How To Make $100 Million Selling A Blanket With Sleeves
I love my Snuggie!
Seriously. It's really comfortable. If you don't have one, I highly recommend it.
But what's more interesting to me is the fact that it has sold more than $100 million since launching nearly three years ago.
This begs a simple question: what are they doing right?
The Snuggie is actually a pretty good product. It delivers on what it promises: a simple, comfortable blanket in which you can easily walk around. Moreover, it made from a very soft material that's easy to keep clean.
But here's the thing: It's not that hard to manufacture a Snuggie. It's basically a very high-margin blanket with sleeves. So clearly, there is more to this, which brings us to…
Calling the product a "Snuggie" was a stroke of genius. It brands the Snuggie as a "confort object," almost like an adult version of a stuffed animal.
Contrast this to the "Slanket," which is basically an identical product, but hasn't sold nearly as many units. The name "Slanket" does not roll off the tongue. It definitely doesn't sound like something comfortable.
The lesson here: a great name counts for a LOT. Invest the time and money needed to make the right choice. Otherwise, you're just leaving money on the table.
When the Snuggie was first released, they launched it via direct marketing channels and infomercials. The original video was a cheesy two-minute clip showing the versatility of the product
When I first saw this, I thought it was really stupid. Boy, was I wrong!
Here's what happened: the "cheesiness" of the commercial led to tremendous mockery. Numerous comedians including Jay Leno, Ellen DeGeneres, Bill Maher, Jon Stewart, and Whoopi Goldberg started making fun of the Snuggie and it's ridiculous commercial. Of course, this was basically free marketing for the product, and led to enormous sales.
In addition to this mainstream coverage, the Snuggie commercial led to hundreds of parodies on Youtube. Many of these parodies went viral, including the WTF Blanket, which received more than 14 million hits.
The executives in charge of the Snuggie quickly realized that they were sitting on a goldmine. The product was original a "direct marketing" play; the idea here was to advertise on television and have people call in to order. But as demand skyrocketed, they realized they actually had a brandable offering.
A few months after things started taking off, the executives cut a deal to sell Snuggies in traditional retail stores. They also mentioned this new availability in their ads. The result? Sales skyrocketed. Wal-Mart and other retailers were thrilled, and quickly renewed their distribution deals.
The Snuggie execs also saw a creative new channel: pets! If people would wear Snuggies, why couldn't dogs? They designed a new Snuggie specifically for dogs, which itself generated millions of dollars in additional margins.
For me, the biggest lesson is not to write off products that aren't going to change the world. They may not make a huge long-term impact, but they are still good ways to make lots of money.
Many people assume that Snuggies (and similar products) are nothing but a fad. This might be true, but so what? Over its lifetime, the Snuggie has generated more than $100 million dollars in total sales…with little more than a simple product and a killer marketing campaign. It's not the next Google, but it's still a great result.