip balm, right? And it'll bring people. It'll bring. It'll bring people in. But, like, it's like what we talk about restaurants. Everybody has a great steak, and the chef wants to say, my steak is the best, or my branzino is the best. But to get them in, if you have the best bread in the city, you know, people will talk about it and come in and then become. And then become loyal to your steak.

[A]

I literally thought better. Like, the bread standard in Ireland was out of control.

[B]

Just for people who missed it, like, this is a pet peeve of mine. How many people have ever had garlic bread and sent it back because it was too garlicky?

[A]

Never.

[B]

Like, so I don't want a suggestion of garlic. I want. I want. I don't want A suggestion. I want garlic. I want to be delivered. I want to go to a restaurant and say, oh my God, this is too garlicky. It's never happened. Why not? Why are you saving money on garlic? You know what I mean? Make your deliverable amazing. People will become attracted to you because of that and then enjoy all of your other offerings.

[A]

I love that. It's a great point.

[B]

Thank you.

[A]

But I do want to quickly touch on this.

[B]

Tell me where the garlic bread is too garlicky, by the way, in the comments.

[A]

Oh, yeah, we'd love to hear that. Please don't say Eastside Marios. The thing that's really relevant to that point, though, is it is important to note that Mariana Hewitt and Lauren Ireland, the owners of Summer Friday, are very big Instagram influencers. So the reason why this also worked is they understood the role of portability in order to get virality on social media to increase that rule of seven awareness. Now, the reason I say that isn't to dissuade you, because the reality is, is that one business's success is unique to that brand and business. Which is why you need to be thinking strategically about yours, but to find your proverbial lip balm for the strategy, your brand, your personal brand that can tap into your psychology. Like, what they did is translatable. It's not stealing the lip balm. You get what I'm saying? Like, it's that level of thinking. But the reason why I brought up the second aspect is I have a general guide for developing a budget. And the general guide is you want to look at your projected gross revenue. So what are you anticipating to create from a revenue standpoint? Not profit for the year. Right. So you look at the entire year, and based on that number, if you're a new brand going into market, you should be putting aside 20 to 25% of the projected gross. That's including like labor. Like if you're hiring a marketing team, strategist, an email writer, as well as ad spend and execution. So if you're going to conferences, like anything within the marketing realm.

[B]

Yeah, I just think you have to qualify that is that those numbers are sometimes useful, but it's the quality of how it's done. Like, I've seen people put more and it'd be a complete waste. I've seen people put less and done it asymmetrically and had a far greater.

[A]

Upside than that, 100%.

[B]

How many clients have you sat down with and challenged their conference budget in terms of actual sales and realized that they were Just doing what they were told they're supposed to do for the last five years. Right. Like so the numbers has to be tied to good strategy or else.

[A]

But most people don't even know where to begin with a number. Right. So you again, the reason why you're listening to this is that you need strategy but in order to have a developed guide moving on from that. If you're an established brand in market, it should be 15 to 18% roughly. So if you're someone that's been in market for five years, for six years, you want to continue to grow, but you don't. But again, the difference between the new to market versus the established market is that marketing rule of seven. So you have to spend slightly less money because you already have that repetition in market. So when you don't have that rule of seven build up, that's why you need to spend more money, because you're trying to launch more ships to start connecting with more people. Whereas the 15 to 18% is more awareness, less discoverability. Discoverability is still a part of it, but it's less of an urgency because more people should know about you. Both of those percentages though have nothing to do with the cost of launching your brand. So like redoing your logo, redoing your website, redoing your marketing materials, anything that is like a actual foundational build is a sunk cost and should not be a part of the marketing budget because your brand also has to look good.

[B]

Yeah, I'm just constantly struggling with how bad strategy is. So all these numbers don't really mean anything because most people executing strategy are just so bad at it that they're just wasting time making things. You know what I mean? And so especially in the corporate world, this is your budget. Give it to an agency, they're going to spend it. Your, your job as the leader or the owners is to understand your brand strategy so it's done properly. Think of Cracker barrel. They spent $700 million on that rebrand. $700 million insanity on that rebrand actually makes me crack. And then they turned it around. That's a $700 million mistake because they hired people who fit the right categories to do something that was nonsense. Imagine if they gave $700 million to our agency to make user generated or good content across North America with some tweaks like imagine the difference to the bottom line of that. That's why people have to be very, very aware.

[A]

But I do think this is the great divide right now though in let's call it marketing. Not branding, because these huge companies are being soaked by these outdated, liberal agencies that are really selling. There's never an end point to the DEI narrative. There's never a point where you've done enough. That's where they keep racking up the bills and spending more money, and you create this ineffective product. I would say, though, of the businesses that we speak to, 6 out of 10 don't even have a guide for even roughly what they should be thinking on spending. And they're often not spending enough.

[B]

Why most people steer away from strategy is it involves difficult decisions. We have to say no to people, you have to say no to departments, you have to say no to options. What strategy is, is using a limited amount of resources, focusing on the thing that produces the best results. Right? And so when it comes to marketing, you might have a budget, but you need a strategy. How are you going to use that budget to get the best results? Because you only have a limited amount of dollars.

[A]

But most businesses where they falter is that they are more comfortable spending on the bottom of the funnel than investing in growing their brand. And that's why I'm trying to. I'm pushing you to think big picture. Like, the trepid I just did a cohort with. These realtors are like, we're talking like, the average home they sell is $10 million, like, per home. Like, starting. Like, these are like the top, top, top realtors in the United States in all of the major markets. And the last takeaway for week five of the six weeks of the cohort, they were like, the number one thing I learned in this is that I need to stop being cheap and hire the videographer. And I'm like, of course you do. Like, I'm like, If you get one $10 million listing when you already have 20, like, most people aren't thinking in terms of, I can't see this right away. Therefore it doesn't make sense for me to invest in it. Opposed to, you need to have a better picture of, based on what you're intending to make, what you can afford to spend. Because by the time you get too, like, stuck, the. The leads dry up, your competitors are killing you on socials, you're too far behind. It is going to cost you not only a lot of money to get started, but time. Because at that point, you are starting from, like, pretty much nothing. And there's no one unless you're gonna, like, just do controversial shit on the Internet. Like, you can't grow at a super fast rate. It takes time. It takes time. To compound.

[B]

Yeah. When it comes to the science of scaling, a lot of entrepreneurs and businesses, you know, they need an influx of new thinking and accountability because what got them there won't get them to the next level. And so they keep, you know, and that's what prevents the next level of scaling. That's where strategy needs to come in. If people are still listening at this moment, I would encourage you to follow and share the content because we provide this information weekly to help people. And there's. We know from the engagement there's tons of people watching who aren't following. So if you can do us a favor and follow and in exchange, I will give you a rogue lawyer behavioral psychology moment. You heard Camille earlier say, I don't disagree with you, but whenever you're having a conversation with a customer in the sales process or an employee, ignore everything before the word but and pay attention to everything after but. Because what's said before but is just a platitude. But what the person really wants to communicate with you are the words after but and. When you're in a. When you're in a sales cycle, always remember to pay attention to what's said after but I agree with you. But.

[A]

The only thing I often agree with. What you're completely correct. And I use that rule often in sales and in working with clients with you. My only struggle is I do think that two things can be right at the same time. And I struggle with when we're talking, because I agree that you are correct, but I want to give you more, more data points for you to consider. I shouldn't have had to justify myself, but I just felt like I needed to get it out.

[B]

But it's like when somebody says, oh, I've been meaning to call you, but I've been very busy. What you can take from that is you're not important enough for them to call you compared to the other things that they're busy with. So just pay attention. What's said after but. And what is the most powerful world word in the English language?

[A]

Your name?

[B]

Well, the name, yes. But in terms of convincing, it's because if you pay attention when you're talking to people, if you want somebody to listen when you slow down and say because you know the reason I did this is because when people say because, you'll all. You'll hear people lean. You'll see them lean in when somebody says because, because they're really interested in knowing what comes up after because. And so if you're selling your product, the reason why you should get into this car or buy this house or, or do my is because.

[A]

And that's how only super cool people will drive this car.

[B]

Yeah.

[A]

Yeah. And you're one of them.

[B]

The because speaks to their identity.

[A]

Yeah, I love that. Thank you for that. For that.

[B]

We better get a crap ton more follows after that.

[A]

Jesus, guys, like we're doing backflips over here for you.

[B]

Okay, so I just want seat bass with laser beams pretty much.

[A]

So the next thing I want to talk about is actually something else that came up in several conversations that we've had with our bigger clients. Just as a reminder, we try to talk about the bigger clients on these people podcast because I think it's really interesting to share with small business owners what happens, you know, behind the scenes with these big companies and to remind you that they are just as lost as you are. In fact, the things that I hear from the bigger Companies are often 10 times stupider than from the really well intentioned small business owner. It's just a difference of how much money they can burn because it's not theirs. But the thing that's really interesting that we've been talking about with these big companies is this looming idea of taking tariffs. And I really haven't seen anybody on the Internet talk about it. And what's interesting is all of these large companies have already had to do their cash flow forecasting for basically projecting how much money they're going to be losing based on the tariffs. Right. And it was money that they are losing that they can't control. So in some ways the marketing teams have less pressure and less money because they're already anticipating future down quarters like going into next year 2026. And what's interesting that we're hearing kind of in these private meetings is all of these big brands are waiting for the first big brand to offset the tariff price point to the customer. So yes, costs are increasing all around, but, but by and large, these big companies are eating these losses because they're waiting for a behemoth, not a, you know, a super small company to offset it to their small, you know, clientele to start doing it. And I think it's a really interesting conversation for us to have because it's, it's interesting that everyone is saying this behind closed doors, but no one is saying it online.

[B]

It's interesting, but it just, it depresses me because it's just a constant lack of imagination. People are like one dimensional leader thing. It's like, oh, I'm waiting for the big brand to do it, get ahead of the narrative like I do prior to consulting and coaching, you got to get ahead of the narrative. If tariffs are coming and undermining your business, you need to message that. Right. And be honest. If you have brand loyalty, if you sell purely on price, well, you got some problems with tariffs because you don't have another option to convince people to buy your product. It's only price. And if nobody else does it, then you have to keep your price advantage or you don't sell anything. Right. So 30% tariff moves you into the medium. You no longer have a brand value to a consumer, so you can't do it unless everybody else does it. But if you're at the top or if you have brand loyalty, just get out in front of the narrator. What I would do is say, hey, look, these tariffs are kicking us in the butt. Right. We're working to move our production as much as possible back to our target market of the United States or wherever it is. Right. But in the meantime, we are continuing to do this, but expect some prices because of it.

[A]

I'm taking, I'm taking the devil's advocate approach this time. Yeah, I really think that these companies shouldn't, and I think that these companies should be looking at themselves in the face with a very critical eye.

[B]

With a mirror. They're gonna be looking at themselves in the face.

[A]

I think they need to be taking a hard look at how they're spending because for a long time it's been a lot of status quo throwing a ton more money to marketing companies that are super inflated. And this braggery of the founders flying around in private jets based on the margins that they can make from their products. And I don't think that there's appetite for much more because they want to maintain a margin that was unrealistic for offshore goods.

[B]

We're talking more about like the non public companies that get their inventory from overseas.

[A]

I'm not actually. I'm talking exactly about the big companies that we've been in the boardrooms in for the last two weeks that are saying they're projected to be losing over $10 million in their first quarter. And they're waiting for the first big company to make an announcement that they're offsetting it to the customers.

[B]

Now what I would come in with kind of guerrilla tactics is like fire agencies because you're spending this amount of money, but you're not getting the value. Fire the agencies, take half, you can spend half of it on whether it's somebody like US guerrilla marketing techniques and then give and then that's where you can absorb it because there is wastage in how people are spending money. You can have some austerity mechanism but most of those big companies are blowing that tariff amount on crappy marketing.

[A]

Well, that's my point. I don't think anyone is actually speaking about the truth of tariffs in that it allowed businesses to have a still way below where companies had to have cost of goods before. But it's blowing out a margin that is that we were only able to access on the backs of emerging economies which in a, in a world of bio warfare when we're probably going to be expecting more pandemics, we need to be more self reliant within the countries that we live in. And to. I saw this fitness wear brand that I follow. This is like first when the tariffs came out and they're the first to be posting on their, all their private jets these fabulous trips they go on with these beautiful models. They order all of their workout gear from China. I know their margins. It's like $2 for a bra that they sell for $135. And they're complaining because they're getting a tariff hit at, at half a million dollars for their shipment that's coming in from China. And I'm like eat it.

[B]

True.

[A]

Because I like, I think that that time has passed where it was a golden era.

[B]

But that's why the tariffs even politically everybody wants to like slam on it. But the absence of tariffs allowed companies to do that. And then there's all these people upset with tariffs but it's like no, where does it go? We're like saying no, no, no, you can't just buy it cheap in China, have a thousand percent markup and then have a private jet when they could be made here a little bit more expensive. And maybe you don't have two private jets. Like that's why like if you're thinking about your nation, your economy, they're not bad just because of what color your politics are. You need to look at it. And your point is really good. That's why I talk about politics sometimes and business is sometimes it overlaps. And what we're not doing enough in our world is thinking about black swan events.

[A]

Yeah.

[B]

And you know when I, with some of the companies I work at least once a year we sit down and we kind of, we bring up that Nicholas Telly black swan thing and say okay, what are, what are five things that could happen in the next two years that could destroy our business? We at least war game things that loss of a supplier, regulatory changes, but by at least war gaming it, then we look at their operations and say, hey, is, is any part of your business dependent more than 80% on one supplier, one thing. So you need to build that into it if you're going to survive over the long run. Nobody does that. I don't think many corporations we've ever do it, they just, they're living off these great margins as you say. I think it's going to, they're just going to bleed the company out, right. And in the end they'll just move on somewhere else.

[A]

Well, and that's the other thing too is like it's been really the, the most incredible time to be able to like I even watch like some beauty brands, right? Like they literally, Dior will launch a new lip gloss. The owner of this other beauty brand will love the lip gloss, will take the lip gloss off of the Sephora shelf, ship it back to a manufacturer in China, they spin it, they pull out the, the formulation and then they'll change one ingredient and then they can too. So like that level of access and the ability to like launch a TikTok shop, like have sell a $2 million in product in a weekend is incredible. But like with that something has to change. Like that perpetually cannot happen forever. And it's also really frustrating to the consumer when these brands can just blow money on hiring like the biggest models, the biggest photo shoots because they have these crazy margins and you're buying a product that falls apart after four washes that you spent $150 on it, it's, it's a problem.

[B]

They're leveraging human psychology that if they can create big brand buzz, they can get margins that are crazy. But they're not investing in their product. It's a short term strategy, not a long term strategy.

[A]

And that's also why I love working with small businesses, especially with these cohorts because small and medium size. Well, I know I love a small business. I love a small, I love a small business. Honestly, I, because they, I don't want to use my powers for evil, I want to use them for good. And it's, that's the thing that really bugs me is that like we can analyze these campaigns all day and we could talk about them and we'll blah, blah, but like honestly at the end of the day, summer Fridays, I roasted, you know, a few months ago because they did this like literally would have had to be like a 3 million dollar two day event and it shows you, like, how much money they're making and how large their margin is, and it's. It's got to be called out.

[B]

Brand loyalty is important because you can survive storms if you have brand loyalty. If there's something else that brings somebody to your product or service or offering other than just price, if it's just price and hype, it's transitional. But I wanted to share with the listeners. I said relative deprivation earlier, and I think too much in marketing and business, we're just always comparing each other on Instagram. And do you mind if I tell the relative deprivation story? Interesting psychological concept. When I was in former Republic of Yugoslavia as a peacekeeper years ago, there was two villages across a zone of separation, say a Croatian and a Serbian village that had been fighting each other and they hadn't had food resupply for three months, so they were starving. On day one, we bring in a resupply shipment, but because of the zone of separation, we can only bring it to one village. So let's say we bring it to village A and we come in and they're just jubilant. It's like flowers on the streets. Thank you. We're giving them bread, milk, some vegetables. There's the next day, we get the next shipment, supposed to be identical. We go the other side, we deliver it to them, and then they're jubilant. The day after, we go back into village A and there's a riot and they attack the military vehicles. And the question is why they were so happy. But what they learned is that village B got eggs and they didn't get eggs. So they were deprived relative to somebody else. Even though they were just ecstatic, they actually rioted and it escalated into like a use of force scenario because somebody else did better than them or got more than them. And when you're a business owner, don't get into that kind of relative deprivation comparison, because it can. It can bring you down and take you away from your goal of what makes me happy, what is effective, and how do I build a loyal community.

[A]

Yeah, I love that story. And it's so true. Right? Like you. You only get sad about things you thought that you could have had. Like, I feel like that way when I go to for in home sense of winners, you know, like, I walk in, I fall in love with something and then I have to leave. And then I keep thinking about it, then I go back and it's not there. And it's like, why am I sad when I didn't know that I could have had that. Like, it didn't exist in my world. When you go on vacation, you look at souvenirs and stuff, right? It's like the idea that you could have had something and you don't. It's. It really is like, bit fucked up.

[B]

But you make a post, you get great engagement, you get some positive comments, and then you look at somebody else who did a post way better, and all of a sudden you feel down. Like, that's a social media disease that's afflicting people.

[A]

Well, it's also the reason why you have to get so focused on, like, what do you want? You know, like, I've even, I've even found myself caught up by it too, with other people that are in our space. And I'm like, you know, look at how many followers they have or look at, you know what? And it's, it comes down to what, it's really where I've grown up about. This is what is it that I want to get. And when I look at a lot of the comments they have and a lot of like, it's not my target, right? So it's, it's not what I'm actually speaking to and want. I think that's a really, really powerful thing. We call it the, the dream audience builder. Right. It's going to be a part of the social media planner that's coming soon. But it's the whole idea of, have.

[B]

You even told people that they can register to be one of the first 500 signed copies?

[A]

No, I haven't.

[B]

Okay, well, don't say anything yet.

[A]

I won't say anything yet.

[B]

So that planner is amazing.

[A]

But that, that really is a core thing, right? Is like, what is it that you actually want so that you don't get caught up in the like the mental health trap of like the ugliness of socials. Let's move on. So the next ting I want to talk to you about, the ting alo yoga is launching a $3,000 leather bag. And I cannot believe that this is not an April fool's joke.

[B]

For $3,000, I should have somebody come to my home and do yoga with me for a year. Well, I'm trying to figure out why. I've been researching what the decision making, what the strategy is.

[A]

There's zero strateg it. It's so. It's delusional. Like, it's. I wanted to say aspirational, but like, aspirational tends to have like a dream. It is literally delusional. If they wanted to get into luxury goods. They should have created like a sister brand with a different name that could skew luxury because it makes zero sense. Aloe yoga to me is holding on by a thread. When I look at the segmentation in the market right now, they own premium. Like they really own premium for middle class people or lower middle class. It's an aspirational brand. It's kind of like that Club Monaco price point or Ritzia price point. Like you're looking at about 150, 200 when you spend there. Like it's a, It's a big deal to have an aloe yoga outfit. And then to people with money, it's a, it's. It's still a brand that they can signal that they're wearing a brand. But it should shows a lack of delusion because who's sweating in a Chanel workout outfit like that is just such an extreme.

[B]

The angle. They're mostly a Gen Z target, but there's older people using. Well, their CEO says Gen Z is they.

[A]

They were Gen Z. But the thing that's really interesting is I find it's.

[B]

I almost finished a sentence there.

[A]

I shut up. I find it's actually so many Gen X's and millennials, like, it's really as skewed to be like, not you because, like, you're actually quite trendy and fashionable, but people who, who have moved away.

[B]

I like that. Like, I wanted something other than Lululemon. I thought aloe might be it. But I think from what I read on the CEO is he believes the next status marker is wellness. And so what he's trying to do is, is link wellness with status by having an expensive Italian leather bag with crystals that reflect intentions. So that aloe bag will be a better quality bag than any Louis Vuitton bag that's plastic because it's going to be Italian leather. It's going to have a crystal, and it's going to. And he's trying to say that wellness is status, which, you know, successful people are often into wellness, but you know what I mean? So I can understand it. But what you're saying is they haven't done the brand groundwork to justify that, because just in the store, there's like a giant jump between the most expensive item and then a $3,000 bag.

[A]

Well, the most expensive item is really not. It's, it's expensive, but it's not. Like it's not actually expensive. Like, it's not a, it's not a, A paycheck expensive. And that's the Thing that is, that doesn't make sense to me is that what would have made the most sense is them start to go up market, like start doing like luxury retreats, start doing like investing in more of like they tried to do a peloton ish model but like it, they didn't really roll it out. Like do more of the aloe studios and like major cities like they have in la or start selling like premium, like, like a full blown like cashmere set. You know, that's like 700 bucks.

[B]

You know what, I agree with you, but I think you, I think you're just going down one trail and you're not thinking like they're launching into the scarcity. There's only a limited amount of bags. They're going to be at their sanctuary stores. They have a limited amount of crystal things. So what's the risk to it if there are wealthier people who love aloe and want to move into it? Like I don't know if there's a risk to, to it, but it could be a way to launch into making aloe a little bit more luxury.

[A]

I don't think rich people love aloe.

[B]

Rich people, dumb people buy these expensive bags. This is the problem. Rich people generally don't.

[A]

You said rich people though. You said rich people who like aloe. And I said I don't think rich people love aloe. I think rich people tolerate aloe because it's, what I'm saying is price range.

[B]

The people who are buying it, their parents are rich, like in many cases. So there's a lot of people who didn't earn their money spending a lot of stuff, a lot of money on dumb stuff. Right. So there was a market there.

[A]

Okay. So if they have five bags, I'm sure they can find five people in the world that will buy them. But that's not, it's not building anything meaningful for the brand that's going to be measurable.

[B]

Well, but isn't it the highest end wellness gym bag on the market?

[A]

Isn't the highest end gym.

[B]

Maybe they're trying to. Because Louis Vuitton. I'm going to make a gym bag that's, you know, like I've seen, you know, those fancy bags. What's the bag? The Gucci bag. Like they make Gucci gym bags. Right. But to me, a Gucci gym bag made of synthetic and plastic isn't worth what Gucci charges for its gym bag. Whereas if Alo makes it out of leather with a crystal, you know, it's going to be the Same price point. Which one does.

[A]

It's not a gym bag. It's. It's a purse. It's a purse. Like it's a purse that you would wear to lunch. And I. Aloe hasn't demanded the authority. For someone to spend $3,000 on a purse like aloe is slightly more expensive than Lululemon. By like $20 more expensive Lululemon. It's like Lululemon launching a $3,000 bag. You would never buy that from Lululemon. It doesn't demand that authority. I don't disagree with you that Gucci and Louis Vuitton have lost the plot, but they, at least for a lot of people, demand a domain, a brand authority.

[B]

I agree with you because I love the word coherence and it's kind of incoherent with its brand identity. To go to 3,000, it sounds like somebody thought it was a good idea. We'll put some crystals on it as opposed to making a bag that was maybe in the 500 range.

[A]

800 would have been super smart. In 800 leather bag with crystals on it, 850 would be super smart.

[B]

That's a signaler.

[A]

But it's $3,000 puts you into a category of Louis Vuitton, which I agree with you.

[B]

It almost exposes you to ridicule. Like it's a risky thing. We'll see how it happens. But you can almost be ridiculed, you know what I mean? Because it's not in the brand identity and you're walking around with a $3,500 aloe bag. It's interesting.

[A]

I just think that where aloe is in its life cycle of a brand is like they grew very quick, they spent a lot of money, they IPO'd. They're in a position where people with money are wearing the product because there isn't a premium accessible alternative to work out wear. Right. Like a lot of wellness has become a status signaler. Everyone is talking about weightlifting and meditating and there, there's an entire wardrobe for your activewear. Aloe did a better job of being more stylish and on brand than Lululemon. Lululemon kind of like lost the plot. They started using overweight models. Like they just be. It really doesn't speak to a large segment of people who spend their lives counting calories and working out.

[B]

So what I heard is they want to become a luxury lifestyle brand as opposed to athleisure and maybe, but you know, they should, like you said, they should. They should make the best gym bag. On the market that's got a little slot for your Ozempic, a little internal fan to get rid of moisture so there's no humidity. Like, just really kid out and.

[A]

Amazing. I just think that there's. I think there's space for what they're saying. Saying it just. It can't be under the name Aloe, right? Because, like, aloe is. Has become ubiquitous. Like, it's, It's. It's nicer than Lululemon. It's more stylish than Vori, but it's still. You can go in any airport and like, you'll count within the first 10 minutes, 20 people wearing aloe. Like, it's, it's like.

[B]

You know what I liked about Lululemon? Like, when they came out with that backpack, it was a damn good backpack for traveling.

[A]

Lul used to do things well. They were a great brand.

[B]

That backpack you could use for work, study, school or travel.

[A]

It's amazing.

[B]

It was.

[A]

Chip Wilson's Little Black Leggings is actually a fantastic book. I highly recommend people read it because Lululemon had a strong brand foundation. Aloe was always designed to be a pump and dump. It's like we're going to come in with a slightly sleeker logo. We're going to copy what that brand is doing. It's going to be polyester, but it's going to be nicer things that you can wear. Now, what Aloe has been doing well, and you've noticed it, they've gotten into more, like, stylish sets. Like, they are going more upmarket for the way that they're dressing people. I just think it's too huge of a jump from a 300 outfit to. I think it's. Aloe to me is. This is. I think this is the core point. Aloe to me is best worn with a Louis Vuitton bag. Like, it's kind of that kind of a brand. Like, it's best worn with another brand. So they should collab, you know what I mean? Opposed to trying to be all the different brand pieces.

[B]

There you are being a strategic thinker again. That's why they pay you the big bucks. But that's why you need to get out of this bubble of marketing. People who don't really know what they're doing and they're in a. Like that. That's brilliant. Right? Collab with the. Right. That's the path to luxury lifestyle.

[A]

Yes, right.

[B]

Is to start getting in there kind of skims, kind of, you know, like, kind of had it to, like, skims.

[A]

Isn'T trying to launch a $3,000 bag. Like when I look at the my, like when I look at like the gym we go to and I look at that, like on Thursday I had a call with a high end client who was wearing an aloe hat, like, but she was wearing, with a Van Cleef necklace. You know what I mean? Like, they don't, they don't want aloe to get into jewelry, they don't want aloe to get into leatherwear. They want aloe to do what aloe does and then they wear their other brands around it, which increases the status of aloe.

[B]

I thought last week you were arguing that Louis Vuitton should get into socks. And.

[A]

Well, so I read this book.

[B]

Oh, you read a book?

[A]

I read lots of books. I read more than him. And she reads a lot. I read a lot. So I read this. This book is actually fantastic. It's called Deluxe and it's basically like a chronicling journey of luxury fashion. And effectively like in. I wish I had read this before our episode last week, we talked about the Louis Vuitton. But effectively Louis Vuitton strategy was to become the proverbial McDonald's. That's what this book says of luxury fashion. Because they wanted Louis Vuitton stopped making its, its trunk wear and it's like handmade leather goods. In the 70s, out of the two factories that were left, there was a complete decline in demand in sales for Louis Vuitton. And Bernard Arnault repurchased the brand so that people who were coming into wealth because there was a complete wealth transfer in the United States States as women started to get into the workforce and they re entered the workforce which, which surged the demand for ready to wear designer goods. Before women re entered in the 70s, there was a complete drop off from the 40s, 50s and 60s because there was just less demand for designer things that the, the aristocracy and like what the US was trying to emulate with the European aristocracy changed. Aristocracy changed. Aristocracy, aristocracy changed. Now with what basically what he said is like, they basically repositioned Louis Vuitton to be the brand that like people can like buy into to buy a piece of heritage. And that's why they put Louis Vuitton stores in like every major tourist city in the world. And they're like, they're often near a McDonald's. Not that to be McDonald's, but because they wanted to be accessible to the masses. So the point is.

[B]

No, but every luxury store is in most major tourists. Every luxury store is In New York City, London.

[A]

No, not true at all.

[B]

They're not. There's not a Cartier in New York City, London, Toronto, Miami, L.A. honolulu, like Goyard.

[A]

There isn't. There is. You're just saying, you're saying all the brands, but it's not all the brands. Right. Like Gucci has become that. Chanel has become that Cartier.

[B]

Are you saying this author said that because they're close to McDonald's, they wanted to become the McDonald's of luxury?

[A]

No, she said that the analogy of the way that Bernard Arnault purchased Louis Vuitton and his goal for the rollout of that brand is to become like.

[B]

Because McDonald's is in every small city. So I don't see the reference of they're like McDonald's because they're going into major tourist cities.

[A]

Well, they're like McDonald's and that it's easy to access. Like, it's an easy to access designer. It's for the mass markets. The way that they approach the design house and how they produce goods isn't designed to be the way that we.

[B]

Mentioned that they started going into malls, which ruined their brand years ago. Right. That that's when they moved into suburb, into the suburbs.

[A]

My point is that the idea of them getting into more souvenirship, like of developing chocolates that people can like go home with and like, like talk about on Instagram and TikTok taps into the idea that they're producing materials for the masses.

[B]

I don't think anybody's talking about Louis Vuitton chocolates unless they're damn good chocolates.

[A]

Well, on Instagram and TikTok, there again, not your feed, not your audience. They're not. Louis Vuitton is not developing little character like chocolates. For Philip Millar, who's talking about carrying a tactical pen around the streets, highly recommend it.

[B]

Check in the bio for my, my affiliate link for Dr. Kompanz.

[A]

As always, guys, please subscribe. Send this to a friend and if.

[B]

Anything, help us grow.

[A]

Help us grow. And if anything sticks with you guys and you're like, man, I keep thinking about that. Send me a message on Instagram. Love to hear from you. Have a great day.