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šŸ›ž The $42K Tire

This tire set sold for $42,000ā€¦

The tire set was made for a Bugatti Veyron and built by Michelin - the largest tire company in the world.

Although Michelin is globally recognized as the top producer of tires todayā€¦

135 years ago they were nothing but a small-town shop in France.

At the time, cars were new and most citizens used free public transportationā€¦

Yet with 1 strategic marketing strategy, Michelin managed to boost car sales by over 37% in the 1920s.

How did they do it? Iā€™ll give you a hintā€¦

It wasnā€™t adsā€¦

It wasnā€™t by giving away free tiresā€¦

It was with a star - the Michelin Star

Hereā€™s what we got for ya:

  • ā­ļø The Michelin Star

  • šŸ’° 1 Strategy, 1000 Businesses

  • šŸ—ŗ We Sell Trips, Not Tires

Read time: 4 min 37 sec

ā­ļø The Michelin Star

In 1889, two brothers Andres and Edouard Michelin opened their first tire store in Clermont-Ferrand, France,

The Michelin brothers

The tires were well made and of the best quality. But they had a big problemā€¦

There were less than 300 cars in France.

At the time, the automobile industry had little luck selling cars as most couldnā€™t afford them.

And if cars werenā€™t selling, neither were tires.

With a great product but no market, the two Michelin brothers needed a way to convince people to buy cars.

And thatā€™s when they came up with the Michelin Guide - the #1 guide for Frenchmen with a car.

From the Michelin Guide Website

Not only was it a guide for changing tires and maps, but it also had a list of the top restaurants, hotels, and gas stations in France.

The idea was simpleā€¦

Give out free brochures ā†’ Convince buyers to visit the restaurants/ hotels ā†’ Offer them tires to get there

The guide was a big hit.

Within the next 9 years, car sales soared in France as the Michelin Guide became a regular on the bestseller list.

The 2 brothers made Michelin Guides for other countries, and depending on the sales, they expanded across Europe.

Today, Michelin is worth $25.65B.

Letā€™s talk about what the hospitality industry has to do with cars, and how you can apply the same thinking in your business.

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šŸ’° 1 Strategy, 1000 Businesses

In any market, all buyers can be grouped into whatā€™s called the buyerā€™s pyramid:

Most companies market to the top 3% ready to buy today. But in 1900 France, that was a very small number of people.

So the Michelin brothers had 3 options:

  1. Move somewhere with a bigger market for tires like the US or Germany

  2. Educate people about tires and why they should buy them (Still a small market)

  3. Choose a different market

They chose #3.

At the time, the hospitality industry was one of the fastest-growing markets in France.

And most importantlyā€¦

If they could pay hundreds for a nice dinner or hotel, they could afford a car and expensive tires.

By targeting the hospitality industry with the Michelin Guide, Michelin could market to the other 97% percent in both industries.

Michelin went from sub 400 to thousands of potential customers without changing a single aspect of their business.

We see this strategy everywhere today. Like alcohol brands marketing to sports fansā€¦

Or Nike marketing to gamers on Fortnite and EA Sports (video games)

But by the late 1900s, most families had a car.

And as the market grew, so did the competitionā€¦.

It became common practice to buy tires where you bought your car. And 9 times out of 10, they were less expensive than Michelin tires.

So Michelin had to yet again shift their marketing strategyā€¦

šŸ—ŗ We Sell Trips, Not Tires

Today, Michelin does not sell tiresā€¦

They sell problem-free road trips to the upper middle class.

Since the first Michelin Star, the system has evolved to a 3-star ranking:

ā€œWorth a special journeyā€... ā€œWorth a detourā€...

Today, they have planned tourist routes on their website that take you to 3-star spots.

Iā€™m willing to bet that most people interested in a 3-star Michelin Guide trip have enough money for expensive car rentals...

AKA Michelinā€™s target market.

So when you open the trip, you get a discount on Michelin car rentals and coupons for some of the listed spots.

The takeaway: Donā€™t sell the product, sell the irresistible benefit.

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