How Chip and Joanna Gaines turned a hit TV show into Magnolia

Repeat Customer podcast, Season 2, Episode 7

Chip and Joanna Gaines were stars of the hit home makeover TV show, Fixer Upper, on HGTV, but when they decided to launch a lifestyle brand called Magnolia, they couldn't rely on celebrity status alone. It required a much deeper customer experience.

Brand strategist Adam Hanft describes the pitfalls of personality-based brands and how to avoid them. Chris Pullig at Baylor University deconstructs some of the secret sauce behind Magnolia's customer experience. And Magnolia's Director of Guest Services, Sam Goff, takes us into the Waco, Tex. call center where customer service reps connect with Chip and Joanna's devoted fans.

Repeat Customer is an original podcast from Zendesk about great customer experience.

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Transcript

[Annette Deming]
And then as soon as you turn the corner, you see those silos and you're just like, "Oh, my gosh. I'm here."

[Mio Adilman]
Annette Deming has come all the way to Waco, Texas from California for one reason.

[Annette Deming]
People are sort of just piling out of the Magnolia Market store with bags and clearly, they were there to do some shopping.

[Mio Adilman]
This is Annette's first visit to Magnolia Market, but you could say she's been here many times before.

[Annette Deming]
I kind of felt like I was my own Joanna and Chip expert walking in. It was just a matter of finding the object that I wanted. The bud vases, the candles, sconces, all I kept thinking was, "Oh, my gosh. What can I get on an airplane?"

[Mio Adilman]
You see, Joanna and Chip Gaines aren't just the owners of Magnolia.

[Annette Deming]
All of the items that are in her store, it was like looking at the set of every Fixer Upper episode that you've ever seen.

[Mio Adilman]
They used to host the massive, popular home-improvement TV show called Fixer Upper.

[Annette Deming]
It's like you're a part of their life now and that's a little surreal. It's really cool if you're a superfan.

[Mio Adilman]
This isn't just a shopping trip for Annette and millions of others, it's a pilgrimage.

Welcome to Repeat Customer, and original podcast from Zendesk about great customer experiences, how companies create them, and why their superfans love them so much. Zendesk is a customer service and engagement platform, and I'm your humble, little podcast host, Mio Adilman, sitting here trying to figure out how two famous reality TV hosts, Chip and Joanna Gaines, took a hit show and turned it into a hot lifestyle brand by focusing on the customer experience.

[Mio Adilman]
Magnolia is a home brand selling all kinds of interior décor stuff. Everything from candles, to paints, wallpaper, bath and body items, gardening products, tools, clothing and jewelry, cookware. There's an online store, additional unique lines at Target and Anthropologie. There's a Magnolia Journal magazine. In 2020, Chip and Joanna will launch the Magnolia TV channel, and at the heart of Magnolia's business is the Magnolia Market, which sits on two city blocks. At the center of the grounds are two enormous empty silos, both 120 feet tall, formerly used to store cotton seeds by an old cotton-oil company back in the day. Now, that's a lot of customer experience to unpack, but maybe the most notable thing is that all of this is happening in and/or being run out of Waco, Texas.

[Chris Pullig]
Are you familiar with the history of Waco and the bad things?

[Mio Adilman]
I am familiar with the history of Waco. That's partly what makes this story so remarkable.

[News anchor]
Good evening. It happened outside Waco, Texas. A heavily armed compound, a religious cult, their leader claiming to be Jesus Christ.

[Mio Adilman]
In 1993, the government raided the Waco compound of cult leader David Koresh. A deadly shootout and then a two-month standoff followed before 80 cult members died in a fire. This dark moment in Waco's history haunted the town for decades, but would you ever believe that a couple of home reno-ers could overcome that tragic legacy?

[Mio Adilman]
Originally from Dallas, Chip Gaines stuck around after attending Baylor University in Waco. Joanna Gaines had been in New York pursuing a career in media but was homesick, so she returned. They met at Joanna's father's Firestone Tire dealership, got married, had kids, and started flipping houses. In 2012, one of Joanna's blog posts about a renovation caught the eye of a production company, and this is how Chip and Joanna ended up on HGTV hosting a show called Fixer Upper, which launched in 2013.

[Kwandaa Roberts]
Well, first of all, are there really people who haven't seen Fixer Upper? I'm not sure.

[Mio Adilman]
Dr. Kwandaa Roberts is a huge Fixer Upper fan.

[Kwandaa Roberts]
The wife does interior design and she's super creative, and the husband does the construction side. They live on a farm. We get to see their kids grow and a little bit of their family life.

[Joanna Gaines]
He's kind of like his dad. He likes to talk when I'm talking.

[Kwandaa Roberts]
They work with a lot of young families. The designer, the wife, has this really different farmhouse style.

[Joanna Gaines]
This whole idea came from just this sweet moment that Chip and I had when we were cutting fresh branches at the farm.

[Mio Adilman]
Among other things, Joanna's known for using something called shiplap.

[Kwandaa Roberts]
Shiplap is essentially wooden boards that form the basis underneath drywall or underneath plaster. That was the first time that even occurred to me that you would take down and use sort of what we consider the innards of the wall and actually make that the feature of the wall itself. I mean, it's just a fantastic backdrop. That sort of shabby-chic look, that it wasn't like she's in the middle of Waco, Texas and she's going to give you New York City chic or modern. It was what the families wanted there, and I think that really resonated with me even if I don't live in Waco, Texas.

[Mio Adilman]
Joanna's style was unique and so was the relationship between the couple.

[Kwandaa Roberts]
It's just this whole thing where you watch their banter and where he's silly and she's the serious one.

[Joanna Gaines]
Chip.

[Chip Gaines]
That's good.

[Joanna Gaines]
Really?

[Chip Gaines]
Oh, dude. I'm sorry. I didn't even see you there.

[Kwandaa Roberts]
That could come off a little bit as a shtick, but with her eye roll, I mean, it just seems like it's him. They just seem like they really like each other. Nobody wants anything to happen to them or their marriage. I think we'd all be personally devastated.

[Chip Gaines]
Babe, you're doing great. I'm so proud of you, but you know I've got to take care of all this.

[Joanna Gaines]
Can you let me know when he's ready for...

[Chip Gaines]
Oh, yes.

[Joanna Gaines]
Yes?

[Chip Gaines]
You're going to be the first to know.

[Joanna Gaines]
OK.

[Chip Gaines]
As soon as he's done with me and needs his mama.

[Mio Adilman]
In the often manufactured world of reality TV, Chip and Joanna Gaines came across as, well, real. A real couple raising a young family. Family always came first, as they ran a hectic business, learning as they went, helping other young families do the same thing.

[Kwandaa Roberts]
They seem like real people that sort of just fell into this TV show and were just sort of living their lives and we're getting a little bit of a glimpse into it.

[Mio Adilman]
Another thing that spoke to viewers was the price point and the locations. The homes on Fixer Upper were in the $150,000 to $200,000 range and outside of the usual urban centers. Tack on another 50K for renos and you could own something attainable and you could build a life. For young families, this is basically the American Dream, so the show quickly got great ratings. Chip and Joanna, their family, and their small town reno colleagues became these beloved characters, and midway through the show's run, Chip and Joanna decide to leverage their newfound profile. I mean, it makes sense, cash in on your fame, but as you're about to hear, it takes a lot more than just celebrity to properly launch a celebrity retail line.

[Adam Hanft]
So I think this has been a trend that we've been seeing probably since the '80s as people started to understand that you could extend brands, and celebrities are brands, into product. I would say it started with the licensing trend and then I think a lot of personalities and their managers said, "Hey, wait a minute. Why don't we start our own brands and own the intellectual property?"

We saw some of it in the '60s. I actually found an ad for a line of apparel that was launched by The Monkees, a band that was created for TV. Of course, in the late-'60s and early-'70s, Johnny Carson had his own line of clothing.

[Mio Adilman]
Adam Hanft is a brand strategist at Hanft Projects. He's talking about the rise of personality-based brands.

[Adam Hanft]
But one thing I should point out is that the track record of TV celebrities creating durable, sustainable brands is actually not a particularly happy one. It's so easy today to find a factory who can design and manufacture and ship products that the barrier to entry is very low, so it encourages people to jump in without fully thinking about the consumer and the product.

[Mio Adilman]
What Adam means is that the products might initially appeal to the celebrity's fans, but many lacked a deeper customer experience.

[Adam Hanft]
Kim Kardashian is involved with a lot of things, including a sunglass manufacturer called Carolina Lemke, and she doesn't just "endorse" the products. They have her name, but she designs them. Those sketches are up on their website, I believe, so the consumer then sees there is a real-life connection. It gets back to what I was saying about respect for the consumer.

[Adam Hanft]
If you respect somebody then you create something that is something you would be proud to wear or use or cook with or whatever it is yourself. But if it's a piece of crap that Jamie Oliver slaps his name on and he would never use it in his kitchen then he undermines his brand and he's not going to have a successful product.

[Mio Adilman]
Here's Adam's advice for a celebrity looking to launch a product line.

[Adam Hanft]
The first thing that you need to do is really understand, what is the DNA of your brand? What is it that people are finding attractive about you as an individual? Rachael Ray is sort of middle-America, not for particularly sophisticated chefs. So, how do you then design a line of products that is relevant to your audience and fits with who you are and how they think of you? The second thing is, how is it differentiated in the market? The third area is you need to build something that's going to succeed beyond your own celebrity window, if you will. I think brands that are opportunistic and are short-term communicate that, essentially, to their consumers.

[Mio Adilman]
OK, so that's a lot. For this to work, Chip and Joanna needed to build a retail customer experience that went above and beyond just their popularity. So even though they were used to a good challenge doing those home makeovers, this would be their biggest project yet.

[Mishelle]
We've got our grounds. We have our garden shops. Seed and supply in the back, and then the two silos, which is our big main...I would say, main event. Then the market and the store. The inside's what everybody comes to see. We've got our kitchen section over to the right, lifestyle in the middle, and then a floral section on the left. We also have bags and jewelry. We have a special section of our store dedicated to Chip and all of Chip's favorite items, and so that's where you can find some of the more manlier goods. Right now we're focused on a grilling station for summer.

[Mio Adilman]
In 2015, Chip and Joanna opened Magnolia Market at the Silos in downtown Waco. The grounds also include a bakery, food trucks, a big lawn/play space, and in another part of town there's a Magnolia restaurant, as well as a few Magnolia houses you can book overnight stays at.

[Annette Deming]
Waco and the Silos, to a Fixer Upper fan, is huge because if you're a superfan of the show you watched the episodes where Joanna decided that this was her vision and that this was her next adventure. As viewers, you shared in that passion and in that dream with her.

[Mio Adilman]
Magnolia, the brand, first started as a simple wish for a local shop in the Gaines' hometown, and that was shared with millions of viewers, like Annette Deming, who are already fully invested in whatever Chip and Joanna wanted to build. Viewers had also developed an emotional relationship with many of the products.

[Annette Deming]
I'm taking home a product that Joanna talks about all the time that is a must-have in your house and you've seen it, and you've seen it transform other people's lives and houses.

[Mio Adilman]
In many cases, we're talking about a decorative wreath, or a candle, or a chair, which might seem weird given how Annette is talking, but the building of a home, for a lot of people, has really deep resonance.

[Annette Deming]
You look at the people, the clients they've had, and you watch those episodes and they have tears coming down their face like, "Oh, my gosh. This has been such a dream," and Joanna and Chip made that happen for them.

[Mio Adilman]
The other big home-related part of this is Chip and Joanna's decision to stay in Waco despite all the success.

[Sam Goff]
I think that's almost what kind of makes Chip and Joanna and what makes Magnolia, is that we have something like Waco and that might set us apart from other television hosts or other retail stores is that they don't really have a place.

[Mio Adilman]
That's Sam Goff, Magnolia's Director of Guest Services.

[Sam Goff]
Yeah, American Airlines is based in Dallas and Neiman Marcus, and JCPenney, all these huge companies are based in Dallas or there's huge companies in Austin, but nobody's based in Waco.

[Mio Adilman]
This is such an important and, to me, fascinating point. We sort of explored it a bit in the Shake Shack episode, where Shake Shack was initially so tied to a park in New York City. You can hear that one at zendesk.com/repeatcustomer, where you can also get tips on how to up your company's customer service game. But Magnolia has an identifiable and unique home, which provides a really unique customer experience to visitors, and not only has the benefited Magnolia, the effect on Waco has been profound.

[Chris Pullig]
Now when you say, "I'm from Waco," people say, "Oh, that's where Chip and Joanna Gaines are. That's where Fixer Upper is."

[Mio Adilman]
Chris Pullig is a marketing professor at Baylor University in Waco.

[Chris Pullig]
It's definitely a much more positive association than it has anything in the past.

[Mio Adilman]
Remember, for years Waco was that town with the cult leader, but now Waco is part of the customer experience for many Magnolia visitors.

[Chris Pullig]
People can relate to Waco. It's not the flashiest, it's not the nicest place, but it's a place where people have made the best of their lives, and people come from all over the United States and from as many as nine different countries to Waco, Texas to visit the Silos. We have individuals who are moving to Waco who never would've considered moving to Waco. We actually have Waco tours now, which I never would have dreamed in my wildest dreams we would have individuals going on tours. They usually try to go and see if they can find some of the homes here in town that they've worked on.

The individuals on the show are real people that live in the community. There is a Harp Design store you can visit. There is Jimmy Don who makes the signs. He is building a store near the Silos. The reason, the brand that they've built on the show, to leverage that to build their own little businesses.

[Mio Adilman]
Everything so far still relates pretty closely to or emanates from Fixer Upper, but it's an authentic brand extension that takes you even deeper into the experience. The next thing Chip and Joanna did was manifest their family focus.

[Chris Pullig]
Most retailers would actually do everything they could to maximize their sales per square foot, and one thing that they are focused on is the experience that customers will have when they visit their store. The fact that they dedicate so much space just to area for families to gather, they have a ball, like footballs, and soccer balls, and things for kids to play on. They have bean bag chairs all over the place for people to enjoy just lounging. But the fact that they are focused so much on the experience tells you a lot about who they are. They are about family values and spending time together as a family.

[Mishelle]
Sometimes we just come out as employees and just to watch the families enjoying their time here. We've got beanbags, cornhole, Jenga. The Silos are here. People love to take their picture in front of the Silos. People are just connecting with each other and being with each other, and I think that's really special.

[Mio Adilman]
As down-home as this all sounds, Magnolia has also figured out how to incorporate technology into the customer experience.

[Sam Goff]
We were one of the first retail businesses to have AR featured in our app, and so you can place any of our products inside your house. You can see that scale, see what they look like.

[Mio Adilman]
And all of the Magnolia Market grounds have been optimized for social media.

[Chris Pullig]
They have set up photo op staging around the grounds and they actually are suggesting hashtags so that they can be tagged to trend on social media. People were really proud of the fact that they'd traveled farther than anyone else there, they thought, so they added this one little area where people can take a photo in front of the Silos and then it has under it or above it #milestothesilos or #milestomagnolia.

[Mio Adilman]
Another huge factor, according to Sam Goff, and this goes back to one of Adam Hanft's points, is Chip and Joanna's involvement.

[Sam Goff]
Joanna is a perfectionist and she does have an amazing attention to detail, so every single product that we sell, Joanna sees and handpicks before it goes out on the shelves. She's testing everything on the menu, she's approving cupcake flavors, and I think that's really helped Magnolia grow and stay pretty true to who we originally were without losing some of those original pieces of Chip and Joanna as it's gotten bigger and bigger.

[Mio Adilman]
As Magnolia expanded its product line, they partnered with established manufacturers, often Texas-based, of items like furniture, paint, wallpaper, but Joanna always acted as the chief designer, and this remains the same with the Target and Anthropologie lines. So, in many ways, the Magnolia product and retail experience seem to be authentic extensions of the Gaines' personal brand, which makes for a great customer experience. But the one thing that many customers really want is access to Chip and Joanna themselves.

[Sam Goff]
It's not just normal retail where you're saying, "Can I help you find anything? Are you looking for something today?"

[Mio Adilman]
This leads us to a conversation about the unique challenge facing Magnolia's guest services team.

[Sarah Grace]
You can just have that rug shipped back to our rug vendor Loloi, and we can [crosstalk]

[Sarah Grace]
Hi, Melanie. This is Sarah Grace with Magnolia. How are you? You're so sweet. I'm so glad that you called...

[Sarah Grace]
If there's ever anything that you see on a Fixer Upper episode and want more information on, we're happy to try to locate that for you.

[Sam Goff]
We have our transactional guests and we have our experiential guests.

[Mio Adilman]
Whether they're visiting the physical store or interacting with the call center, transactional guests are just that, focused on the transaction. "Where can I find that?" "How do I return this?"

[Sam Goff]
With our experiential guests, they are a little bit different than our transactional guests in that they want to be a part of the experience of Magnolia and of Chip and Joanna.

[Sarah Grace]
We get a lot of calls about people asking like, "Can I meet Chip and Joanna? Will they come and redo my house?" Like, "Have you met them?" Like, "What can you tell me about them?"

[Speaker 13]
I received a call a few weeks ago from a lady who had heard of a Magnolia restaurant in a different city and just wanted to share the idea that Chip should take Joanna there for their anniversary. You probably wouldn't call Target and tell the CEO like, "Hey, this is where you should take your wife for your anniversary," but I think people just feel that sense of community with Chip and Joanna.

[Sam Goff]
You may not get to talk to Chip and Joanna, but who you're going to talk to is going to be an extension of the character of who Chip and Joanna are.

[Mio Adilman]
This totally changes the concept of a customer service rep, whether they're on the sales floor on in the call center.

[Speaker 13]
Specifically, with natural disasters, I would say we get a higher volume of emails or calls. They think of Chip and Joanna and want to know if they'll come help with renovating, or redoing it, or building a new home for them. Even if nothing comes from this request for help, people are often wanting to just share the ways that they've been impacted by Chip and Joanna and what they do.

[Mio Adilman]
In many cases, people want or, rather, need to talk. Remember, this is almost like a pilgrimage.

[Sam Goff]
One of our training things is get the story, and so that is one of your roles. If you are on the floor at the store, if you are working at the restaurant or in the bakery, your whole thing is, "What brought you here today?" or just those types of questions just to get to know the person who's with us. That kind of takes that southern hospitality to the next level. We want to get to know the person and get the story instead of push product on them.

[Mio Adilman]
And getting the story sometimes takes a while.

[Sam Goff]
We don't try and set any, "Hey, you need to be off the phone within two minutes and be off the phone within five minutes." Whatever it is...We've had people who have been on the phone for hours. We've had people who have built relationships with some of our guests who have called in and when those guests have come to Waco they've been able to go to the Silos and meet them or take them out to dinner and just build relationships with our guests just via our support.

[Speaker 13]
One of the most meaningful conversations I've had was with a lady who was having trouble applying one of our discount codes. She broke down in the midst of it and just shared with me that her husband had passed away. He had handled all electronic things. It wasn't just frustration about a discount code, it was the depth of feeling the loss of her husband, so I had the chance to pray with her on the phone and just encourage her a little bit that she didn't need to be over this loss in her life at this point.

[Mio Adilman]
I don't know if it's because we're in the south or because this is Magnolia or even if it's both, but prayer came up a few times during our visit to the Silos.

[Mishelle]
This is Mrs. Stephens office. It's her prayer room. She brings in some people from time to time to pray each week over the property. Mrs. Stephens is Joanna's mom.

[Mio Adilman]
There was a lot of talk about family values when it came to discussions about the Gaines' and Fixer Upper and Magnolia Market, which, for me, translates to Christian family values.

[Chris Pullig]
I think their Christian values definitely resonates with a significant number of people who visit the Silos and definitely has created a fandom, but I think what you'll find is that they express those values in always an inclusive and positive way. I think because of that, not only do they capture people who the core Christian values resonate, they capture people who just know that being good and fair to others is going to be something that they can relate to as well. I think there is definitely a need here, but it becomes more difficult as you become larger. Magnolia's scales that caring attitude better than any other organization I've ever seen, honestly.

[Mio Adilman]
Instead of coasting on celebrity, Chip and Joanna figured out, as Adam Hanft suggested, the DNA of their brand.

[Adam Hanft]
I think there's an authenticity in the relationship between the two of them that is transmittable and people believe.

[Mio Adilman]
And there's that authentic commitment to home, family, and community.

[Adam Hanft]
People love the root story and the sort of lack of elitism. I think they have the potential to really create something that is enduring and that fills a need in the marketplace. The whole Magnolia franchise is a good example of really thinking about your users, your fans, your relationships and honoring them. Mostly they show vulnerability. I think people like imperfection and they welcome others who kind of share their vulnerabilities. It makes them feel like they're not alone in the world with their own problems.

[Mio Adilman]
When fans of the show go to the store, like Annette Deming does, it feels familiar.

[Annette Deming]
Chip and Jo have given our marriage an outlet for creativity and teamwork. It's the one thing that my husband and I absolutely enjoy doing together. We love taking on house projects together. We have this phrase between us where we says, "Hey, want to do a little dreaming together?"

[Mio Adilman]
As Fixer Upper fans and Magnolia fans flock to the market at the Silos to be with their tribe, as it were, in the next Repeat Customer, we're going to explore the tribal relationships formed in boutique fitness studios like Flywheel Sports. Until then, thanks for listening.