Product marketing failure due to a merger

 

Here is an example of what is probably my most frustrating pet peeve.  As a marketing and product-design professional this irritates me more than just about anything else in business - the replacement of one perfectly good product with a worse-designed, inferior one as a consequence of a merger or corporate buyout.

Eldon 10484 Simplifile box

The first picture is of an Eldon Storage ‘Simplifile’ file box, which accommodates letter-sized documents, including in hanging files, in a sturdy tote that will keep out rainwater and spills and can be easily carried by someone who’s already got his hands full.  I have two of these, one for business and one from when I taught school.  This thing is invaluable to anyone who must lug about a lot of papers and forms. 

Note that the box’s handle is fastened to the sides of the box body - in fact when the handle is rotated to vertical it locks the lid closed to avoid inadvertent spills.  More importantly, the sides of the box - from which the files inside depend - bear the weight of the load inside.

Rubbermaid 39346ROS file box

The second one is of the Rubbermaid product that replaced the Simplifile box when Rubbermaid absorbed Eldon.  It has a similar capacity and has sold for a similar price.  Note the very crucial design difference. The Rubbermaid box’s handle is fastened directly to the lid.  It isn't as useful (you can't hook it in your elbow) and it will leak rainwater through the handle points in even a light drizzle (destroying the paper inside).  Worse, all of the weight of the load is borne by the plastic catch that holds the lid closed.  If this catch were to fail (from weight) or not be completely or correctly closed, lifting the box will result in a spill, exposure to the elements, a loss of security, and so on.  By design the Rubbermaid box has no benefit over the Eldon one - in fact it is technologically inferior in major ways that matter to the consumer. 

The Eldon Simplifile boxes are no longer made.  ALL small file totes of this general size on the market today are made with the handle mounted to the lid, which is the worse of the two designs.  When Rubbermaid took over Eldon, no one at Rubbermaid thought to evaluate the Eldon design and to consider that, just maybe, the intellectual rights they had just acquired meant they could produce a superior product to the one they had been making through Rubbermaid.  Why did they even buy the company?  My guess is that they meant to put Eldon out of the market, since Eldon had been making too smart of a product to coexist with the Rubbermaid range.  This shortsighted, fear- or ego-driven mentality is more common in industry than most people think.

I first became aware of the stupidity of corporate marketing schemes when, in the 1970s, under Pepsico Foods, Kentucky Fried Chicken merged with Roy Rogers Hamburgers, and they eliminated the very good RR French-fried potatoes and kept only the greasy KFC ones.  They had both available; and for no sensible reason they chose the inferior one.  Since then I have found that there is never a true ‘merger’; the stronger company always seeks to eradicate the other company from the market, as though that is the primary reason for the buyout.  Almost never is it a move to gain new technology or to expand selling channels (the 1980s-1990s Chrysler/Jeep/AMC/Mercedes-Benz combo being an exception).  And, worse, you can take for granted that the better of the two companies’ products will be the ones that will NOT continue in the new market landscape.

Sadly, real-world marketing isn’t usually about making terrific products of clear intrinsic value available to a broader customer base.  It’s more likely based in fear, perception, and a perpetuation of that age-old logical fallacy, ‘If it doesn’t sell, it’s because it’s bad.’  More likely the case is ‘If it doesn’t sell, it’s because nobody is actively promoting it.’  When you think of all the truly BAD ideas (Lincoln Navigator, Microsoft Windows, steel entrance doors, VHS, everything about Comcast) that have been aggressively promoted over the technically superior alternatives, you wonder why, when the difference is so clear and, due to a buyout, so readily available, the dominant company won’t accept it and won’t move to benefit from it.  But the fact is that most often they don’t.

The truly intelligent marketer will recognize potential gain in every new idea that stands as though in opposition to its competition.  If it’s a rival’s idea, one should accept it for its virtues, identify what makes it good, and work to develop something that builds on those ideas and is even better.  If it’s one’s own company’s idea, one should take every opportunity to promote it assertively, to enlighten the public about its unique features, and to encourage comparisons and competition in the marketplace.  That's called 'innovating' and 'driving the market'.  Remaining complacent, letting the market drive the company, living in denial about the superiority of the competition’s product or procedure is lazy, even stupid.  Such marketers don’t deserve to be in the marketplace at all - for ultimately they deny the buying public access to better products and services that, though within grasp, were shelved due to reasons that have nothing to do with improving customers’ lives and making profit into the bargain.

I’m not afraid of different ideas that appear unusual, even quirky, when compared to the current market.  I view promoting them as a challenge; and as a former classroom teacher I have the ability to ‘talk up’ the benefits of good ideas that fly in the face of the competition-maintained status quo.  If we don’t offer these choices, on a level playing field, to the discerning public, how do we know we’re not missing out on plenty of opportunity - in a market in which we may well hold the upper hand?

Call me; and we'll see how we can promote your best ideas in the best light.

- JC2

'Miracle on 34th Street’

 Mustang survival child's PFD life vest

 

Before I started at West Marine I’d been an avid customer of Boaters’ World (whom WM effectively put out of business).  But they didn’t hire me and when I started at WM I was still getting the BW catalogues and the people in the store all knew me well.  One day a customer at WM came in asking about a Mustang child’s life preserver in an advertisement.  I realized it was a BW ad and that she had mistaken WM for BW; so I tried to find something in the store that would serve for her.  But she wanted the Mustang brand; and (at the time) WM didn’t carry it.  There was really no way to get any money out of her.

So my socially-responsible side came out and I dialed a number I knew well.  ‘Hello, Joe; it’s John over here at West Marine.  I’ve got a customer here with an ad for this Mustang life jacket; do you have that in stock?’

Joe, at Boaters’ World, seemed like he thought this exchange quite bizarre.  Of course he knew who I was and that I’d been a customer; but he had probably never received a call like this from any West Marine staff ever.  ‘Yes, John; we do have that in stock; it’s right here.’  (Good answer, by the way.)

‘Great, Joe; I’ll send her right over.’  The customer thanked me and went off - towards Boaters’ World.

At a West Marine district meeting, at which three stores’ staff were in the room, the manager asked for any peculiar matters we’d encountered, and I related this story.  The entire room of WM associates sat in silence, aghast that they were present on the evening the DM fired me on the spot.  But Melissa only smiled at me; and I told the second half of the story.

It wasn’t two weeks later that I got the (inevitable) call.  ‘John, it’s Joe over here at Boaters’ World.  I’ve got a customer here who needs a part; and we don’t have it in stock; can you help him?’

 

We’ve all seen the same thing happen in the film Miracle on 34th Street.  I’m here to tell you that it actually works.  As I explained at the meeting, when that woman walked into the store, I had two choices: I could send her away with nothing, and make no money off her; or I could send her away with a clue as to how she might get what she wanted, and make no money off her.  The option of making money off a happy customer was not there.  So I provided for her what she really came for: the information of where she could get exactly what she wanted.  The customer went away happy and would remember where she had got the help.  And the upside was that Joe at BW did return the favor, for the same reasons.

I’ve found that in most businesses, it doesn’t have to be about greedily taking money out of customers’ wallets.  It’s more about providing help that has value.  Customers who see that a vendor has their needs at heart, even to the point of not needing to make money on every single transaction, will call on vendors whom they trust; and that trust will pay its dividends in regular patronage for some time to come.


Implementing a sound policy for customer service is a key area in which retail salespeople can always use fresh ideas.  Call me; and we'll see how we can improve your customers' experience when they're calling on you. 

- JC2

Kinder, gentler upselling

 

Sierra 18-7945 marine fuel-water separator filter

Around 2005 the marine industry got hit with an entirely unexpected problem: the consequences of using and storing ethanol-blended gasoline.  Boaters in the US Northeast are typically lucky if they can use their boats six months of a year, leaving the poor boat freezing and out of the water for the other six months.  Following time-honored practice, most boaters completely fill their fuel tanks at the start of the winter, on the premise that to do so avoids the problem of condensation.  But ethanol-blend gasoline absorbs water like it’s meant to; and the chemical bonds between the petroleum and the water-based ethanol compound will break down in as little as 6-8 weeks.  Thus these boaters can be left with 150 gallons of dissolving fuel that will yield truly rotten performance, if it will even serve at all, till they’ve used it all up - which, if they continue to pour new fuel into any remnant of the old, affected fuel, can last forever.

Upon discovering this, I learned everything I could about the technical aspects of ethanol-blend gasoline, especially about how it pertains to the boater.  And every time I encounter a customer complaining about stalling, balking, missing, hard starting, I ask him about his fuel-water separator filters.  About half of them look at me with a blank, unknowing stare.  So I show them to the section of the store, and explain the (relatively cheap and easy-to-install) fuel-water separators, explaining why they’re important.

I’ve never considered that this constitutes ‘upselling’.  Indeed my goal is not to get more money out of the guy while he's standing in the store but to help enrich his pleasure-boating experience.  But the numbers don’t lie: most of them buy the parts (about $45.00) from me and took my advice about changing the filters (about $7.50, three or four times a season), and return with gratitude and relief.  ‘That solved it!’ they say.  ‘Nobody ever told me about that before.’  And I earn another confident and loyal customer.


Effective upselling isn’t about the seller’s needs; it’s about the buyer’s.  Consider how many times you’ve gone to buy something and the salesperson suggests adding some item that has nothing to do with it, simply because that’s what they’ve got on sale this week.  This impersonal treatment will annoy customers, who may fear they’re being treated like open wallets on the table.  But sincere, focused, practical advice, coming from an informed salesperson who has listened to the customer, has correctly ascertained his problem, and can promote the appropriate product or service to directly and succinctly address the customer’s real needs, will always be welcome - and, in my experience, will always result in the customer’s return to the store (with his wallet).

I’ve found that, as the salesperson, it becomes almost like a game between these customers and me - John helped solve one problem; can I stump him with the next one?  But if you’ve been in the business as long as I have, you’ll be able to take on the next dilemma with confidence and good cheer; and the customer will again reward you - really only pay you the respect you deserve - by granting you his regular business.


Technical customer service is one of my pet areas for sharing ideas and developing sound strategies.  Call me; and we'll see how we can improve your customers' experience when they're calling on you.

- JC2

Customer service is NOT sales!

 

 

photo courtesy of Shutterstock

Any glimpse at modern ‘help-wanted’ listings will reveal a huge list of openings in ‘customer service’. Call any of them and chances are the job will include phone and web-based sales, often including cold calling and the expectation that the staff member will close each deal on the phone as a result.  This is completely separate from ‘customer service’, which by its very name entails the serving of a customer (who is already a ‘customer’!). 

Customers phone or visit vendors for many reasons; but the ‘I need technical help!’ plea may be the most crucial for both sides.  If your business is based on product knowledge (that is: you are not Amazon), providing an appropriate degree of assistance to really anyone who asks is a key part of your job.  Demonstrate to each caller your eagerness to listen, to care, to offer the right products and services, and your sense of respect for his needs and your sense of professionalism, and your reputation will flourish.

No; you might not get paid today; but a satisfied caller is a loyal customer already in the making.  Customers patronize vendors who elicit their confidence.  Consider this an investment in your business’s success - for you will reap the dividends, usually before long.

Here are a couple of my usual admonitions regarding customer service:

1. Don’t leave people on hold.  If it cannot be avoided, limit it to about 45 seconds (max).  If you can’t assist the caller at the moment, take his name and number and get a one-sentence description of the problem and inform him of when, realistically, you can call him back.  Then, do it in less time than he expected to have to wait, and give him your full attention.  If you’re unable to do this on a regular basis, you need more customer-service people on staff. 

2. A staff member answering incoming customer-service calls must do one of only two things: immediately help each caller competently or immediately route the caller to someone who can.  If the first thing a caller hears from a customer-service staff member is ‘Um -’, or ‘Well -’ or ‘So -’, his first reaction is to believe he’s reached the wrong person to help him - an impression that will not go away soon.

3. Upselling is fine - so long as it is truly relevant to the caller’s needs.  A caller asking about thermostat housings doesn’t want to hear a rehearsed script about life jackets on sale. Regular customers won’t mind - they already know you - but a caller out of the blue should receive your very best impression, and that doesn’t include treating him like ‘just another’ (even though, to this point, he may be).  Advise him of which tools he needs, caution him about specific signs of engine overheating, and absolutely sell him the correct gaskets and adhesives, and he’ll consider you a font of information whom he will definitely call again.

Technical customer service is one of my pet areas for sharing ideas and developing sound strategies.  Call me; and we'll see how we can improve your customers' experience when they're calling on you. 

 - JC2

Inventory is money

 

broken bottles at liquor store after California earthquake; courtesy LA Times

It’s easy to get waylaid in your retail business by the perception that all those items lying around are just stuff.  In reality, you paid for that stuff and expected to make a profit on it.  By overlooking this fact, a small business loses control of what they have and how much money they’re making - or losing.

From the liquor industry I learned that if ten cases of beer go missing each quarter, management will shrug it off - it’s breakage; it was priced wrong; we had a few minor thefts not worth reporting.  But if the same amount of cash goes missing, everyone starts rummaging in other people's desks looking for a stash of twenties.  Why are these treated differently? - in a business sense, they’re exactly the same thing.

Anytime a business discards inventory without adequate reporting - damaged on shelf, received not in sellable condition, customer returns - is a monetary loss.  Don't do it!  Sad as it is to face losing money, inventory accounting is a crucial - indeed, core - process that must be done to run a tight ship.  If anything, losing inventory is actually more expensive than losing cash, for it includes the real costs of ordering, receiving, stocking, and counting the stuff.

I'll go so far as to state that the knowledge of what’s present and what’s sold or lost is the difference between a well-run business and an operation that only pretends to be playing shop.

Let’s agree on these two rules, then:

1. Inventory is cash.

2. Knowledge about what we have and what we don’t is key to solvency.

Inventory management is my area of expertise.  Call me if you want to have a firmer grasp of what you have and what you don’t.  I can show you how.

- JC2