Turning water coolers into a $4bn DTC brand

The 5-step plan you can copy to conquer your market

In 2006, two brothers that loved the outdoors realized all existing water coolers were weak and would break easily. So they decided to build a better one.

One worth $4bn, YETI.

Now, why would you care?

Because if they can build a successful brand selling water coolers, you can too. Their strategy was simple but genius, and we can learn a lot from it.

Here’s the 5 lessons:

1. Be different than the competition

In 2006, many big companies were selling water coolers. The market was crowded and no small business would dare enter it.

But all products had 3 things in common:

• They were cheap and low quality → Average selling price of $40

• They were all sold in the same stores → Walmart, Target, etc.

• They were boring, without soul → a white and red cold box

So, what did YETI do?

• Built high quality coolers that sell at $400

• Sold via different small stores and communities

• Made coolers a product people cared about

This was a risky move that requires great execution to be successful. But YETI understood one thing:

The only way to compete in a monopolized market is to not compete at all.

Be unique.

2. Build a story and create a loyal cult

Great brands offer more than products. YETI does not sell water coolers, they sell adventure.

Cults do not talk to everyone, they talk to the right people. YETI does not sell to everyone, they sell to fishermen, hunters and explorers.

The story:

• When selling the product, they do not explain how much better the coolers are.

• YETI tells you about the iced-cold drinks and a fresh meals you will enjoy.

• No matter where you are. No matter how big the adventure.

The cult:

• When building the product, YETI made sure it was serving the problem and the audience.

• The Seider brothers were fishermen, so they understood well their community.

• Adventurers would love the product, so why try to sell to anyone else?

If you craft the right story for the right audience, solving a problem they have with a product built just for them… your success is almost guaranteed.

If you do win, you become the only choice.

3. Ditch traditional marketing, be a pioneer

YETI understood that if they wanted to sell to adventurers, there is no point wasting money in channels that would speak to everyone else. They didn’t sell to supermarkets, and they didn’t run paid ads.

Instead, they pioneered:

• Sold their products in local sports and adventure stores, when nobody targeted sportsmen directly

• Looked for high-profile hunters to endorse them, when influencer marketing was not a thing

• Gave t-shirts, hats, water bottles and coolers, when brand ambassadors didn’t exist

10 years later, you are probably running many of the same strategies they implemented in 2010. And so is everyone else. If it works, keep doing it.

But if you want to win big, you need to pioneer.

4. Implement best-in-class, data driven, digital marketing

YETI was not a DTC brand from the beginning, they became one. In 2021, over 50% of their sales came from their DTC strategy. In 2015, more than 90% was wholesale alone.

In 6 years YETI has become one of the most successful DTC brands around.

3 things YETI is great at:

• Building an extremely good website that converts

  • Good structure guiding the reader

  • Selling outcomes, not features

  • Clear and visible CTAs

  • Handling objections

  • Building story

• Capturing the traffic into their audience

  • Value-based pop-ups to subscribe you

  • Optimized campaigns consistent with the brand

  • Multiple flows to guide you through your journey

• Data driven iterations to constantly improve

  • Implemented ML to optimize for LTV

  • Focus on highly personalized direct marketing

  • Revisited the site to optimize conversion based on analytics

To implement these changes YETI has reinvented itself. Hundreds of marketers work for the company, and they regularly hire specialized agencies to help them.

You do not need to know everything, find those who do.

5. Be persistent

No brand grows from 0 to over $1.5bn in sales and $3.5bn in valuation overnight. But no brand grows linearly either.

YETI’s growth was strong from the beginning. They started in 2005-6, and grew to $30Mn by 2011. By 2014, they 5x revenue to $150Mn. But we would not be talking about them if that was it.

In 2015, magic happened.

Revenue 3x in a single year, closing at $450Mn.

This was only possible thanks to the loyal fanbase they created over 10 years, allowing them to finally tap into other markets. It was an overnight success that spent 10 years in the making.

From there on, the sky has been the limit.

Will your grow to make billions in revenue?

Probably not, but I don’t know.

Here’s one thing I know, it won’t if you stop before that.

So, remember:

1. Be different than competitors

2. Build a story and create a loyal cult

3. Ditch traditional marketing, be a pioneer

4. Implement best-in-class, data driven, digital marketing

5. Even if you don’t do anything else… at least, be persistent

Who knows, maybe one day you’ll be worth $3.5bn.

Or at least more than today.

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