Why Crocs Are Exploding Again Even In A Down Economy

Has anyone noticed the funny looking shoes that used to be famous and then seemingly disappeared?


If you haven't noticed their resurgence, then how about a 3X Stock Price In The Last Two Years?

Because of that I wanted to break down the "What are they doing?" part of their business... because it's absolutely brilliant.

First, Crocs deals with the problem that most businesses deal with - "How can I create a customer?" as opposed to "just creating a sale".

There's a big distinction there that most businesses neglect altogether mostly due to oblivion (just not knowing).

The reason for this is because most people wake up thinking about their present bank account. They wake up thinking only about their income instead of equity.

Again, the distinction between present bank accounting and future bank account is income v equity.

Income being you make a sale, you get money now - no effect on the future.

Equity being you get a customer, make some now (or not) - a big effect on the future as you know the lifetime value and how much on average your customers will spend.

(BTW - This is why being an accountant is a hard job. 99% fail to think equity and never implement the attraction systems, conversion systems, referral systems, and retention systems that effect future bank account. They just churn, churn, churn!)

Crocs had great income, poor equity.

People bought Crocs, but after purchase -

-There was no sense of loyalty, people didn't go around talking about their new pair of crocs

-There was no continuity, they were very durable, you only needed one pair, maybe two

There were two big problems that Crocs had that were fundamentally equity issues. Post-sale - there was no equity, no effect on their future bank account. In order to continue growing, they had to make another sale... very hard and tiring to do. 

I'm not aware if Crocs understood their issue, but they did to is innovate. Purposely or by accident this innovation = BIG TIME EQUITY.

Their innovation = ADDITION.

(Side note: This is a classic innovation strategy applicable across every and all businesses. For our business we updated our services by expanding on everything tax preparation included because of the recent law changes (ADDITION), and resulted in more price elasticity)

They combined two very popular trends into something altogether NEW.

They combined CHARMS + CROCS to get a remarkable new business model that now has continuity.

After you buy the shoes, you need charms. This has accomplished 3/3 when it comes to the trifecta of growing a business.

  • It increases transaction size
  • It increases customers - if crocs were boring to you now, they aren't anymore  (or to your kids). 
  • It increases frequency of transactions - Grandma just placed a $80 order for new charms our children wanted...

Now Crocs can actually be more aggressive in acquiring customers because their lifetime value of all their customers just went up tremendously.

The question is now  - NOT - how we can make more sales?

It's - how can we acquire more customers?

They may seem the same, but like I've explained in this article - they are different, with different strategies.

Another thing to not miss here - is how they have created a continuity model out of CROCS.

All of this = more equity.

More equity = a bigger future bank account,

Continuity, high customer loyalty, systems = equity.


Joe "The Outlier" Gallegos, CPA

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