CEO’s Perspective: Interview with Cindy Marteney
Q: Why hasn’t Our Health Co-op had a more aggressive marketing strategy, given your marketing background?
“When we founded Our Health Co-op, we acquired an existing customer base and product line. Although I spent much of my time in marketing roles, it was clear that the starting point was not marketing programs.
The starting point was solidifying a powerful concept — that of providing high-quality supplements to seniors, many of whom live on fixed incomes.”
Q: What were your original thoughts on the unusual branding the Co-op inherited?
“As Guido would say, ‘no hissing, please!’ Yes, I’ll admit, I thought the idea of a mascot “kat” writing the newsletter was a little daffy.
I suggested that we do a survey of our customer base to determine if the “kat” was something that customers tolerated in order to get great deals or if the “kat” was really essential to the brand.
If I had been a betting person, I would have lost. The “kat” was quite beloved and the response statistics would have been envied by any marketing professional Well over 50% of those on the mailing list responded and of the responses received, well over 90% were unequivocally in favor of “keeping the kat.”
The reasoning was good. Subscribers deleted most “boring” emails after receiving them a few times. “Guido’s” newsletters, on the other hand, were more often read from top to bottom, and members even swapped emails regularly with the kat. Notes to the kat crack us up all the time, so, I quickly got over myself.”
Q: On a more serious note, talk to us about issues of quality in this industry.
“The business had to maintain low prices to support our core audience, but we also had to ensure that our quality was consistent. In year one, our top priority was to guarantee quality.
What I learned about the supplements industry in that first year was at times fairly stunning. As a little private label outfit, the burden of proof rested entirely on our shoulders. Certificates of analysis from raw materials suppliers could not be trusted. Certificates of Analysis from contract manufacturers, thus, could not always be trusted.
As a new owner, I tested our first shipment of Coenzyme Q-10, a very expensive raw material, and was beyond dismayed with the results. I had a major out-of-stock situation, and the test results were not even close. There was no way I was going to put that stuff on the market. It was infuriating. Where was the accountability in this industry?”
Q: When the shipment didn’t pass your independent test, what happened?
“Heart health is our top category and beingout of stock of our top product hurt financially, but I had no battles to fight with a board or a management team with unrealistic ideas about what our numbers ‘should be.’
We quietly waited for a new shipment, from a new supplier, whose test results were on the mark — while members complained and our revenues fell during the month of May 2002.”
Q: What did you learn about testing through this process?
“We’ve learned a lot of lessons regarding testing along the way. We’ve used a number of labs and they all have their strengths and weaknesses!
For example, labs don’t always tell you that they’re not familiar with testing a particular type of ingredient or that certain formulas create problems when testing individual ingredients. For some blends, especially with herbs, you have to test the raw materials and then test the blending proportions. You can’t test certain active ingredients once they have been blended in a formula with other ingredients. It can be complex, since labs don’t always let you in on these little secrets.
Q: How did you resolve your testing challenges?
“Frustrated beyond belief, I turned to my consultants. The CEO of our consulting firm spent hours on the phone with countless labs around the country, interviewing them about their testing techniques, their service standards, and, as importantly, the equipment they had in house, before making a recommendation. He found the lab of my dreams.
Finally, we have a fantastic laboratory that not only provides a test result, but also includes a complete review of the test procedures used. They exclusively use test procedures documented in peer-reviewed journals and cite the procedures used , which is unusual! Many labs, even some of the truly prestigious labs, use ‘proprietary’ tests, which other labs can never duplicate.
In addition to switching labs, we’ve shifted much of our manufacturing to NNFA GMP-certified companies and the results are just what you would expect — predictable. Products actually meet label claim, the first time around, eliminating costly and irritating out-of-stock situations.
My consultants repeatedly say that this industry has been ‘marketing led’ and that it is starting to become more of a ‘science led’ industry.
The good news is that we frequently hear, ‘No one your size is doing what you’re doing to promote quality, no one!’
Q: What do you mean by “science-led?”
“When I talk about being led by science, I mean that we use science to run our business and also to sell our products. That makes marketing more of an educational process than a routine of hype and slogans.
We’ve stayed out of questionable categories, such as weight loss. While weight loss programs can be augmented effectively with supplements, there are no magic bullets and we don’t like to sell faddish promises.
Also, we’ve declined to carry hot products in which we have little faith — like this year’s rage, coral calcium. If only people could see what comes across my desk from suppliers hawking ‘miracles.’ The flyers all boast how companies like ours can boost profits and capitalize on consumer demand. The science, alas, tends to be missing or highly suspect.
Few in this industry ever walk away from easy revenues. However, our members count on us not only to negotiate good prices on their behalf, but also to give them the straight scoop and the science behind our decisions.
We’ve lost a few customers because we refused to carry some favorite product, but so it goes. ‘We may be quirky, but we have our principles,’ as the kat likes to say!”
Q: You’re running a business. You can’t really tell us that you don’t have designs to market your company, can you?
“We rely on members to spread the word. Our business model does not support much in the way of advertising or marketing programs. In fact, we’d go out of business if we got heavily involved in traditional programs. We don’t have the margins to cover that kind of thing.
What I can tell you about is one of my favorite ideas. As the Co-op’s base continues to get stronger, our stories from members keep coming in, and these stories are often funny, occasionally grumpy, sometimes befuddled, but always personally touching.
My dream is to include Co-op members in publication of a book called, Notes to the Kat, a compendium of the most touching (and sometimes provocative) correspondence between the Co-op’s favorite kat and the kat’s many fans! Any writers out there wanting a cool project?
If you are interested in contacting Cindy Marteney, write to her at email@example.com.