Under Armour – Harvard Business Review
Under Armour is a newish brand in Australia and we are starting to see it become commonplace with AFL stars wearing the clothing and protective clothing and now even in basketball shoes.
What got me interested in this article was the process Under Armour went through to get celebrity endorsement for their product when they were a start up brand.
Start up Challenger Brand
Plank was 23 and straight out of college when he started Under Armour. The concept of the brand was to allow athletes to wear some comfortable clothing under their padding as t-shirts were uncomfortable and filled with sweat. So the idea of an ‘under amour’ product was born that was comfortable, light weight and could soak up the sweat.
The development of this product was innovative and targeted at elite athletes, who would then inspire consumers to get the same gear.
The brand launched in 1996, the days of pre-Facebook, so it was hard to get a following. What plank did was to say to people he knew from college that were playing in the big leagues that he was working for a cool company with some great products and that they should check it out. If they sounded interested he gave them a piece for themselves and another piece for the guy in the next locker to try.
He positioned the product that could be a tool that could make them perform a bit better and therefore they could get paid more, rather than just a favour to himself.
What happened is that once a few players in the team started wearing the product the team felt obligated to buy it for the rest of the team. So this grassroots, guerrilla campaign started to get the first orders flowing.
The Next Steps
From these small beginnings Under Armour signed up the Georgia State football team followed by the Atlanta Falcons and New York Giants. It all started with some free shirts to players and their performance improvement leading to full team orders.
The turning point came in 1997 when the Miami Dolphins called saying that a couple of players had the Under Armour shirts and could he have 150 units so that everyone on the team that Sunday (including Dan Marino) would be wearing one on Sunday. Plank said he couldn’t give away that many shirts and how would that affect his relationship with the other teams that had paid?
Plank stuck to his guns and said that he makes a quality product and that the team would have to pay a fair price for the shirts. So on the Wednesday plank had stared down the offer of the century, but had stuck to his values.
The next day the Dolphins called back, placed an order on a 45 day billing cycle and the shirts were worn on Sunday’s game!
This is a real example of sticking to your guns, understanding the value of your product and not giving it away, but selling it for what it is worth.
Under Armour use celebrity endorsement today to drive the sales of their business. But they do it in a different way to ensure that they stay true to their brand values and only back proven achievers.
The first endorsement was with Barry Bonds. Barry loved the product and was wearing the gear, but then asked for an endorsement to continue wearing it. He liked the gear so the team were able to negotiate a $5,000 fee as well as $5,000 to his favourite charity.
Today Under Armour has Tom Brady from the Patriots as the brand advocate because he is a proven achiever. Unlike other brands Under Armour won’t take a punt on draft picks from the NBA. In 2010 John Wall, the #1 pick was paid $5 million for an endorsement deal and the #2, Evan Turner, was valued by Under Armour for $150,000 but was signed for $2 million by another brand.
The key for Under Armour is that once they have the celebrity onboard they want to go further than just endorsements. Brandon Jennings from the Milwaukee Bucks is signed to the brand and during the recent lockout he became an intern at the Under Armour Headquarters with the title of ‘Curator of Cool’ where he hung out with the designers to help come up with new ideas.
For Under Armour endorsement is important, but just as important is the aligned to the culture and the brand merits and going beyond just endorsing the product.
What we can learn?
I think that there are two distinct learning opportunities from Under Armour:
1. Understand the value of your brand and don’t discount it or give it away unnecessarily. There are times when we are in start up for a new product or even when sales are low. You need to stick to your guns and help customers to understand the benefits of your product and the value that is inherent within the brand. That way you build sustainable, profitable business for the future.
2. When using celebrity endorsement, go beyond the simple endorsement, make the celebrity a part of your brand, embracing the values of your organisation. Look at ways to untap other opportunities, whether this is working with your people to develop new lines, inspiring your staff or using them in the community. Think outside the box.
You can find the full article online at Harvard Business Review – ‘Under Armour’s Founder on Learning to Leverage Celebrity Endorsements’ by Kevin Plank in the May 2012 edition.
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