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Case Study: How a Tiny Manufacturer Convinced Apple to Stock Its Product and Tripled Sales

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Company: Wi-Gear, Inc.
Contact: Mark Pundsack, President and CEO
Location: San Francisco, CA
Industry: Retail, Consumer Electronics (B2C)
Annual revenue: Confidential
Number of employees: Confidential

Quick Read:

Wi-Gear, an independent manufacturer formed in 2004, was focused on one product—a wireless Bluetooth headset—geared toward the Apple iPod. Wi-Gear had a very small sales and marketing budget and no outside capital. It needed to grow its distribution from just online sales to other retail outlets, preferably Apple Stores themselves.

Plenty of competitors also made wireless headphones for iPods, and they too wanted to get into Apple's stores. What if Wi-Gear couldn't get a meeting, or couldn't convince Apple to carry its product? The company wanted to be sure early on that it had a market for its product. So it set up a Web site even before its product was in final production, and set out to spread the word virally.

Wi-Gear founder and CEO Mark Pundsack sent information about his product to friends, business associates and blogs specializing in communication products. Soon a key mention on engadget.com got picked up on 100 other blogs—including those in other languages—and eventually netted him dozens of pre-orders.


That gave him the confidence to continue production, and to show Apple—when he eventually got his coveted meeting—that real customers were ready to buy his product.

The Challenge:

Independent manufacturer Wi-Gear produces one product—a wireless headset for iPods and Bluetooth cell phones—called iMuffs, as in earmuffs for iPods. To gain crucial credibility—and sales—Wi-Gear needed its iMuffs to be sold in Apple Stores. But it had almost no marketing budget, and it was competing against numerous manufacturers that also wanted their wireless headphones to be sold in Apple Stores.

Wi-Gear founder and CEO Mark Pundsack worked tirelessly to get a meeting with the person at Apple who was in charge of buying iPod accessories for Apple stores. At the same time, he needed to drive traffic to his Web site in order to convince himself and his investors that he had a viable product.

The Campaign:

Pundsack formed his company Wi-Gear in late 2004 with a mission to develop a wireless headphone for iPods that could offer superior sound quality and an easy user experience. Although the headsets were still being developed, he launched his Web site in May 2005 to describe the features of his iMuffs.

Initially, the site was getting about two dozen hits a day. Then Pundsack submitted news about the iMuffs to engagdet.com, a popular consumer technology blog site. Engadget wrote one paragraph about the product on May 24, 2005, along with a picture and a link to the Wi-Gear Web site.

Immediately, Wi-Gear's site traffic skyrocketed, first to 1,000 hits, then 5,000 hits and ultimately hitting a peak of 20,000. Pundsack discovered that the one engadget.com mention was linked to at least 100 other blogs, including some in foreign languages. "We got lucky with the timing," Pundsack acknowledged.

He eventually added the ability for site visitors to pre-order the iMuffs and sign up for email updates on the availability of the product. By October of 2005, he received enough pre-orders to not only give him confidence in the iMuffs but also fund the first round of production.

Eventually, Wi-Gear got its meeting with Apple in early 2006, but the key official rejected the iMuffs, telling Pundsack that he had already reviewed 30 similar products and had 30 more headphones to review.

"I immediately asked him what his concerns were about using our product, and pointed out some features that he had overlooked," Pundsack recalled. "For instance, he hadn't noticed one key differentiator of our headphones, that the user can answer Bluetooth phone calls without touching their iPod or cell phone."

The Apple official also was concerned about the color of the iMuff sample—white—which apparently wasn't popular among iPod customers. He became more interested when he heard Pundsack could provide a black iMuff sample to review. Pundsack convinced him to take another look at the product, and the Apple official eventually changed his mind, giving Pundsack an initial order for more than 1,000 headphones.

Because it took about six months to deal with the logistics of getting the iMuffs in the Apple Stores nationwide, Pundsack had to continue to try to bring in as much online sales as possible. He sent the product to several Web sites for review, and a New York Times Web site review resulted in some immediate sales—with minimal cost to Wi-Gear.

By last year's holiday season, iMuffs were in Apple Stores nationwide, and Pundsack had obtained a national online distributor savvy to viral marketing. The distributor sent an iMuffs sample to a tech Web site that often posts product reviews on You Tube. Its four-minute, largely positive review of iMuffs was posted May 1 on You Tube and has since been viewed more than 1,700 times.

Results:

iMuffs are the only wireless headphones for classic iPods and iPod nanos sold in Apple Stores and on Apple.com. That has vastly increased sales, and the credibility has helped Pundsack get other specialty chain retailers to carry iMuffs.

"When I went to pitch to Sharper Image I was able to say we are in Apple stores and the Sky Mall Catalogue (available on major airlines). They decided in just a few days to carry iMuffs," he said. "I doubt they would have made the same decision so quickly if I said we aren't sold in major retail stores yet."

Last year's sales tripled compared with 2005, and Pundsack expects them to triple again this year.

Lessons Learned:

  • Have your Web site ready even before your product is available for sale. Pundsack says he is glad that he had his Web site active before his product was ready. By having dozens of orders in hand before production began, he had the confidence to start production, despite the fact he wasn't close to getting a meeting with Apple. "Having existing customers also helped us when applying for loans," he noted.
  • Be proactive about getting your product on the right blog. Even without a real marketing budget, Pundsack had a significant impact on his Web site traffic by submitting news about the iMuffs to engaget.com, which wrote about the product in May 2005. That one engadget.com mention was linked to at least 100 other blogs, including some in foreign languages, leading to a dramatic increase in site traffic at the earliest stage of Wi-Gear's existence.
  • If your targeted buyer/retailer says no, ask why and take the opportunity to explain your product. If Pundsack had accepted Apple's initial rejection without question, he would not have had the opportunity to address concerns and thus lost the opportunity to gain the credibility he needed to bring his product into the mainstream.

Related Links:

Note: Wi-Gear has fewer than 10 employees.


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