Yesterday, I introduced you to Vancouver-based Ugi Fitness Inc., which, on the eve of an upcoming appearance on the hit TV show, Dragons' Den, has run out of stock of its Ugi ball – the centrepiece of its product lineup.
Ugi, as I told you, was the winner of our recent search for a company that could use my help on its path to growth. Each week, I'm going to share my advice for Ugi's founders, Sara Shears, Melanie Finkleman and Debra Karby, and I hope you'll add your own perspective.
As you'll recall from that column, the core of Ugi's workout system is the Ugi ball itself, which is both a blessing and a curse.
Customers love working out with the soft, boldly coloured ball, but it is tricky for Ugi to make.
At this point, the cover of the Ugi ball is manufactured in China and then sent to Denver to be stuffed and shipped. The long turnaround time to get the balls, coupled with an influx of media attention, including everyone from Dragons' Den to Shape Magazine magazine, means that Ugi has a supply problem.
The covers are still sitting unsewn in a factory in China. Once they finally get made, Ugi's founders have decided to spend the extra money – cash they can ill afford to part with – to have them air-shipped to Denver so that Ugi will have its balls in time for the holiday season.
Even with the expedited shipping, the best they can hope for is to have a supply of balls in November, leaving customers who order today waiting more than a month for their Ugi ball. And that certainly won't be in time for the Oct. 12 Dragon's Den appearance.
So this is the pickle that I found Ugi Fitness in during our first interview as part of the new series.
After that interview, during which the team described their supply problem, I sent them this e-mail:
Melanie, Deb & Sara:
Congrats on creating a product people want. Not every startup can say that! I think the Dragons' Den appearance could still be an opportunity for you, but you need to change your mindset.
Right now, you're obsessing about not having stock, but that's not the message you want to deliver to your customers. Instead, I'd recommend using your supply problem as an excuse to build anticipation and a sense of exclusivity for your product.
Here are a few suggestions:
Ditch the out-of-stock label
Right now, you have an ugly label plastered on your website that reads "Out of stock."
I understand you want to be upfront with your customers, but when you go to all the trouble of getting buyers to your site, the last thing you want to do is turn them off before you take their order.
Instead, think about changing the label to something more positive. like: "Shipping Nov. 15" or "Pre-order now," and include a clock that shows the number of hours until the customer's order will ship, counting down by the second.
When you buy a limited-quantity print, the artist communicates that you have one of a limited number of copies made. When Volkswagen announces it will only make a limited number of special edition GTIs, it increases the demand among enthusiasts.
Consider merchandising your limited supply. You could reposition your shipments into "editions."
For example, your shipment arriving in November could be positioned as your "Spring 2012 Ugi collection" and you could install a widget on your site that counts down the number of balls available in the collection.
Customers keen to get their hands on a ball could pre-order now to grab their allotment of a limited supply.
Reframe the waiting period
Right now, you're spending too much time telling customers about your supply problems but they don't care about the plumbing of your company. They want to get in shape, which is why you should consider reframing the six weeks they're waiting for their product as a preparation period to use their Ugi ball.
Let me give you an example. Before I signed up for a 16-week marathon-training clinic, I needed to be able to get to the point where I could comfortably run 10 kilometres in under an hour. In other words, they expected a minimum fitness level in order for me to even start their program.
What if you reframed the period that people have to wait for their Ugi ball into a six-week Ugi prep program? For customers who have pre-ordered a Ugi ball, you could send a new exercise each week to get them ready to make the best use of their ball when it arrives.
Instead of saying, "Your ball will ship in six weeks," you could say, "Order now and you'll instantly receive the first instalment of a six-week Ugi training program."
You would be communicating to your customers about when to expect their ball without obsessing over your supply-chain issues.
Good luck and, I'll talk to you again next week.
Now, readers, it's your turn. What would you advise Ugi to do?
Special to The Globe and Mail
John Warrillow is a writer, speaker and angel investor in a number of start-up companies. You can download a free chapter of his new book, Built to Sell: Creating a Business That Can Thrive Without You.
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