Patagonia killed their multi-million dollar shoe business to protect their brand. Which is quite a lesson.
I wanted to buy a pair of strong walking shoes last week. I'm hard on my shoes and I wanted a pair that would last and I wanted to buy from a company I could trust. So I went to Patagonia’s website to seek out a pair of cragmaster approach shoes that I’d looked at last summer.
There are no shoes on the website. No hiking boots, no walking boots and no sandals. There are specialist boots for wading when you’re fishing, but that’s it. I was nonplussed. When I’d last looked late last year, there were hundreds of styles and models for every kind of outdoor pursuit. But no more. And repeated searches brought up nothing but the river-boots.
So I filled in the contact form with a brief ‘dude where’s the shoes?’ message. Shortly afterwards I got a personal (non-automated) response from a named member of staff.
“As you know from our mission statement: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” We are committed to provide customers only the best quality. However our shoe business has not lived up to our standards, thus we will cease the production of shoes for now. There is a chance that we may revisit the shoe business in the future.”
What an insanely courageous decision that must have been. I was deeply impressed, especially since a little light digging online revealed that Patagonia’s footwear was profitable, popular and well-regarded by the outdoor press. It was clear that plans for 2015 models and designs were well advanced. There was a full pipeline.
The factors and details that drove this pretty momentous volte face are actually not that important, what matters is that — once again — Patagonia put their ‘purpose’ way ahead of profit. They recognized that what might be a good bit of business was actually not great for business. We all use the phrase ‘customer experience’ far too easily, but Patagonia’s customers hold the company in extremely high regard and will hold the company to account if their experience does not meet expectations.
What the footwear thing shows is that Patagonia held themselves to account too and they nixed a problem before it became a major issue. At stake was Patagonia’s good name and that’s an irreplaceable and supremely precious asset, so despite the million dollar reduction in turnover this year, it was probably a very wise move.
Yes but it’s ruddy Patagonia isn't it? Their corporate courage is unmatched and the Patagonia brand promise is almost unique which means that the power, scale and scope of their business ethics are very hard for any other business to match. They're a mad west-coast hippy-led law unto themselves aren't they?
Or are they? All they did was look at the pros and cons, weighed them in the balance and made a sensible business decision.
I've experienced both sides of this in much smaller businesses where big changes can be the difference between breaking even, or not. More than once I've been part of noisy meetings to argue if what we were doing was a good bit of business (made some much-needed dough) that would be bad for business (caused loads of problems down the line and damaged our credibility).
Once we took a scary and tricky decision to kill a popular service that made a small profit, because it was growing to be a financial burden and a distraction from what we were really good at doing. It turned out to be the right decision and sales and profits rose with the clarity of purpose — and improved use of resources.
Once I watched helplessly as senior managers persisted with selling a bad, cheap product because they knew that they'd sell a load of stock and hit profit targets. Those targets were not affected by the the fact that 30% of the products came back from dissatisfied customers because the suppliers credited our company, so there was no immediate financial loss.
Those managers didn't understand why I (as head of brand) was getting so worked up. We had sold a couple of thousand, which meant at least 300+ unhappy customers that we knew about, and countless more that we probably didn’t. A couple of thousand pounds profit cost us 400 or more people who'd never buy from us again.
Patagonia are a very important company precisely because they are setting attainable standards that the rest of us can — and must follow. If a bit of business is profitable but bad for your brand then you have to kill it before it gets going.
Your customers can only think better of you if you say ‘sorry it wasn't good enough for us so it’s definitely not good enough for you’.
I was disappointed not to be able to buy the shoes, but very happy with the reason why.