TOMS is one of the first brands to use a not for profit model to bring profit. Talking about an innovative business model, this brand shows the benefits of being transparent on your brand purpose as well as ignoring traditional advertising….
The brand TOMS launched in 2006 by Blake Mycoskie started by selling a modified modern version of the classic espadrille. The company’s motto is “One for One” meaning that every time someone buys a pair of shoes, the company offers one to a child in need, from Africa to Chile. Since it was set up the company has managed to offer more than 70 million shoes. Due to the success of the concept, it has expanded its philanthropic action to reconstructive eye surgery (when you buy eyewear) and safe water for someone in need (when you buy coffee).
How do they achieve that, you ask? Well they do not spend money on advertising. In the words of the owner “The millions and millions and millions of dollars our competitors spend on attracting and connecting with their customers is something TOMS simply doesn’t spend. Instead we’re spending that money on giving. And because we are spending on giving and we’re including our customers in that story and because of the Internet, we can share that story easily and generate interest via social media” With no paid advertisement (for the first years at least), TOMS have based their success on two things: the power of social media and word of mouth.
Through social media conversations, and after launching “One day without Shoes”, they asked a simple but powerful question “What should we do next?”(Meaning where should we expand our philanthropic action?) With all their campaigns based online they have managed to give a voice to their consumers who were eager to interact with a brand for such a worthwhile cause. Instead of aiming to expand their fan base they instead opted on having a real conversation with the existing ones. Moreover, the brand’s expansion is based on endorsement: consumer to consumer and celebrities acting as storytellers.
Why has it been that successful? The whole brand plays around a tendency that becomes more and more prevalent: conscious consumerism. Consumers and millennials in particular, exasperated by current events are more aware of what they consume and there is an active movement to stop consuming just to consumer. Instead, they are more sensitive to the companies they select and what they offer. TOMS plays around this ethical consciousness offering a win-win situation: you can look good while at the same time help people
All the above would not have been possible if it was not for one thing: a clear brand purpose. The importance of a brand having a clearly defined brand purpose has been argued by Kantar Millward Brown for many years. A clear brand purpose helps define a brand’s meaningfully different experience which in turn maximizes its potential for growth. The success of TOMS is being able to offer an ideal that “goes beyond the functional delivery of a product to address higher-order needs such as fulfillment, societal and environmental good”
Having a clear brand purpose would be nothing if it was not communicated, and communication is what this brand does best. Their moto “One for One” as well as their website is centered on that. This is the first thing you see and read about. When the brand finally released a paid advertising, the tagline read “This is Bigger than us” and included 30 other companies which followed a similar business model, showing once again its ideal and being a generous and altruistic brand (that of course was also sold for 300,000,000 in 2013).
An interesting business model to take as an example, the success of TOMS is based on understanding the power of social media and how to use it correctly as well as defining and communicating its brand purpose. It is also proof that you need to give first in order to receive.