Company: SIGG USA
Contact: Steve Wasik, SIGG USA President
Location: Stamford, CT
Industry: Retail (B2C)
Annual revenue: Confidential
Number of employees: 6
SIGG Switzerland had been selling its aluminum water and fuel bottles to the US outdoor market for years at an average price of $20-$24, about twice as much as the closest competitor's. The company counted on the Swiss reputation for quality to drive sales. But sales were flat, apparently because SIGG underestimated the level of price sensitivity among US consumers and didn't give them a compelling reason to spend extra for its products. Moreover, by relying on a local distributor to sell its product, SIGG had little control over the sales and marketing process.
In mid-2005, feeling that Americans were ready to embrace an environmentally friendly product, SIGG formed a US subsidiary to take over distribution of its bottles and get closer to its US customers. Through market research, SIGG USA made some surprising discoveries about American consumers: They were worried that their water would taste like the metal container they carried it in, and they didn't fully appreciate the variety of bottle designs.
SIGG USA needed a new marketing plan—both to increase awareness of the usefulness of its product and to make consumers believe it was worth the premium they would pay. It employed a variety of strategies, including an online contest that allowed customers to submit a new bottle design and a commitment to work with environmentally focused bloggers, asking them to mention SIGG bottles. The multi-pronged strategy paid off: US sales doubled in 2006 from the year before, and the bottles are now available in hundreds of more mainstream retail outlets, including Whole Foods Markets.
SIGG Switzerland had been selling its aluminum fuel bottles to the US outdoor market for about 30 years and added a line of aluminum water bottles in 2003. The reusable water bottles came in a variety of colorful designs, and sales took off in Europe, where consumers were more familiar with the company's name. In the US, too, the company depended on the Swiss reputation for quality to drive sales, but a rival product that cost half as much was leading the market.
"We had to convince the retailers and then ultimately the consumers that there could be a premium-priced bottle in the market," said Steve Wasik, who was hired in 2005 as president of SIGG USA. "My goal was to convince them that this was a premium brand."
Wasik's first step after being hired was to initiate market research about his product and aluminum water bottles in general, something SIGG's prior distributor had never done. The two-month research project ("more than just focus groups," Wasik said) yielded some unexpected challenges. SIGG's core customers—outdoor campers—had trouble seeing the bottles as carrying anything besides fuel. Even if they were open to using a SIGG aluminum water bottle, they were worried about how the water would taste or whether the bottle would leak.
"We had to convert the SIGG diehards and educate retailers into (helping them) realize this was a useful water bottle." Wasik said.
The research also yielded an important marketing clue. Those who used the colorful SIGG bottles were pleased when strangers came up to them and complemented them on the bottles or asked where they got them. "It made the water drinker feel fashionable," said Wasik.
SIGG USA launched My Sigg.com, where consumers could choose from more than 100 bottle designs and read about the company's commitment to the environment. Wasik knew he needed a high-profile way to drive traffic to the site while also redefining the company's image. He hired the Gold Group in 2006 to help set up an online contest allowing consumers to submit their design—via MySigg.com—for the next "Lifestyle Line" of SIGG water bottles.
The SIGGART contest, as it was called, needed to be promoted on key Web sites and blogs. SIGG set up a paid sponsorship of Inhabitat.com, an eco-design blog with 450,000 monthly visitors, and got the blog's owner to write about the contest as well as the advantages of using the bottles. At the same time, the Gold Group issued online press releases about the contest to Google and Yahoo news sites. It then pitched a story about the contest to other bloggers, hoping that the combination of the press release running on news sites and the existing blog post on Inhabitat would boost the credibility of their pitch.
The plan worked, garnering contest mentions on several key blogs, including Treehugger.com, which has 1.4 million visitors a month. The multiple mentions raised MySIGG's search engine ranking and gave the company a higher profile among retailers and consumers. The campaign drew more than 12,000 visits, and 170 bottle designs were submitted. The winning bottle design was showcased at the Patagonia sporting goods chain for the 2006 holiday season.
The contest drew a highly engaged niche audience: the average visit length of the 8,000 consumers who visited the site was 17 minutes, an incredible length of time vs. Nielsen's benchmark of 49 seconds per visit (US average). It also helped convert the image of SIGG bottles from being a practical product to being a fashionable one.
In 2006, the first full year of the US subsidiary's operations, US sales doubled from the year before, Wasik said, and sales are on track to triple this year from 2005 levels.
Perhaps the biggest accomplishment of SIGG's new, hip image has been to help convince a wider range of retailers to sell the bottles. Just in the past year, SIGG bottles have become widely available at L.L. Bean and on the shelves of Whole Foods Markets.
Wasik is looking toward Whole Foods in particular to increase market share. "The Whole Foods customer base is sophisticated and concerned about the environment," he pointed out.
- Do market research when entering a new market. As basic as this advice seems, not all companies follow it: SIGG hadn't researched the US market before it hired Wasik in Sept. 2005. "We discovered key information from the research, namely that consumers liked it when someone came up to them and complimented them on their colorful water bottle," Wasik recalled. "It made us realize right away that we could market these as a fashion accessory."
- Getting your product before the right eyeballs can be more important than getting it before a large audience. SIGG reached out to a niche online audience already concerned about the environment, and hence already likely to use a reusable water bottle. That in turn drove consumer demand for broader-based retailers to carry the product.
- If you plan to price your product at the high end, be prepared to justify that pricing. "Give your consumers a reason to be ready to pay more—wrap some emotion around your product," Wasik advised. SIGG USA's ads and Web site now remind consumers that there are 144 bottle designs with 22 interchangeable lids, allowing plenty of personalization.
Continue reading "Case Study: How a Swiss Co. Doubled US Sales by Convincing Consumers That Its Product Is Hip and Worth a Premium" ... Read the full article
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