Lip balm... It doesn't seem like a market ripe for innovation, does it? However, EOS (maker of those pastel-colored, spherical-shaped lip balm products) has overtaken industry leaders such as Chapstick and Blistex in a few short years. Fast Company recently spoke to the founders about the strategy that has led to so much success. Elizabeth Segran writes,
The lip balm category struck them as a prime candidate for innovation, since the vast majority of products on the market "were indistinguishable" from their 100-year-old predecessor, Teller says. Many brands appeared to be driven primarily by cutting costs and competing on price, he points out. "It appeared to us that everybody in this category was being lazy. That was an opportunity."
EOS chose their target market carefully. They focused on millennial women, rather than trying to be all things to all people (generally, the existing products approached all customers uniformly). Specifically, they targeted "millennial women between the ages of 25 and 35 who were style conscious." Why? Their research showed that these women tended to be heavy users of lip balm, yet they did not find the application of lip balm to be enjoyable at all. Co-founder Sanjiv Mehra notes, "The products that women depend on every day should deliver moments of delight that elevate these daily routines." They made a series of other choices that fit with this target market. They tried to "engage all five senses, from soft round packaging that felt good in the hands to the colors of the orbs, to the smells, to the way the flavors tasted, and even to the clicking sound the sphere makes when it closes." Segran writes that the founders tried to build an emotional connection with the customer. They weren't just selling a utilitarian product. They wanted their product to be fun, even delightful.
What a terrific story! The EOS entry into this "tired" market offers several important lessons. First, if many existing incumbents are trying to be all things to all people, then a strategy with a laser focus on a specific target market might be quite successful. Second, empathy with the users can deliver innovative design concepts. Understanding these millennial women delivered key insights that led to an innovative product tailored to their needs. Third, customer needs go beyond the obvious service that is provided. Yes, people don't want chapped lips. However, these millennial women cared about more than the quality of the balm itself. EOS' focus on the five senses demonstrates one can delight the customer by paying careful attention to many details about the customer experience. Ultimately, EOS is selling more than lip balm, just as Starbucks is selling more than coffee.