Monday, September 1, 2008

Brand Runner

"I had no idea that I would run into so many interesting people"

Bobbi Jo is new in town.

And after hearing what a friend had to say over cocktails one evening , she is intrigued by the idea of indulging her running habit while expanding her network. Acting on the word-of-mouth advertising, Bobbi Jo shows up on a Sunday morning to join over 100 other Running Room fans for the weekly practice run. Upwardly mobile professionals and bureaucrats mix easily with soccer moms and seniors as a shared identity emerges; linked by the lure of getting fit in the great outdoors.

Bobbi Jo likes what she sees.

Says she will definitely be back.

This story repeats itself thousands of times each week, allowing The Running Room to stand alone as a "category of one" with a chain of 92 corporately-owned stores in Canada and the U.S. By building a brand identity around the needs of a niche customer, The Running Room overcomes a challenge facing every independent retailer today: "How do I compete against the big guys?"

It's oh so simple.

Pick something. Do it better than anyone else. Turn niche customers into raving fans.

The Running Room makes this happen by knowing who they are and what they stand for, an essence that originates with company founder John Stanton. "The one race we all face is against aging," says Stanton. "We've been able to introduce people to exercise in a gentler way. We're different, however, because we are specialists. We only do running".

The Running Room's focus, commitment and brand promise was forged in 1981 by a three-kilometer run with his young sons that made an out-of-shape, overweight John Stanton realize he had to change his lifestyle. In fact, Stanton would secretly run before dawn because he felt self-conscious about having his neighbours see “this chubby little guy” who could only run from lamppost to lamppost before having to slow down and walk to catch his breath. "I thought this guy peeping through his drapes in the morning - I called him "Curtain Charlie" — was laughing at me. Like most people when they first start running, I was self-conscious. Then one day he knocked on my door and said, 'John, I really admire you. I've been watching you lose weight and quit smoking. Can you show me how you did it?'"

As Stanton dropped 60 pounds in three months and began racing, he discovered practical advice for the novice runner was hard to find. Stanton recalls being frustrated with a teenage salesperson at a major chain store. "He was trying to sell me a pair of racing flats when I needed training shoes. He didn't understand the difference." Stanton sniffed a market niche, and The Running Room was born. Alongside the gear and footwear, Running Room sells a lifestyle of wellness, offering running clinics and practice runs for everyone from the beginner to the marathoner-in-training. "If you are knowledgeable about your sport, you can probably go to a big box store and come away satisfied. But if you're new to the sport or trying to improve, you're not going to go there."

Here is an example of the level of expertise you can discover from one of Stanton's acolytes at any of the 92 Running Rooms. This one happens to be in Hamilton, Ontario.

Rather than blast the airwaves or chew up the forest with advertising, The Running Room relies on the natural, organic power of word-of-mouth; offering free, no-strings-attached, biweekly practice runs that depart from each store Wednesday's at 6 p.m. and Sunday mornings at 8:30 a.m. Runners like Bobbi Jo eventually form tight bonds with other like-minded folks as the strategy draws in customers while providing a social context that makes it fun to run. And then she tells one person and so on. And so on. More than 80% of this roving pack of raving fans will wind up buying, wearing and using Running Room products and services.

Since the first store opened in 1984, The Running Room's revenue has grown an average of 27% per year and has established a beachhead in the U.S. by opening a cluster of stores in Minnesota. They are a textbook example for any company looking to turn customers into converts: harnessing modern technology to help deliver old-fashioned, hold-your-hand guidance that soaks the skeptics and and washes the wallflowers with a can-do attitude and a feeling of being "in the club". The company has been profitable every year since it opened and while average retailers turn inventory over fewer than three times a year, The Running Room's average is closer to four. Annual revenues have reached the $100 million range and the company employs roughly 900 people, however, The Running Room remains a family-owned business with a folksy corporate culture that values fun, fitness and community giving over mega-growth at any price.

John Stanton is also a best-selling author of four books and was once named to Maclean’s Magazine Honour Roll as one of ten Canadians making a difference in our nation for his contribution to health through fitness. He manages to run at least two or three marathons a year, with plenty of half-marathons to go with his 40 to 60 kilometres weekly pace and a work schedule that sees him on the road about 300 days a year. He is well aware of the implications of the phrase "workaholic" but the way he sees it, "True success is never knowing if you're working or playing. If it's going to a road race, talking to runners, customers or just going for a run or a walk are all just fun for me. I think true success is making sure work is play"

Meanwhile, later that same day, while sipping on a latte at Starbucks, Bobbi Jo is raving about her Running Room experience when Darren and Courtney can't help but overhear. A conversation ensues as the newcomers join in to share what they have gained from their involvement. Several people wind up chatting for well over 20 minutes about running do's and don't, road trips to PEI, New York, Saint John and Vancouver and people they have met along the way. All the while, The Running Room brand, continues to secure share of customers minds with little, if any, traditional advertising.

In effect, The Running Room has created a cult brand in much the same fashion as Harley-Davidson, Oprah and Apple; those who dare to be different knowing they're not just selling a product or service. And while cult brands seem exclusive, they're actually inclusive, going out of their way to make potential converts feel welcome.

What is your business doing to inspire brand loyalty? Forget product or service. How does your brand connect with people's emotional needs?

Figuring out whether you've got a potential cult brand on your hands isn't going to happen overnight or by itself.

At some point, you will need to get off the company couch and put on your branding shoes.

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