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Thursday, April 23, 2015

What Sells Cigars?

With the threat of FDA regulation looming over the premium cigar industry, smoking bans, and excessive taxation, it might seem a little surprising to see the current proliferation of cigar brands in the marketplace.  If you use social media you might be shocked to see what seems like a handful of new brands popping up every day. There are "boutique" brands, "craft" brands, "artisanal" brands, line extensions, limited editions, micro-batches, line extensions of line extensions, and even major companies partnering with smaller cigar makers to make co-branded brands!  Most interesting is the drama and hyperbole surrounding many of these new brands: many use sensational names, ridiculous back stories, flamboyant characters, and pop culture tie-ins to get the consumers attention.  As always, strong, romantic adjectives are employed to create the perception of quality, history, and authenticity.  Words like vintage, aged, hand-crafted, curated, blessed, rare, special, artistry, brotherhood, legend, and maestro all evoke pleasant thoughts in consumers minds, compelling you to want to try that new (or old) brand.  And lets not forget that "sex" sells too, as does lifestyle marketing.  So many boobs, high end cars and watches that it's hard to make sense of it all.  None of this is new of course, it's just MORE: more in your face, more extreme, more magazines, more info, more internet, more, more, more... 

Of course, our focus at TU is retail tobacconists and educated consumers, so we must try to make sense of it all.  Ultimately, retailers must filter through all of the products and messages to build inventories that are compelling to their customers.   Retailers must build inventories that are well-rounded, both in price and flavor spectrum.  We must avoid the overly hyped products which sit on the shelves after their five minutes of fame because they will ultimately end up deeply discounted on the internet and make us look bad to our customers.   

Every retailer has made the mistake of buying the 'flavor of the month' cigar only to have customers come in and tell them it is discounted 90% on some website: ouch, that hurts!  

Great retail tobacconists must vet their products and be able to educate their customers about them.  We also need to edit our inventories and make sure products turn (sell).  To that end, we have polled many of our Certified Retail Tobacconists (CRT) to try to understand what drives cigar sales in the retail humidor.  It turns out the answers are not that surprising and probably timeless.

Tobacconist's Preference
Probably the most powerful factor driving sales in the retail environment is what tobacconists like:  when a retail tobacconist gets behind a brand, it sells in that store!  Tobacconists naturally push what they smoke and that can be influenced by personal relationships and taste.  Ultimately, a good tobacconist knows good recommendations bring customers back, so we must honor that trust the customer puts in us.  

Marketing & Hype  
Advertising, advertising, advertising!  Sure, that helps, but it's expensive and must be persistent.  The biggest brands are constantly advertising in print media and on the internet to make sure you remember their names.  There is nothing new about this strategy, except that there are many more players fighting for your attention.  Hype, exclusivity, rarity, and perceived 'specialness' are the newest tactics helping to create consumer demand.  In addition, branded lounges, signature events (cruises, wrestling matches, pairing with other luxury goods), over-the-top personalities, and social media are all being used to create awareness and drive demand.  Great tobacconists know to be wary of these techniques, but we must also give our customers what they want... most of the time. 

Romance & A Story
Romance and a story, the holy grail of salesmanship!  If you want to sell cigars, a story helps!  Every brand has a story, some better than others.  The truth is most cigar brand stories today are empty, shallow, and/or contrived.   Sure, you can name a cigar after a famous song and sell a few to fans of that music, but how long can you survive on that trick?  Romance and a story may get the consumer's attention for a minute, but the substance of the product had better be there for long term success.     

Ultimately, great tobacconists have to balance all of these factors, remember that taste is subjective, and build trust with their customers in order to thrive in this market.  You can always sell what you like, but be careful what you read and repeat, and if your going to tell a story and romance the product, make sure you're being honest and not just another fan boy or dilettante regurgitating marketing hype!  Be about something, or you will fail!  



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