196 | A New Approach to an Old Business Model: How Cigar Entrepreneur Michael Herklots Built a Successful Brand on a Tight Budget

Marketing your business on a budget? 

In this episode, Michael Herklots shares how he used the power of storytelling and personal branding to build his luxury cigar business from the ground up.

Michael has worked in the Premium Cigar Industry since 1999. He served as Vice President of Nat Sherman International, responsible for creating and maintaining the company’s portfolio of premium cigars, pipe tobaccos, and accessories. Most recently, he is the co-founder of Ferio Tego, which has been named the “Brand of the Year” by Cigar Dojo and “New Company of the Year” by Halfwheel. 

Michael is a Certified Master Tobacconist by Tobacconist University and a thoughtful business leader with 20 years of experience in specialty retail and wholesale luxury goods. 

The Power of Storytelling

When Michael and his co-founder decided to launch a cigar company during COVID-19, there was no shortage of obstacles. Aside from the challenge of selling cigars during a respiratory pandemic, they also had limited capital. Without the budget to hire a marketing team or ad agency, they leaned on something more powerful: their story. 

Over and over again, they told the story of Ferio Tego, their backgrounds in the cigar industry, and their vision for the brand. Both Michael and his co-founder Brendon Scott had plenty of connections in the cigar world, but they took a unique approach to every conversation.

Every time they met with a potential partner, they would lean into different aspects of their story. For instance, smaller companies were more likely to relate to their story of bootstrapping the business from the ground up, while larger companies wanted to see the data and volume. 

Innovate the Process, Not the Product

In today’s fast-paced world, many companies shift their marketing and add new products every week–but ultimately, that hurts your brand recognition and makes it harder for retailers to sell your products. The more consistent you stay, the greater the chance consumers will start to relate to and remember your brand. 

While the Ferio Tego brand is consistent, Michael is constantly innovating other aspects of the business. He and his co-founder have taken a unique approach in partnering with other cigar companies. They now have factories in multiple countries without the overhead of managing their own warehouses.

Enjoy this episode with founder Michael Herklots…

Soundbytes

17:46-18:30
“New businesses, we don’t have a marketing budget, we don’t have an advertising agency. We don't have four people who are building decks on what is Ferio Tego and what isn't Ferio Tego and creating all of those thoughtful pyramids. Who has time for that? We're fighting for our lives every day, trying to get another sale. And so what we lack in that sophisticated, deep infrastructure of brand, we have what a lot of those departments crave and try to create which is the absolute authentic story of time served and process and how we do things.”

19:20-19:37
“What they are trying to do is to create brands that feel authentic, whereas we have, just as a consequence of being a small startup, we're creating a brand that is authentic. What you see is what you get.”

27:09-27:37 
“As a Brand Builder and a storyteller, it's incumbent on me to tell the same story over and over and over again consistently, so that you as a retailer, can tell the same story over and over to your consumers. The consumers can learn that story and share it with their peers, and by the time they learn it, they can catch back up with the brand, and we're still singing the same song. We've abandoned that in so many industries.” 

54:04-54:50
“There are times when you look at something that just seems so overwhelming, whether it's something as small as playing a gig, or something as big as launching a company. And to get over the hump of it, I have to believe that the opportunity and the idea and the consideration–all of the work has been done for a reason. All those opportunities are lined up for a reason and therefore I have to have faith that this is meant to be.” 

Quotes

“They’re trying to create brands that feel authentic, whereas we, as a consequence of being a small startup, are creating a brand that is authentic.”

“As a Brand Builder and a storyteller, it's incumbent on me to tell the same story over and over and over again consistently.”

“It’s become innovative to go back to building the brand.”

“It's probably naive to think that it's possible to be everything to everyone. What I try to do is be something to everyone.”

“I don't know anyone who would consider themselves an expert. Even the most famous, most successful are still practicing all the time.”

“You have to live within what's authentic to you and let your audience find you.”

Links mentioned in this episode:

Learn more about Ferio Tego cigars: https://www.feriotego.com/

Connect with Michael on LinkedIn: https://www.linkedin.com/in/michaelherklots/