The Sit-Down: Matt O’Toole, Reebok

Four years ago, we took every one of our 1,500 employees out on the back lawn and we did a workout together. Then we gave them the message that we are now a CrossFit company and we believe that you will do a better job eight hours a day if you take one of those [hours] to exercise — and as a matter of fact, your manager is going to insist upon it.

The stat that fascinates me is that with all the marketing from Reebok, Nike, Adidas and the athletic brands over the past 30 years, the per capita participation in exercise has declined in America.

Photo by: GETTY IMAGES

Millennials want more experiences and fewer things. That makes it an interesting marketing challenge for a consumer products company, since we are selling things. That’s what’s shifted us as a brand to be more about outcome than equipment.

For sure, we have to have great product, but what’s going to differentiate us is our purpose and our message. I don’t think there’s any brand speaking to this [fitness] consumer authentically, the way we do.

We are competing against a bunch of guys that are talking about sport in general, but we are saying there’s something more important than the outcome of a competition. It’s about having a better life because you are active.

One out of two Americans either has diabetes or has the early stages of diabetes, so a lot of people in America aren’t moving. Our research tells us when exercise activity is solo, like getting on a treadmill or going to a gym, the likelihood of you sticking with it is low.

If the activity is something you are doing with a friend or friends, it becomes a lifestyle choice and the likelihood of sticking with it is much higher. So the story we want to tell is about getting people moving, as opposed to shaving a tenth of a second off your 800-meter time or kicking a ball farther.

We all have to recognize that brands are being co-created by the consumer today. We can’t issue a brand book and be done with it anymore.

Clarity and focus wins; it’s when your message is fuzzy that the co-creation gets pretty scary. We borrow open sourcing from the computer world. The idea is to put the new idea of what Reebok is about out there and let people make it their own.

Our business today is probably 35 percent apparel, and the way they [devotees] express their fitness lifestyle is through apparel. We’ve had nine straight quarters of growth, and a lot of that growth is with women. The look of fitness has become a street look as well; people are wearing it when they go to Starbucks.

When I was in business school at Northwestern, my best professor used to say marketing was simple: It’s about the allocation of limited resources. But for a lot of companies, like Reebok in the past, it was tough to make those choices, because if you pick fitness you might give up football or whatever.

The reality is that the best brands in the world make those singular choices and then they get really good at that. For us it’s about sticking with it.

Millennials don’t think about fitness the same way you and I did. They see it as much more experiential. Our researchers call it “the new well-thy,” they want to be well and healthy. They are more interested in experiences like a Spartan Race than going to the YMCA.

We partnered with UFC because there’s 35 million people across the globe using mixed martial arts as their primary method of staying fit. They tend to skew more female than male and we need to have a calling card for authenticity in that space for our products.

They have huge media exposure, so UFC may have been the last league that we had an opportunity to create a business with — around a league with a large group of very passionate fans.

There’s no magic formula for distributing your brand’s content, but there is a magic formula for the approach you take to the market.

Reebok’s biggest opportunity now is to stay on message.