How Tiny Experiments Created Estée Lauder
Is it me, or has “risk” become a dirty word?
I don’t know about you, but I’ve been in meetings where expressing disagreement would also have meant unemployment.
It’s why people are scared to offer a dissenting opinion or experiment with new ideas.
However, when 75% of ventures fail within 10 years, openness to new ways of thinking could make or break your business.
In fact, small experiments created one of the most iconic brands of today — Estée Lauder.
If you learn about what she did 77 years ago, you’ll realise the same way of thinking is equally applicable to scaling a business today.
The lessons she learnt can help you whether you’re just starting out or in an established business.
How did she build her brand
In many ways Estée Lauder is the embodiment of the American dream.
Her start in life was not easy.
Estée’s mother, Mrs Rose Rosenthal, arrived in America from rural Hungary with 5 young children in tow.
There being no sign of Mr. Rosenthal, she swiftly remarried Estée’s father Max Mentzer.
Born to a crowded flat above a hardware store, it’s safe to say she was hustling from the very beginning.
Though she was expected to work in the family shop, she found herself drawn to her uncle’s work as a chemist.
Having found she had a gift for creating creams and scents, she started with a small range of creams which she sold door to door.
This is where it gets interesting, she embarked on 3 relatively low-cost experiments that yielded huge results. They were:
1. Checking her friend’s bathrooms
In an industry like beauty, it doesn’t hurt to be invested in how things look.
Estée Lauder carefully considered everything from the shape and size of the product to the packaging it came in.
She was so focused that when she went to her friends for dinner, she’d make a beeline for the bathroom to see what kinds of wallpaper were in fashion.
The contrast with the tiles and wallpaper informed the design of her products.
Maintaining a keen design eye gave her an advantage in commerce.
If you can create a distinctive look, it’s a huge advantage whether it’s a perfume bottle or a mac computer.
2. Pioneering the “Gift with Purchase”
In the early years, Estée Lauder realised she did not have the budget for advertising spend.
As she bluntly said herself “Expenses ate up just about every dime.”
This is where she experimented with the power of word-of-mouth advertising and decided to offer a gift with purchase.
She gambled that if people liked the products they would tell their friends about it.
It had never been done before and was a great risk at the time.
What started as a response to a disadvantage became a huge advantage.
The impact was such that the gift-with-purchase can be as much as 30% of companies total sales volumes today.
3. Youth dew — combined bath oil and scent
One thing that stands out about Lauder’s approach to business is her nuanced understanding of human nature.
Nowhere was this more apparent than in her 1953 creation of “Youth Dew”.
A client commented on how nice her bath oil smelt and this sparked an idea.
In the 1950s, perfume was a gift for special occasions and not a repeat purchase.
Bath oil, however, was used frequently and purchased weekly.
She then launched her combined bath oil and perfume “Youth Dew”.
This created a new market and, in today’s money, earned the company over $55,000 a week.
How others channelled her
You can also see this in a company Estée Lauder acquired — Jo Malone.
To convince others of her brand’s luxury status, Jo Malone contacted 50 people she knew in New York and asked them to walk around with empty bags bearing her name.
The fear of missing out sparked interest in the brand even though they didn’t have a shop or even products available.
When Malone opened a store she’d sparked interest from affluent New Yorkers as people assumed there was a shop already.
Similarly, the Australian bikini brand Triangl wanted Kendall Jenner to advertise their brand.
Like Estée Lauder, they had no advertising budget and had to be creative about spreading the word about their product.
Instead of sending the product directly to Kendall Jenner, they sent it to her friends hoping she’d see the bikinis and like them.
Triangl gambled that by using the concept of social proof, Kendall herself would want the products.
The risk paid off and Kendall messaged the brand asking for bikinis and publicly endorsed them without payment.
What you can apply today
Though obviously, times have changed, Estée Lauder embodied 3 fundamental business truths which are often neglected today.
1. Don’t be afraid to experiment.
Estée Lauder found success in daring to be original. As she observed: “No one ever became a success without taking chances… One must be able to recognise the moment and seize it without delay.” Too often people do things just because everyone else is doing them.
2. Know your customer.
It seems many of her most profitable insights were from first-hand conversations with the people who bought her products. I’ve seen too many oversimplified customer personas in my time in marketing. There’s no substitute for talking to people and understanding their needs.
3. Never sell yourself short.
Estée Lauder knew to never underestimate what she had to offer and turned down many offers to buy her business.
As Stanley Marcus, the owner of Neiman Marcus, recalled fondly about his business dealings with Estée: “She came swinging into the store like the boxer Sugar Ray Robinson, utterly determined to fight her corner.”
If you don’t stand up for yourself — who will?
To conclude on that note, don’t let the fear of risk hold you back from reward. Creativity can be found no matter your background, budget and business. As Estée proves little experiments can go a long way.
If an $87 billion dollar luxury brand’s success came from experimenting with rebranding perfume as a bath oil — what could similar experiments do for you?
