Grow Your Business/Grow Your Community
I recently attended a presentation by one of the former owners of the Penda Bedliner Company. Now, in order for you to understand his story you need to understand the meaning that the name Penda once had to pick-up truck owners. Personally, I used to think a car was just a car, a means of transportation, and that people who went on and on about their vehicle were just, well, silly.
At least I thought that until I bought my first pick-up truck. It was a lipstick red, Dodge Ram. It was not a girly vehicle, but then I’ve never been a girly, girl. I bought it the day I was promoted from Credit Analyst to Ag Lender. It symbolized my making a leap into a job which few women held and which I’d worked very hard to obtain. To my customers it symbolized that I was willing to work hard for them and get my boots dirty. Oh, and it was lots of fun to drive. (Do you know the big trucks rule? Big trucks rule!)
Once you make that emotional commitment to your pick-up truck the next thing you need to do is figure out how to trick her out. I spent hours poring over the accessories catalogs trying to decide whether I needed the practicality of sure grip running boards or the flair of ovals. It was next to impossible to pick between the tri-fold or the snap down tonneau cover. But, there was no question I had to have a Penda Bedliner. Penda’s were the best, and I wanted only the best for Alice. (Oh, yes, I named my pick-up truck).
In 2006 pick-up truck sales hit a peak. They were not only being purchased by hard-working contractors and farmers, they had also become a recreational vehicle of choice. Accessories for working trucks needed to be practical, but most accessories for recreational trucks were for show. Dozens of new accessory makers entered the market and a funny thing started happening to the sales of Penda Bedliners.
New entrants to a market often try to gain market share based on price, and all the new producers deeply undercut Penda. Penda management expected sales to come back when people found out that the quality was not comparable. But, sales of Penda Bedliners never regained their former levels. Penda had run into a truism of consumer sales – sometimes the best cannot compete with good enough. The lowest price point did not capture the greatest market share. Consumers did want quality, but after a certain level of quality they were not willing to pay a premium.
The first question I ask companies is “What differentiates you from your competition?” If they answer “quality” I try to not visibly cringe. Customers have a minimum expectation of quality. Under that minimum they will not buy no matter how low the price. But, the range from the minimum to good enough is generally fairly narrow. Competition in that narrow band is fierce. True differentiation is something that you do that your competitors don’t, and that it would be very difficult for them to copy. What your differentiator is today may not be the same as it is tomorrow. It often needs to change if you want to stay ahead of your competition.
The team who owned and managed Penda at the height of market dominance, eventually sold out their shares of the company. The company still exists and if you do a Google search you find that they are repositioning themselves on their skill at custom heavy-gauge thermoforming. People still do buy Penda Bedliners, but the company is pursuing market share based on all of their strengths, and finding new ways to differentiate itself.