The Wall Street Journal
By RAYMUND FLANDEZ

Some small companies win instant fans, often because their products or services strike a nerve or generate buzz. But turning those followers into loyal customers can be a challenge.

Take Threadless.com, an online T-shirt retailer in Chicago, which launched in 2000 and quickly built a following through a simple approach: allow anyone to design a T-shirt and upload it to the site, where people vote for favorites each week and get to buy them.

Threadless, a unit of skinnyCorp LLC, has signed up a million registered users on its Web site, and now has about 860,000 Twitter followers and more than 70,000 Facebook fans.

It can be hard to sustain such interest, especially amid a recession. So, Threadless is keeping customers engaged by tweeting gift codes and tickets to music festivals and uploading videos on Facebook, where it gives away products.

“Now, we’re being deliberate about finding out who our customers are and what products are going to incentivize them to buy,” says Jeffrey Kalmikoff, skinnyCorp’s chief creative officer.

Dogswell CEO Marco Giannini used a thankful letter from a customer to pitch a story to NBC’s ‘Today Show.’
Other small businesses that have enjoyed sudden popularity are actively reaching out to the national media to tell their story, putting more salespeople on the ground to give out freebies and getting celebrities to try their products. Done right, these strategies could prolong the initial rush of success.

“As you grow, you have to maintain that quality and specialness,” says Stephen Burnett, professor of strategic management and associate dean of executive education at Northwestern University’s Kellogg School of Management. “It’s an interesting challenge because what happens a lot of time is that when you become too large, you ruin that kind of mystique.”

Larger companies with a big loyal following such as In-N-Out Burgers, the Irvine, Calif., fast-food chain, are always careful about nurturing that emotional connection between their customers and their brand, says Stacy Perman, author of “In-N-Out Burger.”

The burger chain’s cult status among customers wasn’t planned, she says, but the company has been careful not to commercialize its image since 1948. It rarely advertises, letting the heavy lifting of promotion be done by its customers, which include celebrities, top chefs and politicians.

That’s a good lesson for any small business trying to keep its spotlight bright. For the past six years, Dogswell LLC of Los Angeles has spread word about its natural pet-food products to pet owners by giving away samples at sporting events. In mid-March, Dogswell received a note from a customer who said that her aging dog had arthritic problems, but the dog is now able to walk because of a two-year diet on the company’s products, which have added vitamins and supplements.

Skullcandy’s Rick Alden says the company is trying other freebies besides samples. such as spray-painting its skull logo on beach-goers.
Marco Giannini, its chief executive, immediately pitched the story to NBC’s “Today Show,” where in May viewers got to meet Chanel, a dachshund-mix. At 21, she is the world’s oldest living dog (120 in human years), as certified by the Guinness World Records. After the show, Dogswell received more media attention from about a dozen local outlets.

Having loyal fans can make it easier for small businesses to do well in tough times but star power can sweeten that hold. Crumbs Bake Shop Inc. got New Yorkers hooked on its $3.75 cupcakes six years ago when it opened its first store in Manhattan, and it works hard to make a Crumbs cupcake an addiction by building a celebrity following.

Crumbs says it recently appeared as the featured business in a “Celebrity Apprentice” episode and counts Katie Holmes, Leonardo DiCaprio and Uma Thurman as some of its regular celebrity clientele.

Now with 22 stores across the U.S., Crumbs sells 200,000 cupcakes each week in the city alone. Foot traffic is “just as strong as ever,” says Jason Bauer, president and chief executive. “The fact that it makes people feel good helps us in this economy.”

Getting customers excited by doing more local events can be key to keeping fans. Batter Blaster LLC of Austin, Texas, which started in 2005, created an immediate buzz in 2007 with the launch of its organic pancake and waffle batter in an aerosol can. Customers blogged, created Facebook groups such as “The Church of Batter Blaster,” and posted YouTube videos.

Now, the company is dispersing street teams to various cities to hand-out samples at fairs, schools and parks as well as sponsoring pancake breakfasts for charities. In May, Batter Blaster teamed up with a local charity in Atlanta to break Guinness World Records’ “Most Pancakes Cooked in 8 Hours,” serving 76,382 pancakes.

“We were able to go down there and build a following,” says Sean O’Connor, founder and chief executive.

But a little restraint in product promotion can go a long way to hold on to customers and prevent overexposure. Since 2003, Skullcandy Inc., a Park City, Utah, maker of specialty headphones, has targeted a niche market by giving away free samples to the skate and snowboard crowd. Now it’s trying to back off from that practice by giving away other freebies, such as spray-painting its skull logo on beach-goers at surf events.

“It’s not so much as seeding the market as it was in the early days,” says Rick Alden, founder and chief executive. “Now, it’s just maintaining a great vibe.”