10% sales lift from “Made in USA” tag

CHALLENGE

As the economy soured last fall, the team at Foamiture, a foam-based furniture manufacturer and retailer, was redesigning their website.

Unemployment levels were rising and consumers were starting to think about where their purchases came from, says Jon Yoder, Team Member, Marketing, Foamiture.

"People were becoming more aware of where they buy stuff and whether it’s local or imported from overseas, knowing that if they buy local or American-made products that they’re supporting local jobs."

Yoder wanted to emphasize that Foamiture’s products were made in the U.S. to show customers that their purchases supported American jobs. Additionally, Yoder felt the information would forge a stronger connection with customers and create an expectation of quality customer service.

CAMPAIGN

Yoder’s team communicated their home-grown message via their website and product packaging. Here are the steps they took to get it done:

Step #1. Check with the legal team

Knowing whether a product is 100% American made is more complicated than it seems. Check with your legal team to ensure that your claims are not deceptive, because it’s easy to make a mistake.

Below are some tips we’ve taken from the Federal Trade Commission’s website (linked below). (But be sure to review them with your own legal team -- we are not lawyers.)

- Unqualified claims

An unqualified claim simply means that you’re saying that your product is "Made in USA."

Products using this tagline have to be "all or virtually all" made in the U.S., which means that all significant parts and processing must be of U.S. origin. "The product should contain no -- or negligible -- foreign content."

Exactly what "significant" and "negligible" mean is open to legal debate. The product’s final assembly or processing must take place in the U.S., but a negligible portion of its components can be imported.

Again, there are loads of nuances in these guidelines, and every company’s situation will be different. Talk to a lawyer to make sure that you’re in the clear.

- Ask suppliers

"Rather than assume the input is 100% U.S.-made, manufacturers and marketers would be wise to ask the supplier for specific information about the percentage of U.S. content before they make a U.S. origin claim," according to the FTC.

Even the origins of raw materials are open to scrutiny if they are only a few steps removed from the final product, or if they make up a significant portion of the product’s manufacturing costs.

- Qualified claims

Do not lose hope if you cannot comfortably make an unqualified, "Made in USA" claim. You can make a qualified claim, such as:
o "70% U.S. content"
o "Made in USA of U.S. and imported parts"
o "Chair assembled in USA from Italian leather and Brazilian frame"
o "Designed in USA, made in Turkey"
o "Software written in USA, disk made in China"

You still have to ensure these claims are accurate, and again, these qualified claims are subject to nuanced rules. Make sure your lawyers take a look at the FTC’s guidelines.

Step #2. Check customer preferences

An "American made" promotion might not work for every product.

For example, it might not suit a product that has a significant foreign customer base. Another example is a product that has an American customer base with a preference for imported goods -- such as Swiss watches or German cars.

Yoder’s team knew that about 95% of its sales were shipped to American addresses. They were also getting feedback that customers were happy to do business with an American company, Yoder says.

"The vast majority of our customers are in the U.S., and we felt that in the times that they would be looking for something that is manufactured here and promotes jobs here," he says.

Step #3. Add tagline to messaging

Yoder’s team gradually added the "Made in USA" tagline to messaging to avoid any sudden negative impact, and to gauge customer response.

"We’ve added a little bit here and there, not to be overbearing with it, but just to continually put that bug in the customer’s ear," he says.

The first places they added the tagline:

- Product pages

In the bulleted lists describing each product’s features, one bullet point mentioned in bold that "Foamiture Furniture is Proudly Manufactured in the USA."

- Customer service

The team also encouraged customer service reps and other employees who deal directly with customers to mention the products’ domestic origin.

Step #4. Continue to spread message

As the team grew more comfortable with the customers’ response, they applied the tagline more broadly.

Additional mentions were added to:

- Homepage

A small image of a U.S. flag in the shape of the lower 48 states is featured on the homepage next to the text "Made in the USA," and "manufactured and shipped to your door from our factory in Indiana."

Yoder wanted to specifically mention Indiana in hopes of forging a stronger bond with nearby customers looking for local companies to buy from.

- Product tag

They began including an approximately 3-inch by 4-inch paper tag saying "Made in USA" above a graphic of an American flag with each product they shipped.

- Packaging

An approximately 2-inch by 3-inch black stamp, identical in design to the product tag, is placed on each product’s box.

RESULTS

The team made these changes from November 2008 to April 2009, culminating with the "Made in the USA" message on the homepage. During that time, they made no other major changes to their marketing and customer service initiatives.

"Our efforts have contributed greatly to our image," Yoder says. "Our ‘American made’ promotion had a significant effect on sales."

Comparing sales from the three months before April 27, 2009 to the three months after that date, they saw:
o 19.1% increase in orders per day
o 4.6% increase in order value
o 10.1% increase in total sales

Useful links related to this article:

Creative Samples from Foamiture’s "Made in USA" messaging campaign
http://www.marketingsherpa.com/cs/Foamiture/index.html

FTC: Complying with the Made in USA Standard
http://www.ftc.gov/bcp/edu/pubs/business/adv/bus03.shtm

Foamiture
http://www.foamiture.com