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nike syndrome

The Nike Syndrome: Marketing is Not Just for Power Brands

In the 25 years I’ve worked with entrepreneurs and business owners, I’ve discovered a phenomenon that I call the “Nike Syndrome.” When deciding whether to spend money on marketing, entrepreneurs often cite Nike as the reason it will never work.

The script goes something like this: “Of course it’s easy to market when you’re Nike. They are the #1 sports brand in the world and have deep pockets. I’m just a little company.” This statement usually stops any further exploration of what type of marketing could work for them because it’s made clear that there are no viable options open to “small companies.” But what business owners fail to recognize is that Nike was not always “Nike.”

Back in January of 1964, Nike was a young startup known as Blue Ribbon Sports (BSR), the brainchild of University of Oregon track athlete Philip Knight and his coach Bill Bowerman. Geoff Hollister, another teammate, joined as co-founder in those early years.

So how did little Blue Ribbon Sports become the Mega Brand known today as Nike?

From the start, BSR had a clear vision: to provide the best running shoes for competitive athletes. After all, they were athletes themselves so they had a unique perspective and a core understanding of their target customer and as a result, they were passionate about educating people on the benefits of running. Since BSR didn’t have a lot of money for marketing, the founders did something quite unusual for the times. They asked well-known athletes of the day to wear and promote their products and because they couldn’t afford expensive TV spots or multi-level advertising programs, they focused their marketing efforts on building a strong base of “Brand Evangelists,” one enthusiastic fan at a time.

A common side effect of the “Nike Syndrome” is the reluctance of most business owners to consider changing their company’s name, even when it fails to connect with customers and limits their growth and success. BSR was no different. Blue ribbons are meaningful in county fairs but don’t carry the same gravitas in a growing global company; it took BSR 14 years to recognize the limitation of their name and change it to Nike. In 1987 Nike hired Scott Bedbury (author of “A New Brand World”) “to turn around the struggling number 3 athletic footwear brand” (from A New Brand World by Scott Bedbury). Bedbury spearheaded the “Just Do It” campaign and from 1987-1994, helped position the company into the #1 sports brand in the world, where it’s been ever since. Sales jumped from roughly $10M to $100M.

It took Nike more than twenty years to become “Nike.”

Today, Nike is valued at $19 Billion and spends roughly $1 Billion on marketing. It should be noted that the industry standard recommends that 10%-15% of a company’s gross should be devoted to marketing so Nike is still shy of that number.

Effective marketing is scalable, which means you need to take into account where you are in your business cycle and remember, “one size does not fit all.” Successful companies recognize the value of marketing and treat it like a capital investment (instead of an item on their balance sheet). They have a reasonable marketing budget and spend more, not less when business is going well because in lean economic times, companies that have invested in marketing do better than the ones that don’t.

The Nike Syndrome often keeps company sales flat because business owners do nothing or spend money on a much smaller version of advertising and fail. Since you can’t grow your company without investing in marketing, it’s fair to say you’ll never become Nike; thereby creating a closed loop that feeds on itself.

It’s true that startups don’t have deep pockets but if they’ve invested in a true value proposition, they understand who they are and what makes them different. They have a good story to tell and a name that resonates with their customers and attracts new ones.

A marketing strategy based on measurable results and customized to the size of your business works. Just Do It!

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Copyright 2015 Orly Zeewy, Brand Architect. All rights Reserved.

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