New Stuff To Do More

I remember when this was a simple business. Or at least I thought it was a simple business. You had a pro team, ran some ads, built relationships with core shops, sold C.O.D. or on 30-day terms, and were thrilled if you could get enough product to fill orders.

With supply shortages, the fact that quality wasn’t always very good was less crucial. Margins were better anyway.

Your team is still valuable, but successful team riders have to do more than rip up the hill. Apparently, they also have to look good in their underwear. Riders have agents now for god’s sake.

Your choice of where to run ads has expanded dramatically. We used to laugh at people who ran an ad anywhere but the usual places, now we wonder if we’re missing an opportunity.

Thirty-day terms are pleasant memories and selling some product at a decent margin is tougher than climbing out of a tree well after a ten-day dump. You can’t just focus on ’core shops any more. Hell, it’s getting hard to even find one if you define it the way we used to.

Not only does a snowboard company have to do the same old things better, but my contention is that it has to do a whole bunch of new things as well.

Endless Product Lines

SKUs are getting out of control. Product lines have gotten enormous–largely as a competitive response to what other companies are doing. I’m not against responding to your competition, but recognize that such a response is strictly defensive in nature. Rather than differentiating you, it makes you look like you’re simply copying your competitor.

This is yet another example of our talking and listening to ourselves, rather than focusing on the customer. It also costs money. Making and managing more SKUs is expensive. In some cases, it may even drive up costs of other products by shortening production runs.

The situation requires a little zero-based product planning. Don’t start by looking at your competitor’s product lines. Begin by looking at what your customers are buying and what you think the market trends are. Design your product line in response. Figure out all the hard costs of an extra product–molds, samples, employee time, short production runs, etc.

Now, what are the specific benefits of another length of one style of board or an extra color in a jacket? Will you actually increase sales or will you just cannibalize another part of your line? Are you making it even more difficult for the store to carry and merchandise your products? Will your reps really understand the whole line and will they be able to make a cogent and complete presentation to the poor retailer before that retailer keels over in confusion and exhaustion?

The hard costs are real. The soft benefits are tougher to quantify.

Public Relations And Co-Branding In Advertising

Snowboarding has been turned into the poster child of the cool, young generation every advertiser wants to reach. Snowboards and snowboard products are turning up everywhere. Are any of them your products? If not, you’re missing an opportunity.

Does a particular board’s base graphic turn up on a resort’s promotional brochure by accident? Did K2 team members just happen to be standing around in their Jockey underwear, boards in hand, when a photographer happened by, took a picture, and sold it to Jockey?

Most of this exposure is not accidental; taking advantage of all these opportunities is a full-time job for somebody. And the work that’s done now probably won’t ve an impact until next year due to the lead times involved. So get started sooner rather than later. Prepare and distribute a press kit. Include photos anyone can use. Make contacts with companies that are interested in your customers and make it easy for them to get the images or the product they need.

One note of caution: it’s easy to believe that free or inexpensive exposure is good, no matter where it occurs or in what association. Not true. Make sure the opportunity is appropriate to your brand and its market position. To use an extreme example, how many snowboard brands rushed out to have snowboarding’s furry Olympic mascot Animal seen on their boards?

Resorts Are Our Friends

I think we’re to the point where the director of resort relations is probably a full-time position for a snowboard company.

Ignoring rental possibilities for a minute (because that’s a whole separate issue), there’s an almost endless number of things you can do to help resorts focus on snowboarding and the kids they want to attract and retain.

Are you maintaining a database of key resort employees and contacting them from time to time? Do you have a program to flow a little product to the right people?

Are you having a couple of team members spend a day at the resort and then sending an unsolicited letter to the appropriate resort executive telling them what a good time they had and maybe suggesting a few things they could do to improve the snowboarding experience?

Have you sat down and thought specifically about how the needs of resort shops are different from city shops and, besides given different terms, how you can meet them?

I don’t think I’m even scratching the surface here. I’ll bet your new director of resort relations, a snowboarder who’s spent some years in resort management, would have a whole lot of ideas.

Rentals

The trouble with rentals is we don’t know why we’re doing them. Are they a loss leader that gets people on our product and ultimately selecting our brand when they buy? That is, are they justifiably part of marketing and promotion budget? Or are rentals supposed to be a moneymaker?

As long as I’m restructuring the sales and marketing organizations of snowboard companies, may I suggest a sales manager of rentals?

I know rentals are growing dramatically. I suspect they’re no longer just for people trying snowboarding for the first time. They have become a convenience, like takeout food. Done well, as it increasingly is, the equipment is always new and tuned, and the boots are dry. All you have to do is show up.

Why buy if you’re a typical participant who’s only on the slopes for a few days each year?

I think the rental trend is going to catch us by surprise, at least partly because we in the industry spend too much time talking to each other instead of to our customers. This is an interesting problem. We sell rentals cheap, or offer ridiculous terms, or agree to take the product back next year. We do it because we believe that ultimately it helps sales. But by providing cheap, new product each year to rental shops we make it increasingly easy and economical for participants to rent. Aren’t we helping the rental shops to build their businesses and killing ourselves? Yet another example of irrational competition in a maturing market.

I wonder if any snowboard companies really make money in rentals. By embracing snowboarding, the resorts have given themselves tremendous leverage over the industry. I suspect your new sales manager of rentals and director of resort relations will be working closely together.

Wherever You Go, There You’ll Be

In a maturing industry you either find a defendable niche, or become a low-cost producer. Considering the trends discussed above, it’s obvious this is true for snowboarding.

Margins have declined, but the cost of doing business has increased. There are too many things you have to do to succeed. Which means your break-even point has gone through the stratosphere. And the working capital investment required in this highly seasonal business has grown even more.

My perception is the entire business model is changing. Snowboard companies have to do things they haven’t done before. There is a new group of stakeholders who aren’t just the people who snowboard. The snowboard industry has lost a lot of the control it had over snowboarding. Getting that control back, if it’s possible, requires new organization and a new way of thinking.

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Jeff Harbaugh is currently the COO of Sims. As always his views aren’t necessarily those of Transworld Media or Sims. Reach him at: (425) 951-2739–especially if you disagree with him. He loves that.

uspect your new sales manager of rentals and director of resort relations will be working closely together.

Wherever You Go, There You’ll Be

In a maturing industry you either find a defendable niche, or become a low-cost producer. Considering the trends discussed above, it’s obvious this is true for snowboarding.

Margins have declined, but the cost of doing business has increased. There are too many things you have to do to succeed. Which means your break-even point has gone through the stratosphere. And the working capital investment required in this highly seasonal business has grown even more.

My perception is the entire business model is changing. Snowboard companies have to do things they haven’t done before. There is a new group of stakeholders who aren’t just the people who snowboard. The snowboard industry has lost a lot of the control it had over snowboarding. Getting that control back, if it’s possible, requires new organization and a new way of thinking.

––––––––––––––––––––––

Jeff Harbaugh is currently the COO of Sims. As always his views aren’t necessarily those of Transworld Media or Sims. Reach him at: (425) 951-2739–especially if you disagree with him. He loves that.