Posted in Small Business Hacks | by: Iris Kuo

The Growth Tactic Most Small Businesses Overlook—And How Coolhaus Used It to 10x Sales

It was 2009. Natasha Case and Freya Estreller chucked their architecture degrees and turned a $2,900 mail truck into a popular ice cream brand. They opened to long lines at Coachella. They launched a brick-and mortar-store in Culver City. And they expanded their food trucks to hubs like New York, Dallas, and Austin.

The gutsy duo had made it. Coolhaus was collecting mentions in the New York Times and Vogue, and amassing diehard fans with its signature “farchitecture” (food + architecture) ice cream sandwiches. Their funky flavors like “beer and pretzels” and “brown butter candied bacon” had single-handedly created a quirky dessert movement.

But it wasn’t exactly party time.

The trucks were breaking down. Permitting headaches cropped up in every new location. Natasha, the CEO, was putting out fire after fire, only to have new ones arise. One night while working ever-longer hours for what seemed like ever-smaller gains, it hit her.

“It wasn’t working. We needed to pivot.”

Coolhaus needed a new direction, so an investor urged them to take their business wholesale. But how could such a tiny dessert brand go that big? One word: partnerships.

A strategic partnership is a win-win relationship between two businesses—and it’s not just for big brands. Over the course of three years, Coolhaus used partnerships to scale from a handful of ice cream trucks to a nationally recognized brand carried in over 6,000 stores. Through relationships with Whole Foods, Urban Outfitters, and Quicksilver, Coolhaus was able to launch itself onto a bigger stage, in front of a broader customer base. They’re now the only women-owned nationally distributed ice cream brand in the country.

So how can you follow Coolhaus’s partnership script? According to Natasha, it’s all about staying nimble, curating growth opportunities, and responding quickly to partner feedback. We sat down with her to hear how she architected such a winning partnership plan, and got her step-by-step guide on how you can replicate that same sweet taste of success.

Wait, does this story apply to me?

If you’re looking to reach a new customer base, reposition your brand, or simply increase sales, the right partnership can be a game-changing move. It can allow you to maximize revenue without increasing overhead, since it leans on other companies’ established networks. All in all, partnerships are a creative way for small businesses to harness the distribution power of another booming company.

Trick #1: Discover your business partner soul mates—and be okay with swiping left.

What this means for you: Write down what you want out of a partnership, then come up with your dream list of partner companies. This focuses you strategically, and—bonus!—you’ll be prepared if others approach you about opportunities to collaborate.

For Natasha, her list of requirements was short and sweet: a business that would increase Coolhaus’s distribution and complement the look and feel of the company’s hip brand. “You have to start with a wish list of who you want to work with and go from there,” Natasha recommends. “People are going to reach out to you, but you have to be ready with a vision you’ve already created.”

Here are the questions she uses to evaluate whether a partnership is a good fit:

  • How does it move the needle? “Moving the dial is number one. It should have impact for the partner brand too, but think of your brand first,” Natasha says. “Are you going get new followers? New sales? Enter a new region of the country? Know the answers to those questions, and make sure they’re compelling ones.”
  • Does this partner complement your company? Say you want to get into ecommerce. Use that goal to define the types of partnerships you pursue. “Whatever it is, your partner should elevate and move your brand forward in some way,” Natasha says. In her case, she noticed Urban Outfitters was experimenting with food and beverage in its physical stores. There was no other “cool” ice cream brand in sight, and the brand’s aesthetic was a match for Coolhaus. It checked all the boxes—so she reached out.
  • Does this partner have the same values as you? “Coolhaus is young, diverse, and women-owned. The big questions for us were whether our partners aligned with the makeup of our team, whether they were serious about quality, and whether they had a similar approach to innovation,” Natasha says. “Ask directly if you don’t know. The answers are important.”

 

Coolhaus women-owned

 

To get a sense of a company’s values, you need to do some homework.

  • Review all customer communications. This includes ads, web copy, social media, and any other outlets where they appear. Don’t be afraid to go down that Google rabbit hole.
  • See if the tone of their brand is a match. Do they sound like someone your company would hang out with? If so, hang out.
  • Vet their team. Go on LinkedIn and do some digging. Do their team’s skills and backgrounds complement yours?

Not every opportunity will work out. And that’s okay. For example, Natasha turned down a partner that wanted to benefit from the team’s social media success—without offering much in return.

“Both sides should be getting something out of the deal, and it should be relatively equal,” she recommends.

For example, if you’re a local clothing store you might partner with, say, a popular jewelry line, so you can start carrying the brand in their stores. The collaboration could open up ecommerce opportunities and a new line of business for your store. At the same time, the jewelry company might gain more name recognition and could establish a physical presence in a geographically important location. The goal here? Making it worthwhile for everyone.

“If the dollars and value don’t match, it’s okay to let go of an opportunity,” says Natasha. “It opens the door for others to come in.”

Trick #2: Aim high and pitch fearlessly.

What this means for you: Slow down and think about the partners you’d like to work with the most. Have a rhyme and reason to which companies you approach first.

Once you’ve identified your dream partners, it’s time to knock on doors. Here’s Natasha’s three-step approach to planning and executing a partnership strategy.

 

Coolhaus hustle

 

1. Start high.

Take your dream partners list. Now rate them in terms of how well they perform on the metrics that matter most to your business. That can mean:

  • Premium customers: If you’re eyeing a company that sells natural skincare products, these are the customers who are willing to pay more for their high-quality line.
  • Premium brand sentiment: If you’re interested in a well-regarded dance studio, the fact that they’re known for training future Rockettes is why you want to team up with them.
  • Premium product quality: If you’re thinking about partnering with a luxury leather supplier, that premium material could in turn enhance the quality of your own handbags.

Pitch starting at the top of your list. Once you’ve successfully conquered a premium market, you can start expanding into bigger markets that will become easier to attain because of that first victory.

So if you run a design firm and want to team up with another agency to offer a package deal, start with the most well-regarded agency in town. Once that company’s on board and you’re associated with their stellar reputation, you can begin partnering with lesser-known firms.

“Start at the Whole Foods of your market. Dominate that market, then work your way from there once you have a proven track record,” Natasha suggests. After getting in the door at Whole Foods, she was able to place Coolhaus in mass-market grocery stores like Safeway and Publix, thanks to that initial supermarket success.

2. Just ask.

To land Coolhaus’s first grocery distribution deal, Natasha simply walked into her local Whole Foods and asked to speak with someone about selling their ice cream on the shelves. Soon enough, she was sitting down with the regional buyer.

“Don’t be afraid to just ask, and when you do, bring early evidence of your success. For us, it was the buzz and press from our truck.” That proof was worth its weight in gold—and it convinced Whole Foods to give their shelf products a three-store test.

3. Pitch creatively.

Show your partner brand what you can do for them. Say you’re a centrally located restaurant that’s hoping to work with a popular local bakery. You could show them a mockup of a menu that lists them as a supplier, a poll where the majority of your customers say they want that bakery’s goods at your restaurant, or press touting your establishment as a go-to spot for the best locally-sourced foods.

When Natasha was pitching Urban Outfitters, she broke out the pitch like this:

  • The need: Urban Outfitters was dying to relate to a hip, young, female consumer.
  • How Coolhaus could get them there: Coolhaus products could enable Urban Outfitters to create a unique experience that might not resonate with customers if done under their own brand.
  • The end result: They launched Coolhaus-branded ice cream carts at select stores, allowing people to enjoy a refreshing treat while they shopped.

 

Coolhaus kiosk

 

 

“Don’t discount yourself because you’re a small business. Smaller can mean premium, targeted, or faster. Sell your best attributes,” Natasha says.

Trick #3: Go for a test drive. Then, radically alter your product based on what you learned.

What this means for you: The work doesn’t stop after the deal is inked. Listen to feedback, and make changes as needed. Do what you can to keep your partners happy.

So you’ve negotiated a trial run of your partnership or distribution deal. This is your chance to shine, but it’s also a space to stumble.

Coolhaus kicked off its Whole Foods partnership with an ice cream box that was designed to look like one their trucks. It was a unique idea that connected customers to Coolhaus’s scrappy roots. But they soon had to go back to the drawing board after seeing the initial sales figures.

“We couldn’t afford to make the packaging in color, so it was dull, just black, white, and gray. It was almost like we were hiding on the shelf,” Natasha says. “The product wasn’t standing out.”

Good partnerships require iteration. Whole Foods told Coolhaus the ice cream wasn’t selling, and the team listened. That’s why it’s crucial to constantly ask your partner for feedback. If sales are lower than expected or people aren’t happy with the product, ask them why they think that’s the case. Then, address those concerns.

The Coolhaus team eventually settled on a shiny foil bag that popped on the shelves and kept the ice cream colder for longer. That shiny new packaging ended up prompting a 10x gain in sales.

 

Coolhaus packaging

 

Natasha rode that wave and got her ice cream in additional Whole Foods stores. Partnership by partnership, brand by brand, store by store, Coolhaus grew until it climbed to where it is now—on thousands of shelves across the country.

Howdy, partner! The Coolhaus journey

“Brand partnerships have been totally key for us. They helped us grow in an organic way, and associated Coolhaus with brands that elevated us,” Natasha says. And if you want to makeover your distribution strategy like Coolhaus did—now stocking over 6,000 stores with their inventive ice cream products—then go forth and partner.

The key? It’s all about freeing yourself up to dream big. Get introspective and outline the benefits to both your company and the partner. Then use those benefits to craft a compelling pitch. And don’t discount your value just because you’re a small business. You may not feel like you have a lot to offer, but in reality, you do. “If you can find the right companies to partner with,” says Natasha, “you have a real shot at rocketing your business upwards.”

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Editor’s note: This story is part of a new series that reveals exclusive advice from small businesses that are seriously crushing it. Each story dives into one issue these companies wrestled with, along with the unique hacks they used to overcome it. The goal? To help you make your business just as successful.

We’re always on the hunt for best practices that small businesses and entrepreneurs will find useful. Have a story to share? Hit us with your best pitch at kira.deutch@gusto.com.

About Iris Kuo

Iris Kuo is a writer in San Francisco focusing on entrepreneurship, data, and diversity. She co-founded the diversity index LedBetter and is a proud alum of The University of Texas at Dallas and Columbia University.