How Patrón Stays One Step Ahead with its Marketing
Any master brewer or vintner can tell you that too much of one ingredient has the potential to ruin an entire batch. The same is true for a luxury brand, says Lee Applbaum, Chief Marketing Officer of Patron Spirits and winner of The CMO Club’s Creativity & Storytelling Award. “A lot of luxury brand marketing is brilliant fiction—storytelling.” What can spoil their sales over time is too much glossy imagery, and not enough substance. Even those that dominate their categories have lost market share because consumers eventually gravitated towards a competitor’s more compelling—and authentic—story.
(To listen to the Renegade Thinkers Unite podcast episode with Lee Applbaum, click here.)
A brand’s last call
Applbaum can speak on this point because it was a threat that Patron faced when he joined in 2013. “In the handful of years prior to my arrival, the growth trajectory had slowed and began to flatten out, yet the category continued to grow,” he says. At the time, Patron enjoyed a high-60’s share in the luxury tequila category. Its brand image—high-end, dashing and smooth—had penetrated every facet of American pop culture.
“Fundamentally, we had just one card we were playing—the swagger style card,” says Applbaum. “We were embedded in pop culture and movies and TV, in rap, hip-hop, rock, and country. Celebrities and athletes as well.” However, Patron’s two-dimensional brand story had achieved peak potency. “There were a lot of factors, one of them being that a theoretical maximum was reached in terms of market share.”
Enter the Knows
To expand sales, Applbaum and his team sought to add depth to their appeal, and decided to pull back the curtain on Patron’s artisanal, small-batch production process. This opened up the brand to an entirely new target. If Patron’s existing customer base could be called “The Bros,” its new target was “The Knows.” Where The Bros are drawn by style, The Knows are drawn by substance. “They’re the farm-to-table movement,” says Applbaum. “They want to know who makes the product, where does it come from, is it sustainable.”
In truth, the Knows and the Bros have more in common than they know. “While there are always extreme ends of the spectrum with Bros and Knows, Bros still desire to be smart and validated. Conversely, there are Knows who might shoot down the image, but most of them want to be smart and stylish,” says Applbaum. “At the end of the day, a Bro wants to be smart, and Know still wants to be cool.”
Serving the perfect story
One factor that separates them, however, is that The Knows are often the ones behind the bar. This makes them key influencers and Patron storytellers. “The Knows are increasingly influential not only for their audience, but for the Bro audience as well,” says Applbaum. A lot of what they consume is not only based on peers, but experts. For them, the expert is going to be the mixologist.”
Applbaum and his team began educating mixologists on the Patron product. “Many of them served us enthusiastically, but never understood the authenticity piece,” he says. The team took an innovative approach to sharing their story through VR and trips to Mexico to let the mixologists experience production firsthand. The effect rippled as influencers then spoke with restaurateurs, spirit writers, luxury professionals and ultimately consumers. “Having the people who make the product talk about it has been a really key part,” says Applbaum, “then taking a step back and letting those mixologists become our marketers, talking objectively about our brand and our product.”
It’s a refreshing about-face from Patron’s earlier encounters with consumers. “A couple of years ago, ‘haters’ would get on social media and talk about our brand as this swagger-only brand with no substance,” says Applbaum. “We’d have to enter these conversations and explain in great lengths why that isn’t true. The irony is, the harder you work to market yourself, the less genuine you appear.” Today, mixologists chime in to defend the brand. “I think that makes us more authentic than anything we could accomplish in advertising.”
A measured mix
Patron now enjoys 70% market share in the ultra-premium tequila sector with 98-99% brand awareness. “We were sitting on our greatest asset: authenticity. The organizational pivot not to move away from swagger, but to balance it with substance, has really been the key and has resulted in accelerated sales growth,” says Applbaum. In the end, it came down to the right proportion of ingredients. “That’s the thing that so many [luxury] brands don’t have. They’re incredible marketing engines, but it doesn’t rest on a foundation that’s real. We enjoy that, and we’re never going to lose sight of what is ultimately motivating consumers to purchase luxury brands.”