On June 28, 2012 Ms. Mueller of the New York Times wrote an interesting article about how to brand your product without the need of an advertising agency.
June 28, 2012, 7:00 am
Building a Brand When You Can’t Afford an Ad AgencyBy MP MUELLER
An insider’s guide to small-business marketing.
I met Tito Beveridge, the man behind Tito’s Handmade Vodka, about 15 years ago when he first started making vodka in Austin, Tex. Thinking it would be great to do advertising work for an adult beverage company, I called him. He told me he couldn’t afford advertising, but he invited me out to his still — and I couldn’t resist visiting a maker of spirits during business hours.
It was a hot Texas summer day, and I recall driving down a long, dusty dirt road outside of Austin’s city limits to find a little shack with concrete floors (before they were cool) and a black Lab at the door. Mr. Beveridge was pretty much a one-man operation then, but he sat and talked to me about his product and his story as if I were the largest distributor in the country and I’d come looking to make a deal. In the corner of the room was a tall still, sweating a bit in the Texas heat.
In the years since my visit, he has managed to build a brand and create demand without the benefit of a major advertising effort. The small-business owner in me champions him as an inspiration for other small businesses — the hard work does pay off. But the advertising agency owner in me, naturally, wishes he were a poster child for how advertising can build strong brands. The truth is, Mr. Beveridge built his brand by beating the pavement, telling his stories, and giving away samples — lots of them. If there was a gallery opening or a nonprofit event in Austin, he was there, unloading boxes of vodka from the back of his car and pouring drinks himself. He would go into bars and talk reluctant bar managers into carrying his vodka by conducting blind taste comparisons. And on weekends, he would hand out samples in neighborhood liquor stores. His value proposition was then and still is today to make a great vodka and sell it at a reasonable price.
At one point, he accumulated 19 credit cards and $95,000 in debt. For six years, he and a few staffers bottled the vodka by hand, wearing out wrists and backs before they got a machine to do the work. There was also the time Mr. Beveridge says he stood up to the feds at a hearing in Dallas without a lawyer (he couldn’t afford one). It was after the Alcohol and Tobacco Tax and Trade Bureau’s third tax audit of him, when he was cited for 26 code violations. At the hearing, Mr. Beveridge says, he went through every code violation and got all of the charges dismissed.
Gradually, in the days before social media, the brand’s reputation spread by word of mouth. His vodka won the double gold medal at the world spirits competition in 2001 where 28 judges said it was the best of 72 vodkas.
Back in the offices of my ad agency, over the years, we have had conversations about the vodka that didn’t need advertising. We picked at his product’s bottle the way a dog picks at a scab, always ready for a little Carson Kressley makeover action. Here was this amazing product, and yet it’s got this homely packaging with a label that looked like it had been designed, well, by an engineer using Corel Draw — a very early desktop design program. We hoped we might get an opportunity to do a lid and label makeover. But that opportunity never came.
When I e-mailed Mr. Beveridge recently to see if I could visit him again for this blog post, I got a two-word reply: “Call me,” and his cell number. Of course, when I returned, I had to ask him about the label design. “I did the label and logo myself in Corel Draw and picked the fanciest font I could find — Lucida Calligraphy in bold italic. I was dating this vegetarian girl at the time and she went with me to the printer and insisted I use a recycled paper. I ran into an art student at the University of Texas and said, ‘Hey, if I pay you $25 will you design some labels for me?’ I went to bars on 6th Street at midnight and asked people to vote on their favorite of seven. The tan recycled one was one that nobody really loved or hated, so we ended up with that one. I ran into this guy who started Ketel One, David van de Velde, at a spirits convention early on. I asked him for his input on the brand and sent him some bottles and followed up. At the time, the label said Tito’s Texas Vodka. He said, ‘Man, you’ve got to decide if you are Texas or handmade.”
Mr. Beveridge ended up going with the label on the brown recycled paper, just as he, an engineer, designed it. He eliminated “Texas” from his brand’s name and opted for Tito’s Handmade Vodka. With its down-home packaging, complete with a shiny copper-colored plastic bottle cap, it’s clearly the wallflower in a lineup of spirits. But, the inexpensive packaging costs less and allows Mr. Beveridge to deliver on his value proposition. In this case, being counter-chic has worked.
“I think there’s some kind of charm in the plaintive quality of the bottle,” he said. “I’m a geologist by education, and my friends say it looks like a rock. My distributors in Connecticut told me I have to change my bottle, that it looks like I took a brown paper towel and wrapped it. But I don’t put my money in the package and I get to sell it for $5 less than if I had a really fancy bottle. My whole thing was just to get people to try it and when they do, they’ll love it.”
Today, he still uses the same label with the fancy script font and copper-hued type that matches the shiny bottle cap. But even with his success, his marketing efforts haven’t changed all that much. He is fuzzy on how much he spends on marketing, but gauges it at less than $1 million a year. Most of that goes toward participating in festivals like Austin City Limits, SXSW and Jazz Fest along with industry trade shows. The company buys maybe three of four billboards a year, some print advertising and “a tiny bit of radio,” and it does a lot of point of sale displays in liquor stores and drink menus in bars.
And the results are in: He now has 13 stills, 11 of which hold up to 12,000 gallons. Mr Beveridge didn’t want to say what his annual revenues are, but he sells hundreds of thousands of cases, and his shack has grown into a 100,000-square-foot facility – although he still has his office in the same little shack, with the same desk. He projects that sales in 2012 will be 40 to 50 percent above 2011.
Look, I’m biased, but I do believe advertising works. Is it the only way to build a business? Obviously not. In my next post, I’m going to highlight some specific takeaways from how Mr. Beveridge built a brand without an ad agency, an entourage or a big wallet