On Top of the World

Lynne Greene has propelled the 43-year-old Clinique into the industry’s leading power position.

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Beauty Inc issue 03/11/2011

Greene credits her fortitude to stay the course as the key element in Clinique’s turnaround. “When you’re big, the courage to be different is a lot of courage,” she says. “When it works, that’s great. When it doesn’t, people say, ‘Why would you do that?’ When you’re launching the traditional products that people know, it’s hard for someone to criticize you because you can intellectually defend it. Intellectually defending some of the things we’ve done is not the easiest thing to do.”

Ronald Lauder, chairman of Clinique Laboratories Inc., says Greene’s courage of her convictions is one of her primary strengths, comparing her with Clinique’s pioneer, Carol Phillips. “She has a lot of the same traits,” he says, “which is the fact of understanding exactly what women want and the simplicity to make it in one product. Lynne has both the day-in, day-out ability to make things happen and the vision for tomorrow, which is very rare, to be able to do both equally well.”

Greene describes her approach to business as three-dimensional: the right brain, or creative side, where one can see possibilities, coupled with the left brain, or analytical side. (“Imagination without power is a lot like a Ferrari without a driver. Someone has to step on the accelerator to get you to where you are going,” she quips.) But key, too, is the emotional connection. “You don’t want to wave to people as you’re going out the door and say, ‘By the way, make sure you emotionally connect with the consumer.’ There is heart in a brand, in a business, in a team.”

She might well have added confidence. “Lynne is a woman who embraces uncertainty without the fear of failure, and it’s a great recipe for success,” says Marigay McKee, director of fashion and beauty at Harrods. “Fear often halts progress, but at Clinique, the strategy is fearless efficiency and great products for great skin.”

When asked if she ever had doubts about the success of Even Better Clinical, Greene’s answer is characteristically immediate: “No. I didn’t. I never did. It’s not like I’m sitting around looking at the Ouija board. There were numbers in one place, the emotional connection in another—because dark spots and acne are emotional issues for consumers—and the dermatological and medical community in another.”

Part of the product’s success can be attributed to a radical change in media mix, particularly an increase in television advertising, a medium that Clinique is increasingly using on a global basis to drive sales. Traditionally, prestige beauty brands use TV advertising on a regional rather than national basis, often to tout promotional gift-with-purchase selling periods or seasonal fragrance offerings, and almost always tagged to a specific retailer. Greene’s idea was to create a commercial message compelling enough to drive consumers into stores.

Nailing the creative proved to be the easy part, but determining the right frequency and reach was much more challenging. The brand first tested a nationwide commercial for Three Step, to disappointing results. Determined to crack the code, Greene decided to test the same spot in May 2008, in two markets with increased frequency. “From a retail sales point of view, we were a good eight points better than the trend at that time,” she says. “We took the test and said, ‘If we do this nationally, this can have some very compelling results. And if we do this with a new product that is breakthrough, those results can be absolutely astonishing.’ ”

It’s a business decision lauded by William Lauder. “She has continued to push boundaries for the brand in a number of different areas, how the brand communicates and what it does,” he says. “Before Lynne, the brand wasn’t meaningfully committed to TV. She wanted to do it, but one of the challenges she had was to do it with the right product in the right way with the right proposition. It took a great deal of time and effort.”

Going forward, Clinique will continue to play in the dermatological concerns arena. In April, Pore Refining Correcting Serum will launch, claiming to visibly reduce the appearance of pores by 58 percent in two weeks. While there are products on the market that claim to reduce pore size from a visual point of view, Greene says Clinique has discovered a way to “biologically change the size of your pores.” Saleswise, she doesn’t expect Pore Refining to reach the level of Even Better Clinical, but says it will be of “significant value—we’re talking in the millions in terms of units.”

Numbers like that have fundamentally changed the architecture of Clinique’s business. In 2007, the majority of the brand’s top 10 stockkeeping units resided in the accessibility category, or basic skin care, such as Dramatically Different Moisturizing Lotion and Clarifying Lotion. Now, that number is more than halved, with products like Even Better Clinical, Repairwear Laser Focus Wrinkle and UV Damage Corrector and Even Better Makeup occupying the top spots.

“If 25 percent of our selling mix is new, we look for 10 percent of that to be in- terruptive technology,” says Greene. “We will continue to make that an important part. Why not all of it? Because you still have mainstream evolutionary innovation that you have to launch. Keeping products that exist current and up to date and relaunching dormant aspects become important elements of the brand, as well.”

Greene’s primary objective over the last five years was to reestablish Clinique’s primacy in skin care, with a calculated de-emphasis on makeup and fragrance. With that goal clearly on track, the brand is now turning its focus to color cosmetics, applying the same accessibility and desirability formula that has worked so well in treatment. “Makeup is where skin care was two years ago,” says Greene, “but we’re starting to get traction.”

Greene declined to disclose figures, but industry sources say Clinique is still the number-one prestige foundation brand in the world, selling about 10 million units annually. Although she would neither confirm nor deny the figure, she did note that the brand’s two-tier foundation structure, comprising classics such as Superbalanced Makeup and newer skin care–connected items like Even Better Makeup, has helped Clinique post sales increases of almost double those of the overall prestige market in the U.S.

So far this year, launches such as Chubby Stick, a lip balm in a thick-pencil format, and Bottom Lash Mascara, a tiny mascara wand specially designed for the lower lashes, helped fuel sales 10 percent in January. The success of Bottom Lash, which Greene personally shepherded through the product development ranks, clearly delights the hands-on executive. “It’s already performing at the rate of our number-two mascara and we haven’t even finished running the ads,” she exults, also noting that, thanks to consumer review areas on Web sites such as Facebook and Sephora, you can tell within 36 hours “what kind of product you have and whether it’s a success.”

Simultaneous to revamping the product strategy, Greene and her team were also reinventing the in-store experience. (Ever the word buff, she coined new terminology: designing a service strategy.) The result was a counter concept called Service as You Like It, which recognized the impact of open-sell formats like Sephora at a time when many in the prestige world were still willfully covering their eyes to the enormous changes happening in how and where consumers shop. First launched in the revamped beauty floor at Bloomingdale’s 59th Street flagship in 2009, Service as You Like It consists of four ways to shop: browsing, express service, consultation or DIY. Right now, there are roughly 10 global Service as You Like It counters, with 50 to 100 scheduled by the end of the year.

“Lynne is building a business that is relationship based, not transaction based,” says Michael Gould, chairman and chief executive officer of Bloomingdale’s. “She has a great passion for the business. The fact that we can always try something new—some of it may work and some of it doesn’t, but nothing is going to work if you don’t take a swing.”

But the learnings that have been gleaned will be manifested at all of Clinique’s global counters. “One of the key things we learned was that, if you let the consumer go where they choose to go and give them the service how and where they want it, they relax and are willing to have more of a dialogue with you,” says Greene. To that end, Clinique created color-coded plastic bracelets—pink for immediate help, white to be left alone and green for consultation—to enable consumers to immediately telegraph to consultants how they want to shop. Prices are prominently displayed everywhere. (“That was very important to consumers, and it wasn’t an element we were address- ing,” says Greene.) Tester units have been reorganized and rewritten so that consumers can self-select. And even Clinique’s beloved “computer” is being joined in many stores by iPads, which update the brand’s diagnostic capabilities.

Appointed to her current role in early 2006, Greene was about two years into her modernization program when another change agent appeared on the scene: Fabrizio Freda, a seasoned P&G executive, was named president and chief operating officer of the Estée Lauder Cos. in March of 2008 and ceo one year later.

One of his primary mandates is to transform the company into a global powerhouse attuned to consumer nuances around the world. “Leading a brand like Clinique, the difficulty is to keep up with the taste of the world,” says Freda. “It changes constantly in our society, which means having to be fast, having to adapt fast, to find and discover new opportunities quickly and to react fast. At the same time, you have to be able to keep the equity of your brand well linked to its roots and to protect brand integrity,” he continues. “That is a big challenge, the tension between the past and the future, and Lynne manages the tension as nobody else.”

While North America was the logical starting point in Greene’s turnaround plan, international markets, particularly Europe and Asia, have played crucial roles, too. The changes being implemented in the U.S. have been exported worldwide, and growth in Europe has largely mirrored that in the U.S., with France, Russia and the U.K. all posting stellar results. China, where Clinique has seen some market share gains, is a key focus. Greene has been there three times in the last 12 months, and has a new brand manager in the country whom she says truly understands the dynamics of the brand. Wherever she travels, Greene meets with consultants and consumers as well as key executives on the team. (In her spare time—and, because she also oversees Origins and Ojon in her role as global brand president of all three, there isn’t a lot of it—Greene is a theater buff who recently started investing in Broadway shows.)

Television has played a key role in the growth of China. “In China, everybody talks about how trust is so important, and that’s one of the reasons TV has become so important—because if you can afford to do it, it means you are a big company.”

That being said, selling white space in China requires a distinctly different strat- egy than it does in the U.S. “Fabrizio came back from [The World Economic Forum in] Davos and said to us: ‘Negotiating in China means that you give to get, not that you sit down and do win-win.’ That made me think about white space differently,” she says. “In the U.S., people love to discover new things on their own. Give them something new and different and they love that. In China, you have to give them something they know and relate to, and make a bridge to the new for them. It’s a different way of delivering the news. But if you just continue to play where the industry is, you’ll be an also-ran.”

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