More Is Sometimes Just More

I have a client that no matter what I tell them they seem to rush headlong in the wrong direction.? They are so obsessed with staying current and being with-it and hip that they do not realize that their actions are leading to their destruction.

I just finished some market research and it is not good news.? People love the brand and their products, but they are twice as expensive as their nearest competitor without being twice as good.

Their competitors are most local mom-and-pop chains that are able to not only undercut their prices, but also deliver better service.? Even national competitors offer a comparable product for less than half the cost.

The only differentiating factor is that my clients offer a wide variety of products that their competitors do not.? The problem is that the core line-up of all the companies in this space is the bread-and-butter.? No one wants my client’s specialty offerings.?

They spend millions on research-and-development, licensing deals, and the like which forces them to occupy a premium segment in product that has only one national premium competitor.? My client is also the least profitable.

Domino's is currently touting its “Perfect Combo Deal” at just under $20.? A local pizzeria cannot compete with that value.? Its national competitors in that space can.? What a local pizzeria brings to the table is that it may taste better, it may be more authentic, and it is owned by someone you know.

This is the law of the jungle.? The big guys do it for less.? The little guys compete on overall quality.

My client should be following these guidelines, but they are eschewing them in favor of their own rules that are leading to their disastrous end.

There is nothing wrong with going your own way or carving your own path, but you need to cut your losses sooner rather than later.

Their internal team came up with a crazy idea.? Since people are not buying in regular single serving portions, how about discounting when you buy in bulk.? They have the margin to cut on bulk orders.

That approach is akin to hiring someone who fails and them asking for more money to do it on a grander scale.

Can you imagine a supermarket realizing that customers are staying away because the prices are too high then offering to throw in a chest freezer and meat slicer at cost if you purchase a month’s worth of groceries at a time?

It is pure lunacy.? If you compete in an industry where people want the basics at a good cost, do not reinvent the wheel.? Give them what they want.? If you want to try something new, then do it while delivering on what people want.? If it fails then you still have the old steady to keep you afloat.

There is nothing wrong with trying and failing.? It is when you fail to realize when to stop that it becomes problematic.

Learn from my client’s mistakes.