COLORADO SPRINGS, Colo.—The Honest Company says it has a few things in common with credit unions. Its products are boring. Not very sexy. Commodities. But it has also done something uncommon at most CUs: it has taken all that and made it “exciting” for its customers, and its sales are skyrocketing.
And it’s done all that in just three years by recognizing what is truly “sustaining.”
Lauren Meyers speaking at CO-OP THINK Conference.
“It’s about having an emotional connection with the customer,” said Laurel Myers, Senior VP with the Honest Company, in remarks to CO-OP’s THINK 15 Conference here. “It’s about more than just a commodity. It’s about tapping into those needs. You need to put yourself in the customer’s shoes. How do you get inside their mind to identify their needs?”
The Honest Company was co-founded by the actress Jessica Alba, who was seeking safer, effective, natural lifestyle products for herself and a new daughter, and Christopher Gavigan, who was previously CEO of Healthy Child Healthy World and who has dedicated his life to helping families nurture healthy, happy babies and children. The company is based in Santa Monica, Calif.
Since it’s founding three years ago, it has grown from 15 to 120 products, from three product categories to six, and form $10 million in sales in year one to $150 million in sales in 2014. It is now preparing to go global.
The Honest Company has built its business model on a core value of doing good. It’s a model Myers said has much in common with that of credit unions. It’s also a model that should hold another more-than-tantalizing aspect for CUs, as well: The Honest Company’s target market is Millennials, and it has found its message and model greatly appeal to that demographic.
Honest, Company Knows Millennials
“Millennials are constantly connected and engaged with each other,” said Myers. “They care about community. They do have a reputation for being self-oriented, and it’s important to recognize that. It’s OK in this market to have a little vanity in there, but they really care about more than just their immediate reality. They are highly idealistic. They want to be contributing.”
Myers said The Honest Company knows Millennials, because it was founded by Millennials, including herself. Its target is also people such as herself; 30, planning to have children. “I wanted to work for a company and buy products from a company that has values,” said Myers.
Betterment, which was one of the four themes of the THINK Conference, is manifested at The Honest Company, said Myers, by improving products that are commodities and making them better.
“In that regard, we’re not that different from credit unions. What we make, home cleaning products, diapers, that’s not sexy,” said Myers. “We had to ask ourselves how do we reinvent that to make it interesting and make it a conversation piece? We looked at brands that have been around for decades, and that are boring? Why does it have to be boring? Can’t a diaper be more fun and entertaining?”
But the conversation needs to go beyond just that, said Myers.
“It is more than just the products; it’s about the experience. How to make this easier, how to simplify?,” said Myers. “We thought wouldn’t it be convenient if these items just showed up at your doorstep. So we put it on an-auto-subscription. We’ve taken the complexity out of the process. It was about simplify, simplify, simplify. We make it very easy.”
The Honest Company is based on more than just being an uncomplicated retailer. And, again, it’s a trait that shares a commonality with credit unions.
'Doing Good' In the DNA
“A key part of our DNA is about doing good. It’s part of our philosophy and how we operate as a company culture,” she said. “It’s something we feel, that we have a greater responsibility, and that we need to give back to the community. But this is also about an emotional connection. Fear is one of the most powerful emotions, but the problem is it’s not a sustainable emotion. You can use a scare tactic to get someone engaged, but they are not going to feel good about the association. Fear is tempting. Guilt is tempting. But ultimately, long-term sustainability is about harnessing the positive emotions. We believe it’s aspiration. Having a successful life. A healthy family. Doing well. And this is one of the key tenets of our brand from the design of the product, to the brand promise to even the price point.”
Another key tenet is authenticity, which she said customers feel and are willing to pay for: “I am making this choice and it makes me a better parent. It gets to that whole betterment philosophy.”
Myers said she chose to major in religion while in college because it provided a cross-section of so many disciplines: art, literature, psychology, and “so many different pieces of the human experience.”
“Part of that is the universal need to believe that is common to the human experience,” said Myers. “And it’s really not that different from a consumer product. People have to have belief in that product, and the only way they can believe in it is if you tap into this foundation and makes them feel better about that product.”
Actress Jessica Alba is a co-founder of The Honest Company.
Myers urged credit unions to reach out and identify member needs, and that means getting senior management involved in conversations with members, she said.
“Reach out to your members. Talk to them. Have a conversation. Ask questions. Get to know who they are and what they want. So many consumer products companies sit there in their board rooms and ideate and don’t talk to their customers,” Myers said. “Talking to our customers is something Honest Company really prides itself it. It’s not easy. We had to admit we made a mistake on baby wipes. We went back to the drawing board. You can make consumers a part of the journey, and this gives them loyalty.”
Myers said that one of the company’s founders and principles calls customers every week, including those who are most dissatisfied with it. That often leads to “shock and surprise,” she said, when the co-founder calls.
The Honest Company’s tagline is “Together we can make it better.” Myers said that slogan permeates the organization, which in turn helps it attract impassioned employees.
“How do you attract a team that is passionate?,” asked Myers. “It starts with having a brand and a product that they are passionate about. We are open to ideas, and making sure they feel embraced by the company. Social goodness is a core culture of who we are. We are who we preach. We really embrace that.”