Stacy Crespo, Director of Business Development & Partnership Strategies at Motorola, talks about how the Phat Farm partnership came about.

The following is part of a transcript of a panel discussion from February's iMedia Brand Summit in Florida. Stacy Crespo, director of business development & partnership strategies at Motorola talks about that company's Phat Farm partnership. Tomorrow: Peter Blacker, vice president, international & multicultural, AOL Media Networks, will highlight Ford's efforts to target Hispanics.

Stacy Crespo: Hello. Thank you all for joining us, we're really happy that you guys chose our breakout session because I think you’ll … you know, even just with Erin’s presentation, there’s a lot of really positive information there and hopefully you guys can take bits and pieces of it and go back and make stuff happen. I will be talking about the Motorola Phat Farm/Baby Phat partnership that we put together. But I thought it would be important to explain what division of Motorola I work for. Unfortunately I don’t work in the division that has built that razor phone, so I can’t help anybody with that. iDEN stands for Integrated Digital Enhance Network. We’re the division that manufactures phones for Nextel and Boost Mobile, as Erin alluded to before. And traditionally, Nextel was a B-to-B. You would see your limo drivers, construction workers using the phone. But one thing Nextel and Motorola, at the time, didn’t realize, there was a whole community using this product, even without them directly focusing on them.

Now, about four years ago our division decided, we have this B-to-B down, but the network is still underutilized. We had some extra money lying around and decided to do some calculated risks and look at limited edition handsets. These are handsets that are higher priced, lower unit volumes. But we really did want to test the market. And whether it was leverage some of our existing niche markets that we really had not addressed, or -- you know we did a product with Swiss Army so we focused on the durability of the phone. It was a red phone -- you get it. But another thing is we wanted to be able to take these products and really highly customize them, not just the face plate. I think you’ll see how we were able to do that. To the last point, we wanted to find organic ways to co-op market the products because we were looking to get to a really niche, core consumer. Obviously since we weren’t doing that many products, for example the first Baby Phat phone we did 2,000 units. For the first Phat Farm phone we only did 500. So we weren’t looking for mass acceptance of it, but to leave a consumer, “oh, shoot … I’m number 501,” you know? 

Now, here I just want to do a quick market analysis because obviously, as I said, we were a B-to-B, why go into this at this point? I thought this was really neat. These markets are not impenetrable markets in need of penetration but sites of tremendous growth and opportunity. I just think that’s so key. You know, these consumers, they were already using our product. We weren’t directly marketing to them or anything. But there was an opportunity for us to address it and really take a little bit of advantage of what they were doing. Also accept into our company some of the successes.

I want to focus on urban -- more of a geography and mindset, not so much on the issue of race. It really isn’t. They’re the trend setters. They have mobile phones. So that was a definitely attractive point for us.

As we went out looking -- I actually was one of the people who had the chore of deciding on that ideal partner. So I met with all the key leaders in the space. I wanted to make sure they were respected in that space; because we were a new entrant and we really needed to go in with somebody who was respected because otherwise we would look like we’re really patronizing that community, so that was really, really key for us. Their brand identity and their channels needed to complement ours. There’s really no value if we were going to go out and look for a company that was exactly like ours and very conservative or whatever. We wouldn’t have attracted the consumer we wanted to that way. 

And then it was very important, as well, to find somebody that already had the connections in the media outlets, because we wanted to cost effectively promote the product.

Last point, we had to make sure we found somebody who was really in it for similar reasons -- a Corporate Citizen committed to some philanthropic causes, you know, really give back to the community, not to patronize them.

All roads led to Russell Simmons. Russell, as you know, is involved in all of these different facets. But more important to us, he’s a big Motorola fan. It wasn’t a stretch for us to talk to Russell about a phone because he was already on our two-way pager in 2002. And he was always using our phones. He fought very hard to try and get Motorola to stay in the two-way pager business. Unfortunately it didn’t work. 

If you look at the two brand profiles -- and I use Nextel and Phat Farm just because Motorola does not touch the consumer, our service providers do. You can all relate to that. But if you look at the two brand profiles, they’re very different but they definitely offer a lot of opportunity. And that’s the strategic mindset we really had to focus on and not the fact that “oh, no but they don’t have this income” but they have a lot of money that they’re not spending on what maybe other folks would spend it on. They’re spending it on clothes and luxury items actually.

Another very important thing now is this channel strategy. They were already marketing directly to this consumer, and very successful at it. So at the time with the first products, we weren’t able to convince Nextel to take on the products so we sold them through babyphat.com and phatfarm.com. It was word of mouth. It was definitely viral marketing at that point. And we were able to leverage their affiliate programs with Def Poetry and defjam.com. You can see the kind of visitors they get there.

Now the second year we were … Bloomingdale’s picked the product up, but they also included their online properties as an additional channel.

The way we promoted the products have always been piggy-backing on the events that Phat Farm and Baby Phat were already involved in, that were relevant. So we were involved in the Magic Shows, which are apparel shows out in Magic where trendsetters and fashion editors go. We’ve always been able to get that kind of press, because now, what we’ve done is positioned it as a fashion accessory.

For both of us, Motorola and Phat Farm and Baby Phat, we’ve been able to cross sell, so if you’re going on the website for the phone, you just happen to need a pair of jeans too, or sneakers or whatever it may be …

Here are some of the results. This is our portfolio. As I said, you’ll see the first year where we started out with 500 units. And now we’re at 20,000 units with this lovely phone here with point eight karats of diamonds on it, “The bling that rings.” And this phone … what we’ve also done is … it’s not just the hardware that we focused on, the ring tones are ring tones that Kimmora Lee Simmons, Russell Simmons’ wife who was an ex-Chanel model, picked out. She’s a Japanese-African American woman so she wanted something Asian. Wallpapers are again, in tune to her lifestyle and the Baby Phat consumer lifestyle -- and same with the Phat Farm products.

Here’s a look at what we’ve done. Keep in mind that added value. Phat Farm is already doing it. Baby Phat was already doing an ad. But this is now become part of the Baby Phat consumer lifestyle. Motorola didn’t pay for that. That was already included alongside of everything else. And she just happened to do a little charm too, because now she has Simmons’ Jewelry so she’s got a whole line of designer or fine jewelry.

And here, the Business Week article. Russell didn’t have to have our phone. Well, it’s his phone. Again, he’s so committed to the partnership that it ended up on the cover of Business Week. 

The first one over there, we were on… that was the first day of Magic, that year, and the phone was being sold just on babyphat.com. Consumers started to go to Bloomingdale’s and say, “I've gotta get this phone. Why don’t you have it? Why don’t you have it?” So they ended up putting an order in. And so that was a really successful one.

Then again, looking at the organic integration of the phone … I mean, this is fashion week in New York and it’s truly become a fashion accessory. So it has a lot to do with the relationship, too, because there’s no specific line in our agreement that you have to do that, but … and just on Saturday, they included it again in the show.

And here, speaking a bit about how we used another distribution channel. This is on our homepage, the image there with her using the phone. And then fully promoting our product is you know … obviously it’s a Baby Phat phone by Kimmora Simmons, but it’s a Motorola product.

Now this is something that we’re having to deal with as well, the good, bad and ugly of it. I don’t know if any of you have gotten this pop-up online, “Win a free diamond phone.” It has given us great exposure that we weren’t expecting, but it’s been a customer service nightmare as well. We’re still trying to track that person down.

As I close up, I just want to give some words of wisdom. When you think about a cell phone, when you call somebody on a cell phone you get that person. When you call a place … when you call a landline you get a place. There’s so much opportunity here. This is the most direct connection to the consumer and I think publishers really need to begin to look at it as that; and obviously a new real estate for advertisers as well.

And then, content is king. Other speakers have touched on this a bit, but it’s not only downloading, preloading. I mean, there’s specific content on this phone that adds value and demands a higher price point because it’s preloaded on the phone. 

So… that’s it. Thank you.

Tomorrow: AOL Media Networks' Peter Blacker talks about Ford's Hispanic marketing.