Friday, February 7, 2020
I’ll start with an excerpt from a book called, ‘What They Don’t Teach You at Harvard Business School’, by Mark H. McCormack, one of the most successful and honoured American entrepreneurs that has ever folded a dollar bill.
It’s from the opening of Chapter 8 titled, ‘Marketability’:
‘Many years ago, I was having dinner with André Heiniger, the Chairman of Rolex, when a friend of his stopped by the table to say hello. ‘How’s the watch business?’ the friend asked.
‘I have no idea,’ Heiniger replied.
His friend laughed. Here was the head of the world’s most prestigious watchmaker saying that he didn’t know what was going on in his own industry.
But Heiniger was deadly serious. ‘Rolex is not in the watch business,’ he continued. ‘We are in the luxury business.’
It is knowing what business you are really in and understanding the underlying perceptions that connect your product to the people it is being marketed to.’
Think about that for a minute.
I’d have probably laughed too if Rolex’s top man said they know nothing about watches, as I would if the boss at Bentley Motors said he or she had no idea about the automotive sector. But it makes perfect sense in both cases.
After all, if all you wanted to do was tell the time, you’d buy a cheaper wristwatch than a Rolex. There are probably some great timepieces that keep to the minute from one daylight saving to the next that can be bought for £50, or less. And nobody buys a Bentley Mulsanne because it presents a safe and efficient way of getting from A to B. The man with both the watch and the car doesn’t arrive on time and in one piece, they arrive in style to a chorus of oohs and ahhs.
It’s an important theory to understand because we can easily misinterpret the marketplaces where we sell our products and services. My company is in the lifting sector and I would be able to answer the question over dinner, ‘How’s the lifting business?’ But, really, the ‘lifting business’ is only a term given to fellow distributors and manufacturers who make and sell products that lift. When we’re on a construction site, we in the construction business; when we’re underground, we’re in the tunnels or infrastructure business; when we’re backstage at a theatre, we’re in the entertainment business; when we’re offshore, we’re in the oil and gas business.
True enough, we’re always involved in picking something up and putting it back down again, but the type of product, its specifications, design and durability is completely dictated to by the point of use. No purchasing decision maker at a wastewater treatment plant ever said they want a davit arm; they said they needed a solution to pull a submersible pump to change a seal. The arm is therefore as much a tool of their trade as it ever is an item of lifting gear. The fact that a davit arm could also be used on a rooftop for changing filters on air conditioning units is irrelevant to the wastewater professional.
Consider the two buying decision makers involved in sourcing the same arm. One might be a water quality professional and the other a hospital facilities manager. So, the davit supplier is really in the water and facilities management businesses.
I speak to a lot of end users and in many cases, they have to think twice before naming a crane, hoist, or item of rigging. To them it’s a means to lift an industry-specific load and make a secure connection. And it’s very often an afterthought. In some markets, they use terminology that’s different to the lifting sector. A stage rigger might call a hoist a motor, for example. An astute seller to the sector will call it the same thing; they’ll immerse themselves in the marketplace. They’d become a stage equipment company, not a hoist or lifting business.
Food for thought
It’s been timely for us to digest this theorem here at my company recently, particularly as we continue to present the JD Neuhaus (JDN) range of Mini Next Gen air hoists to purchasing decision makers in extreme environments, and onboard the German manufacturer’s new line of food grade Mini air hoists. When we’re on an oil rig taking an order for explosion-protected hoists, we have to think like offshore professionals and apply the technology to that sector. When we’re donned in cleanroom apparel—hoods, goggles, face masks, and special boots are just for starters—on a food or pharmaceuticals site, we have to become experts in solutions that lift and move loads in the food and pharmaceutical sectors.
If we only thought like a lifting company, we wouldn’t understand the requirement for food grade-approved chain lubricant. If we adopted the same mentality for every product, we wouldn’t be able to recognise that resistance to corrosion and high levels of humidity is more of a concern in one sector than another.
This is why clever marketers have different strategies for presenting the same product to a myriad of markets. A hoist (or motor) that raises a truss at the theatre might be called StageLift and painted black so it doesn’t interfere with sets and scenery, while a hoist that operates in a cleanroom may be called CleanLift and painted white to fit in with the sterile environment. It’s not actually a hoist at all. Remember, the Rolex isn’t just a watch and the Bentley not necessarily a car.
A balance must be struck, however. Of course, buyers in specialist and niche markets want to be assured that they’re working with experts in their fields. Lifting companies must stay in their wheelhouse, but tailor their expertise. The end user must have faith that the product is being supplied by a reputable company and also that it is not being shoehorned into their application. Don’t use a case study from a residuals and biosolids farm to demonstrate the ability of a hoist to raise vats of drinking water at a bottling plant. Lots of things weigh a tonne and the pick points might be broadly similar, but the end user markets completely different.
It’s important to market a product to each sector accordingly. Fords and Bentleys aren’t sold on the same forecourt. It’s not cost-effective, or astute, to have a different brand for each end user marketplace, but advertisements and exhibits should be designed to appeal to the audience of the day. And think outside the box. McCormack convinced Heiniger to take a major sponsorship deal at the Wimbledon tennis tournament because of the lushness and luxury connected to the tournament. The All England Lawn Tennis and Croquet Club isn’t associated with affordability and it’s unlikely that many players or fans wear Casios.
As a note of caution, niche can make or break you. Diversify too often and too broadly and you’ll be stretched too thin to make it work. If a single service van driver has to change from cleanroom clothes to hardhat and headlamp too many times a day, it’ll be counterproductive. Working with JDN has helped us because they are already experienced in providing solutions to these markets; we can lean on their expertise and knowledge. It’s advisable to crack one sector before going onto another, which is why we are introducing different air hoist products in a piecemeal fashion.
I’ll conclude with another excerpt from ‘What They Don’t Teach You at Harvard Business School’:
‘If we have had a formula for growth it has been: start with the best; learn from the best; expand slowly and solidify our position; then horizontally diversify our expertise.’
It’s a good guide for anyone with a transferable product or service.
Rope and Sling Specialists Ltd