If you haven’t heard about the recent changes at the company that makes Solo Stoves, it is a cautionary tale for any leader who falls in love with an expensive marketing idea or anything that involves financial risk. When the big bet fails, the question that I always ask is, did you check with your sales leadership on the monetization of this expense? I do not know the full story of what happened at Solo that led to the dismissal of the CEO, but it looks to me like he signed off on a big, pricey endorsement campaign utilizing Snoop Dogg.
Here is a quote from the CFO in the press release announcing the new CEO: “While our unique marketing campaigns raised brand awareness of Solo Stove to an expanded and new audience of consumers, it did not lead to the sales lift that we had planned, which, combined with the increased marketing investments, negatively impacted our EBITDA,”
Marketing and media back seat drivers were quick to blame Snoop for the CEO’s demise, calling his fit for the brand a mismatch. I disagree. Snoop was a great fit. He creates content with Martha Stewart! He has a wine brand! 40-something Dads who want a portable outdoor campfire love him!
He was probably just too damn expensive. Marketing likely had to abandonPerformance tactics to support the big celebrity endorsement campaign. When the campaign launched, the social media metrics were fantastic. The Advertising press raved about the campaign.
I will bet you my solid gold grill that the CEO was pumping “Gin and Juice” in his dorm room 25 years ago and was personally invested in Snoop Dogg as his endorser. When he saw the super funny creative execution of the campaign, the CEO was so excited that no one in sales had the heart to tell him that the increased unit sales forecasts were doomed if the company was abandoning its performance budget to fund this love affair with Snoop.
Solo tried other new, brand-focused marketing tactics in 2023 like a float in the Macy’s Thanksgiving Day Parade. Do floats equal performance? How did the Thanksgiving Float draft off of the Snoop idea?
As Snoop Dogg himself once said, "Sometimes a loss is the best thing that can happen. It teaches you what you should have done next time."
I will tell you what should be done the next time–check in with your sales leadership and create an environment where they can call your Snoop idea a real dog. Big brand marketing campaigns are for big brands. Solo Stoves are not a well known brand and to pivot 100% to brand building efforts like high priced celebrity endorsements and parade floats without adjusting KPI’s is asking to be burned alive.
My personal experience with Solo Stove was as a Performance advertiser with tight ROI metrics based on ad spend.
The difference between Performance and Brand advertising is huge. Performance is day to day metrics. Brand metrics are “lift” studies.
Did someone at the company know that these new brand tactics were not going to deliver the same short term results? Did someone think to let the CEO know that there was a problem with forecasts based on these tactical changes?
The CFO’s quote implies that an immediate sales lift was expected from the brand campaign involving Snoop. When it didn’t happen, the CEO was let go.
I should note that the previous CFO was torched along with the CEO. The quotes are from the new interim CFO—who was serving on the board.
Was marketing talking to sales? Did anyone see the revenue projections against the new marketing tactics? Were people afraid to speak up? When the CEO falls in love with an idea, who will speak truth to power? Sometimes leaders are so persuasive that they can get you to believe in an idea that is deeply flawed. If the CEO is surrounded by lap dogs afraid to bark when danger is near, then moving the budget into lame brained ideas can and will happen.
(Please take note of all my dog and fire metaphors in this post)
Next time you want to make a big bet follow some rules:
1–Look at your new incremental investment purely from an ROI perspective.
2–Challenge Revenue Leadership to make other choices with the same investment for a potentially better return.
3–Ask somebody on the outside of the day to day of the company to give a POV.
4–Game out the worst case outcome.
5–Involve the board and let them weigh in.
I cannot confirm any of this depiction is accurate but one thing is clear–expectations were not managed when the company made the strategic shift. A new strategy often means new KPI’s. Bad surprises from unexpected negative outcomes are never welcome.
Here are some other articles for more background on this story.
Retail Dive: New CEO Solo Brands
AdWeek: Snoop Dogg & Solo Stove
For the record, the Snoop campaign was great. The problem was that it was designed to build the brand which is fine if near term cashflow is no object. Brand building is an investment in long term growth. Performance marketing is always safer especially for emerging brands.