Lessons from a Business Growth Consultant: How Dial Soap Got Cleaned Out

Lessons from a Business Growth Consultant: How Dial Soap Got Cleaned Out

I’ve invited my old friend and former co-worker Molly Lindblom to provide some content on the Clever PM blog; Molly is an exceptional product strategist, and was instrumental in the success that I had creating the LexisNexis Market Intelligence product so many years ago.  My experiences working on that product have informed much of what I’ve done since — so, without further ado…

Thanks for giving me the opportunity to include a guest post on the Clever PM! I’ve been an avid reader for a long time and am looking forward to sharing some of my experiences as the founder and principal of my business growth consultancy Business Transformations. To kick things off, I’d like to share my experience as an assistant brand manager for Dial who (unknowingly) went to war with Proctor & Gamble.

Consumer product positioning is a tricky thing: a lot of companies have been selling products in different categories for a very long time, and have built strong market strategies based on a significant understanding of their customer needs. So at the tail end of my new product planning for Dial Dishwashing Liquid, imagine how excited I was thinking that I had a product that would clean up on the competition.

In the 1990s, antibacterial products were brand new and in vogue. Qualitative customer interviews had shown that salmonella was a big concern in consumers’ kitchens, and quantitative surveys backed up that finding. So what better tagline for a new dish liquid than “kills germs on dishes?”

The claim tested well, and it felt good. We did enough product pricing research to narrow in on a very competitive price point: we would go head to head with P&G’s competing product. I thought we had a game-changing new product: a dish soap with a new benefit available at the same price as other products that weren’t nearly as effective. It was the perfect understanding of customer needs. And it turns out we were right.

But there’s always a catch somewhere. Today’s lesson from a business growth consultant? Never underestimate your competition. They’re always trying to kill you.

For six months, I was enjoying the biggest new product success of my career. Then, the sleeping dog woke up.

I came in to work to find our attorney had a letter on her desk from P&G’s lawyers politely informing her that the claim that our soap killed germs on dishes had to be vetted with the EPA, rather than the FDA as we had done, because our product was technically a germicide. In a panic, she called the EPA. They allowed us to do a recall and re-label, and keep the product on the shelf. But that effort took time, and while we did it P&G launched its own product with the same claim, approved by the EPA. They went after our shelf space and undercut us on price, so that by the time we were back on the shelf at full strength, EPA-approved, the nail in the product’s coffin had already been sealed.

Do you know what I hadn’t done, that I now do with every one of my business growth consulting clients today? I hadn’t performed a thorough market analysis that factored in the competition. And boy did I pay for it.

The way I later heard the story from a colleague at a product development conference who worked with P&G went like this. P&G saw the pricing of Dial’s product as a direct existential threat. If I had priced the product at a premium level, they would have seen my concept’s launch as an experiment in the category and simply monitored its performance. But by pricing my product on par with theirs, they believed I was trying to eliminate a multi-million dollar-revenue product entirely, and they reacted as aggressively as possible. In fact, I later heard that, while Dial’s product had to be retired a few years later, P&G was able to grow the category. I’m still waiting for them to thank me.

So my business growth consultant lesson for you today is this. Product development best practices don’t just involve the easy stuff like quantitative surveys and customer interviews. You aren’t competing in a vacuum, and so your product planning has to include a deep market analysis that factors in the effects different product positioning elements may have (pricing strategy, go-to-market strategy, etc.).

It’s not easy to humble yourself during new product development. But the more wide open you are to your customers AND your competition, the better chance you’ll have to launch that fabulously successful new product.

I hope you enjoyed this lesson. If you’d like to read more, please feel free to browse Business Transformations’ case studies on product positioning, strategy and business growth or contact me to discuss product strategy.

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