If you believe that you compete with only things that are directly analogous to your business, nothing is learnt — the same failings will get perpetuated; reiterated.
I’m reminded of this courtesy of being prompted a recollection from a management course, many years ago. Most such courses are, of course, awash with cliches and practices that are irrelevant to contemporary business (then, let alone now), but one session recently came to my mind because it seems more relevant now than ever before, even though this case-study from our tutor was from the 1970s.
We were, as was often the case on such courses, set oblique case-studies to analyse — to rationalise and make recommendations, even though armed with limited information.
Lesson 1: Make assumptions at your peril.
Anyway, this particular example concerned the Remington razor/shaver company.
For years they had dominated the male personal-grooming market, with highly predictable (and hugely welcome) hockey-stick sales figures over the Christmas period. However, over recent years they noticed this was flattening-off to the extent where sales were becoming barely any greater than at any other time of the year.
Understandably, this caused much consternation amongst the board members at Remington.
An investigation was demanded. Remember, back then sales-data was pretty rudimentary, to say the least. BI tools? What’s BI?
Obviously, the damn competition was impacting their sales, even though they, Remington, were acknowledged as being the leading brand in their sector. Why was the competition suddenly being more effective against them? Did they have a better model? More seductive advertising? More aggressive pricing? Entering global markets Remington hadn’t adequately penetrated?
This case-study challenge hardly enthralled us. It was the late 1990s; who cared about such mundane consumer products? Regardless, we were challenged with deducing why the competition was suddenly impacting Remington and identifying who was it likely to be.
After much deliberation, and much assumption making — inevitable, considering our limited data — we all presented our cases and recommendations. Typically, we assumed that more contemporary companies (eg, Philips) had aggressively entered the market and so impacted Remington’s sales, especially during the all-important Christmas sales period. After all, Philips was a more diverse and contemporary brand, with strong European roots, so could better penetrate the global market as it moved from wet-shaving to electric.
All our theories were wrong.
So, who was it stealing sales away from Remington?
Parker had begun to increasingly focus their marketing on their pens being bought as a gift, especially at Christmas time. Remington’s Christmas sales-spike was historically because their razor/shaver products were being bought as a gift for a father or husband, if nothing else as an alternative came into mind of the purchaser.
The price-point of a Parker Pen was directly comparable to the Remington products and many Christmas shoppers found the pen to be a more personal present for their loved ones. Remember, even the most successful businessman back then needed a pen. He didn’t have a laptop, let alone a smartphone to transcribe his business notes on. So, if you must have a pen, or indeed a number of pens, why not get them a nice pen at Christmas?
Then, the killer product packaging followed — this being so, why not offer ‘his and her’ gift pen sets — or a family package of stylish pens?
The only analogous aspect to these very different products was the pricing and nature of why they were purchased, especially at Christmas or as a birthday gift. The concentrated data, even back then, offered by Christmas sales offered Remington an insight (after much research at the time) into what was going wrong with their strategy and market assumptions.
I was reminded of this whilst listening to a children’s author on BBC Radio4 a few days ago; he was discussing the competitive nature of this ethereal and transient customer demographic and when he was asked who was his biggest competition he replied ‘Candy Crush’ — and other such apps…
Attention was his biggest competitor.
What we can learn from this is that our competition (regardless of our business) is not always what it seems, so be careful what/who you study and obsess about when wishing to ensure your business continues to grow and prosper.