The Brand Builder's Playbook // The Partnership Payoff: Picking the Right Collaborations // With Kristen D’Arcy (True Religion)

0:01Models, influencers, celebrities, there's the what component, and then there's the how.

0:10Welcome to the Brand Builders Playbook, the show for modern marketers who are done with guesswork and ready to implement what actually works. Well, hello, everyone. Welcome to Episode 6 of the Brand Builders Playbook. We're having a lot of fun with this series. This is Jim Stengel. I'm Ryan Barker. And I'm Lindsay Winking. Okay. So last week, we had an intense discussion about brand and performance marketing, right? This is an evergreen topic. I hope someday it goes away because they should be one in the same as Ryan is a firm advocate in. But this week's topic, I think, is a perfect follow-up to brand and performance marketing because we're going to talk to a guest who believes in both, and they can happen at the same time.

0:49We're going to talk a lot about collaborations and partnerships with this guest. But before we do that, I'd like to return to the little tradition we have on this show, where we talk about the brand's playbook this week that is interesting for us, that we're paying a lot of attention to, that's relevant to the topic of the show. So I'm going to go first on this one, and then I'll turn it over to Lindsay and Ryan. But this is really topical for me because earlier this summer, I went to Portland with my family and just went to the most extraordinary experience. And that was the Lego Jurassic World Rebirth Brickman Partnership.

1:25It just blew my mind. It was so fantastic, so interactive. You could participate, you can build things, you could do videos, you can make videos. And it's like the fourth Jurassic Park movie they've been a part of. I don't know if there's a brand in the world right now who collaborates as well as Lego. Think about Star Wars, Harry Potter, Jurassic World Rebirth. And it's, you know, it's not just one thing. It's like video games, it's museum exhibits, it's campaigns, it's special collections. So I think there is so much to learn by how Lego thinks about partnerships and collaborations. We're about to talk about true religion, which is also doing a great job.

2:02But the scale of what Lego does, I think is mind boggling. And the fact that it's so integrated into their business model. So I think it's endless learning. Maybe we should get them on the show later, you two, and talk about that. Yeah. I mean, Lego is incredible. I just saw their botanical series for the first time. And like all of my adult friends are just going nuts for it. So you're so right there. I feel like they're the masters. You know, later we're going to talk about true religion and Megan Thee Stallion. But but I'm always very interested in like how to do really deep cultural partnerships.

2:39I think a lot of the risk you run with partnerships often is like just like slapping an influencer on it or slapping a celebrity. And then those things, you know, maybe get you awareness, but it doesn't feel deeply integrated into the into the culture of the audience. And we were doing some work for Frito-Lay a few years ago, and they hired us to study the subcultures that are obsessed with Flamin' Hot Cheetos. So not just the customer, but what are like the cultures and the subcultures that in their own right have their own culture that are just really love, really love the product. And that led us deep into the world of like, I kind of call it like Southern hip hop and trap, like female Southern hip hop and trap.

3:18So it's like Megan Thee Stallion, City Girls, that whole world of obviously like baddie subculture, which we're going to talk about a lot more with True Religion, because I feel like they're doing a brilliant job of tapping into bad bitch culture. But yeah, we ended up going very deep on, you know, what is kind of the worldview underlying that subculture? And then what are all of the aesthetics and the signals? And from that work, they ended up partnering with Megan Thee Stallion to create a new song called Flame and Hotties that like paid homage to the obsession that this subculture had with Flame and Hot.

3:52And I thought it was perfect because obviously Megan's dying in a big name and maybe you would have come up with her regardless just because of her popularity. But I think to like do a song called Flame and Hotties, it just so perfectly captured the culture and the language and the aesthetic. I thought that was brilliant. You and I have talked about this before. Didn't they even integrate the subculture insights into product development? Yeah, yeah. So they are doing that subculture work as part of their innovation process. So how can you pull collaborations with subcultures so deep into the innovation process that the marketing kind of writes itself as you develop the product?

4:28So are you a flaming person? Yeah. I love my mouth to burn. My son-in-law is too. He has, I don't know, 40 or 50 hot sauces in the refrigerator. Mind-boggling. It is mind-boggling. Okay, Ryan, what about you? What are you looking at this week? Before I get to, I have to comment on the Legos. we're a big Lego family. I love Legos. I wish they would have a Dr. Scholl collaboration so that when parents have to clean them up at night, that your feet wouldn't feel so bad. Other than that, I am deeply in love with Legos. They may do that, Ryan. They're very customer centric. Probably listening to this, you may see that in the next year.

5:03I would love it. So blockbuster movies, I saw Formula One and then it got me thinking again, we went into the Barra database. And when Formula One and Netflix got together in 2019, they launched their series. Until today, the brand has more than doubled its fan base, especially in the US, let alone globally. And then as we look at the equity, this was a brand that was very niche, more for the affluent. Youth wasn't watching it. It wasn't a cool brand. And then we look at the data and the brand has grown overall equity by 30 points from cultural shift. That's not 30 points growing in sports. That's 30 points growth across all brands, which is just absolutely amazing.

5:46And then not stopping there and now doing the Brad Pitt Formula 1 movie, which was good, by the way, it just keeps growing. It keeps growing. So they're continuing to nurture that relationship using entertainment. And now all of these drivers, they're celebrities, they're rock stars now. Ryan, let's get into the process of collaboration and partnerships a little bit more deeply. I know you're looking at this with your database and you help brands and companies figure out which partnerships will make sense to grow both brands' equity and hopefully their sales as well. So can you tell us a little bit about what you've learned?

6:17So I think it starts with brands need to understand what is their challenge? Are they looking for differentiation? Do they need to become more culturally relevant? Is it an awareness issue and you're looking to piggyback? From there, then it's all about positioning. If you know what is in the core of your essence, you help find brands that address perceptual weaknesses while reinforcing strengths. You want to make sure that those brands you partner with will bring the differentiation that you need, but it has to be authentic and therefore not difference for the difference state. It still has to have the core of your essence.

6:50Data can help you with that. Lindsay, your reaction to that? Yeah. I mean, I think Ryan hit it. And I think that I want to put an exclamation point on the point you talked about, relevance. I think a lot of times we get really blind when we chase partnerships and really not thinking about what is relevant and what helps us experience the essence of the brand in like a new way or through a new culture or through a new aesthetic or to a new audience. And I think that's where you see partnerships that really, really feel like magic. So we're about to bring true religion into the show in a segment, but what's one thing you want our audience to be super tuned to and pay attention to in this discussion we're about to have?

7:29I think for me, like, I mean, just as an observer, like true religion is killing it in the culture game. And I think tuning into how do they do that internally? How do they operationalize this thing that can feel magic and ephemeral and hard to operationalize, which is cultural relevance? I feel like that's what I'm most looking forward to. Well, this week, please welcome to our virtual studio, Kristen Darcy, the CMO of True Religion. And this brand, Kristen, is having a moment. So congratulations on everything you're doing at your company. And thank you for joining us. Absolutely. Thanks, Jim.

8:05Happy to be here. Now, I want to start with a big mega question. What do you feel is the biggest, biggest driver behind this momentum on True Religion? It's a good question. And I don't think it's any one thing. It feels like lightning in a bottle, that's for sure. You know, first and foremost, we have an incredible CEO who came back to the brand in 2019. and he was laser focused on making sure we understood our consumer. That was years before I joined. He really revamped the product. So when he came back, the logos and everything that we were really known for, the big horseshoe, the Buddha had been removed from the product.

8:51He made sure that that was put back on. The product is incredibly recognizable. It's fashion forward, word. There's some heritage pieces, of course, but the product is so fabulous. And I think then you enter this marketing and, you know, my team is also laser focused on leaning into culture, in particular sports and music, which we know our customer loves and sort of looks to celebrities in both of those arenas for, you know, fashion and styling advice and tips and so forth. And so I think it's a conglomeration of all of those things that's really helped drive a lot of the growth that we've seen over the last couple of years.

9:35So, of course, our topic today is collaborations and partnerships. So what's another big question before we start clicking down? What's been the role of partnerships and collaborations in your growth model, your playbook? Yeah, we look at them in a couple of different ways. So partnerships might be with a celebrity. I could use Megan Thee Stallion as an example of that. she was the face of our holiday campaign last year. She was so happy with the outcome of the campaign, as were we from a sales perspective, that that partnership with the talent continued into this year. We dressed her head to toe on a Coachella stage, True Religion, you know, I just talked about the product, but True Religion and the logos front and center, which was incredible.

10:21And then we will continue that partnership. I'm going to keep it vague as we go into 2026. So, you know, talent partnerships would be one. Influencer partnerships would be another way that we look at that. And that would be Team True. So Team True right now is made up of just over 100 men, women, NIL athletes, professional athletes, stylists, musicians, etc. I would say those faces range from 50 ,000 followers to 5 million. and they act as an always on army of, you know, fashion influencers. So that's another way we look at partnerships. And then the third would be collabs. So this year we launched a collab with Ford, followed by Cookies in June.

11:08We launched Belladonna for women. And so, you know, the brand to brand collabs would be another way that we look at partnerships. So those are the three different tiers. That's a huge diversity of collaborators and partners. What's your top criteria when you're thinking about going forward with a partner? It's really a little bit of math and magic. So top criteria on the math side is number of followers, engaged audiences, where are their audiences coming from? And does that map back to where our sales come from or the biggest opportunities across the country where we want to drive more sales.

11:49It's what is in the queue. Are they, if they're a musician, are they going on tour? Are they dropping a new album? What was so interesting about Megan is, you know, we really picked her at the right time. When we looked at the math of it, you know, across all the metrics I just mentioned, solid, solid, solid. She did a Bud Light commercial right before our campaign launched with her. And And that was to kick off the NFL season last year. She was a host of VMAs. She had a Netflix documentary coming out. She was performing at Coachella. So check, check, check. But then on the other side, there definitely is magic.

12:28Does this person or this brand, does that feel like something our customer would expect, would want? What is the objective of the partnership? Is it scale? That would be the example of Ford. or is it to try to attract a new audience? That was the objective of the collab that we did with Belladonna earlier this week. So math and magic, and I think also then making sure on our side that we're very, very clear what does success look like from the jump. Math is a four-letter word and Ryan is a four-letter word. So Ryan. So I love the math and magic. I woke up this morning, took a look in the Barrett data.

13:07The data is doing the talking for the True Religion brand among Gen Z Just in the last two and a half years, the amount of cultural relevance that grew was 23%. The perceived differentiation in the marketplace among that group, 31%. So the data is definitely doing the talking. And so it's interesting to see whether it's a long-term executive perspective or short-term. How do you attribute and realize I need to do more of this one and less of that one? What's that process, Kristen? You know, some of it, I mean, the headline actually goes back to what I mentioned earlier about how we pick the math and the magic.

13:42The math is we look at last year's calendar from a merch planning and marketing perspective, and there are certain moments we know we need to anniversary. Then there are other moments that we've created. When I joined the brand over two years ago, it was, I think it was June or July, and there was no big holiday campaign planned. And, you know, I've been in retail a long time. Anyone who's in retail knows you need that incredible holiday campaign in order to get enough wind through your sales to drive growth for the rest of the year. And so that was an example of it was net new. We inserted that in because it's a playbook that I've learned and I've executed before.

14:30And then as we moved into that holiday season, we saw traffic up to the website over 50%, traffic up to our own stores across the US up 20%. Sales were up 20%, 30 % throughout that season. So that's an example of something, again, net new. But what we try to look at is where do we need to comp some of these moments? And then what is the broader business objective? When I joined, the women's penetration of the business was probably sub 40%. We know that there's a huge opportunity to grow and we have been growing the women's side of the business. So there are two, objective, grow women's, net new, how do we insert the right women's support, whether it be Megan Thee Stallion and Anita, the global Brazilian pop superstar.

15:21We partnered with her in February of this year to launch the Own Your True campaign or a brand new, again, net new women's collab with Belladonna. So it's having a very keen understanding of what we're trying to do with the business and then using marketing to actually help pull all the levers to drive growth. Very interesting. Now, for future viewers and brand builders out there, have you had experiences and partnerships that have gone bad? Anything you could share with listeners on what you've learned from that and how do you course correct? You know, I think there are some that perhaps didn't perform as well as we thought.

16:00But then from the macro perspective, this brand has been growing double digits. It's interesting. You talked about the data and obviously we're relevant to our customer. I also look at the sales. And so I don't think there's been a huge mishap per se, but there's definitely some where we thought we would have seen more brand heat. On the flip side, there's some that just take off in a way that we could have never imagined. We partnered with an influencer two years ago, Jada Cheeves, for our female baddie collection. And within the first 24 hours, we had sold through 30 % of the inventory. She dropped a hidden link to her audience that was incredibly engaged.

16:47we put our marketing muscle behind it. And all of a sudden, you know, we're looking at the numbers and you can't even plan for that. Of course, we did order more, but we've seen it go both ways, where sometimes things don't quite take off. And then other times it's just this wow moment because it just hits at the right time at the right place. Makes a lot of sense. Kristen, you have a culture that obviously is good at collaboration and good at partnerships. So could you speak a bit about how do you build the culture to do this well? How do you design for it in terms of organizational design? How do you hire for it?

17:23So could you give us a little bit of a look behind the curtain on what capability you've built to do this so well? I mean, I can't share all of our secrets, but it's a great question. I think our team, the marketing team is incredibly diverse. You know, there are people that have never worked in sort of a formal corporate marketing organization before. We have someone who joined us from the music industry and is so incredibly tapped into what is, you know, just coming up. she's always bringing new and incredible ideas. And then there's other people on the team that have been here, let's say for years and years, but know the brand so well.

18:13And it's just this, they have the touch. They know by, you know, looking at another brand or looking at different celebrity opportunities that goes back to the magic part, you know, there's, they, they just know. And so I think it's a combination of these incredible historians and then bringing in people as I mentioned, who just have such sort of diverse backgrounds. But then on the other hand, the common thread is they are all very, very well connected to culture. They love music. They love sports. We start every weekly marketing meeting with tea. And the tea is about what they're seeing in the industry.

18:54So what partnerships are happening? Who's fronting different brands? what's a campaign that they like, you know, and the team now is over 50 people. And what I love about that meeting is nobody is, you know, they're all tapped in, but nobody is watching the same thing. Nobody's reading the same thing. And what I, and I think they learn in that meeting serves as the framework for incredible brainstorming then go forward. And that's the other piece is, we have a really incredible brand right now and a great business. And so from a recruiting perspective, that kind of opens the door to so many different types of talent.

19:36But then when they're in here, that brainstorming cross-functionally and among the marketing team is critical because good ideas can't just come from one place or one person. And so we've been focused on our collab calendar for next year over the last couple of weeks. And I decided to bring together a team of about 10 different people in order to just brainstorm. And so we came up with a list of 50 different brands, 50 different people we wanted to work with. The 10 of us all went through one by one by one, went to their website, went to their Instagram, went to their TikToks, and really tried to decide, you know, where do we want to lean in based on our business objectives for next year.

20:18So it took this small, but very diverse and mighty team. We came up with it. I presented it yesterday to our CEO. And there's some great ideas in there that are both niche, like we talked about earlier, and mass. And I think not only will drive new customer acquisition, which we've been seeing almost 100 % new customers coming into the brand over the last year, but I think it will also continue to reignite that core customer that's been with us over the last couple of years. Well, with all these tea times, we've seen a lot of partnerships where folks just think putting two brands together through osmosis, the magic gets released.

20:57Then you have an extreme where there's a co-collaboration on actual functional or experiential integration, more expensive, more difficult. How do you think about the balance between those? And are any trends shaping that you're seeing in part of your tea time? The one that we talked about recently that we loved was Skims and Roberto Cavalli, which I've heard some of those key pieces have sold out. And it felt like such a perfect blend of two, you know, sort of similar brands. There's also a bit of a throwback there, which is a big trend, right? Y2K, of course, is everywhere, not only in fashion, but in music and so forth.

21:40And so we loved that one. The experiential piece, I think, came to life through an incredible influencer play within that collab. And I think, you know, for us, when we're looking at the right collab partners, similarly, it needs to be, does this brand and their target audience feel like us? Then you start to do the, you know, how big are they from a business perspective? Are they additive sort of to us? Do they have broader reach? Do they have a totally different customer? And then how do we create a product? And that's really the most important thing that feels like both brands can come together in the most authentic way.

22:25And so when our incredible product design team does these designs and they work in tandem with another brand or with a celeb, it's really about how do you take kind of the very best, the things that each brand or person are so well known for and bring them together. We have an incredible collab. Unfortunately, I can't reveal yet who it's with, but that collab is coming out in November. And the brand cues from us and from this collab partner are just so apparent. The melding together is awesome. We will be in conversations with them about experiential, how do we bring this to life even beyond the product in real life?

23:09And I think that's where a lot of the magic comes. So yes, tea time, we're watching this. We're always talking about what we're seeing out there that's interesting. And then, you know, we try to create that here on our own as well with our partners. Engineering is best for both brands. I have to ask a measurement question. It's obviously you can measure the short-term impact of all of this, right? You can look at your sales, if it's a special collection, whatever it might be, you can sort of see what happens in the stores. When you think about the long-term impact on your brand equity, and obviously it has grown as Ryan talked about a few minutes ago, how do you think about that?

23:43Is it, are you measuring it? Is it a way to measure it? Do you have a point of view on that part of it? I go back to the objective that we talked about, right? And really making sure that upfront, it's understanding what is the purpose of this collab. And to be honest, all of them are to do both of those things, to drive a sale, to help continue to grow this brand from a sales perspective in that moment. But every single one of them also is to build that long-term equity. And when we look at measurement around that, we look at LTV. So our CAC to LTV ratio is incredibly healthy. We look at, as I mentioned, all the new customers coming into the brand.

24:31We look at how much they're spending in year one with us. We look at what they're spending beyond the purchase, let's say, of a collab product. We personalize the experience through marketing for them. So if they come in with a slightly higher priced collab, they're not immediately thrown into a promo email cadence, for example. We're trying to expose the broader world of the brand to them. So there's a lot of personalization that goes into that. But it's really around the behavior of the customer. That's how we're measuring the success. And again, I'm excited because I do see it. I see it doing both of those things.

25:12I see it driving the immediate sale. You know, we launched Belladonna, that collab on, we pre-launched it to our loyalty members on Monday for exclusive early 24-hour access. Then we launched it more broadly on Tuesday. You know, the top five products for, you know, for women's that have been sold online this week have all been Belladonna. That's incredible. So check it did what it was supposed to do and hopefully will continue to. From a sales perspective, it's selling out on Belladonna's site already, which is amazing. but the equity play and the long-term customer impact will continue to measure, but that's really the goal.

25:55They have much more of a Hispanic consumer. We know that's a big area of opportunity for us. It's why we leaned into Anita earlier in the year. And so now to follow that customer who's come in as a result of this Belladonna collab, and again, look at their LTV, see how many times are they coming back? How can we get them to engage with the brand in other ways? Sign up for email, SMS, the loyalty program, et cetera. That's really the objective of all of these. Really interesting. You know, since you brought up some financial terms, if we were to talk about return on marketing investment and not revealing any numbers, do you believe or have you experienced that the right partner could be as effective as mainstream media or TV channel or social media?