Give IT To Get IT

 

Before we get started I want to share a recent interview I did with Doug Stewart for his blog Furnishing Results. Doug asked me to talk about a failure in my career so I shared one of many. I have never really told this story publicly until now so if you ever wondered what happened behind the scenes of The Virgin Mattress web series, you can hear the whole story and how it eventually drove me to better things.

Screen Shot 2015 07 01 at 7.52.34 AM Give IT To Get IT

“Failure is not the opposite of success, it’s part of it.” Doug Stewart

 

“If you want to be successful today you should give something up…..Where is it written that the more you have to sell, the more you sell?” This is law #13 in the book The 22 Immutable Laws Of Marketing which is the Law Of Sacrifice. The book says that there are three things to sacrifice; product, target market and constant change. Let’s take them one at a time.

less is more Give IT To Get IT

When you walk into a store today how many beds do you see? 20? 30? 40? How many times have you heard that consumers are very intimidated when they first step foot onto a mattress floor? They see one big sea of white and to the uneducated consumer, they all pretty much look the same. To remedy this I have seen retailers partition their store so that it looks more broken up. I have seen them separate the categories by color and even by vendor to help the consumer navigate all of those fluffy WHITE rectangles. Do we really need all of those beds? I know that there is value in having multiple vendors because you can get more slotting fees, improve your selection etc., but does the consumer really benefit from all of that? When I worked for Serta we had 2 beds at Sam’s when I started which ultimately grew, but we did an enormous amount of business on just two sku’s. I took over the shop television business later on in my career with Serta and during our broadcast we featured only one mattress. We got pressure from leadership to offer a choice but we held them off. Isn’t it logical that more options creates more opportunity? My thinking was that on television anyway, if you showed them a plush version and a firm version, the consumer would freeze not knowing which one was the right decision. Mostly since you couldn’t try them out. We sold millions of dollars worth every hour doing it that way. How about Tuft and Needle and Casper? They have only one bed and they sell on line. I realize that there is much more to consider in this equation but if you consider narrow selection, I think there is a case to be made that more isn’t always better.

When you look at sacrificing target market that one gets tricky fast. There have been several attempts to focus on very specific markets like the Duck Dynasty crowd or overweight people from King Koil, or Simmons going after millennials with Loft. I really like the idea of narrowing your focus on the target market but if you are going to do that the product has to be right, what you say, how you say it, where you say it, how often you say it all has to follow, and that is complicated. Most of the success in targeting a market in our industry has been restricted to companies chasing the luxury market. Even that has slowed. How many producers out there are great at selling mattresses over $3,000?

Finally the book talks about giving up constant change and I couldn’t agree more. Change can be a good thing but if you are in a constant state of it, it’s not helpful its disruptive. Is your company committed to your strategy or do you shift at the first sign of trouble?

So there you have it the “less is more” blog post. What did I miss? Do you like adding complexity or keeping it simple? Where is the proof!?!

 

 

 

Don’t Extend Yourself Too Far

“By far the most violated law in our book is the Law Of Line Extension. What’s even more diabolical is that line extension is a process that takes place continuously, with almost no conscious effort on the part of the corporation. It’s like a closet or a desk drawer that fills up with almost no effort on your part. One day a company is tightly focused on a single product that is highly profitable. The next day the same company is spread thin over many products and is losing money.”  The 22 Immutable Laws Of Marketing brings us law #12, which is the Law of Line Extension, and as you can see here, it is a problem for many consumer products companies.  I understand why this law is broken so often because any good leader wants to take a success and ride the wave. They want to milk that momentum for as long and as far as they can. The problem is it doesn’t work in most cases.

The book says it has a lot to do with the leaders in the company that believe in the brand so much, they are “blinded by their loyalty.” I agree but say it a little differently. I think there is a lot of ego involved in these decisions and companies just think that because they have done well with one product, they will do just as well with the next one. Many times they forget about all of the hard work that it took to make those past products successful and they think that their brand can do anything. Isn’t the diversion a problem as well? In my blog post on the Law Of Focus I talk about companies that try to be everything to everybody and in most cases that doesn’t work out too well; same thing here. Extensions can take your focus off of your core business which can send you to a place you don’t want to be.

I will give some credit to Select Comfort, Therapedic and Tempur-Pedic on this point and I’m sure there are others. These companies have done very well in developing sleep accessories that compliment their brand in adjacent spaces. The product development teams have found great solutions and are driving their business outside of their core competency. These are definitely the exception however, as there are many more failures than successes.

 Dont Extend Yourself Too Far

Nothing Sleeps Like A Hog

Want to avoid missing the sweet spot? In the mattress industry I have seen several attempts by bedding producers to establish relationships with other consumer brands outside of our industry, brands in the entertainment space or even fashion designers, and they rarely work. Borrowed interest can be a good thing, just make sure that the extension makes sense. For example, I don’t see a Harley Davidson mattress doing that well. Don’t get me wrong, I love a good hog, but I want to ride it not sleep on it.

If you want a great example of how to do a brand extension the right way, just look at Apple. I am pretty sure they are the benchmark. If you are successful with portable music players, phones, television devices, tablets, computers, and entertainment content among other things, you are the undisputed KING.

PS-Extra bonus tip!: On a personal note, I just started to binge watch Game of Thrones. I have heard references to it many times but was never interested enough to tune in. Do yourself a favor…subscribe to HBO Now and start on season one; you can always cancel. I am starting season five so I flew through 40 something episodes. It is AWESOME. Who is your favorite character? Tell me in the comments section!

The Law Of Division And Perspective

This week I am going to cover two laws in one post. The 10th law from the 22 Immutable Laws of Marketing is the Law of Division. It says that over time a category will divide and become two or more categories. Take computers for example, when it all started you had computers and main frames. Now there are mini’s, phones, tablets, phablets, laptops and the list goes on. Looking at our own industry and we can apply this one pretty easily. When I started in this business there was really only one category and that was the big bucket of mattresses. Later came pillow tops as a construction type and then specialty and most recently the hybrid which is obviously the most fun of the categories. Don’t agree? Do any of the other categories have their own rap song and music video?

Law #11 is the Law of Perspective and it says “marketing effects take place over an extended period of time…The long term effects are often the exact opposite as the long term effects.” Is alcohol a stimulant or a depressant? It depends on what time of the night you are in the bar doesn’t it? Early in the evening when you have had a few cocktails the volume level of the bar increases, the jokes get dirtier, and the evening gets a little crazier. Check back with that same group around 2 or 3am and what are you seeing? The depressant side of the coin unless of course you went to college with us at SFA, in which case we were just getting started, but I digress. icon smile The Law Of Division And Perspective

What is the short term effect of running big sales in the mattress industry? Sure it drives business for the holiday you are focused on, but does the consumer ultimately learn to wait to buy from you until the next big holiday? The largest retailer on the planet, Wal-Mart, is EDLP or every day low price so I am certain it works but maybe only for general merchandise? That’s not true either because there are some very successful mattress retailers out there that do a bang up job with EDLP price structures. If sales are the drug of choice for our industry, does that make financing the crack/cocaine of the industry?

 The Law Of Division And Perspective

The short term effect that sales and finance offers have on our business is easy to see as it relates to sales spikes. The question on the table is, will those short term gains ultimately have a negative impact because the consumer doesn’t like all of the BS that comes with it. Much of it is deceptive and that can only hurt you long term. Mostly in this transparent age of the internet.

What do you think about the Laws of Division and Perspective, have I missed it?

The Law Of The Opposite

I wasn’t much on “follow the leader” when I was a kid, and for those of you that know me, that probably comes as no surprise. Not that the other kids didn’t have good ideas or take good paths, I just liked to do things my own way. Still do. According to the 22 Immutable Laws of Marketing, “You must discover the essence of the leader and then present the prospect with the opposite. (In other words, don’t try to be better try to be different.)” Remember the old Coke vs. Pepsi which soon became Pepsi the NEW GENERATION. Go against the establishment and see what that gets you.

 The Law Of The Opposite

Applying that law to this industry made me think of a few examples. Consider the brilliant job Tempur-Pedic did attacking innerspring beds. Those guys were not only trying to be better than the beds in the market, they established themselves as different. They got a lot of attention for that effort and built a nice business from it. Sealy, Simmons, Serta, and just about every other producer out there tried knocking them off and for a while, many of them failed. There are a few reasons for it I think, but one of them is because they were trying to be a “me too” and simply duplicate what Tempur-Pedic had already done. Then Serta got smart and went after Tempur-Pedic in the same way that Tempur-Pedic went after the innerspring category. They told consumers that they had a NEW gel foam bed “without the potential negatives associated with traditional memory foam sleep systems.”  They took Tempur-Pedic head on and presented themselves as the opposite of what Tempur-Pedic was and as result, Serta had the best product launch in the history of the company.

There is a lot to learn from the top dog in every industry, but there could be something to attack at the same time. Where is your competition vulnerable?

 

 

 

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The Law Of Duality

“In the long term, every market becomes a two horse race.” Really? I don’t think so. Especially in the mattress industry!

Law #8 in the 22 Immutable Laws of Marketing is the Law of Duality which basically says if you are not in the top two you are likely not doing much in the way of market share. In our industry the top four guys are separated by a very slim margin of market share. So how is it that we buck this law? I’m not sure I have the answer but I will suggest a few things for your consideration:

 The Law Of Duality

It’s a very close race.

  1.  Serta, Sealy, and Simmons really haven’t invested in their brand all that much. Don’t get me wrong, they are investing like crazy through co-op advertising spend, some national budget, and certainly through their sales force acting as brand ambassadors but in the long run, nobody has really pulled away from the pack. When you give the majority of your marketing budget to retailers to place product and price promotions on your behalf, it does very little to advance the consumer preference for your brand or to do what you really need it to, which is to separate you from everyone else.
  2. The “S” brands have never really found the sweet spot in a message or ad campaign to make them that much different from the other guys. I will give some credit to Serta with the Counting Sheep because they have advanced that pretty well over the years, but it has not helped them pull away from their competition leaving anyone in the dust.
  3. The products are all pretty much the same. Forgive me for speaking such blasphemy but at the end of the day tell me what makes them so different from one another? They all use foam cores, innerspring cores, ticking, foam toppers, gel/foam toppers, some latex here and there, they all have some sort of edge support, and they all have the exact same box spring. (Well it does exactly the same thing anyway.) Yes there are some differences in components but when it comes right down to it, does the consumer really get it? Aren’t all of the manufacturers sort of clustered together? You could easily say the same about other consumer product groups today, but if they are significantly ahead of their competition, they have likely done either #1, or #2 very well to help them pull away.

If you are going to be one of the top two guys dominating an industry you have to figure some of that out. If you look at other industries where two guys dominate, I bet one of these three things I point out here are different, meaning they do STAND OUT in some way.

If you are wondering why I have not mentioned Tempur-Pedic, its because they do stand out for a few different reasons but still have not run away with any market share lead which begs the question why? Their product used to be significantly different, their marketing spend is much higher, and their message is much better if you ask me. All that said, they should be better off than the other guys but even they haven’t blown anyone away.

It is not my intention to upset anyone, but simply to point a few things out as it relates to this book. It isn’t as easy as I make it sound here as there are many more factors but you can see some of what I am getting at. We need to give the top guys some credit because changing some of this stuff is incredibly difficult. It is very easy to say that you need to spend more on your brand but convincing the bean counters of that isn’t easy. So for now we will likely continue to be an industry that is happy to define our own immutable laws.

 

 

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