PR--an intrinsic part of marketing

Method Man

Eric Ryan, Co-Creator and Chief Brand Architect, MethodEric Ryan of Method on building a belief brand, fusing fashion and design, and going after 8 CPG GoliathsEric Ryan, who co-founded cleaning products company Method in 2001, has a simple strategy for competing with the likes of Unilever, Procter & Gamble, S.C. Johnson, and Clorox. "Everything we do has to be different," says Ryan, 36, chief brand architect of the San Francisco company, which is among the fastest-growing private companies in America. "Method is a belief brand being built on what money can't buy. We're a challenger brand, taking on 8 Goliaths."
With sales "just north of $100 million" and 106 employees, the company has a long way to go before it can slay even one of the Goliaths in its space, as Ryan readily admits. Meanwhile, he's betting that "our scrappiness can match competitors' scale." And, perhaps more crucial to the company's continued success, he's betting that consumers will embrace the company's environmentally friendly philosophy of producing cleaning products that are effective, safe, and without toxic ingredients. "Historically, consumers were focused on the best products," he told the crowd during his session to kick off Tuesday. "Now, consumers are equally focused on how things are made." Ryan was joined on stage by Scott Potter, founding managing partner of San Francisco Private Equity Partners, a key investor in the company.
Ryan's presentation created quite a buzz among the 300+ attendees, who were fascinated by his entrepreneurial spirit and optimistic outlook. "The difference between successful and unsuccessful companies is that the unsuccessful ones gave up too early," Ryan said as he described the launch of the company in 2001, during an economic downturn. "We constantly push ourselves and remind ourselves that standing still is not an option."
Ryan had much more to say, on a range of topics, when ANA Magazine Editor Bob Barrett sat down with him under the 100-degree Phoenix sun. Here's a transcript of the interview.
Bob Barrett, ANA Advertiser: You've created an instant buzz here and I've seen you shaking a lot of hands since coming off stage. What kind of response have you had to your presentation?
Eric Ryan: Usually, the word I hear most often, which is really cool, is inspiring. That's what I try to do, as far as a lot of people working for really big companies and legacy brands. I feel like the one thing I can do is just help try to inspire them to think a little differently and give them the confidence to do that. So I try to design my talk, as much as possible, to be uplifting, anything's possible, and then here's some real simple ways of how to think about it to try to create change. People want something they can use, versus just talking about it. So I don't want to just talk about what we do. If I talk about something we do, I want to make it easy for someone to take that and run with it.
BB: What role has traditional marketing played in the growth and success of Method, to the extent that anything Method does is traditional? And how close are you to the marketing function?
ER: I'm really close to marketing because I come from a marketing background, and the only asset we own is the brand. So, creating and building the brand is my number one priority. Now, with that, we've got a big team and we've got a head of marketing, a creative director, and other people who that's their daily responsibility. But it's something that I still get my hands quite messy on, so it's still very focused.
BB: As you look forward and you think about the next level of growth for the company, what role will marketing play in allowing you to achieve the success you're targeting?
ER: Well, we're in a great spot, depending on how you look at it — glass half full, glass half empty. Our awareness is high for how new we are as a brand and how little we spend. But, compared to our competitors, our awareness is very, very low. So, the role of marketing, more than anything else, is going to be trying to get our story out there in a broader way and bring more people into the brand. If you look at our growth drivers, our number one growth driver is getting more people into the brand. We have a lot of distribution opportunity, a lot of products opportunity, but what's really going to be our number one focus is just creating more advocates, as we call them.
BB: Today you talked about differentiation and how you really work hard to differentiate Method from the mega-competitors you face. But what have you learned from them? What are some things that maybe you're doing similarly to them, even though they have much bigger scale?
ER: The big thing we're trying to do is use their strengths against them, right. We can't outspend them. We can't outmarket them on claims. So we've got to try to use their legacy against them. So, that's anything from the way we try to reframe products. It's all about shifting the conversation, right. These are brands that have been around for decades and decades, so they own the conversation. If you're Windex, you own the conversation on streak clean. We can't come in and join that conversation and do a better job, so we've got to shift the conversation to a different topic. So, in that case, we shift the conversation to non-toxic and the fragrance and the beauty of it and the overall experience. So, that's the biggest thing we've got to do, is keep trying to figure out what is the conversation that our competitors are talking about and then how do we shift it to something different.
BB: You are ever-mindful of your competition, including the fact that many of them were listening to you today. Given that, how do you approach a presentation like this? Are you cautious about giving away secrets and strategy?
ER: We're cautious about what we share. But, also, anybody can look at what we do and dissect it. It's not rocket science, it's soap. And the things we're sharing we know are difficult for them to do in some cases. In other cases, they're really, really great at it. And I don't think we're giving anything away. But, also, if we really are a challenger brand, we've got to keep innovating and keep challenging. So, our story shouldn't be static. It should be dynamic. And what I shared here this year, by next year, this story should've evolved. So, if they're following what were doing today, that's fine, as long as we're evolving.
BB: How are your competitors reacting to Method's early success and your presence in the market?
ER: Quite aggressively. We're seeing it come from all spaces, but it's coming in a very different way. So, I think CPG really struggles to build tensions into a brand. So, what makes Method unique is the tension of style and the tension of substance. Bringing those together is really challenging because there's constant trade-offs that you've got to work through. Typically within the world of consumer products, brands are built around a single attribute, so there is no tension within it. It's a single plot. The way you're seeing competitors come after us, the way it's manifesting, is they're focusing on green or they're focusing on design. Nobody's focusing on bringing them together. Design's not something you talk about; it's just something you do. It's your tone. It's who you are. It's your personality. And the ones who are focusing on what we call substance, which is the green, they're also doing it in a very single-dimensional way, which is selling green as a product feature. Whereas, to us, it is a product feature, but it's bigger than that. It's the entire philosophy behind the brand.
BB: Has Method reached a point where you need to formalize and scale functions like finance, procurement, and accounting?
ER: Yeah, absolutely. We're north of $100 million, so we're a real business. And with that comes real challenges and you need to have real process. So, for us, it's great because we started the company with a clean sheet of paper, so we're very sensitive to what needs to continue to be protected and nurtured as far as what makes us different in terms of our competitive advantages. But, at the same time, we have to add on more professional management so the company can scale and get to the next level.
BB: Method has private investors, including the venture capital firm of your co-presenter today. How does this keep you on your toes and has it ever led you to compromise any of your ideals?
ER: No. Our investors are our business partners, so we've brought on partners who share our values and our vision for the company. Therefore, in the board room there's no tension about what we are tying to achieve for ultimately who we work for, which is our advocates. And that's also good, because having professional money in a company does challenge you and does push you harder to be a greater organization, and it brings in expertise as partners that you might not otherwise have if you were just growing the business slowly and organically.
BB: What kind of impact has the current economic downturn had on the company? Has it stalled some of your plans in terms of growth and do you see that it will hinder you at all going forward?
ER: Well, we started the business in 2001, which was a recessionary year, so we were kind of borne out of a recession, which is great because it just forces you to kind of sharpen what you're doing a little harder and it makes you have to really prove whether you have a good idea or not. So, now we're back in our second recession in the history of the company, and it's the same thing. I'm a big believer that you don't want to ever waste a good crisis for opportunity. It's made us more focused this year, so it forces you to trim the fat to really rethink some of the things you're doing and tighten and focus your company even more, which is very, very healthy. But, what it hasn't done is slowed down our investment for the future. So, we've made sure that, while we're not launching a lot of products this year and we're a little tighter in the way that we're running the organization, we made sure it hasn't sacrificed the future. So, our expectation is we'll see a recovery next year, and we're putting ourselves in a position with pretty big investments and R&D and innovation that will hit the market next year. So, as things pick up, we're running.
BB: What is the longer-term plan for the company? Have you planned for moving beyond private investors and perhaps taking the company public?
ER: Well, when you take professional money, they want it back at some point. The company ultimately will reach a point where it's going to need even more resources to get to that next level. What that is, we don't spend a lot of time speculating on it. Certainly, an IPO could be an option. There's a lot of different ways you could go. But we think we've got a long ways to go and huge growth potential in front of us, so there's absolutely no rush. The great thing about our investors, too, is they're very patient and they don't have any short-term demands. Therefore, we've got a long runway.