RENEGADE THINKING from the Founder/CEO of Renegade AND the author of "The CMO’s Periodic Table: A Renegade’s Guide to Marketing."

Q+A on Small Business Saturday w Scott Krugman, American Express

11/8/12

As far as I am concerned, Small Business Saturday is the quintessential example of Marketing as Service, achieving the kind of success that most marketers can only imagine.  The service in this case not only establishes a day that puts the spotlight on small businesses and rivals Black Friday and Cyber Monday, but also enables small businesses to be more competitive throughout the year, with marketing toolkits that highlight their distinct advantages over their larger competitors.

With the third annual Small Business Saturday set for November 24, perhaps the most remarkable part of this program is how it is developing a life of its own, with politicians uniting over its significance and more and more small business owners trying to take advantage of “their” day. To better understand the thinking behind this program, I spent a good hour on the phone with Scott Krugman, Director of Communications at American Express.  Here’s part 1 of my interview with Scott.

Drew: So let’s start with the origin of the idea of Small Business Saturday back in 2010.
Well, like all good ideas, in a way, they originate from our customers. AmEx OPEN’s been around now for twenty-five years, and the reason why we’ve been around so long and been so successful is because we really take the pulse of our customers in a variety of ways, and in this particular case, what we found out through research and talking to our customers, their biggest need coming out of the recession was more customers. So that got us to thinking, what can we do to help small businesses get more customers?

Drew: So after identifying the need, what then?
After a number of conversations with a lot of people, the thought came: what could we do to drive business to small businesses during key times throughout the year?  Naturally, that got folks in the room talking about the holiday season. Obviously big-box merchants have “Black Friday.”  Online merchants, more recently, have Cyber Monday.  So we thought there might be something there for small businesses, and the thought here was, let’s give small businesses their ceremonial kickoff to the holiday season.  Let’s get their holiday shopping season off to a strong start.  Let’s create a day for them.  It wasn’t as quick and as simple as I’m making it out to be, but what that ended up becoming was Small Business Saturday.

Drew:  Looking back now, it seems like a no-brainer, but why back in 2010 did you think it would work?
We thought it was the right message at the right time.  There were a lot of conversations that were happening about the importance of small businesses to the economy.  The “shop local” movement was going strong, so we knew that there would be a lot of support.  We also knew through research that 98 percent of consumers said that they wanted to support small businesses.  So we wanted to create something that would take that support and turn it into sales.  And as we started iterating, it became clear that this was a movement. 

Drew: So how long did it take to go from idea to execution?
I should point out in terms of the timing element, this was basically getting the concept of Small Business Saturday to market—it had to happen in a matter of a few weeks.

Drew: Wait, let me make sure I heard you correctly. So in 2010, from green light to execution, it took how long?
A matter of weeks!

Drew: Did you advertise Small Business Saturday in Year 1 (2010)?
There was definitely advertising.  There was also a press conference at city hall involving New York City Mayor Bloomberg and our CEO, Ken Chenault.  There was a lot of earned media around it in terms of announcing the day.  It was a unique enough concept where it got a lot of curiosity and a lot of pickup.

Drew: What role did social media play in the launch of SBS?
There was a lot of social media around it.  In just that first year, we saw 1.2 million people liking the Small Business Saturday Facebook page.  That’s a lot of likes in a very short period of time.  We saw 30,000 tweets using the hashtags #SmallBusinessSaturday and #SmallBizSaturday.  I was told this, and I guess it was determined with Google, that it (“Small Business”) was the fastest-rising Google search term over that time period. So, I mean, there was a lot that went into it, but we knew in order for this thing to take off, it really needed to have a strong foundation in social media for it to become viral.  That certainly worked.

Drew: So why do you think this program took off?
We’re looking at four factors that really helped.  One was there was a lot of inclusiveness.  There was national scope.  The message was clear in terms of individuals being able to boost the economy.  This is really key and really important, because as much as we talk about American Express in this—and we’re not always comfortable doing that because we feel it takes away from the day—it became an agnostic day.  For small businesses to participate, they don’t have to accept the American Express card.  For consumers to participate, they don’t have to use the American Express card.  Is American Express making an offer for consumers on the day?  Yes.  But, they’re not limited to using that card in order to make a difference.

Drew: How did small businesses react?
It created a solution to help spur more business for small businesses, and small business owners really took to it.  I think in Year 1, not as much, because there wasn’t a lot of time to get them to own the day.  So I would say Year 1 was probably more about claiming the day.

Drew: So this feels a bit like cause marketing, another idea AmEx essentially invented.
You know, there are a couple schools of thought on that.  Small businesses definitely needed the help.  But at the same time, this isn’t charity.  Small businesses are the engine that drives the economy.  They’re creating jobs.  If people support small businesses, they’re supporting their local communities.  So they’re not just supporting the businesses, they’re supporting themselves.  They’re helping everyone.  It makes the entire engine work, especially as you’re coming out of recession. But the other piece of it is, it’s the discovery aspect of what makes small businesses so special.  And it’s not the fact that maybe they do need the help, but it goes beyond that.  It’s helping consumers rediscover these businesses that have been there all along in their communities: the amazing customer service, the unique selection and the special experiences.

Drew: So how do small business compete against larger rivals in the face of discounting?
They focus on their core elements.  Large businesses spend millions of dollars a year on customer relationship management tools to understand their customer. Small businesses?  That’s an inherent part of who they are.  So it’s a day for them to really leverage those strengths and allow consumers to kind of rediscover what makes them great.  But at the same time, it’s helping small businesses not just own the day, but give them the tools that they need to thrive during the day.  This might kind of take us a little bit into Year 2, but we can always pivot back and forth.

Drew: It must have been tricking to balance AmEx branding and the SBS idea…
This is one of those campaigns where the message was so compelling, and the reason for doing it was so genuine, that people naturally wanted to take part in it.  Again, this is where it needs to become more than just about American Express, because you’re not going to get the response from public officials if Small Business Saturday is owned by any one corporate entity.  You’re not going to get that kind of response.

So that’s why it’s more than just about us.  We might have been the one to push the idea into the marketplace, but in all honesty, it’s the small business owners that owned the day.  It’s their day.  We might have given it to them, but they have taken it and made it their own.  We will always support it.  We will always do things in the marketplace to support the day and to support small business owners because that’s what we do at OPEN.  But it is their day, and that’s what makes it genuine.  And frankly, that’s what’s made it successful.

Drew: Was it hard to relinquish ownership of this idea?
That’s a fair question.  I think it’s one of the tough things when there’s such a good idea on the table.  I think the natural inclination is to want to own and control it.  But that’s the irony here.  For it to be successful, you couldn’t do either.  And I think there were enough smart people in the room to know that.  Ultimately, we realized, it takes a village to create a day.

Drew: AmEx “$25 offer to shop small” couldn’t have hurt the program.
For us to do this right, AmEx also had to be “skin in the game,” so of course the card member offer was critical.  Otherwise, it’s just lip service.  Like I said, Small Business Saturday is what we created for the entire small business community.  But I think our merchants come to expect us to look out for them in ways that others don’t.

Drew: So, did Small Business Saturday drive small business sales? 
Yes, actually.  I can tell you on the record that transactions of—we can only right now measure folks that use the American Express card, right?  That’s what we have available to us.  So for merchants that accept the card, card transactions were up 23 percent on the day.

Drew: How about the softer measures like favorability among small businesses towards the AmEx brand?
I’m limited in terms of some of the metrics that I can discuss.  But let’s say our philosophy is, if you do the right thing, customers are going to recognize that about you.  And I think that there are not many companies that would have been able to do something like a Small Business Saturday in a genuine way.  I think that has a lot to do with the OPEN brand as it relates to American Express, frankly.

Drew: It must help that this is not the first time you’ve focused on small businesses.
Yes.  We’ve been in the marketplace for small businesses probably longer than anyone else.  I believe we had the first business card devoted to small businesses.  I think because of the history we have in this community, there’s an expectation that we are going to be supportive beyond product offerings.  So I think that it’s one of those situations where all those interests are aligned.  Obviously, we have an interest in doing the right thing to help small businesses: it’s what we’ve been doing.  Our customers expect us to help them with their solutions.  So I think you could say, in a lot of ways, Small Business Saturday was a result of us doing what we have always done, and that’s listening to our customers’ needs and trying to find solutions.  It just so happens that we found something, in this particular case, that was massively innovative.  And is there a halo effect from that?  Absolutely.  That’s why I think you see a lot of other companies wanting to be a part of Small Business Saturday as well.

Drew: So is this about doing well by doing good?
Like I said, I think for a company to do the right thing in a meaningful way, it needs to be genuine.  And I think the marketplace, whether it’s small business owners or consumers, are smart enough to know when it’s not.  So I think it needs to start from the desire of wanting to do good and wanting to do the right thing.  That’s where Small Business Saturday is no different.  That’s where it starts.  I think there’s… if you do the right thing in the right way, good things come with that, yes.

Teaching Social Business at San Jose State (with IBM)

01/13/12

Ben Franklin’s line, “well done is better than well said,” gets at the very heart of Marketing as Service.  If you want to truly engage your target to the point that they have a genuine desire to do business with you then you have to do something–it can’t be just talk.  A great example of doing something is IBM’s recently announced collaboration with San Jose State University with a program they call The Great Mind Challenge.  This program brings together students, teachers, IBM’ers (as mentors) and local companies that seems to be a win/win/win/win for all involved.

As part of my background research for a story on this program (see FastCompany.com), I interviewed Larry Gee, the SJSU instructor working with IBM to teach “social business” to a select group of undergrads.  I think you’ll find what Gee has to say about this business/academic collaboration quite interesting.

DN: Can you give me a little background on this program from SJSU’s perspective?
SJSU,  College of Business, has always brought innovation to the classroom so students can learn, apply, and differentiate themselves in the business world.   SJSU and IBM has a long relationship over the years.  It is only natural that ideas are bounced back and forth between us;  how we can make a difference when preparing the next generation of leaders.  Bringing social business into the classroom was one of those ideas that fit the innovation framework.

DN: Why did SJSU decide to collaborate with IBM on this project?
SJSU, College of Business,  decided to collaborate with IBM on this project because Social Business is a critical skill that students need to have to be competitive in the market place.   Social Business is a transferable skill across multiple disciplines ie business, bio-sciences, engineering, humanity & arts, etc.  Students worked on a real business problem, real time, to learn and apply social business tools and processes.

DN: Do you have collaborations with other large corporations?
Yes, we have collaborated with other large corporations such as Cisco, Google, Microsoft to name a few.

DN: If you were talking to another educator at a different university who was considering a similar collaboration, what advice would you give them?
My advice:  1) Identify key social business partner asap.  This is critical because a real life component is needed to reinforce key concept and process.  2)  Plan quickly with a clear course work and administration buy-in roadmap for execution in 60 days.  3)  Execute plan and have class up and running by next term.

DN: How are you evaluating the success of this program?
Students must be able to understand and apply social business tools/process to a real life problem.  The program success is measured on how well students learn, grasp, apply, and demonstrate how social business can be used in a business environment to increase competitive advantage or improve business process cycle time.

DN: How have students responded?
Students response has been great because they have already been exposed and used social media, Facebook, blogs, bookmarks, wiki, to name a few,  basic components of social business, at a very young age.   What is new then?  They are able to build a social business environment using various social media tools they already know and use, but this time, in a business setting.

DN: Can you speak to the advantages of having IBM experts mentor your students?
Certainly.  Having a subject matter experts available to talk, demonstrate, and relate to actual projects are key.   One can read articles and talk about them in class.  But when you are given access to the latest  materials and platform to create a social business environment then this is collaboration at its highest.  Mentor is only a few clicks away to kick around ideas and bring those ideas to reality.  This is where academia  and business intersect.

DN: Is there a risk with a program like this that it will be perceived more as a marketing ploy for IBM than a more company-neutral business course?
I don’t believe the program is a major marketing ploy but rather a  business neutral course because majority of tools and contents used were not IBM but rather current tools such as Facebook, Twitter, Bookmark, wiki, etc.  GBS, IBM Business Partner, provided the real life problem for students to do a deep dive into their social business space.

How to Sell More by Selling Less

08/1/11

He was harder to shake than a telephone poll and just as dull.  Another financial advisor spouting out his expertise into my ears before I’d even downed my first cup of coffee.  I didn’t know the guy from Adam and he sure as heck didn’t know me.  Nonetheless, he droned on until my patience expired, forcing a polite but stern, “thanks but no thanks,” followed by a hope-ending click. [Funny enough I just got another cold call much like the one described here. Make them stop!]

Later that week, I attended my fifth Media & Technology CEO Summit put on by my friends Tom Livaccari and Ken Shapiro, two UBS financial advisors who are about as far from the cold-calling yacker as you can get.  Long-time proponents of the approach I call Marketing as Service, The Livaccari Shapiro Wealth Management Group offers a textbook case on growing your business by selling less and doing more.

Know your Niche
For Marketing as Service programs to be effective, it’s essential to have a tightly defined target to whom you can deliver a meaningful benefit.  Having been entrepreneurs themselves in the ‘90s, it’s not surprising that Livaccari and Shapiro decided to focus their practice on advising entrepreneurs and CEOs of Internet, media and tech companies. Remembering the unique issues these entrepreneurs faced, Shapiro noted, “We always wished we could find an advisor that would in essence partner with us.”

Start Small
Since Marketing as Service programs can be costly, start small and build from success.  When Livaccari and Shapiro first realized they could help their clients by bringing them together, they started with a roundtable discussion among a few CEOs facing the same issues. The program grew quickly. Reported Shapiro, “They found [the events] so valuable that [attendees] suggested other CEOs that they thought could benefit from similar discussions in the future.”

Vary the Value Add
At the core of every successful Marketing as Service program is something of genuine value to the target.  For Livaccari and Shapiro, the value to their prospects and customers is more than just useful information.  Explained Shapiro, “Clients tell us that these summits have helped them stimulate meaningful ideas, make valuable connections and in one case even initiated a conversation with a party that later acquired their company.”

Rely on Relevance
One of the more obvious aspects of Marketing as Service is the benefit of pinpoint relevance to everyone concerned. “Because the content and the other participants in these events are so relevant to our clients and prospects’ lives we find they are eager to join us,” added Shapiro.  “This leads to these events being excellent ice breakers, which enable people to experience first-hand our consultative and value-added approach.”

Differentiate by Doing
The essential notion behind Marketing as Service is the fair exchange of value between buyer and seller, during which the seller earns the trust of the buyer by doing something meaningful instead of just talking about how good they are.

“These events are an excellent way for us to provide prospects a window into the way that we interact with clients, put their needs first and help them with a wide array of issues that are not commonly addressed by others in our field.”

Triumph with Trust
It is the mandate of any form of marketing to build trust. Without trust, there is simply no brand, especially in the financial services arena. Marketing as Service programs like Livaccari and Shapiro’s CEO Summits are particularly good at building trust.  “From these events prospects often begin a dialogue with us regarding whichever matter is most pressing to them, and over time this often leads to them becoming a client as they gain comfort with us, our approach and our thought process.”

Extend your Engagements
Done correctly, Marketing as Service programs offer unique opportunities for meaningful engagement that go well beyond a specific event.  With the goal of being recognized as “uncommon partners,” Livaccari and Shapiro have built a community of likeminded CEOs who are thus positively inclined to share what they’ve learned. “We know that as long as we put our clients’ needs first then over time they become our best sales force as they share with their friends the positive experience they have had.”

Final Note:
Having been in their client’s shoes, Livaccari and Shapiro have built a successful practice by simply doing what they wish others had done for them when they were entrepreneurs. Its not rocket science. Just smart marketing.  For more insights on their approach, see the Q&A with Shapiro on these pages.  (This article first appeared on FastCompany.com.)

Oh and if you found this content useful, feel free to subscribe via email or RSS in the box at the top of this page.  Thanks.

How to Build Trust with Clients & Prospects via Marketing as Service

07/26/11

The following is an interview with Ken Shapiro, who along with his partner Tom Livaccari, have grown The Livaccari Shapiro Wealth Management Group at UBS through the judicious use of Marketing as Service. This interview focuses on their event series called Media & Technology CEO Summits which I’ve attended many times and always found useful.  [This interview is also the basis of my upcoming post on FastCompany.com.]

DN: Tell me what you call your event series and how it came into being?
The program began when more than one client asked us during the 2008 downturn if it was better to fire employees before or after Thanksgiving. Having struggled with the question ourselves when we were entrepreneurs during the internet crash in 2000, we suggested that we facilitate a roundtable discussion on this topic with a few other CEOs facing the same dilemma. They found this so valuable that they suggested other CEOs that they thought could benefit from similar discussions in the future. As this grew to 50+ CEOs at an event, we decided calling it a roundtable was a misnomer so we renamed it the Media & Technology CEO Summit.

DN: Describe the basic structure of these events.
The CEO Summits consist of a networking breakfast and then an interactive panel discussion consisting of industry leaders such as those that built Gilt Group, DoubleClick, About.com, Take 2 Interactive, and, Omnicom, to name just a few examples.

DN: What were your original goals for this program?
Our primary goal was to provide a forum that would help our clients be more successful and to reinforce for them that we go far beyond the norm to help them achieve their goals.

DN: How did you decide on your niche and what distinct value are you trying to bring to your target?
In the 90s we were both entrepreneurs of internet and tech companies ourselves and saw that we had needs that wealth management professionals were not fulfilling in a way that was of value to us.

Principally, having much of our wealth tied up in the illiquid and risky stock of our own companies, we always wished we could find an advisor that would in essence partner with us to not only conservatively manage the money we had already made, but as importantly be an additional member of our extended team of core advisors to help us think through the myriad of issues we faced while trying to build and maximize the exit value of our companies. These included everything from sophisticated wealth planning, to having a sounding board to help us think through critical business and personal issues to selecting the right M & A advisor to ultimately help us sell our companies.

Because of our experience [as entrepreneurs] we realized that if this was a problem for us then it likely was for many others. We therefore narrowly focused our practice on entrepreneurs and executives building digital media, marketing and technology companies and architected and built every component of our practice to provide them the comprehensive advice that we were not able to find when we were in their shoes.

We were confident that our unique perspective and approach would enable us to be an uncommon partner to these individuals and enable us to provide such distinct and value-added advice that would separate us from our competitors.

DN: What do you think these events say about your practice?
These CEO Summits have been a great way for us to foster a sense of community amongst our clients and other leaders in these niches. Clients tell us that these Summits have helped them stimulate meaningful ideas, make valuable connections and in one case even initiate a conversation with a party that later acquired their company.

DN: Have you been able to meet prospects and ultimately gain new customers as a result of this program?
Because our clients derive so much value from our CEO Summits they often ask if they can invite CEO friends who would similarly benefit. This ends up being a great way for new prospective clients to be introduced to us and our way of thinking. Ultimately, people hire us because the trust us, like us and believe that having us by their side with our differentiated approach will help give them the highest probability to achieve their personal, family and professional goals.

These events are an excellent way for us to provide prospects a window into the way that we interact with clients, put their needs first and help them with a wide array of issues that are not commonly addressed by others in our field. From these events prospects often begin a dialogue with us, as their situation dictates, regarding whichever matter is most pressing to them and over time this often leads to them becoming a client as they gain comfort with us and our thought process.

DN: How do track down your speakers and persuade them to come?
Speakers include clients, friends and other notable industry leaders. Because our attendees are amongst the most important and dynamic leaders in their niches, we find that speakers welcome the opportunity to participate and engage in a dialogue with them.

DN: How hard is it to get your target to show up to these events?  Does it beat cold calling?
Because the content and the other participants in these events are so relevant to our clients’ and prospects’ lives we find they are eager to join us. This leads to these events being excellent icebreakers which enable people to experience first-hand our consultative and value-added approach.

DN: Seems like these events must be time consuming to put together, especially when you consider all the pre/post event follow up you do.  Is it worth the trouble?  And if so, why?
Though these events take a tremendous amount of time and effort to organize and run, we feel they differentiate us substantially from others and are well worth the effort.

DN: How have you been able to keep the hard-sell out of these programs?
We begin each day thinking about how we can be most helpful to those with whom we interact. Because of our problem-solving mentality we never think in terms of sales cycles. We know that as long as we put our clients’ needs first then over time they become our best sales force as they share with their friends the positive experience they have had.

The New Curators (of Content)

06/3/11

How Thrillist, PSFK and start-up iFlow are capitalizing on the accelerating need for content curation. (This article first appeared on FastCompany.com)
Barring the invention of a “time turner” like the one Hermione Granger sported in 3rd Harry Potter novel, most of us will never have enough time to consume the information we might otherwise want to absorb.  There’s simply too much info and too few waking hours.  Enter the notion of curation, a relatively new term that is not unlike the editor of old, a trusted person or organization that filters information and aggregates it in an organized fashion for others to enjoy.

According to Steve Rosenbaum, author of Curation Nation, “curation is the new way of organizing the web going forward.”  And no doubt he’s right.  Curious about why new curators like Thrillist and PSFK were thriving while the traditional publishing world floundered, I spent some time with their respective founders, Ben Lerer and Piers Fawkes.  These conversations plus one with Eric Alterman, the founder of a new curation engine called iFlow, revealed four insights that could help you too capitalize on the curation phenomenon.

You can’t curate for everyone, so be targeted
In Brian Solis’s recent tribute on FastCompany.com to Rosenbaum’s book, Solis noted, “the social capital of a curator is earned through qualifying, filtering, and refining relevant content.”  The key words here being filtering and relevance, something that Thrillist with its focus on urban males 22-30 has done exceptionally well.  Explained Lerer, “we’ve zoned in on a niche group that was previously starved for the kind of information we deliver.”

Thrillist, for the uninitiated, started in 2005 with a newsletter to 600 New Yorkers and is now in 18 markets with 2.5 million subscribers.  Added Lerer, “our voice is extremely targeted to a very specific part of the male demographic.”  Lerer and his fellow curators of newish nightlife have built a highly profitable business during a time when traditional publishing tanked. This was done, according to Lerer, “by zoning in on a small sector of the population and speaking to them in a voice that they trust.”

It’s not curation without a well-defined focus
The New York Times famous line “All the news that’s fit to print,” made sense when newspapers were the primary source of daily information.  Now it seems more like a potential epitaph, as newspaper readership plummets in the face of more focused web-based alternatives. One of the up and coming alternatives is PFSK, which founder Fawkes described as “the go to source for new ideas for creative professionals.”

Founded in 2004, PSFK has grown from a trend-spotting website to a hybrid company that publishes content, creates events and provides consulting services to clients like Nike, Target and BMW.  When asked if PSFK was in the curation business, Fawkes affirmed, “yes, our job is to find new ideas and we present them up to 50 times a day.”  Reflecting on their focused approach, Fawkes added, “every month a million designers, ad folks, digital entrepreneurs and media mavens get inspired by our content.”

If the curation is good enough, it will [almost] market itself
In the new world of curation, “information becomes currency and the ability to repackage something of interest as compelling, consumable and also [as a] sharable social object is an art,” wrote Brian Solis. This perhaps is the fundamental difference between the old world newspaper and the new world of curators.  New world curators can connect and engage with other curators, helping to disseminate information quickly and at little to no cost.

Ben Lerer of Thrillist recalled taking this approach out of necessity since, “one of the stipulations with the money we raised was that we couldn’t spend any of it on marketing.”  “So we focused all our energy on building something that people actually liked and would want to pass along to their friends,” explained Lerer.  By “putting content first and making sure its written for the guy reading it,” Lerer and his team developed a loyal audience that in turn shared the content and or acted upon it demonstrating they too were in the know.

Human curators beat the algorithms
No matter how you many words you type into Google, you’re not going to find a recommendation you trust without clicking deep into another site.  On the other hand, a quick visit to Thrillist and PSFK provides recommendations and ideas that are trustworthy without fail. When discussing the shortcomings of algorithmic curation, serial entrepreneur Eric Alterman explained, “only human curation can deliver real time content… that consumers are actually seeking.”

Seeing an opportunity in the limitations of algorithmic curation combined with the overwhelming flow of content generated via social media, Alterman is just about to launch a new curation platform called iFlow.  Alterman believes that iFlow will address the problem of information overload, enabling “efficient curation into highly contextual aggregate streams [that] include all content types.” Given Alterman’s track record of turning ideas into successful companies like KickApps, his hope “to bring the art of content creation to the widest possible audience,” is anything but a pipe dream.

Final Note:
While admittedly I’m no longer in Thrillist’s demographic, I became a fan in ‘08 when one of my clients wanted to connect with their readers.  Seeing Lerer’s presentation at a recent PSFK event, I was simply blown away by their success in three short years.  It was the quality of the presenters at this conference that got me thinking about curation and led to my conversations with Lerer, Fawkes and Alterman (see their respective interviews on TheDrewBlog.com).

Q&A with Ben Lerer, Thrillist Co-Founder

05/23/11

I saw Ben Lerer speak at the recent PSFK conference and was blown away by how quickly Thrillist has grown.  In many ways, its is a classic example of Marketing as Service, with the newsletter being the service and in this case part of the product that meets a distinct information need.  Thrillist has also had a profound impact on the businesses they’ve recommended, gaining the kind of “make a hit” influence that newspaper critics used to enjoy.

DN: Thrillist has grown quite a bit since its founding.  Can you give me the highlights of this growth in terms of subscribers, markets, revenue, profitability?
We sent the first Thrillist email in 2005 to 600 friends in New York and in that first year slogged through the mud and grew to 30,000 subscribers by the end of 2006. By the end of 2008, we had expanded into seven cities and became profitable, bringing in approximately $5 million in revenue. In 2009, we launched in five additional markets and passed the one million subscription mark. And now, just a couple of months into our sixth year, we’re in 18 markets including our first international edition in London, reaching over 2.5 million subscriptions. With the acquisition of members-only online retailer JackThreads.com and the launch of localized deal site Thrillist Rewards, we’re expecting to bring in more than $40 million in revenue this year.

DN: Why do you think the Thrillist newsletter has been so successful?
As with any successful company, the winning formula is always a strong demand and a quality product. We’ve zoned in on a niche group that was previously starved for the kind of information we deliver. They were looking for trusted recommendations on where to go and what to do in their city and the best ways to spend their time and money and we do a good job delivering that.

DN: How do you decide what to feature in each of your newsletters?  What is the editorial review process?
We have a local editor on the ground in each of our markets whose main job is to scour their cities to find awesome things.  It has to be something new, unknown or under-appreciated (i.e. an underground supper club, a maker of custom shoes operating out of a warehouse in Brooklyn, or a restaurant with an off-the-menu three martini lunch special).

DN: Talk to me some more about the importance of curating great content…
When we first started out, one of the stipulations with the money we raised was that we couldn’t spend any of it on marketing. So we focused all our energy on building something that people actually liked and would want to pass along to their friends. We know how valuable our guys’ time is and we don’t want to waste it with anything but the winners, so we always put content first and make sure it’s written for the guy reading it.

DN: Newspaper and magazines have been curating content for years yet almost all are losing money.  Why do you think Thrillist has been able to be successful curating editorial content when these other info sources have not been able to make any money, especially online?
Our voice is extremely targeted to a very specific part of the male demographic. We’re not trying to reach all people in all cities. We’re zoning in on a small sector of the population, speaking to them in a voice that they trust and relate to and delivering content that they want to read, in a way they want to read it. Because of this, we’ve developed a loyal audience that trusts us and acts on our recommendations.

Photo of Ben Lerer by Thorstenroth.net

DN: Do you have a customer feedback system in place to help you measure what content is resonating?
We do have a system that collects data, click-through rates, etc. but we mostly find validation by speaking with the owners of the businesses we cover. We have stacks upon stacks of testimonials about selling-out seats, packing restaurants and huge increases in traffic to websites. We also see the companies being covered in additional press outlets and going viral across all social media platforms.

DN: Have you ever recommended something that turned out to be a bust?  If so, how did you handle this?
We’ve definitely recommended some things that were better than others — that’s part of the challenge of breaking stories. But our batting average is high and I think the audience has patience for when we miss because they really appreciate when we hit the nail on the head.

DN: Can you give me a specific example of a new restaurant or bar that you featured and the impact it had on that business
We recently covered a food truck named “Feed Your Hole,” that serves specialty hot dogs and burgers. We spoke to the owner a few days after our write-up who told us they were experiencing lines around the block and that they even had to turn away crowds of people. Prior to our write-up, they were unknown and by their opening day, there were masses of people lining up for their food. This is common feedback for us but its still awesome every time we hear it.

DN; What role does your website play in your overall marketing and customer service mix?
We recently redesigned our website but prior to that, it was mostly just used as a tool for capturing subscribers. Most of our partnerships efforts drove traffic back to the site with hopes of enticing new subscribers to sign up. Now, our website is more of a destination for users seeking local lifestyle and entertainment content but we still have lots of work to do. Basically, we know we’ve got lots of valuable content on the site but we’re still figuring out how to surface the right content to the right guys.

DN: You’ve added some new services in the last year or so.  What are they and why did you add them?
In the past, we had covered JackThreads editorially – they hosted a lot of brands that we also frequently covered and so it made sense for us to actually be able to sell these brands to our audience, instead of simply recommending them. Another recent launch is Thrillist Rewards, which gives us a chance to monetize some of the local transactions we’re able to drive every day. Our mission is the same with this as it is with our content: we want to bring guys deals that they’ll actually enjoy and are actually relevant for them. A few of our recent deals are “Unlimited Beer and Ribs at Hill Country BBQ” and “a Strip and a Strip at Robert’s and Score’s.” We are also able to help small business reach our audience beyond editorial coverage and national display advertising.

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