Kat Cole is an unlikely success story. She grew up with humble beginnings in Jacksonville, Florida. While in college, she took a job at Hooters in order to pay for school and support her family. Soon enough, she dropped out of college to travel the world, opening franchise locations for Hooters globally, and became a Vice President at just 26.
Today, she is President and COO at Focus Brands, a company that owns many of the most iconic food brands in the world, such as Carvel, Moes Southwest Grill, and my personal favorite, Cinnabon.
In this episode, I uncover Kat's biggest advice and learnings in building a successful brand and how growing eCommerce companies can build a meaningful, everlasting business.
"Be in love with your product. And then be obsessed with your customers and how they use it. That is everything." [Tweet this quote]
"You are the brand and you are the culture. Do your best to be as obsessed with your employees and their experience and their growth as you are with your customers and good things will happen." [Tweet this quote]
"Being very nonjudgmental as a human has afforded me the opportunity to see the beauty in many paths and that many things can be true at once." [Tweet this quote]
"Brand is a promise to the consumer. And that promise is made through every touchpoint, both proactively and reactively." [Tweet this quote]
"A brand is a point of view on what it could or should be. Part of what a founder or marketer is trying to convey is not just the reality of the customer's day to day interaction with the brand, but the aspiration of it." [Tweet this quote]
"Building trust means delivering on the brand promise. In the early days especially, make sure you're not so distracted with too many SKUs or too many variations or too many target customer groups that you can't deliver on the promise to begin with." [Tweet this quote]
"Don't get caught up in the shiny, bright light of being all things to all people. Do a few things really well, because in the early days, everything is the brand. The founders interaction on social media is the brand. The first product is the brand. The customer service is the brand. The website is the brand." [Tweet this quote]
"There is beauty in every human's story and in especially the inspiration that caused a founder start the business in the first place. That's incredibly important." [Tweet this quote]
"Scarcity drives value, but it is not the only way to drive value. Some brands have successfully built their brand and goodwill by being everywhere or in as many places as they can be." [Tweet this quote]
"Making the decision whether to go into retail, whether to go mass market or not, whether to go in boutique or not, whether to go on Amazon or not. There is no one playbook. There's an example of a brand that's been successful in every different approach." [Tweet this quote]
"Embracing omnichannel and allowing the brand to live and breathe in many different places is what led Cinnabon to $1.5 Billion in sales. Advice: coordinate marketing across the channels, rinse, wash, repeat." [Tweet this quote]
[00:00:36] Jessica: Today, we're talking to Kat Cole, chief operating officer at focus brands, a company that owns many iconic food brands, such as Carvel Moe's Southwest grill and my personal favorite
[00:00:47] Kat is no stranger to the retail and direct to consumer industry and has been featured in Forbes, undercover boss and well, everywhere it scenes.
[00:00:57] And it's no surprise why?
[00:00:59] her story is considered legendary in the restaurant industry and beyond what started as a humble upbringing in Jacksonville, Florida Kat took her first job at Hooters in order to pay for college and support her family.
[00:01:12] She quickly Rose in rank taking a VP position at the age of just 26.
[00:01:18]Today as COO at focus brands, she oversees their franchising, businesses, manufacturing, Andi commerce for all seven brands.
[00:01:26] Kat seems to know more about branding than anyone, but her perspective is different than most. And for me personally, quite refreshing in this interview, I seek to uncover the true definition of brand. as e-commerce companies. Do we have it all wrong?
[00:01:41] And what can small companies learn from the mega brands like Cinnabon? I'll explore these questions and more.
[00:01:51] Kat: I think brand really is a promise to the consumer and that promise is made through what a company says, in written and verbal and creative communication. And then that promise is, either delivered on or not via experiences with the brand. And that means the brand promise is being stress tested.
[00:02:19] Or formed and therefore the beliefs that the customer has around the brand, are being formed over and over through every touch point - what's often called moment of truth. Every interaction, what the brand does proactively or the business does proactively reactively, more so today than ever. What employees say about the business and the brand is as connected to the brand's marketing and the brand's product and the brand's channel, and the brands, price position, as anything else.
[00:02:51] And so, I think that concept of thinking of it as a living, breathing, promise and thing that stands for something that is going to communicate to customers and resonate with the group and not resonate with the group. And then that resonance will evolve over time as the environment changes, customers are on their own journey of evolution and preference and as the company and product change.
[00:03:19] Jess: Yeah, that totally makes sense. And I remember one thing you said, and I also should've mentioned, I've heard a couple of your talks in clubhouse, and so I actually have a couple quotes that you said, so I'm going to repeat some of those, but if I've misquoted you at any point, just correct me, but I remember one point you said a brand is a point of view on what it could or should be.
[00:03:41]Kat: I mean, I think that is about the fact that brand, you know, when people think of brand, part of what a founder or a marketer is trying to convey is not just the reality of the day to day of customer's interaction with the brand, but the aspiration of it. So that is probably what I was referencing with could or should be, because the reality is we don't always live up to our brand's promise in every moment of every day, internally and externally.
[00:04:10] The best companies do it more often, more consistently than others. But of course there will be times that there's a spot or a moment or season in your company where a product lunch maybe, gets a little off the rails from the brand's core and what customers believe the brand stands for, or a partnership goes awry, or we've all seen marketing campaigns where you think, yikes, that is a major miss from what I would have expected better from that brand.
[00:04:39] And so, we, the best of companies have those moments, but the best of companies, they are few and far between. And so I think it's important to remember that a part of brand and branding is aspirational is about what a brand and its promise. And therefore every manifestation of the brand, the logo, the tone, the voice on social, the products themselves, where they're sold and all the things that live under the hood of a brand.
[00:05:05] That ultimately it is aspirational and there will sometimes be things that are on their way to living up to that aspiration and other things in a brand that are dead on with it. There's nothing wrong with conveying aspiration as a brand. It just shouldn't be so very disconnected from what it in fact is, that's when brands can get into, into trouble, usually you don't see that until you see older, more mature brands. That's rarely an issue for startups or early stage DTC brands.
[00:05:36] Jess: I've seen a lot of cases where a brand's marketing campaigns could be so aspirational that you almost don't even know what they're doing or what they do or what they're trying to communicate, cause it's almost as if they're trying to mimic another brand that is also aspirational versus doing it for the right reasons.
[00:05:52] Kat: [00:05:52] Yeah.
[00:05:54] Kat: Marketing is a driver of the way a brand evolves. It is the aspirational part. It is the activity of saying, here's what we want you to expect. Here's what we. I want you to believe, but then the interaction with the employees or customer support or the service person, if it's a service business and certainly with the product or service itself, in fact, is what determines how the brand is perceived.
[00:06:21] But the marketing is the early promise of what it can be.
[00:06:25] Jess: And if I'm a small brand and I'm just getting started and I have, I obviously have big aspirations to be that kind of brand. How do I think about getting started? You know, making a million dollars in revenue or just getting there. What are some of the things I should maybe start to think about or invest in to start to build that brand trust?
[00:06:47] Kat: Part of building trust with the brand is delivering on the promise and it's actually most of it. Building a brand in the early days is about delivering on the promise and always, and so if someone is in the early days, just to make sure you're not so distracted with too many SKUs or too many variations or too many target customer groups that you can't deliver on the promise to begin with.
[00:07:13] And usually that means focus. If it's a product business or a core offering, if it's a service business and just delight your fans and or users or customers or consumers or whatever you call them, blow them away. Often the brand is a product in the early days.
[00:07:38] That thing you do is the brand it's, as it evolves over time, and the product evolves into multiple iterations or the service offerings proliferate, or there are partnerships that quickly grow what the brand is involved in. Those are the types of things that can become very distracting in the early days.
[00:07:59] So don't get caught up in the shiny, bright light of being all things to all people, but rather just listen to the customer, stay close to the customer, do a few things really well because in the early days, everything is the brand. The founders interaction on social media is the brand. The first product is the brand.
[00:08:20] The customer service is the brand. The website is the brand. So much of the brand in the early days is the marketing because there is more impressions being made from what's being put out into the world than the number of people that actually have the product or service. And so it's really important to have your head down, being able to deliver on that promise so that what you're saying, the brand is supposed to be is in fact, what people are experiencing.
[00:08:46] Jess: I love that. And to your point, when you talk about the founder being the brand, like how often a benefit it is to do as a founder there, use yourself in your own marketing and being very vulnerable about putting yourself out there and to talk about that. Because so many times you go to a brand's website and you see product, but you actually don't see who it is that's behind that product.
[00:09:08] Kat: Yeah, I will say that that's a very personal choice. Some founders for many reasons, want to remain in the background and that's okay. I, what I would never want to see as a founder who stays in the background because they don't realize the power of their story.
[00:09:26] Consciously, maybe they have a lot going on with their kids. There's something going on with their health. There's something in their past. They're just not ready
[00:09:45] It's a choice, but I would never want to that choice to be made because someone mistakenly thought that it would be a distraction or they couldn't add value because people like doing business with people. To your point, especially in the early days. So I want to honor the fact that there are occasions where a founder chooses to be more in the background.
[00:10:03] And that is totally cool, but I want to affirm that there is beauty in every human's story and especially the inspiration that caused a founder to create the concept. That's incredibly important.
[00:10:35]Jess: That, and that totally makes sense. When you were talking about, how essentially everything the brand does is a product of the brand, one piece of scrutiny that I think part of the DTC market has gotten over the last few years is overvaluing great brands because of their marketing and because of their brand, even though their product isn't super differentiated.
[00:11:04] Kat: I think that's true in any industry. People get really caught up in hype and so it's up to the company to deliver on that. And I don't, you know, one, I'm such a non-judgmental person at my core. Anyway, I just observe and what I observe is there are companies that are far better at marketing than they are at actual product and what I hope for them, because I want to see everyone succeed.
[00:11:34] Who's in the trenches, in the arena, doing the work. What I hope is that if their marketing far outpaces their product capability or quality, that they figure that out quickly and close the gap. And don't mistakenly believe that the marketing will carry the day. It just opens the door.
[00:11:55] What keeps people, it just creates trial. What keeps people coming back is obviously the experience.
[00:12:01]Jess: And then there's one, there's one term I remember hearing you say about support for a brand: accretive ubiquity. Can you talk more about what that means?
[00:12:12] Kat: Yeah, it's not important for every brand. What that means a accretive ubiquity, sometimes people hear that and mistakenly think I'm saying “creative” ubiquity, but it's a accretive ubiquity, meaning it is building on it is additive. It is incremental to be in more places to be everywhere. So often there is a school of thought that scarcity drives value.
[00:12:39] And that is true, but it is not the only way to drive value. Some brands have successfully. Built their brand value, like the actual goodwill of the brand and its relevance as well as the business, by being everywhere or in as many places as they can be. And so that's not for everyone. I do believe in scarcity drives value.
[00:13:49] And my point because scarcity drives value. And my point in highlighting that there is another way is to simply say, it's not easy. It's easier to damage your brand if you go too far, too fast in the wrong ways with the wrong people, but there is a way to do it well. And certainly, brands like Cinnabon that I've worked with for so many years brands, like Coca-Cola, whatever you think about the mission and the product and the company, you cannot deny that their early mission to be within arms reach of everyone on the planet. Again, whether that's good or bad is a different discussion for a period of decades was actually a creative to the brand. And in fact, it was part of the defensive positioning because if you weren't there, your competition would be, and there was a lot of competition amongst those brands.
[00:14:39] There are shoe companies that I can think of where, think of Nike, right? They're putting themselves in many, many, many places now retrenching with some of those channel partnerships, but for decades it made sense because if they weren't there, the competition was whether that was Amazon or in another, shoe retailer.
[00:14:59]Or other co-labs or other retail partnerships there was, there was incrementality to the brand value and being in more touch points and more accessible versus being boutique and hard to find. Now they had certain skews that were boutique and hard to find, but in certain releases, certain, limited release sneaker products, but the brand itself, over the decades, has had a accretive ubiquity. The more places they’re in, the bigger the brand is getting now. It's just, it's not because they're everywhere. It's how they're showing up everywhere. It's how they're marketing. It's their athlete partnerships. It's their mission driven approach. And yes, the fact that they're accessible in many places.
[00:15:41] So anyone who hears me talk about that should know that I don't, I'm not saying that's the only way, but I often find I'm in conversations where people feel that if you're in too many places immediately, your brand is diminished and that is not true. If you do it the right way.
[00:15:57] Jess: Yep. I see. And one thing that. Comes to mind when you talk about a accretive ubiquity, is it seems to be what powers, what powered a lot of, especially, iconic brands today in terms of being everywhere, being accessible. When I think about the DTC market, which I think is more of a channel per se, than like an entire category, but the whole value is being direct to consumer. Obviously there's value in being both direct to consumer and working with partnerships and retailers and wholesale, et cetera, but there also seems to be this, allergic reaction to, a DTC brand, like starting to lose control of that and having to work with retailers or what have you to grow. Do you see a lot of companies in this space resisting that? Should they embrace it more?
[00:16:48] Kat: I think the important thing for founders and early stage is that there is no right way, right? If you've got a ton of funding and you can be selective about what you make, how much you make, where you sell it, good for you. If you're bootstrapping and you need revenue and exposure and marketing, then you're probably going to say, yes, to a lot of things that come your way and good for you, right?
[00:17:09] It's just, again, being very nonjudgmental as a human has afforded me the opportunity to see the beauty in many paths and to see that many things can be true at once. And, every founder and every company's early stage story, again, their access to capital, their resources, it all varies, and those are many variables that play into a channel decision or whether to go into retail, whether to go in mass or not, whether to go in boutique or not, whether to go on Amazon or not. There is no one playbook. There's an example of a brand that's been successful in every different approach, which suggests there is not a best way.
[00:17:55] It really is dependent on that brand its journey, what the founders need, what the company needs and wants, what they feel is aligned with their mission and then where the customer gives them permission to go.
[00:18:07] Jess: Yeah, I love that. AndI think one of the things that I was thinking of around that strategy is there's a lot of. Chatter that, the DTC market is going to blow up at some point that the way we market today is not going to be sustainable. CAC is rising. There's more competition than ever before.
[00:18:25] I know you say you're nonjudgmental, but if you were going to judge the market, where do you see it going? Do you believe that, that market itself is going to
[00:18:36] Kat: No, it's not
[00:18:37] Jess: Yeah, you're more of an optimist. I know.
[00:18:42] Kat: No, I mean that certainly there are dynamics that are going to change. And so yeah, if it costs more to acquire a customer, then that means you've got to be more dead on with what you're using to market. And that you're more right than wrong about who your most valuable customers are. So if that LTV is higher than you can afford a higher CAC, right?
[00:19:32] And so I just don't see something that's that eminent, that is not workable where there aren't equal upsides in other parts of the approach.
[00:19:43] Jess: Yes. I agree with that. And also, if there are things that are. Starting to break or not be as effective today. That just means we're becoming more innovative to discover the things that will be for the future so it's more of an evolution versus a versus an ending, I think. This is, this is probably another judgmental question, but I have to ask, do you, is there any conventional wisdom that you hear often that you think is either no longer true or is dangerous?
[00:20:12]Kat: I think any belief taken to extremes and amplified on platforms where people trust it could be dangerous.
Um, It's one of the general dangers of lit interwebs that, you know, certain things can be amplified without being really well grounded in experience, and then maybe believed by a lot of very impressionable people.
Um, but I don't know if there's any single belief that whether it's amplified or not, I think, Oh, Whoa. That's. Dangerous. Um, and, but that's a reflection of the circles I'm in, you know, the talking to people who are willing to challenge each other and our own thinking. And, um, probably not speaking in a alarmist absolutes in any way, understanding that there.
[00:20:59] Really good exceptions to a lot of general rules, which in and of itself evidence is that very few things are always true or eminent. No, if you have any examples that you want me to react to, I'd be happy to, but I don't nothing that I consider, dangerous as it relates to it's
[00:21:17] Jess: Sure. And maybe that wasn't the right word on my part. I think there's just a lot of conversations that happen online, about as a brand, you need to invest in these channels, at your stage or your calf needs to look like this or.
[00:21:36] Kat: Yeah, maybe I'll just build on what I said before, which is, for those who espouse that there is only one way, that is so much better than others. That then makes founders nervous about taking a contrary approach. That's unfortunate because as I mentioned before, for those of us, who've been building brands who have seen brands come and grow, seen many brands be successful in ways that other brands could not there.
[00:22:02] Isn't one way, certainly. We all have to honor math, if it costs a certain amount to acquire a customer and the customer's spend is X and their churn is Y that could be good or bad for the business, depending on what numbers are in those variables. So the
[00:22:22] And then the question around how important is it to you to be profitable or not? That comes into play with those discussions because some industries, and companies within those industries are in a win and acquire the customer at all costs phase. Especially if they have super high valuations and, being first to market and winner take all is a bit, maybe a bit more of their mindset, but in general, for those that are in the thick of it bootstrapping or in the early stage launching products, I think the only thing I would disagree with is anyone who says there's one way, there are just many paths to various positive outcomes.
[00:23:04] Jess: Yeah, totally. I totally agree. I think sometimes what happens is as a brand, we get, inspired or obsessed with the like, The most famous brands that are growing and we're being told that we have to grow that same way or in some way like it, but instead, actually looking in the opposite direction could also lead you to a great path of success.
[00:23:29] Kat: Yeah, that's right.
[00:23:31] Jess: I'd love to talk a little bit more about focus brands, for a minute. One, so a couple of different thoughts I have on that is, you're part of what your role is, is responsible for like all of these really big, amazing companies that have, really well-known brand names.
[00:23:46] You probably have access to a ton of capital. What can some smaller brands learn from some of the brands that you're working with today? Like Cinnabon and what are maybe some things that they should just like completely ignore?
[00:24:01] Kat: What could they learn from us? I think one of the things we've done very well is multichannel. Really embracing a brand's definition and allowing it to evolve and live and breathe and many different places. Cinnabon is famous for a cinnamon roll in a franchise brick and mortar location in a mall, but it's also got 70% of its global product sales are outside of that core channel are in grocery or in other restaurants are in, any place that food is sold through CPG products and other fresh-made products and other channels. And so there's where this fourth largest license or a food and beverage in the world, not franchise or license, or that's just the CPG business.
[00:24:51] So we have a big, very successful, well-oiled machine. That is far fewer people than others might think considering the sales of the business. Who just really understand how to, to respect a brand, respect its core channel, innovate, many places it's abilities of where the brand can go and what forms, find really great partners to help us go to market manufacturers and brokers and retailers bring those ideas to life in a collaborative way.
[00:25:24] Coordinate marketing across the channels, rinse, wash, repeat. It's something I'm incredibly proud of. It is a gem in the organization. It is very rare to find in a restaurant business and it's, it's a billion and a half in sales. So I mean, it's not small.
[00:25:43]Jess: Yeah, I'll take that.
[00:25:44] Kat: I'm really proud of that, of, of that group in that team and how it's grown and evolved.
[00:25:50] And, so that's the one thing that people could look at and study and read articles about and really learn about the approach. And any of our team members are always accessible to mentor, help others think through it. We've got some really talented leaders on that team. Another thing is just, global expansion we're in 60 countries.
[00:26:10] With brands that are wildly successful around the globe. And so those are things that not everyone's good at, and we weren't always good at it. We learned through trial and experience and mistakes and are one of the most in some of the most international food brands, in the industry, what I'd say to you ignore….we're early in our e-commerce and DTC. Journey, because we are in all these other channels first. And so we are more students in that area. Whether I'm on Clubhouse or on Twitter or, 2PM Web Smiths group, or connecting with other people. I am a student. I have a really strong point of view on brands that can add value to DTC, but the mechanics of DTC, the marketing of DTC, the talent in the space who could help us we're early in that journey.
[00:27:03] So that wouldn't be an area where I would say, oh, look at Focus Brands as the example in the way that other native direct to consumer brands are, but we are on the journey and we're probably on the journey faster and with more enthusiasm and respect for what we don't know than most other companies in our industry.
[00:27:23] But that'd be an area where I'd say we're nowhere near, as advanced as we are in the other areas. I mentioned.
[00:27:29] Jess: So fun fact, cinnamon rolls are my favorite dessert and I'm quite a frequent consumer of Cinnabon products.
[00:27:46] So thank you for that.
[00:27:48] Kat: Good. Send me your address. I can send you our DTC cinnamon rolls.
[00:27:52] Jess: Oh my
[00:27:53] Kat: Our brand that you can order fresh baked cinnamon rolls, shipped overnight to your house.
[00:27:57] Jess: Oh, my God, I didn't even know that existed. Okay. So tell me more about that strategy because, how did you approach it? Did you have to worry about any conflict with any retailers or partners in doing and going through to see? Cause I've heard that in a couple of patients from other brands, but tell me more about that.
[00:28:14] Kat: No, it was, you know, it's a brand that is an indulgence. It's a treat it's celebratory. It's certainly seasonal. It makes a lot of sense for gifting. 20% of our sales and our franchise business are already fresh baked rolls to take home in a multi-pack. So there's clearly an occasion.
[00:28:37] That's there for gifting and special occasions. And that lends itself to putting our toe in the water for direct to consumer. If you're just a sandwich brand. When people want a sandwich, they go to a sandwich place. They don't really need a sandwich shipped to them overnight, unless it's super famous and you can't get it anywhere else, but Cinnabon is different.
[00:28:59] It is special enough. It is unique enough. It is gifted. So about, I don't know, 18, 20 months ago, the team, the Cinnabon team really built out a strategy to, have a commercial kitchen because we couldn't produce the volume out of one of our little franchise locations and hire and train people to make the cinnamon rolls, figure out how to ship them without the product degrading.
[00:29:25] And, then we got started. We just started ourselves from scratch. Rented a commercial kitchen, trained some chefs and bakers, figured out the packaging figured out the shipping cost, had access to funding from our parent company that was willing to front the dollars for marketing. Because that's a different marketing muscle to market, a shipping only DTC business versus marketing a franchise business.
[00:30:11] And it was just a lot to learn shipping such a well known product. People know what they're supposed to get when they get it. So protecting the product, integrity was super important in the value chain, and the supply chain. And then just the whole time of marketing and what are the customer acquisition costs and what should that return on spend be when we're early in early days.
[00:30:32] And then we, our shipping business, our DTC business was featured on Good Morning America, and it just blew. Up like we couldn't keep up. The website stayed up, which was great. And the benefit of having really great servers in good tech on the back end because of the franchise business. But we couldn't, you know, we could barely keep up.
[00:30:51] And then we learned a lot about the economics of the model we were choosing for overnight shipping, free shipping versus paid shipping. And then we just realized, look, this is getting big and this was pre COVID and it's getting bigger and bigger. We probably need to get this in the hands of someone who does this for a living manages fulfillment.
[00:31:11] And then we reached out to Harry and David. They loved that. We had an exciting branded boutique and growing DTC business, and that is what they do. And so we partnered with Harry and David to be our fulfillment arm. So we weren't managing it end to end. And that allowed us to have all the goodness that comes from a partner that's that professional, at DTC sort of the OG and the food DTC space.
[00:31:37] If you think about gifting food, and shipping food, nationally and around the world, in many cases, they are the gold standard. And so we partnered with them. So now, if you go to cinnabon.com, you can have it delivered via Uber eats, which we've partnered with them for six years, or if you want to ship it to yourself or gift it to someone, it says ship it then takes you to the Cinnabon, DTC page, which is hosted by Harry and David.
[00:32:03] And then they order it from our bakers that are making it in the commercial kitchen, handle the fulfillment and all of the backend.
[00:32:10] Jess: Holy cow. I can't wait to check this out. And are you shipping the products like fully baked?
[00:32:19] Kat: Fully baked. You just have to warm them up for 10 or 15 seconds in the microwave.
[00:32:23] Jess: [00:32:23] This is going to be dangerous. Thanks for letting me know that. One last question. So knowing that there's a lot of small growing e-commerce owners that are going to be listening to this, any final thoughts or words of wisdom that you have.
[00:32:44] Kat: Just one, be in love with your product and what you think it does. And then be obsessed with your customers and how they use it. That is everything. And there's no shortage of research that proves that having a hundred mega fans is better than a thousand people who get your product, who are neutral.
[00:33:51] Don't lift your head up and go onto the next thing until you really feel like you, they are living, the best experience with your product. And you are very clear on how they use your product and what that means to go find more people like that or what that means for the next thing that might delight that very, engaged core customer group.
[00:34:52] Jess: That is correct. Perfect advice. Very timely. I'm going to take that to heart as well. So thank you for that. With that, I think we can wrap it up, but Kat, thank you so much for taking the time and sharing all your wisdom today. I really appreciate it.