As a brand consultant operating in Port Elizabeth for the last ten years, I have noticed brands go through the unfortunate condition I call “the slow fade”. The slow fade is a condition whereby brands devalue themselves in order to compete with other companies. Most never realise that price is only one of the factors involved in gaining business and clients.
During a consultation this week with a local Port Elizabeth walling company, the owner explained to me how they were cutting prices to the point where they were not making any profit, only covering cost. Competing against 4 other companies, this is apparently the occurrence putting this industry under immense pressure. This has resulted in companies using sub-par materials and methods.
The problem they are facing is that he refuses to lower his standards in manufacturing and instillations. He can provide a proper quality product at the right price, but have to compete against companies substituting quality and under quoting on a profitless job.
I fully understand that the economy places many under pressure, but does brand quality not count for anything anymore? Spending some time investigating their predicament, I realised the following.
- They are offering a well-made durable product
- They have trained staff, manufacturing and installing their walls
- They have the right business registrations and safety procedures in place
- They have enough vehicles and staff to offer fast service
- They pay their staff and managers a fair daily wage
- They have managed job sites
Most of the other companies (not all) are operated by a single person multi-tasking several sites. A common problem that occurs is that instillations take longer, are not done properly or are left undone due to cash flow.
Now the question I pose… with as little as 10 to 20% price difference, would people not rather trust an established and proper run business?
My advice to him is the same as I teach all my clients, value your brand by creating market trust. We have gone back to the drawing board and created a new branding plan for her business, focusing on the following aspects:
- Educate your clients in your sales pitch that your focus is on quality and lasting service, not a quick buck
- Your business is set up and operated in industry standards for your benefit
- Establish brand trust by leaving a client happy and satisfied, above saving him a few bucks
- You offer the right product at a competitive price
- Present your business in a quality way, no skimping on sales pitches and material. Spend money and create a lasting business.
I have found in my own industry that many times we lose a contract to another company, but then gain the client back in the future thanks to bad service or inadequate work, but disgruntled about the time and money wasted.
So what I am actually saying, you get what you pay for, so don’t be penny smart and dollar dumb.
Source: Unfortunate Brand Decay in Port Elizabeth
Some businesses do recover from Brand Flops though – take the example of the Ford Edsel:
Ford dubbed 4 September 1957, the day the Edsel debuted, as “E-Day” and spent the year leading up to it pushing a teaser campaign for the new brand and the new car. At launch, Ford made 18 different versions of the Edsel available – an unheard-of move at a time when most car companies offered just a few models. The Edsel was supposed to be everything American car buyers wanted; however, it was a terrible flop.
Ford started developing the Edsel in 1955, based on polling data from car shoppers – but unfortunately, the company disregarded much of the data from the polls. Ford’s marketing department also overpromised on the Edsel. That yearlong teaser campaign had whipped the public into a frenzy, leading everyone to expect the car of the future – something the Edsel clearly was not.
The Edsel was saddled with quality and reliability issues from the very beginning. Its price was another sticking point: It started at $2,500 and topped out at $3,800, which was much more expensive than other Ford models at the time. Adding to the Edsel’s woes was the fact that it debuted at the beginning of a recession. An expensive Ford didn’t look like a good option for most consumers.
Actually, most people didn’t think the Edsel looked good, period. Ford designers wanted to make it stand out, so they hit on the idea of a vertical grille. The thing is, a car’s grille has a specific purpose: It allows air into the engine bay to keep the engine cool. In order to keep the Edsel running, that vertical grille had to be enormous, which made the entire car look silly in the eyes of critics and consumers.
Ugly, overpriced, overhyped, poorly made and poorly timed, the Edsel was made for only two years. Ford pumped $250 million into the Edsel before launch (it is estimated that the eventual cost was $350 Million). The “car of the future” is now a cautionary tale in business classrooms, though there were actually a few winners in the case of the Edsel. That flop of a car is now a rare collector’s item. Relatively few cars were built between 1958 and 1960 (when production ended), and Edsel convertible models can fetch as much as $47,000.
Why Edsel?
Ad men got to work thinking up thousands of names and testing them in focus groups with civilians and Ford execs, and even consulted the Pulitzer Prize-winning poet Marianne Moore for the perfect name for the perfect car. (Moore suggested such absurd names as the Utopian Turtletop and The Intelligent Whale.) Despite endless hours of testing and consultation, the chairman of the board decided at the last minute that he was going to go with Edsel, the name of Henry Ford’s son.
The Gates Connection:
The late John Brooks’ book “Business Adventures,” a collection of New Yorker articles from the ’60s that was republished in 2014, Brooks explains what went wrong in the story, “The Fate of the Edsel.”
“Business Adventures” is Microsoft founder and philanthropist Bill Gates’ favourite business book, and he finds the Edsel piece especially interesting. He explains in his blog:
[Brooks] refutes the popular explanations for why Ford’s flagship car was such a historic flop. It wasn’t because the car was overly poll-tested; it was because Ford’s executives only pretended to be acting on what the polls said.
“Although the Edsel was supposed to be advertised, and otherwise promoted, strictly on the basis of preferences expressed in polls, some old-fashioned snake-oil selling methods, intuitive rather than scientific, crept in.”
It certainly didn’t help that the first Edsels “were delivered with oil leaks, sticking hoods, trunks that wouldn’t open, and push buttons that … couldn’t be budged with a hammer.”
And, because it was 1957, Ford decided to have two media previews, one for male reporters and one for their wives. In the former, the Edsel was driven around a stunt course as if it were in a Hollywood blockbuster – at one point an Edsel almost flipped.
Gates mentions in his blog that the women’s event, a fashion show, was one of his favourite passages in the story because the host was revealed to be a “female impersonator” (i.e. a man in drag), which was not only bizarre but, as Gates says, “would have been scandalous for a major American corporation in 1957.”
References: Why the Ford Edsel Failed | 4 lessons from the failure of the Ford Edsel, one of Bill Gates’ favorite case studies
Alan Straton
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