Entrepreneurial optimism: Ugg Australia founder Brian Smith on the power of loyalty
Marketing speaks with Brian Smith, founder of Ugg Australia about the challenges and opportunities he faced building a global brand, and pearls of wisdom to help any entrepreneur forge ahead.
It’s hard to imagine a more iconic Australian brand than Ugg.
Moving to California to sell the boots to the surfing community in the 1970s, Brian Smith faced many challenges which threatened to ruin his business, including imitator brands, unexpected buyouts by partners and sudden abandonment by suppliers back home in Australia.
Thinking about problems positive head-on and viewing adversity as opportunity, combined with encouraging loyalty from his customers, he was able to excel, and build Ugg into a powerful and iconic global brand. He turned a small California surf community cult following into a product that appeared on Oprah, and turned over a billion dollars.
At the recent World Marketing and Sales Forum in Melbourne, smith told the story of how he took what was already a popular item in Australia – sheepskin boots – and turned it into a global brand. He shared his four mantras of successful entrepreneurism with attendees of the Forum.
Marketing: Tell us about the mantras you do business by.
Brian Smith: I have four mantras. The first is feast upon uncertainty. The second is fatten upon disappointment, the third is invigorate in the presence of difficulties, and the fourth is enthuse over apparent defeat.
What they are, they sound like negatives, but they’re actually – if you look at the first word of each one – ways to spin situations into ones where you are in control.
If you’re an entrepreneur, a lot of the time you’re going to feel out of control, and this is the way to take every situation that hits you, and say ‘OK, dammit, that’s not good, what can I do about it?’
The minute you pivot like that into a positive, you’ll be surprised how many times there’s a solution sitting there right in front of you. You’ll think ‘oh my god! That’s better than what I was doing before!’
Those four mantras have been the four that lead in to what I call ‘pivoting’ or lateral thinking.
M: In your keynote you mentioned the power of the brand. You came across a lot of challenges to the product and the business itself. What are some times when you recognised this power?
BS: The first time was when I was going to change the brand name because of an impending lawsuit (an Oregon based company had come out with ‘Ugh’ brand sheepskin boots, and Smith contemplated changing the Ugg name to Jackaroo boots) and I had some young kids who were riding in an Ugg surf team. They absolutely refused to change the name of their surf team. They said ‘it’s crazy changing the name’.
It was their passion that made me realise ‘this brand has momentum’. Momentum I wasn’t really aware of. It was the instinct of backing those kids that made me pivot and fight the lawsuit, and I won.
The other time was when my supplier abandoned me, and went with a different distributor. But my retailer clients refused to go across to the different distributor brands. That was a testament to their customer brand loyalty to me.
Most of it was the brand-building I’d done by customer service. The customer service was really critical there.
M: Customer service, then, would be the critical thing for you?
BS: Customer service is the most critical thing for any business. That’s the brand you develop. If you go to McDonald’s, you know what the service is going to be like. You know what the food’s going to look like. You know what it’s going to taste like. They deliver on a known quality every single time. They never deviate.
Federal Express, when your package has to absolutely, positively be there overnight, they never deviate from that. That’s where you build the trust for your brand.
With Ugg, it was the quality, the colour, the consistency was what we developed. The passion about Ugg, and backing that up with customer service.
M: One of the questions asked at the end of your talk was regarding the saturation of the Ugg product. There are dozens of imitator brands and sheepskin boot producers out there. Did you see this as a threat?
BS: I’m here in Melbourne, I could be In Sydney, or Perth. There’s hundreds of stores with Ugg sheepskin boots. But the market is only as big as how many tourists come. The real market is back in their country – like China, around Europe, Holland, Germany, around Scandinavia, England – in those countries, the market’s protectable.
In Australia, they took it off the trademark register as a generic name. But for every tourist that comes there’s a hundred people that don’t come, that have to buy our brand in their country.
The lion’s share of the market is still protected.
M: What advice would you give to aspiring entrepreneurs?
BS: Believe in your product, don’t give up. Remember that statement ‘the most disappointing disappointments become the greatest blessings.’
That’s so infallible. Even though you might have a dream and a passion to go along one path and then you hit a wall, there’s always a way around it. There’s always a solution, and nearly always you’ll look back and say ‘thank god, because is better than what I would have done.’