M&C Profile: 3point5

Brands in the technical footwear space know that in an age of cost-cutting and fewer sales reps, training retailers about your product can be a challenge. But knowledgeable salespeople drive sales. So when training company 3point5 launched in 2004, it looked to fill the gap.

“The consumer was becoming far more educated. At the same time, retailers were finding it harder to hire talent, and big box was starting to take over. There was a general concern from brands and retailers that they needed to handle these more-educated consumers in a different way,” Duncan Robins, CEO of Swarmbuilder, 3point5’s parent company, told Footwear News about the company’s founding.

The brainchild of Salt Lake City marketing exec Paul Kirwin, 3point5 helps brands and component manufacturers create training programs that retailers can access online. Each session ends with a quiz to make sure the information presented has been retained — and if it has, it unlocks the prize: discounted pricing and ordering for the product being tested. (Some brands up the stakes. Finnish athletic company Karhu, for instance, gave away a trip to Finland last summer to an associate who had completed the training.)

The goal of the trainings, Robins said, is to “teach key insights that could be woven into the conversation and establish that retail sales floor rep as an expert.” So far, the formula has worked. 3point5 saw growth of more than 2,000 percent over the past three years. Still, Robins pointed out, as a small company, “it’s easy to grow fast.”

Early adopters of the technology came from the outdoor and athletic worlds. “In the beginning, the brands that did best were more technical; they got it faster,” Robins said. “They really wanted and needed to reestablish themselves as legitimate brands with heritage, [as well as] dominate that whole technical side [and show] the technical advancements they were bringing to the market and how they were applying that to their products.”

Today, 3point5 works with almost 150 brands, many of which are in footwear or components. Their clients, which include Gore-Tex, The North Face, New Balance and Sorel, pay the company a fee that can range from $15,000 for a basic package to north of $100,000 to set up training materials, which are offered for free to their chosen retailers. (The company is considering offering a flat monthly fee-based payment plan in the future to supplement the performance-based pricing.) The payouts also provide access to more than a quarter of a million sales employees in more than 20,000 retail doors, from big-box accounts such as The Sports Authority and Cabela’s to independents including Salt Lake City Running Co.

For Waco, Texas-based insole maker Spenco, partnering with 3point5 has meant accessing sales associates formerly beyond their reach. “We’re not in a position where we have our own training personnel,” said Spenco marketing manager Paul Kemp, who oversees outreach training for the brand. “We don’t have 800 sales people.”

After starting with 3point5 in August and making its training information available to retail accounts, Kemp said Spenco has been “pleasantly surprised” by the number of sales associates at running, outdoor and sporting goods stores who have used the online training, as measured by the number of insoles they have redeemed through the employee purchase option. And getting product on the feet of the retail sales force, he said, could only improve sales. “For us, it’s been a great fit.”

At The North Face, the math makes sense. “We’re able to measure the return on investment on the expense [of the 3point5 relationship], and it’s significant,” said Scott Lustig, VP of sales for The North Face’s Northeast region, who oversees training for the company. “3point5 reaches almost all the retail out there, especially in the outdoor industry, which is so important to us. They offer a vehicle to speak to the features and benefits of our products, and dive into it much more so than a hangtag or a workbook can.”

Lustig added that the 3point5 method complements the efforts of his own workforce. “We rely on our sales reps and tech reps to be the primary voice for us when they’re in the field, and we do a really good job of teaching all those folks as well,” he said. “But you might not get through to [everyone], and a one-on-one situation can resonate better.”

Going into 2010, Robins said the training program can go beyond the highly technical worlds of components, outdoor and running. Potential opportunities, he explained, lie in the branded space, where companies can tell their stories to sales staffs, especially in this economy, which has been challenging for higher-priced brands and for retail independents. The addition of brown shoe and fashion brands could also boost the number of retail accounts to include more independents, family shoe stores and department stores.

“[In the past] it was the mom-and-pops who nurtured new brands and technologies — and there are fewer and fewer of those, so there’s a definite need for education,” Robins said. “[But] you can extend this [service] to almost any kind of consumable product.”

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