Dear CMO:

Giants exude a smug arrogance. They may have earned their way to the top but often they forget that a one time masterpiece does not a dynasty make. They start believing their press. They’re clinging to the back-end of a rocket and convincing themselves that they’re steering. It’s our job to bring them down. It’s a new year. The War of the Flea has begun.

How do you kill a giant? I’ve been on both sides of this in my career, so far, so between what I’ve lived through and what I’ve learned from others, here’s a good discussion starting point. Classroom participation is mandatory, so I’m counting on my loyal ten readers to add their words of wisdom here. Don’t make me cold call you. I will.

Killing Giants:

Lesson #1: Aikido

Familiarity breeds contempt. Use this, their size and their popularity against them. If I was competing against the iPod, this is where I would begin. They have 80% share and therefore are by definition a “mass market” product – they did iTunes right, have a nice MP3 player (not without problems) but they charge double. “We” have performance for a fraction of the cost.

Consumers are smart. They know when they’re paying too much. Remind them. Performance is everything. And image is nothing.

And by relying on this ‘performance is everything’ platform – which you can back up – you’ve just carved out an image of your own. You’re a populist in an age of fluff. Now animate this in a dozen smart, positive ways and start carving out share. The iDont campaign was well-aimed by a smart company with an excellent agency, but they missed the mark and received a bit of deserved backlash because the campaign went negative. So say the blogs. You don’t have to go negative.

Lesson #2: Thin Ice

Go where they can’t go because of their size, their capabilities, or their structure. Lead them out over the thin ice of your own creation. At Plantronics, we positioned our own specific technical capability – making boom-style headsets – against the bigger guys who also sold phones. The sound transmit of a boom is better because the mic is next to your mouth, not dangling around your collar. We quantified the impact of the distance on transmit quality in the lab and then trained our retailers that the difference between a boom and an ear bud was the same as walking down the street and then passing a jackhammer.

We also launched a series of enterprise campaigns to drive headset adoption in the enterprise with a heavy dose of PR talking about how our field salespeople helped office workers pick which headset style worked best for them in their offices. Our competition didn’t have a field sales organization. We won by default.

Lesson #3: Inconvenient truths and ROII

Back in the 90’s, we launched Sony batteries in the US. We got a foothold in the US market just as I left the company. This was an ill-fated product launch, but it proved an interesting point. By measuring the return on inventory investment (ROII), calculated as [turns] x [margin], we financially proved our case to several key US retailers that they made a better financial return on every dollar invested in Sony inventory than they did with Duracell and Everready. It warranted a test. And we got on the planogram.

This same strategy worked with our other blank media products. We took VHS tape from a #4 position to a #1 position, with a market size twice that of our nearest competitor, in a pure commodity market – a 10% drop in retail price caused a jump of 1,800% in unit volume in mass merchants — using ROII data. Our products turned faster because we promoted very effectively, even at a slight premium to the market price.

Figure out the mathematical scenario where you make them more money: if you don’t turn as fast, give them a higher margin and figure out how to increase your turns until your ROII is better. Show them the math and start carving out share.

Lesson #4: The War of the Flea

Can’t outspend them? Win at the point of influence. Winning the channel’s hearts and minds can work where brute force, which giants are known for, can’t. They run national advertising? I run a channel spiff. They drive traffic. I get the sale. They spend millions? I spend thousands.

Does your competitor lose focus, even for a moment? Take advantage of it immediately. A competitor discontinues a particular product in the enterprise market that has an installed base – you launch a guerilla campaign at their installed base showing how your competitor has just orphaned the product they just bought and offer a trade-in to your product. Another Plantronics tactical move that absolutely confounded our competition and left them churning for a quarter.

Does a competitor’s senior marketer leave with no heir in place? Now is the time to launch a sticky, difficult to counter program (like the PLT example, above), just in time to wrong-foot them with no one in charge. How RIM missed this opportunity recently I’ll never understand.

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Key Takeaways:

> Aikido: use their popularity against them. Be a populist in an age of fluff.

> Thin Ice: lead the giant out over the thin ice of your own creation.

> Inconvenient Truths: make the math work to your advantage.

> The War of the Flea: win at the point of influence. They spend millions? We spent thousands.

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This is the year of killing giants. I said so in my resolutions. How are you going to kill the giant in your industry this year?


Copyright © 2007 Stephen Denny