By Jim Hinshaw
Growing up, a shoe polish that was in every household was Shinola. They owned the market back in the day. Then people stopped shining their shoes, suede came into vogue, whatever, we just did not see much from Shinola. Tom Kartsotis did see something in that brand, however. He had a career growing Fossil watches into a $2 billion/year company, which he still owns 12.5% of. Started with a stake of $200,000 importing watches from Asia, but I digress. Here is the important story.
2010, he has just stepped down from chairman of Fossil, not sure what next step would be. He is on a vacation trip to Williams, AZ, stopped by the Flintstones theme park called Bedrock City. Tom, since he was a kid, was fascinated with the Flintstones, wanted to visit the park. It was rundown, he actually considered buying the park, converting it into a sustainable living model, helping to support Native American communities all around it. As he was leaving, a friend mentioned that if he wanted to make a difference today, he should go to Detroit.
So a few weeks later he is in Detroit, where he connected with Don Nelson, former NBA coach, and Dan Gilbert, owner of the Cleveland Cavaliers, and co-founder of Quicken Loans. He had pumped more than $2 billion dollars into dozens of properties in downtown Detroit. Gilbert became an investor in Bedrock, Tom’s group that he uses to invest in business he feels have long-term potential. Here is a couple of guys who are wealthy, buying businesses and building manufacturing plants, and don’t need government subsidies to get it done.
Tom’s first idea was what he did with Fossil, produce high end watches for a couple of luxury brands, maybe employ 100 people in a factory in Detroit. It dawned on him that Detroit was a brand, one that had lost some traction since the automobile production days. One early study that was done showed a key element, would people pay $10 for a US made pen and $15 for one made in Detroit? The study showed that folks would pay a Detroit premium. Tom went on to buy the Shinola shoe polish name for $1 million in 2010, started selling Shinola watches in 2013.
He is creative in how he put this all together, the Argonaut movement name came from the Argonaut research lab where the automatic transmission and heart lung machine were created. He uses his employees in ads, customers can watch dial makers working through plated glass in the retail stores, they feature products from other Detroit craftsman, all bringing a small boutique feel to the items for sale.
Kartsotis talks about a quality supervisor named Bibb, 32 years old who thought she would never do more than basic janitorial work. Tom claims that she and others like her are the main reason he is doing what he is doing, growing the Detroit brand. His idea to sell high end products, with high quality and often a creative story behind them is also a strategy for creating jobs and careers in Detroit. Take the extension cord for example. His extension cord is beautiful, available in green, beige, or black. 5 receptacles, 2 USB ports, it looks significantly more robust than the ones you find at your local big box store. It also starts at $85, but this one you will put in FRONT of your Christmas tree.
And what else are the Shinola guys up to? Lots, they have jewelry, knives, fine leather belts and purses, and of course, a slew of nifty watches. In fact, they just rolled out a diver’s watch in a limited edition. It is an automatic, only 500 pieces available, called the Lake Erie Monster. Comes in a box with a high intensity flashlight, map of Lake Erie, extra strap, it rocks. Limited to 500 pieces on first run, $2200, sold out first week.
Back to products. They have a separate factory just for high end bikes. Prices range from $1000 to $3000, and they will sell you a pedal wrench for $20. Audio, they make turntables, speakers, headphones, all excellent quality and built to highest quality standards. Leather journals, address books, key fobs, baseball gloves, footballs, baseballs, gloves, even a stunning set of allen wrenches, all color coded! Jackets, scarves, ball point pens, candles, it goes on and on. They are rolling out a hotel in Detroit, complete with a vinyl listening deck.
My point is this. The guy took a concept and ran with it. People will pay more for a story, for an improvement to society. Each watch purchased helps Detroit’s fight for survival. How can we apply this marketing and sales lesson to our business? You don’t have to go far to see a bunch of new watch companies, most are using Kickstarter to fund initial runs of products. They are almost always less than half the price of the Shinola watches. I found it interesting how Tom turned what most people think is a commodity into a unique product with a message. He also has a life-time warranty on the product. Life-time.
We need to work on our offerings in the marketplace. Bundle more features, warranties, guarantees to set ourselves and our products apart from the group of people selling boxes. Put together a story, give back to the community, do something different this year. It will pay dividends.
Full disclosure: For Christmas I gave myself a Shinola Runwell Sport Chrono. Actually used some left over airline miles to get it. I am delighted with how it feels, works and the life-time warranty. Will let you know how it goes in a few years.
About Jim Hinshaw
Upon graduating from the University of Missouri at Rolla, Hinshaw started his career in the air conditioning industry. Hinshaw’s background includes positions as a manufacturer’s rep, President of one of the oldest and largest air conditioning companies in Arizona, residential startup specialist for the Carrier Corporation, and an officer in a Carrier owned service agency. Hinshaw enjoys training sales, technical, and management team members with companies that want to increase profits and grow to the next level. He has worked in all areas of the industry: manufacturer, distributor, contractor and now consultant. He has worked with companies that have sales in the billions per year and family owned businesses with only two employees. He can help with sales, organizational issues, marketing, how to set up the company for improved profitability, all phases of the business. He has provided high results training for clients from Calgary, Canada to Adelaide, Australia. Hinshaw retired from the contracting business in 1999 when he formed his own training company, Sales Improvement Professionals, dedicated to bringing his real-world experience to help enhance your sales and marketing efforts. Hinshaw can be reached at 602-369 8097, or via email at jimhinshaw@siptraining.com. And now as an AUTHOR: “For those who might be interested, he has a collection of writings from the last 10 years. Stories of how one person can ruin a relationship with a customer, and how one can repair it! Stories of the loss of service in America, and how you can improve customer service today. Go to the following link for full details on how to make this collection yours!” www.blurb.com/bookstore/ detail/2223484 to check out the book – first 15 pages are free, sample before you buy! For more information please contact him at Sales Improvement Professionals, Inc., 1281 E. Magnolia, #D- 145, Fort Collins, CO 80524; Office Pho: 970-635-5675; Cell Pho: 602-369-8097, or visit www.siptraining.com; or on Facebook: Sales Improvement Professionals, Inc.
