# 93: BOOK OF THE WEEK — “Elizabeth Arden”

Story behind the Book Choice

If you want to learn how women became tycoons, there is no way around the beauty business. This already explains a lot about one of the most fundamental principles of business: solving problems while also sensing a market behind the products you are offering that exceeds the immediate use value of the product. The cosmetics or “beauty” industry is such a great example of this. But one needs to remember that back at the end of the 19th century, the world looked a lot different. People had other things to worry about than looking good. Still, some women were able to see that there is more potential behind offering facial creams and hair care.

Elizabeth Arden was one of them. But that was not even her real name. The lady that made it into the historical gallery of women business moguls was born as Florence Nightingale Graham in 1878. Her name change was also a sign of her business instincts. After first trying to open a beauty parlor in New York City with a business partner whose name was Elizabeth Hubbard, she kept the first name of her partner after separating from her and then added the last name from a poem by an English poet entitled Enoch Arden. She knew exactly how much the right name mattered for building up a brand. There is much to learn about her intriguing business acumen from this slim and quite informative biography.

  1. Sales Talent
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Even before Arden, who still called herself Florence at the time, came to New York City in her early thirties, she jumped from job to job. She had previously completed her training as a nurse in Canada but that was not what she wanted to do. It was clear that she wanted to make money as a business woman. The reason why this description of her early professional years is so interesting is because it is quite ordinary — but only if you look at it as an unfolding sales career. Of course, Arden already followed an unusual way of life by not getting married and not pursuing her work as a nurse. The fact that she switched jobs so often, however, was highly relevant for her later success.

This frequent job changing is something that I have noticed in many sales careers, not just by women, of course. I do think that you can only really learn sales if you work in very different jobs, thus selling different products. It does not mean that you have to work as a salesperson all the time. Arden, for example, worked as a bookkeeper for some years. Still, all the experience you gain by diving into a new business every time you switch jobs is the best business school ever.

In addition, and I think this is the most basic preliminary for becoming a good entrepreneur and/or sales talent, Arden did chase money. I mean that in a very positive way. Making money is such an interesting and motivating incentive because it offers immediate feedback. When the author states that Arden was always “on the lookout for opportunities that would pay more money,” it becomes clear what the engine behind her hard work and her constant innovativeness was.

This does not mean that money is everything for a salesperson and/or an entrepreneur. But especially for working-class people who decide to become their own boss, just like it was Arden’s vision, money is the compass. Making more money means you are on the right track. I do think that this also is a reason why people from well-off backgrounds might even have a disadvantage when it comes to making it as entrepreneurs. For sure, whenever you have money, you do not want to lose it and lower your lifestyle. Still, there has to be a reason why some of the best salespeople in history came from poor backgrounds and ended up selling anything. You have to be great at sales as an entrepreneur, no matter how good the product. There is no way around it, unless you have a strong partner from the beginning who compensates for the commercial side.

2. Customer Experience & Branding

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Of course, a concept such as customer journey did not exist in Arden’s times. Still, she had the great instinct to know what would set her apart from her competitors. Much of this was related to her awareness that it mattered in which atmosphere she would sell her facial treatments and beauty products to her clients. It is quite remarkable to learn that this was a strategic part of a branding process. Even more remarkable, however, is the fact that Arden spent quite some money on these things that others would — even nowadays — call unnecessary. Who needs an expensive carpet or a special door paint to stand out if your company is about the products and/or services — especially if you still lack the money for such fancy?

Arden understood how important all this was for the success of her business and as we all know, she was damn right. When she passed away in 1996, she left a fortune of 50 million USD. Of course, her somewhat extravagant habit of giving her products exotic names and buying special furniture was not all that it took to achieve what she achieved. Still, it made a huge difference. Above all, she already knew that she was not just selling products or services — she was selling an experience and a vision to the women that came to her. It was the vision of looking young and healthy — and thus staying young and healthy.

Even though more than a century has passed since the beginnings of Arden’s business in 1910, these core pillars of selling experiences rather than products could not be more up to date. With the turn towards the service economy in our age, we are seeing exactly this: You do not sell creams and treatments anymore, you sell well-being. You do not just sell diets and weight-loss pills, you sell health. And you do not just sell a vacation to tourists, you sell luxury and relaxation. Arden understood all this way before most of her competitors were aware of it.

But sensing these movements is only one side of the story. The other side is trusting your gut feeling. It was by far not self-evident that the beauty business would flourish against all economic odds and financial crises. Still, it did. Arden did not just talk about this, as some people do nowadays whenever they have some insight and share it with the world on social media. No, she acted and invested into what she thought would be important to create something special for her clients. This also included marketing investments, of course, such as Vogue articles. But really, she knew that her brand was based on the exclusive atmosphere she created. That paid off without offensive marketing. I wish, more (young) businesses today would focus more on what they actually create for the customer instead of wasting time and money on being loud.

3. Training Brand Ambassadors and Word-of-Mouth

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I was not surprised to read about the training activities of Arden. All other famous sales women in history stressed training their (female) salesforce, including Madame C. J. Walker (her competitor) and later Brownie Wise of Tupperware, to only name a few. What is remarkable, however, is that training was a concern quite early in all these businesses. From my perspective, this also was the case because all these women were self-taught business women. From minute one of their operations, they had been the engine and the face of their companies. So, naturally, they did not just care a lot about how their employees would run the business in new branch offices. They also knew that whoever was working under their label would represent the brand — be the brand.

This is also something that is so obvious and known to anyone working in or running a business. Still, reality looks different. Especially in times when change is a constant and companies are heading from one restructoring process to the next, there seems to be little concern about how these internal affairs directly impact the crucial sales part of a business. Even though, only a small portion of people in a company work in sales, all people function as brand ambassadors for clients and outsiders. People like Arden understood this, not just because this was a beauty business and, of course, the women working for her needed to represent this.

Treating every member of the company as a brand ambassador also brings about recommendations. Again, this is something that might sound out of place in a digital business word. But really, social media do nothing else. It is “word-of-mouth” to give good customer reviews and recommend products to others. Still, I think that the analogue part of the communication, the personal recommendation by one customer to another, is underestimated by people who are starting a business today. All they see are the “loud” recommendations and offensive social media campaigns. But really, these things are worth nothing compared to one big client recommending your product to another potential buyer who will immediately trust you.

Arden, despite her autocratic and quite difficult leadership style, knew that this trust in her employees as brand ambassadors was necessary. Again, she was right. Yes, of course, she was not the only one realizing this. But she was among the best and most progressive business women of her time. It is quite interesting to read that this also went along with a personality that was anything but “easy” — neither for her staff, nor for her private contacts and family members. After all, this was never her goal for the woman who continued working extra shifts in the evening for many years, despite running her own business already.

After all, working hard and working most of your lifetime is what drives sales geniuses like her. This is nothing to be sorry about. It was part of her personality and this still holds true for many entrepreneurs who love what they do and who also love watching how you can build up an empire by learning to become better and more confident every day. It is thus little wonder that Arden never invested much time into private affairs. Finally, however, horses changed that. She got into horse racing and this “hobby” even triumphed over her marriage.

“Having a hobby sounded like playing to her, and she didn’t know how to play just for the fun of it. However, the more she saw of the racing scene, the more she liked it…

Reflection Questions

1) Are you a good sales person?

2) Which products/services do you buy because the customer experience is outstanding?

3) What is your most important learning from the “Elizabeth Arden” story?

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