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COMPETITION AND MARKET SHARE

When It Pays to Flatter Your Competition
 

Jim Koch, legendary founder and CEO of the Boston Beer Co., recently steered a potential customer to a rival.

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You've heard of trash-talking the competition in sports? It can happen, very publicly, with competition in business. Take, for example, Microsoft's line of anti-Google promotional products, including a mug that reads, "Keep calm while we steal your data." Zing! It's certainly not what you'd call sportsmanship.

Especially when you compare it to what Jim Koch--legendary founder and CEO of the Boston Beer Co. (makers of Sam Adams)--recently said about his competition on a sports radio station in Boston. 

Respecting Your Competitors

Koch was a guest on the Planet Mikey show on 93.7 FM. A caller to the show identified himself as diabetic. He then asked Koch if the Boston Beer Co. could make a beer that wouldn't spike his sugar levels. A beer, in other words, that a diabetic could savor. 

Koch said he couldn’t.

And what he said next was more remarkable. He suggested, with total earnestness, that the caller try Michelob Ultra (which is low in carbs). He suggested this, even though Sam Adams produces a light beer of its own. He suggested this, even though he probably could've gotten away with saying something like, "We're looking into that." 

It was hard not to respect Koch after this response. On a highly-rated big-market radio program--on a segment I'm guessing his company pays for--he steered a potential customer to a competitor. Two takeaways:

1. Know your values. Sam Adams's mission, plainly stated, is delicious beer. That's more "core" to their raison d'etre than making a beer for every dietary need. In Koch’s view (as he explained on the radio after answering the caller), it's simply hard to skimp on carbs and create a delicious beer.

2. Honor your competition. With superb spontaneous speaking skills, Koch somehow managed to convey this point without insulting the taste or quality of Michelob Ultra. In fact, his tone and verbiage signaled immense respect for Michelob Ultra as a product for beer drinkers with different needs and priorities. Not worse, different. 

"We'll Miss You."

It reminded me of a story The Table Group likes to tell about Southwest Airlines. A flight attendant, speaking to the seated passengers before takeoff, joked: "And for those of you traveling with small children--first of all, what were you thinking?" Most passengers laughed. But as it turned out, the joke prompted one passenger to write an angry complaint letter to Southwest. Southwest replied with a letter of its own. The letter contained one sentence: "We'll miss you."

The point? Rather than placating an angry customer with some bonus miles, Southwest recognized that this particular customer would never be happy flying Southwest--for she could not appreciate the humor and irreverence that define their culture. So Southwest said goodbye. Or, put another way, Southwest said: We know who we are. And we know we're not the best airline for someone like you. Which is essentially what Koch was saying--in a much friendlier way--to the caller. It was the honest admission of a mismatch between customer need and company mission.

Insofar as personal branding is important to CEOs--and insofar as projecting an image of being a reasonable and fair competitor is important--Koch must have earned many points in the Boston area (where he's already quite popular) by saying what he did on the radio. He demonstrated not only his knowledge of a competitor's ingredients but also his earnest-sounding desire to help a person find a beer that he could drink and enjoy--even if it wasn't the beer that Koch was selling.

Last updated: Nov 30, 2013




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