Priit Kallas: behind the success of Iglusauna is a high price

A great deal of the success of Iglusauna brand outdoor and living space saunas was achieved with the decision to emphasise quality on the international market, and not price, said Priit Kallas, manager of the marketing and cooperation projects of Iglusauna, at the conference Innovation Lab 2017.

Kallas, who focused on the small-scale producer’s export experience, remembered that the company entered the market in 2014, having positioned themselves in the same price category as the barrel and tube saunas offered by their competitors. “In 2015 we created the Iglusauna, which basically meant the most expensive type of outdoor sauna, and we started to place our focus on quality instead of the price – as our competitors sold their barrel saunas on the Estonian market for EUR 4,000, we sold our two-person Iglusauna for EUR 6,000. In 2015 Iglusauna invested a sum that amounted to 50 percent of last year’s turnover into the brand and marketing in Estonia.

Kallas emphasised the protection of ideas and execution, as all of Iglusauna’s products are covered by industrial design protection.

As Iglusauna currently has resellers on 17 foreign markets, then there were numerous standards to be followed on the target markets, so that it would be possible for each market to have a product that is suitable. “Testing the customer experience is very important, as the devil is often in the details. The Finns told us repeatedly that the “product is not finished”, but now, after two seasons, it seems that we have finally gotten it right,” said Kallas.

Iglusauna is completely handmade, but Ford and Toyota have been taken as examples in the development of the production processes. The production software is cloud-based, which is the easiest solution. With a production team of seven people, Iglusauna is able to make 500 one-person saunas per year. A big issue was the spherical shape of the saunas, which required special metal benches to bend the plywood.

Today, Iglusauna has resellers in 17 countries and, over a period of two years, has sold 500 products. “You are only as good as your worst reseller,” noted Kallas.

According to Kallas, a small-scale producer should also consider direct sales to the end customer, which is not complicated and involves a greater margin.

Kallas highlighted the positive experience from SEB Innovation Incubator, where he remembered the question posed by Alar Kolk, asking how Iglusauna will get so far as to be able to ask for an additional EUR 8,000 from customers ten years after their purchase.

Conference Innovation Lab 2017, organised by SEB Pank, focused on the rapid and vigorous growth of small and medium-sized enterprises. Estonian entrepreneurs and international experts shared their experiences with almost 220 participants at the event. The conference Innovation Lab 2017 was organised in each of the Baltic states, with a total of nearly 600 participants.

For more information:

Evelin Allas
Communications Manager
Marketing and Communications Division
SEB

Phone +372 665 5649
Mobile +372 511 1718
Address Tornimäe 2, 15010 Tallinn
E-mail evelin.allas@seb.ee
www.seb.ee

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