Why Good Marketing isn’t always 100% Commercial!
The Australian version of Shark Tank premiered on Channel Ten last night, but it is a story from the American series which is doing the rounds in the news today. And this is happening for one reason – the product is truly consumer-centric.
If you haven’t seen the video yet, allow me to give you a quick synopsis. Johnny Georges took his revolutionary idea – the Tree T-PEE – to the Shark Tank. With the aim of saving farmers money and increasing their yields, Tree T-PEE is essentially a small plastic cone around the base of trees to ensure that the water funnelled to each tree through an irrigation system isn’t spraying water away from the tree. The conical nature of the device ensures all the water stays within the tree’s reach saving costs and the amount of water required.
He comes in with some impressive statistics. As opposed to the 25,000 annual gallons most trees require due to lost irrigation water, the Tree T-PEE only requires 800 gallons per tree resulting in enormous savings for farmers. Surely – for an industry doing it tough across the world – these kinds of simple engineering systems are the exact solution.
The commercial mindset from one of the Sharks kicked into gear when they found out that Johnny was only making a profit margin of $1.00 from the sale of each T-Pee. Especially when the sale price of each product is only $4.50. This resulted in a barrage of comments regarding price hikes. Surely the only future for this product – in the Shark’s mind – was to bump the price up to $12 to pay distributors across the country.
But there is an issue behind this thinking. It focusses purely on the commercial side of business (How can I get the most profit?) rather than the consumer-centric side (How can I enhance the lives of my customers?). If a company is purely focussed on the former then they are going to alienate their market.
As an industry, farming doesn’t have the money to invest in an expensive solution, but they do have enough money to invest in a $4.50 solution. And at the $4.50 price tag, this product will provide a lot more value to customers than a price above $10 which leads to another powerful sales force – word of mouth publicity. This is a sales force that is also, arguably, more powerful than an army of distributors. Through the value that each customer will gain from his products, they will in-turn become brand advocates sharing this exclusive find throughout the farming community and providing a much more powerful recommendation than anything coming from a distributor. But the publicity doesn’t end there . . .
By simply appearing on Shark Tank, Johnny has already started the wheels on this impressive word of mouth force. His appearance on Shark Tank allowed him to tell his moving story to millions of people across the US (and now across the world due to Facebook) to provide a value-adding story behind the product. And this is something that a series of distributors could not recreate.
Who needs distributors when you have publicity?
This story may not be strongly based in entertainment marketing, but it hammers home the importance of knowing your customer. You can have a fantastic product but if you cannot communicate its value effectively or provide it at a reasonable price – well, then you aren’t going to get anywhere!