WHAT WE THINK ABOUT WHAT YOU THINK ABOUT.
These are important concepts we learned from our consultant. They are particularly important for franchise concepts. In fact, we had a client a while back that started as a franchise concept, but the very successful first location found itself so dependent on the personalities of the owners (an asset that cannot be easily duplicated at each subsequent location) that they decided not to roll it out. Sad for them. Sad for us.
Scalable simply means that the size of the operation can be adjusted upward or downward with relative ease. For example, Asian car makers were able to scale their U.S. operations by putting plants in places like Alabama, TN, Georgia, North Carolina, and South Carolina. Retailers (especially grocery retailers) sometimes scale in a given location by line extension. Adding more SKUs, to increase market basket and leverage the high-traffic, high-square-footage investment. Banks sometimes scale by adding services like wealth management and insurance. Sometimes this works, sometimes it doesn’t.
In general, scaling by line extension has a cost in terms of brand equity (even if it works). When I worked on a well-respected soluble (instant) coffee brand, they tried to leverage their brand equity into a ground and roast product. The problem is that the equity was pointed the wrong way. We discovered that consumers saw all soluble coffee as inferior to all ground roast coffee. So, they simply did not believe our claim that our superior knowledge of coffee (which provided the highest-quality instant coffee on the market) would also provide a superior ground roast coffee. It would be like a hang-glider company trying to launch a jet liner. They might have legitimate, relevant expertise. But it is not credible expertise in the marketing sense.
Portable is a slightly different issue. A concept is portable to the degree that it can be rolled out from foot-print to footprint. Starbucks was great at this in their prime. They narrowed their consumer benefit to one of upper-middle expectation for coffee. This enabled them to deliver in many environments. Kiosk. Mall stores. Freestanding stores. Large footprint. Small footprint. Add-on stores inside of bookstores. To be portable, you need to have a very solid definition of your value proposition. And you need to have a fairly scalable product line (in Waikiki, Starbucks offers several Hawaii-specific whole bean varieties, a range of fruit juices, a jammin fruit cup…etc; in some airport kiosks, they offer drip coffee and espresso drinks and that’s it).
For most of the life of our company, Gibbons | Peck has struggled with the whole portable and scalable puzzle. Recently, we invested in some social media capability, including people with expertise. This seems to have killed two birds with one stone. We have scaled our offering (we have offered social media services for some time, but we now have the capability to offer a full-fledged social media product). And with the addition of new, senior folks, we have mitigated the dependence on Anne’s and my personalities for the daily delivery of the brand. It’s an exciting time. We are actually practicing what we’ve been preaching. I guess we’re slow learners, but we do eventually learn.