Giving is Good Business: The TOMS Shoes Model

Blake Mycoskie’s new book “Start Something That Matters” is a must read for all entrepreneurs.  The humble owner of TOMS shoes has changed the way people are doing business by promoting philanthropy as a necessity.  He also implements trust as one of his key management strategies.  By giving back to people in need and trusting everyone in his organization Blake has created a company that is changing the world and the way we do business.

Blake credits the story behind TOMS shoes for their worldwide success and believes that every company should sell their story, not just their product.  His story is a simple one.  While traveling through Argentina he realized the astonishing number of people (mainly children) that did not have shoes, and with minimal research discovered that it was a serious health risk.  It was then that he came up with his “one for one” business model.  He would make simple fashionable shoes, and for every pair sold he would give one away to people in need.

When TOMS was founded Blake was the sole employee.  He had very little money and almost no product, but it was that resourcefulness that helped inspire him.  One resource that TOMS still relies on is interns.  Blake believes that finding clever young minds is key to success.  He would rather have employees that have not proven themselves in business because he feels like they are more driven, and the ideas that they have are new and intuitive.  These ideas are the ones that drive business.  People who have experience rely on tried and true concepts that do not equate to progress but simply to consistency.

The backbone of the TOMS shoes story is “one for one”.  For every pair sold a pair is given away, and Blake feels like this is the reason the company is so successful.  He believes that businesses should be more than a product because people want to feel connected.  We live in a world that thrives off staying connected through the internet, phones, television, and media, but we are still looking for new ways to feel like we are a part of something bigger.  TOMS gives you that satisfaction.  When you buy a pair of TOMS shoes you are not just buying shoes, you are becoming a part of a community while simultaneously helping someone half way across the world.

Blake’s business model is simple:  Find your story, face your fears, be resourceful without resources, keep it simple, build trust, and giving is good business.  The idea that a company’s only objective is to make money for its shareholders is rapidly decaying.  The more connected our world becomes only increases the ways we are looking to be a part of something.  I believe in Blake’s mission and believe that all entrepreneurs should “Start Something That Matters.”

What do you think about philanthropy as a for profit business model?  Would you trust your employees and use unproven ideas to drive your business?

Bond With Your Brands!

Branding should be huge part of every company’s marketing plan.  If it isn’t you are missing a very important connection that many consumers look for.  In today’s marketplace there is always a substitute product, and if you disagree, I would argue that you do not know your market well enough.  With the overwhelming amount of options consumers are faced with every day it is sometimes difficult to distinguish yourself from your competition.  This has resulted in businesses trying to connect with their customer on a more personal level to help solidify their brand.

One way several businesses have built long lasting brand recognition is by taking on a “Do Good” corporate philosophy.  My favorite example of this is Toms Shoes.  What started as Blake Mycoskie’s personal project turned into a world-renowned humanitarian movement.  I do not personally own a pair of Toms Shoes; however, I know dozens of people who do, and most of them will vow to never buy another brand of shoes ever again.  This brand dedication comes from a sense of good will customers feel when purchasing the shoes along with the high quality of the product itself.  Since the overwhelming success of Toms several other companies have adopted the “buy one give one” philosophy in hopes of coat tailing on its reputation.  Warby Parker is one of those companies.  Warby Parker is an eyeglass manufacture/retailer that makes high quality eye wear for affordable prices, and donates a pair for every pair sold.  Warby Parker “sales have jumped by several hundred percent each year since its 2010 launch.”  Do you own a pair of Warby Parker glasses or Toms shoes?  If so what inspired you to make the purchase?

Another way businesses have inspired customers to make purchases is through selling more than just a product.  Some businesses are now marketing themselves in such a way that customers are buying a sense of community when they purchase products.  This type of business plan can be traced back to Live Strong.  No one bought a plastic yellow bracelet because it was a quality bracelet.  You bought one because it stood for cancer research, and it made you an active member of that community.  Lululemon Athletica has found its niche in the high-end athletic clothing world by developing a feel good, inspirational, goal oriented community.  “In addition to yoga and health, we’re also passionate about helping our guests create a life they love through the power of goal-setting.” “People care about our brand because they feel connected to it and what we stand for,” said Laura Klauberg, senior vice president of community and brand.  Using the community driven philosophy has allowed Lululemon to open 60 new stores over the past two years.

We have developed a need for connectivity, and we are now looking beyond social media to fill that void.  We want to feel a deeper connection with the shoes we wear, the gym we go to, and the music we listen to.

Entrepreneur Magazine, April 2013, Andruss. Paula, “7 Bewitching Brands” (pg 48)