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 Innovation Kitchen Event Resource Page Speaking at "Innovation Kitchen" Event Gold Coast as a Guest of Rowena Bell-Bradbury, Department of Innovation, Industry, Science and Research on November 17th 2009.
Building a Brand creates Value, all else is cost! You have, no doubt, heard or read about the importance of building and protecting a brand. Today, I am going to repeat that message and try to “bring to life” the way I have done this (so far) including traversing some slippery slopes. When asked “what my business is” by those who may be expecting a summary of manufacturing, my reply is always: “we design, build and market a brand of off road products”. Now, we have to build the majority of the products as there is nothing else available. The manufacturing is by far the hardest day-to-day task and it can quickly consume most of your attention to improve your business’s bottom line. However, it is not the focus when talking about building a brand. The focus is “Design” and “Marketing”. As a side note, there common thread across all 3 areas which is “Lean Manufacturing, Lean Design and yes, Lean Marketing” And here is the first step BEFORE any journey: “start with the end in mind”
What does this mean? Brand is a combination of product and service (delivery). Lets talk “service” first: The bigger the geographic area, the more the product plays a key role and the service is harder to create. In a tight geographic area, service can be the corner stone to your strategy. We sell through Dealers and so rely on their service as well as our own. Virtually all of our competitors sell less than a quarter of the number of units we sell and they sell “direct” to the retail customer. They can better control their intimacy with customers and their direct service but we are “local” in every state with the dealers. We rely on the Dealer’s level of service and control it by having a very tight Dealership agreement. Trying to better educate, communicate and maintain a high level of dealer service is a constant focus and one that is my role. Lets talk “Product”: Our product strategy is one of value. We define best value as the lowest cost to the consumer after they have purchased, used, and resold the product. (This assumes the product suits their needs) Product Value= +Purchase Price + cost to use – resale Price In this equation, we decided to concentrate on lower “cost to use” and higher “resale Price”. There are a lot of balls in the air here. In short, I believe design and technology are the keys to this equation. And you have to refresh your designs regularly based on customer input and changing requirements. You have to believe that innovation is essential to your business strategy. In 2003, I set a goal of being the biggest off road camper trailer manufacturer globally. What I can say is that the goal was a slippery slope: It is far too big an investment right now to have global innovation on large capital products. In the midst of the GFC (2008), I changed this goal to being the dominant Brand in off-road recreational accommodation. To answer the end goal question, our critical resource is the design and marketing group. We have 2 Tertiary qualified designers, an IT professional full time on internet marketing and myself. What can 4 people achieve? Well 4 people in a tight, fast, team can get more done in this area than 50 people in a behemoth corporation with end to end meetings and debates. This is probably the most important “take away” concept that we practice. Our organisation is separated into “finder”(sales/marketing), “thinker”(designer/engineer) and “doer” (production). Try to avoid having one person do 2 roles. It wont work! Our goal dictates 80-100 innovations a year. Some are small and done in a day, others take 3 months. Yet each person has only 2-3 items on their “dance card” at any one time. The secret is speed. To achieve speed you HAVE to have invested in technology, follow a structured process and work as a team. We spent over $350K on the design, manufacturing and CRM software. I have a summary of the providers and our assessment of them on our website for you to use. Now you create and build the “Brand” when you have numerous products and/or services with the same look and feel and the same or very similar common denominator. You can partly measure the strength of your “Brand” by counting the number of times consumers google your Brand and all the misspellings compared to the competition. As at the end of September, our Brand was googled close to 40% of all the combined total of all names in our market space. Our market share is less then 35% so our googled rate is higher. Come back to the journey. In 2003, I had purchased a business that was a market leader, To maximise profit prior to sale, the owners had not invested in any new products or features for the 2 prior years. The brand carried them while the market was buoyant. The Brand was one of quality and practicality. Not one of innovation. The challenge was to change that!
In 2003, very few off road camper trailers had fridges in them. The reason given to me was that designing and building an electrical and refrigeration system was fraught with problems and warranty costs. I was told to “Keep it simple” and sell customers to put all that “stuff” in the back of the 4WD! When you hear words like that, look for the opportunity. It is true that having a good design for an electrical and refrigeration system is very challenging, expensive to implement, and fraught with risks if you get it wrong but it was what customers wanted. We mastered the refrigeration application quite quickly. It just took just 6 months to have the best solution in the market. Thereafter we looked for the most challenging technical problems in camping and focussed on how to provide solutions that were practical. Since then we have pioneered:
The list goes on and on. Without exaggeration, there are over 30 major innovations with the majority still unique to our brand today. So we have innovated where we thought there was customer interest. BUT, a slippery slopes comment: we started our lightweight “SportsRV” model 3 years before the peak in fuel prices and it was not until the peak that sales took off. – we tried to “push” a product before it’s time. Timing is everything. We have over 28 trademarks and patents and a raft of solid innovation. The first set of innovations was like giving birth to triplets, now we handle major changes and innovations like it’s par for the course.
Here is the theory: We use the Blue Ocean Strategy for every new product or major model enhancement. This strategy preaches a combination of BOTH value and a differentiated product. It is as good as any framework to use. The important thing is to have a framework for screening and developing new products. Secondly, we are innovative with our marketing. We run 6 websites by product but all with the same :”look and feel” of the brand. We average 30,000 unique visitors per month of which 75% are from Australia. We practice an “open” website with all the pricing and technical information available to customers as it would to dealers. We are transparent!
Giving customers what they want is now enhanced with the internet. Using internet based marketing strategies; we rotate a variety of advertisements to see which one has the highest click through rate. Then we validate with dealers and implement in a fraction of the cycle time we used to do it in. The time itself depends on the complexity of the product. Back to manufacturing: Now we are back to the heart-ache of the day-to-day challenges. To ease the pain and allow you to focus on brand building you have to promise yourself to think of your people every day: Build a team: a team requires leadership and training. There is no reason why your business leaders can’t come from the employees of today. All our supervisors and sales director were once on the assembly floor. Each one has had specific training to help them in their leadership. I am in awe of the return I get in spending money on training once people have done the hard yards. I get more return on people training than buying a computer! Finally a catch cry of mine is “a hot market beats hot management” – in other words find the sweet spot in the market and you can park your management skills and still win hands down! This is the ultimate achievement. But the irony is only good management repeatedly finds the hot market! For Kimberley: in the Australian marketing space, we are now adding a new business of innovative “eco-camper” products to reach more customers who have bought other brands of trailers or caravans. Our time frame is NOW. Our marketing and investment is high. This is a “hot market”. In the global space we have had to set our “product targets” a little more tighter and the time frame longer. We have now exported to 5 countries and in each have a strong customer base but our brand globally does not have the same local strength. We have:
An even awesome set of staff handling customer service with customers who have skull dragged their product over rough ground and all sorts of conditions. As all our kids say as you start any journey: “Are we there yet?” No, you never get their so enjoy the journey and keep passing the car keys to other employees to share the driving. A lot of business owners are scared to let others drive. Drivers can be made accountable. Accountability is crucial to success. People have to be accountable for both outcomes and time deadlines. It is the acceptance of all employees to this culture that shifts your business to the robust and mature Bruce Loxton Kimberley Group Sydney Nov 2009 A summary of this and other resources is on the website www.kimberleygroup.com.au
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