EOS, the makers of the now famous lip balm, have an interesting story of success, proving that smart, out of the box thinking and dedication to an idea can cause a small start up company to rocket to 2 billion revenue by 2020 in a market that’s over-saturated to the brim. As of 2015, it’s the “second best-selling lip balm in the country”. Co-founders Sanjiv Mehra and Jonathan Teller used careful application of business, practice that Mehra gathered from his extensive background and experience with Unilever.
The Co-founders, seeking to start their own startup, researched how they could change take a step into the beauty aisles in stores, and found their soon-to-be competition underwhelming. Mehra realized that the companies dominating the lip balm market had overall taken a lazy route–focusing on maximizing their return on loyal customers. Companies like Chapstick knew people needed a lip balm, and so instead of focusing on rising trends and innovative techniques to make their lip balm easier to use, they opted for costs. This allowed the founders of EOS to use market research to give them an edge in a market that really needed a change.
Knowing that customers who generally bought lip balm were loyal to their brands had Mehra pondering an interesting question. How could their new startup compete with companies who had been in the lip balm industry for decades? Mehra and Teller sought to get a leg up by market researching actual buyers of lip balms, where they discovered that the vast majority of buyers were women who were using lip balm as part of their beauty regimen.
Realizing they’d need an edge to beat their rivals, they hired a professional artist to create a new look for lip balms. Design was key; they knew younger women were style conscientious, so they looked for an aesthetically pleasing design–right down to the round egg shape, pastel colors and matching flavors, to even the sound design of the cap’s click.
Getting their product into stores was initially difficult. Men who participated in market testing couldn’t understand the product, so stores were unsure of taking a chance on EOS. However, the company lucked out when they grabbed the attention of a female buyer at Walgreens, who loved the style of the lip balm, which left Walgreens with a positive impression, making the popular drugstore chain EOS’s first account.
With Merha’s savvy business-sense, they took advantage of this success early by relying on themselves to manufacture and produce the product instead of a third company. This solidified them as a new contender, because they were able to meet the demands on their accounts quickly. Target and Walmart @walmart.ca began selling EOS lip balm shortly after.
Innovation has turned this company into a lip balm household name. EOS advertised extensively to millennials by partnering with beauty bloggers on social media, and then moving on to young female celebrities such as Miley Cyrus and Taylor Swift. The company has created new flavors and partnered with other companies such as Disney to create themed lip balms. They’ve also branched out into other beauty products like lotions and shaving cream.
Mehra credits their success to his knowledge of the “ins and outs” of business, along with his partner’s “entrepreneurial mind-set”, a combination they make sure to use in their company daily.
For more of EOS, be sure to click on https://www.evolutionofsmooth.de/press#