Beating a Bear Market
A bear in a box: It seems so simple, yet the Vermont Teddy Bear Company has created a thriving business with its Bear-Grams, which are handmade teddy bears sent in a box—featuring an “airhole”—that’s filled with other goodies such as chocolate and a gift card. The company’s success is even more amazing when you consider that it’s difficult to turn buyers into repeat, year-round customers when the bears often are considered holiday gifts.
To extend that warm and fuzzy first-time buyer experience into a long-term relationship, Vermont Teddy Bear blends best-in-class customer service with strong loyalty techniques that appeal to both gift giver and recipient. Throw in a carefully crafted upsell program and numerous cross-sell options via several strategically aligned sister companies, and you have the makings of a bullish bear market for this gifts company.
A Company Bear-story
Vermont Teddy Bear traces its roots back to 1981, when founder John Sortino noticed that all his son’s teddy bears were foreign-made. Wanting to create an all-American teddy, Sortino made several bears in his wife’s sewing room and sold them to friends. In 1983, he started selling his bears at an open-air market in Burlington, Vt. One day, a tourist asked Sortino to mail a bear to her home, and the Bear-Gram was born.
In 1990, Vermont Teddy Bear had radio ads read by well-known radio personalities in New York City, and the response was overwhelming. Within the first two days, the company reached its sales goal for the entire year. In 1992, Inc. magazine reported that Vermont Teddy Bear was the 80th fastest growing private company in the United States. By 1993, it ranked 58th; that same year it issued an IPO to help fund a new factory and headquarters. In 1995, Sortino left the company and has become a successful business consultant. Ten years after his departure, Boston-based private equity firm The Mustang Group took Vermont Teddy Bear private to enhance future growth.