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Jurassic Park: How P&G Brought Febreze Back to Life

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You must remember the scene from Jurassic Park where a needle extracts dinosaur blood from a prehistoric mosquito frozen in amber. With that blood and some scientific magic, the DNA of the dinosaur is used to bring those extinct T-Rex's back to life. If only it was possible to do the same with big American companies!

Well I am happy to report that there is one old American company that's managed to inject the DNA of a start-up  into its 175-year-old hide. That corporate dinosaur is none other than Procter & Gamble (PG).

Like many people, I was fascinated by the New York Times article on how companies use big data to predict their customers' behavior. One part of it that caught my eye was the story of how P&G rescued its air freshener, Febreze, from its corporate dustbin.

In so doing, P&G not only applied remarkable insights into human psychology. It also demonstrated its ability to apply some of the best things that let start-ups innovate.

Of these, by far the most relevant one to Febreze's ultimate success is start-ups' ability to try something, get feedback, learn from the feedback and try again until they succeed. I have written about this in the cases of Juntos Finanzas and PayPal to name just a few examples.

You can read more about their stories by following the links, but the basic idea is that start-ups excel at failing fast and doing what's dubbed, composting, to use the analysis of the failures to provide the intellectual nutrition required to propel the start-up to an eventual discovery of a workable solution.

As the Times explained, P&G applied principles of psychology to turning Febreze into a huge business after it nearly perished. People form habits -- the first time, say, you learn how to back a car out of garage, you have to remember a dozen seemingly complex steps. But soon it becomes second nature.

Whenever you need to back out of the garage after that, you go through a three stage process: cue -- something that triggers the habit; routine -- where you instinctively perform the habitual activities; and reward -- where you get some pleasant outcome as a result of performing the routine.

What P&G discovered -- after a failure from which it learned -- was that its original approach to marketing Febreze was wrong because that approach required consumers to change their habits. When P&G ultimately discovered a way to make Febreze part of an existing routine, sales exploded.

In the mid-1990s, P&G started work on a new product "that could eradicate bad smells." According to the Times, P&G "spent millions developing a colorless, cheap-to-manufacture liquid that could be sprayed on a smoky blouse, stinky couch, old jacket or stained car interior and make it odorless."

When Febreze was ready to go to market, P&G failed before finding a way to market it successfully.  The first time, P&G marketed Febreze as a way to make remove odors -- such as cigarette smoke -- from peoples' clothes. But after months of trying to pitch Febreze that way, sales went from bad to worse.

So P&G began investigating why by talking to consumers. P&G researchers visited a woman in Phoenix who kept a very well organized house -- that hosted nine cats. When the P&G researchers entered the house, the stench was so overpowering that "one of them gagged." But the woman of the house thought the house smelled fine and exclaimed, “Isn’t it wonderful? They hardly smell at all!”

What P&G realized was that people like the cat lover in Phoenix developed habits that desensitized them to the horrible odors in their lives. Therefore, selling the Febreze routine as the reward for a fresh-smelling home cued by a bad smell was an utter failure because consumers thought their houses smelled fine.

To its credit, P&G did not give up. It hired a Harvard Business School researcher and watched videos of customer interviews. One woman in Scottsdale, Ariz. provided a clue to the Febreze marketers.

After she cleaned a room in her house, she sprayed the carpet with Febreze -- and then enthused, “It’s nice, you know? Spraying feels like a little mini-celebration when I’m done with a room.” At the rate she was going, P&G's team "estimated, she would empty a bottle of Febreze every two weeks," according to the Times.

After further analysis, P&G realized that it could only succeed with Febreze if they positioned it as part of an existing cleaning routine rather than trying to create a new one. Specifically, they came up with advertisements that sold Febreze as the reward for cleaning a room.

P&G's new advertisement showed open windows and gusts of air. It added perfume to the Febreze formula and filmed commercials of women using "Febreze to spritz freshly made beds and just-laundered clothing." Each of its commercials fit Febreze into an existing cleaning habit.

It included the cue -- a freshly cleaned room; the routine-- spraying that room with Febreze; and the reward -- relishing "a smell that says you’ve done a great job." Within two months of the summer 1998 marketing revamp, Febreze sales doubled. By 1999, Febreze revenues totaled $230 million. Since then Febreze has introduced spinoffs that account for over $1 billion in annual sales.

It's unfair to liken P&G to an extinct dinosaur brought back to life by a miracle of science. But one of the reasons that P&G has been able to survive for so long is that it has found a way to inject the DNA of a start-up into the corporate genetic code of a 175 year old giant.

And thanks to its Febreze turnaround, P&G's bottom line smells much sweeter.