Laura Kakolewski

Marketing in Pursuit of Purpose

Posted by Laura Kakolewski, Oct 17, 2016 0 comments


Laura Kakolewski

Nearly eight decades ago, a group of 23 mountain climbers made a promise—a promise to take their shared passion for the outdoors and apply it toward bettering people’s lives. They followed through on that promise when in 1938, a business was born—one that reflected their shared purpose for “a life outside.”

It’s been 77 years since Retail Equipment, Incorporated (REI) opened its first location. Its beginnings were driven by an inherent sense of responsibility to the outdoors and the community that depends on it, and today, the brand is guided by its core purpose for advocating for A Life Outside.

REI’s business model is unique in that they are organized as a co-op; co-ops are a way to share ownership with members. According to REI President and CEO Jerry Stritzke, "As a cooperative and as a members-owned operation, we define success very differently. We take a long-term perspective and run our business to meet our membership's objectives, and for us that's predominantly about delivering a compelling outdoor experience."

With its purpose-driven strategy and member-focused culture, the brand prides itself on Trust, Customer Loyalty, Inclusion, and Social Responsibility. The co-op model also supports passion before profit, and in today’s digital and fast evolving consumer-driven world, the brand’s transparency and authenticity is a refreshing breath of air.

Many nonprofit arts organizations would say they are just like REI—driven by values, and focused on the community. But in this case, REI has succeeded in showing their members what it really means to belong to something bigger than themselves.

Most—if not all—nonprofit arts organizations are constantly seeking out ways to connect more deeply with their patrons, subscribers, donors, and members. But at the end of the day, we have revenue goals to meet (or, ideally, exceed). Often, when push comes to shove, our responsibility to increase the bottom line trumps creating meaningful moments of connection with individual patrons.

But as a member-driven business, REI has managed to continuously increase their sales (beating out competitors such as L.L.Bean and Patagonia) and show drastic increases in membership. Today, REI is the largest consumer cooperative in the United States, with 6 million members and 143 stores nationwide (in 2015 alone, more than 1 million members joined REI).

Here’s the nitty-gritty into how, and why, it’s working:

The brand exists for its members and, as a co-op, returns a portion of its profits to its members in the form of annual dividends. Members receive 10% of their annual purchases in the form of store credit, cash, or check. Thus, the more you purchase from REI, the bigger the dividend you receive.

A low barrier to entry (a lifetime membership at REI costs $20.00) allows money to go straight to the bottom line with a zero “cost-of-goods-sold.” According to the company’s website, in 2016, more than 6 million members nationwide will receive more than $185 million dollars through dividends (compared to $165 million last year). That’s right—the company shares three-quarters of its profits with the outdoor community, annually.

But this low barrier to entry is actually a major access point for an inner desire to belong—to belong to something bigger. Just like its founders, the current REI member base is still driven by the same idea that it’s in the wild, untamed, and natural spaces that we find our best selves. That’s why shopping at REI is a constant reminder that you are making an investment in the outdoors and helping people get outside. 

REI’s Flagship Store in Denver, Colorado, complete with an indoor rock climbing wall

REI’s goal of creating, improving, and sustaining access to inspiring places is why they dedicate resources toward introducing members to experiencing the outdoors. It’s a relationship between the brand and the customer: REI members make the choice to support the co-op, and in turn, REI makes it their responsibility to represent the outdoor community.

But REI isn’t just a crunchy business run by hippies—their award-winning social media strategy demonstrates brilliance forged through its values.

In 2015, REI announced that it would close all 143 of its stores on…Black Friday. For retail, this decision could be business suicide. But for REI, the company made this decision so its employees, and hopefully its customers, would actually enjoy time outdoors instead of in stores.

A social media marketing campaign for the closing of its stores, #OptOutside, went viral. And according to Fast Company, within 24 hours of the #OptOutside campaign lanch, the brand's social media impressions went up 7,000%, with 2.7 billion media impressions. Overall, the campaign attracted 6.7 billion media impressions, 1.2 billion social impressions, and got more than 1.4 million people to spend the day outdoors. Not bad, huh?

To summarize, here’s how the arts can be a little more like REI:

  1. Focus on your most loyal customers, first. REI maintains a laser-focused approach on its loyal member base, and in turn, the brand has seen an enormous increase in customer loyalty, brand credibility, and revenue. In the arts, however, audience retention continues to be a field-wide, systemic issue. The focus, or priority, more often than not is on audience acquisition. What could be possible if retaining current audiences was at the heart of our audience development strategy?
  2. Actions should be driven by organizational values. When #OptOutside was first launched, REI President and CEO Jerry Stritzke made it clear that the brand was making a statement about its values: “Creating something fueled by purpose is really important to people.” In a statement on the brand's website, Stritzke notes, “For 76 years, our co-op has been dedicated to one thing and one thing only: a life outdoors. We believe that being outside makes our lives better. And Black Friday is the perfect time to remind ourselves of this essential truth.”
  3. Marketing led by altruism is more important than marketing led by an agenda. The brand smartly created an inclusive campaign that encouraged everyone to go outside and share the experience on social media. The success of #OptOutside demonstrates why, now more than ever, customer empathy matters and why marketers need to take action. It is the brands that not only operate with empathy, but allow empathy to drive decision-making, messaging, or products and allow it to fuel every decision, message, or product, that will come out on top—more agile and more successful.
  4. Tough decisions can lead to meaningful ways of connecting. While the press and competing retail stores doubted any traction that #OptOutside would receive, REI knew that even tough decisions can open the door to meaningful and relevant ways to actually connect with people.

How do you allow your actions as a marketer, a brand, and an arts organization to be driven by purpose? How are your marketing strategies really resonating with people, leading to meaningful community connections?

The Fueling Change in Arts Marketing blog salon is presented by Americans for the Arts and supported in part by TRG Arts.

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