Can Bombas Reach CLIENTS while Maintaining Its Social Mission?

Bombas was were only available in 2013 with a dual mission: to provide quality socks and donate much-needed footwear to people surviving in shelters. By 2021, it had become among Americas most visible buy-one-give-one companies, with over $250 million in annual revenue and 50 million pairs of socks donated.

Initially the business had to determine how exactly to price its product. Socks are usually a cheap item of clothing, however the founders needed a cost that would permit them enough margin to provide on the social mission. In addition they needed to know what role that mission should play within their marketing. Later, as Bombas expanded into underwear, t-shirts, and slippers, the business struggled to find out what pace of growth would best let it reach clients while maintaining its social mission. Harvard Business School assistant professor Elizabeth Keenan discusses the case, Bee-ing Better at Bombas.

BRIAN KENNY: In the event that you were born between 1995 and 2010, you’re an associate of generation Z. And which means that you, my pal have leverage. You as well as your peers contain the keys to 29 billion in purchase power and 333 billion in influence. You’re digital natives and you also will be the most diverse generation ever. And in accordance with research by McKinsey, you care deeply concerning the truth. You have high expectations of the role that business should play on the planet, but by way of a margin of five to 1, you merely dont trust them to accomplish it. Actually, you imagine corporations are causing the majority of the problems nowadays. But instead than going along, youve made a decision to take matters into your personal hands and let your digital wallet do the talking. Your loyalty is reserved for brands that support social justice and economic equity, and the ones that give back again to society in meaningful ways. And brand managers who may be listening ought to know that youre just starting out. Today on Cold Call, weve invited Professor Elizabeth Keenan to go over her case entitled, Bee-ing Better at Bombas. I am Brian Kenny, and youre hearing Cold Call on the HBR Presents Network. Elizabeth Keenans research explores individuals pro-social choices and behaviors within the domains of charitable giving and environmental sustainability. Liz, thanks for joining me today.

ELIZABETH KEENAN: Many thanks. Many thanks for having me.

BRIAN KENNY: I must ask, are you currently a person of Bombas?

ELIZABETH KEENAN: Indeed, I’m absolutely a person.

BRIAN KENNY: Fine. I understand Ive talked to many people. I told them we were likely to be having this conversation and I’d say four out of five of these are Bombas customers.

ELIZABETH KEENAN: Were many of them here?

BRIAN KENNY: Yeah. A lot of them are here. And that may explain it. And were likely to talk about a tiny bit since they arent the least expensive. They arent probably the most inexpensive product to get.

ELIZABETH KEENAN: Right.

BRIAN KENNY: So, I believe thatll be a fascinating dimension to find yourself in. But also I believe its so timely given what I type of teased in the introduction there concerning the need for purpose in organizations today and Bombas is all based around that idea. Why dont we just dive in? Im likely to request you to begin by telling us whats the central problem of the case, and whats your cold call that you utilize when you begin the case in the classroom?

ELIZABETH KEENAN: Bombas was founded in 2013 with a dedication to two goals. The initial was to generate superior socks, and the next was to aid the homeless community. Lately 2021, that is concerning the time of the case, that they had crossed nearly 250 million in annual revenue, had 180 employees and had donated their 50 millionth couple of socks.

BRIAN KENNY: Wow. Thats plenty of socks and lots of good that theyre doing, right?

ELIZABETH KEENAN: Absolutely. Absolutely. Therefore, the case, what it can is it focuses on the companys success up to now and the pace of growth that could best permit them to keep to effectively deliver on both missions they have continue. Now, the case really just debuted recently for the very first time in class.

BRIAN KENNY: Good.

ELIZABETH KEENAN: But my cold call was, just how much would you purchase a couple of socks?

BRIAN KENNY: Ah, from what we were just discussing before?

ELIZABETH KEENAN: Exactly. Exactly. And I asked that of several students. Even though this is simply not the original substantive opening cold call question, it had been really designed to lay the building blocks for getting a feeling of the common consumers willingness to cover a set of socks. Which eventually became a launching point for discussion, whenever we were considering just how do we actually push up consumers willingness to cover socks. And traditionally we do this by increasing quality. It may be linked to the brand and things of this sort, however in this case these were selling something more plus they were selling a social benefit. Therefore that allowed us to obtain back again to this conversation about means of increasing willingness to cover in this space.

BRIAN KENNY: Yeah, thats awesome. How did you hear about Bombas and what made you choose to write the case? So how exactly does it relate with things that you see as a scholar?

ELIZABETH KEENAN: So, I first found out about Bombas actually in one of my students in class, many years back had mentioned that Bombas, that they had worked for Bombas and understood what my interests were and thought that I’d really like the corporation. So, my research, as you mentioned, revolves around pro-social consumer behavior, and lots of that centers around how nonprofits can best engage donors to provide in their mind charitably. But Ive increasingly become thinking about considering how firms use pro-social areas of their companies to attract consumers in. So Im considering the pro-social consumer, but additionally now pro-social companies and what they try attract those consumers.

BRIAN KENNY: Yeah, and perhaps not merely consumers nowadays, but employees too. I wish to talk about a tiny bit later, and again, with the attitudes of gen Z and millennials at heart. But maybe you can begin for those who arent acquainted with Bombas, now they know they sell socks, but how was the business created and just why did they land on socks because the central product?

ELIZABETH KEENAN: So, among the founders, David Heath had actually run into an infographic that indicated the main requested item from homeless shelters is socks. And curious to learn from what extent that has been true, he actually went and bought some socks himself and started handing them out to those in need. And just the reaction alone of somebody considering him and saying, how do you realize, how do you realize this is just what I needed, convinced him that was a significant space. And he went and shared this with a pal and a colleague, Randy Goldberg. And together they started doing some research into why socks are so limited in homeless shelters and whatnot. Plus they gathered some information round the proven fact that often used socks aren’t donated to homeless shelters, or accepted for hygiene reasons. And socks, really themselves dont last for very long, and eventually we’ve a hole in the heel or the toe plus they fall apart. Therefore it had been clear that there is a gap and a need for the reason that space. And during that research, in addition they found the knowing that there is room for innovation in socks.

BRIAN KENNY: Therefore, this is section of what the case identifies because the buy one, give one model. And perhaps it is possible to talk a bit about this. I actually hadnt heard that term until I browse the case. So maybe our listeners would like to hear a bit more about other types of firms which have adopted this model.

ELIZABETH KEENAN: Absolutely. So yeah so, the buy one, give one model which Bombas identifies as you purchased, one donated is really a model where companies will sell products, and for each and every product they sell, they donate among those what to somebody in need or a business in need. Both that really one thinks of beyond Bombas which are pretty much known in this space will be TOMS Shoes Company and Warby Parker. Plus they were the leaders in this space, and actually, a few of the inspiration for the Bombas team to start out their business. And several different companies have engaged in this space. Some actually will donate the comparable item. In other cases, they donate other items which arent exactly comparable. However in the case of TOMS, Warby and also Bombas, the things generally right from the start, at least have been exactly the same product these were selling, they might also then donate.

BRIAN KENNY: Weve had plenty of cases on the show previously about companies which have adopted an objective. They already had a company, these were selling something or perhaps a service, and they adopted an objective within it and several of them did an excellent job now providing for that purpose. But these firms will vary since they were founded with the objective and its own intrinsic with their DNA, right?

ELIZABETH KEENAN: Absolutely. And its own actually why this case was vital that you me, both from the perspective of the pro sociology of businesses, also for a training course that I would be building, that i finished up teaching recently, that was on purpose-driven marketing. And what we did is we took a glance at firms which are both attempting to prosper and do proficient at once. And in a few of these cases, they are organizations that from the bottom up started predicated on purpose. Its section of the DNA, as you explain, and from the bottom up, thats what these were predicated on, whereas, other organizations enter into purpose later with time. They could adopt it as time passes and due partly to a variety of pressures, whether internal or external that drive the necessity for focusing in on a mission-driven purpose. However in the case of Bombas, yes indeed, its just how they start.

BRIAN KENNY: Lets talk a bit more about their socks, which weve already acknowledged aren’t the lowest priced socks you can purchase. Its curious as to the reasons they might adopt a strategy that required them to market a higher priced product. You’ll believe would somehow limit their capability to grow market. But perhaps you can talk a bit about why quality mattered in cases like this.

ELIZABETH KEENAN: So, socks, generally, the commoditized socks that people think of that people buy multi-packs sometimes, theyre choosing in regards to a dollar to $2 some. And Bombas during the case was selling pairs for typically $12.50, that is a lot.

BRIAN KENNY: I dont think Ive ever paid that much for a set of socks.

ELIZABETH KEENAN: I hadnt, but I’ve now. WHEN I mentioned earlier, nobody had innovated in the area of socks for a long time. There’s the performance sock market, that involves athletes, runners hikers, and thats the marketplace where theyre selling for up to $20 some. And they also viewed that market and realized some of these innovations could actually be utilized and used in these everyday socks that people wear. That could incorporate moisture wicking properties, padded heels, seamless toe, arch support, and so forth. Plus they wondered maybe if we’re able to embed these innovations into these everyday socks, we’re able to charge an increased price. And that higher price we can do that. In addition, it could be create so that people are pricing near or below the price tag on performance socks, but allow us enough margin to really deliver on the mission of donating socks aswell. And they also felt like they might play for the reason that space a bit. And something thing that has been really interesting they said whenever we were talking was that it wasnt like these were attempting to dramatically raise the cost of an automobile, that is something thats nearer to the expense of a sit down elsewhere or lower. Therefore dramatic increases in cost for that kind of product, they felt works better than should they were employed in a space where in fact the base price of this product had started quite high already.

BRIAN KENNY: Just how much, if any, of these motivation here also was to create a sock which could stand up contrary to the conditions that homeless people encounter?

ELIZABETH KEENAN: It will be played a job. They wished to sell socks with those properties. However, in addition they wanted quite definitely to donate socks with those same properties. If they first began to explore how exactly to even donate, they did learn that a few of the top features of socks that might be helpful will be reinforced heel, the moisture wicking properties, antimicrobial features, and things of this sort to handle the specific needs that population has.

BRIAN KENNY: So, that which was their head to market strategy with a $12.50 couple of socks? How did they get visitors to even take that leap?

ELIZABETH KEENAN: Well, they first tested the theory out by putting a crowdfunding campaign together in 2013, with the purpose of raising about $15,000, and instead they raised $140,000.

BRIAN KENNY: Wow.

ELIZABETH KEENAN: So, that moment, I believe spoke in their mind and made them realize we might be onto something here. As soon as they raised that money, they began to create their first pairs of socks and sell them. And by the center of 2014, that they had already sold $450,000 worth of socks. And at that time they gained attention given the growth plus they were invited to participate on Shark Tank.

BRIAN KENNY: Aha. I dont know if thats a very important thing or perhaps a bad thing. I assume in cases like this, its a very important thing.

ELIZABETH KEENAN: In this instance, it seems to possess been a very important thing. Daymond John, among the sharks, finished up buying them. And at that time they began to grow increasingly more. Now, the majority of the sales for them have already been direct to consumer. So theyve focused in on the E-commerce space. However, after a few of that early growth, they did begin to take part in short-term partnerships with some retailers and finally they created more long-term relationships with some of those retailers although almost all the sales still are through their E-commerce site. Another section of their strategy was with regards to their marketing. Specifically, they started with Facebook ads where these were featuring primarily pictures of these socks. Knowing that it is a grab and go kind of product, they wished to get pictures of the socks, the colors, and show all of the socks they had to market and obtain those images out front. After they could scale on advertising, they began to launch into not only social media, but they experienced radio and podcast. And after a few years, after they could expand advertising even more, thats if they experienced print and commercials.

BRIAN KENNY: So, theyre always promoting the socks themselves, the attributes of the socks. Do in addition they discuss the mission and the goal of the business, or is that a thing that they let people discover?

ELIZABETH KEENAN: Thats an extremely good question. So initially all their ads virtually were product focused, simply because they had needed visitors to notice the truth that that they had socks and thats what these were selling. It requires longer to inform the mission side of the story and the mission side of the business. And they also didnt really begin to concentrate on sharing that story with the general public until around 2016, if they created videos. Actually, that has been round the time they had finally donated their one millionth couple of socks. And at that time they created a video about their mission and the founding of Bombas and how it started. And at each major milestone, theyve continued to create these films. They post them on YouTube and on Facebook. And now that they’re settled right into a strategy, they focus primarily product type advertising because of their social media. And for the print and for commercial, they concentrate on talking with the mission combined with the product.

BRIAN KENNY: Therefore, heading back to gen Z for one minute, that if you ask me just sounds so authentic. Theyre not leading with the reason, theyre leading with the merchandise, however the purpose continues to be this important section of what theyre doing, however they dont thump their chest about any of it.

ELIZABETH KEENAN: No, they dont. They dont thump their chest about any of it. Actually, actually, Ive, Ive spoken to several Bombas sock wearers like everyone else have, and interestingly enough, most of them didnt actually even understand they donated socks. And many of the students in the class that I had learned all about this facet of their business, since they browse the case though, that they had also already owned Bombas socks.

BRIAN KENNY: Yeah. And contrast that then with TOMS and just how that they visited market, it felt like TOMS was a lot more out front in what these were doing. And I dont say that in a pejorative way, I simply say its another approach.

ELIZABETH KEENAN: It really is, this is a different approach. And I believe either approach can work, particularly when you focus on this dual mission. I believe its a whole lot harder to start out marketing the social side of one’s business later.

BRIAN KENNY: Right. So theyve donated like an incredible number of socks.

ELIZABETH KEENAN: 50 million.

BRIAN KENNY: 50 million pairs of socks, that is amazing. How can you even commence to scale an attempt like that? How can you obtain the socks in to the hands of individuals who need them?

ELIZABETH KEENAN: Its a funny story. If they finally had socks to donate, they realized we dont learn how to donate these socks. Therefore, they literally Googled how exactly to donate socks. And what popped up was a business called Hannahs Socks and Hannahs Socks donated socks. Plus they reached out plus they called Hannahs Socks and asked, Would you like some socks? Plus they said, Wait one minute, youre just offering us socks free of charge? Plus they said, Yes. Therefore, that has been among their first giving partners, nonetheless it wasnt only a giving partner, it became a collaborator plus they finished up sharing knowledge, important understanding of the area of homelessness and the necessity for stuff like socks and what aspects and top features of those socks will be important. Therefore theres partners which appears to be a style throughout all the relationships they will have making use of their giving partners is these partners often become collaborators in assisting them better understand the area that theyre attempting to serve.

BRIAN KENNY: Yeah. So, theyre getting all of this ready to go, theyre determining ways to get the socks in the hands of individuals that require them, and COVID hits, the pandemic hits. And obviously that impacts everybody over the board, the homeless people and individuals at Bombas and everywhere else. What type of a direct effect does which have in it and just how do they pivot for the reason that space?

ELIZABETH KEENAN: After they linked to Hannahs Socks, person to person spread relatively quickly, and the amount of giving partners that they had grew to a spot where that they had a waiting list. They, at this time have in 2021, 3,500 giving partners. The pandemic only enhanced the necessity. And what they finished up doing is recognizing that, hey, guess what happens? We already have a chance here to become a voice for these partners to greatly help highlight the truth that they will have now began to overlook donations, they’re financially struggling and theres a larger need. So were at a spot where homelessness is increasing and usage of resources, like donations and money have already been decreasing because everybody is beginning to pull inward and drive back this pandemic. Another thing they recognized is among their core competencies was to determine how exactly to distribute supplies and what to those in need. Therefore lots of organizations along with other companies, brands were embracing them and saying, hey, we’ve inventory that people desire to now donate due to whats going on, but we dont learn how to do it. Therefore Bombas became a resource for these other brands to greatly help teach them, just how do we begin to distribute items.

BRIAN KENNY: Yeah, its amazing. We hear frequently, cases which are taught here, about companies that begin with one competency and develop another competency on the way, also it creates a complete new group of opportunities for them. So, that is another good exemplory case of that. You mentioned earlier they had relationships with several retailers, but theyre still doing everything primarily through their website and direct to consumer. Im wondering why that’s. Would they not have the ability to grow a lot more quickly and serve their mission in a more impressive way, should they were atlanta divorce attorneys store and you also may find them anywhere?

ELIZABETH KEENAN: That’s a proven way for growth, nonetheless it is actually a risky approach for just about any company. And I believe Bombas has recognized that right from the start, controlled growth has really served them well. And you also could see this controlled growth, both within their marketing and advertising, in addition to with regards to products expansions and extensions. Therefore, theyve tried to regulate that growth whenever you can with the vision and the purpose of instead of growing the fastest, that is quoting Heath actually that instead of growing the fastest, in which to stay the overall game the longest. And that may permit them to both sell their products and earn profits the direction they have to be in a position to then support this mission. Should they grow prematurely, then suddenly they will have a more complex issue, both with regards to managing revenue, along with now managing multiple versions of donations to potentially a large number of giving partners.

BRIAN KENNY: So ,lets talk a bit about the proven fact that theyve now began to look at branching into other product offerings. Theyve learned all about the socks, but theres also a lot of other items which they’re now recognizing are critically vital that you homeless people. Does that not develop a whole new group of challenges to allow them to face because they transfer to other products?

ELIZABETH KEENAN: You suppose it’ll certainly create some complexity when it comes to sales and distribution, both on the selling side, the commercial side of these business, in addition to on the giving side of these business. But whats nice about both of the things that theyve put into sales is that the quantity two most requested item in homeless shelters is underwear, and the quantity three is T-shirts. Therefore all three of the are on your own body, you hook them up to. Its among the first sets of things you placed on each day, and the story still works. It is simple to tell the story about both need in homeless shelters, along with the connection of the products when it comes to everything you do each day.

BRIAN KENNY: And certainly those are items that people cant donate and places that accept donations, cant take those as secondhand items. So, its in keeping with what theyve finished with socks. I assume that makes lots of sense. Do you consider that the mission, which would exceed Bombas, but any firm that’s focused on an objective in this manner, which is built around an objective, does that provide them an advantage when it comes to attracting talent?

ELIZABETH KEENAN: Absolutely. It is a huge recruiting tool. Once you speak to Bombas and the staff and the employees at the business, it is possible to tell that is a thing that they value plus they value deeply. Many people are onboarded. Everybody is handed socks in the beginning and told, venture out and present these away and see what that experience is similar to, and theyre bought in right from the start. And many of these stay due to the mission. Its an excellent spot to work. The culture and the city reflects the nice work theyre doing, also it reflects within what theyre doing. And actually, the name Bombas is Latin for bees, and its own beehives and bees interact in concert. And thats what the corporation represents.

BRIAN KENNY: Im sorry, that explains the title a bit. I would ask you concerning the title of the case, because Bee-ing Better at Bombas, you spelled it with two Es. So, now I obtain it. Now I obtain it, many thanks.

BRIAN KENNY: Do you consider that idea, this style of buy one, give one will probably are more prominent, particularly in a global where society is expecting much more of business? Individuals are looking for businesses they can feel great about buying from. And companies like Bombas have discovered a method to do that that seems sustainable, where they are able to do well and do proficient at once.

ELIZABETH KEENAN: So, Im uncertain that the buy one, give one model will necessarily end up being the norm in the area of attempting to prosper and do good. I believe its likely to be among the approaches an organization may take. And I believe the components that basically matter would be the product and whether it is possible to sell a top quality product at a cost which allows the margin for you yourself to make the donation and to manage and control the growth of the donation side of one’s business.

BRIAN KENNY: Needless to say. So, it has been an excellent conversation, Liz. I cant enable you to go without asking one last question. And that might be, what would you like our listeners to eliminate out of this case? Whats a very important factor youd like them to keep in mind?

ELIZABETH KEENAN: A very important factor that I believe is important to keep in mind in cases like this is that the model, the buy one, give one model is an extremely fragile model as you are effectively running two businesses under one roof. You have the commercial side, and you have the giving side. And the total amount between your two, every change you make to 1 causes a big change in another. Therefore, its an extremely careful balance between both of these. And you could actually leverage both to greatly help the other. Therefore, one change to the commercial side will assist you to build and grow your giving side and vice versa. Now it appears to be that having a social purpose, whether its section of a buy one, give one model or other is now table stakes nowadays. Therefore, exactly what will become important isn’t so much the differentiation or the claim to this type of a model, but rather the care with that you execute that model and the authenticity with that you approach it. Another thing that I believe is essential for listeners to eliminate is that Bombas socks are very comfortable. As soon as you put that pair on, its very difficult to really start gaining all of your other socks. So, each and every time I open my drawer of socks, I look. I’ve three pairs and Im constantly washing them because I’d like them available. And the main one day when I havent done most of my laundry and theyre not there, I’m very sad.

BRIAN KENNY: They feel great. And you could feel great about putting them on. So thats a win-win.

ELIZABETH KEENAN: Indeed.

BRIAN KENNY: Elizabeth Keenan, many thanks so much for joining me on Cold Call.

ELIZABETH KEENAN: Many thanks for having me. This is great.

BRIAN KENNY: In the event that you enjoy Cold Call you could also like our other podcasts: After Hours, Climate Rising, Skydeck, and Managing the continuing future of Work. See them on Apple Podcasts or wherever you listen. Make sure to rate and review us on any podcast platform where you listen. When you have any suggestions or simply desire to say hello, you want to hear from you. Email us at coldcall@hbs.edu.Thanks again for joining us. Im your host, Brian Kenny, and youve been hearing Cold Call, the official podcast of Harvard Business School, presented by the HBR Presents network.