The ability to recognize and quickly respond to a competitor in building materials is not the strong suit of most building materials companies. At some point, every leader falls because it didn’t recognize and react to a competitor soon enough. Here’s an example:
Is Huber Getting Under Dupont’s Skin?
Category leaders, like Dupont’s Tyvek® are usually slow to respond to competitive threats. This is especially true if it is not a direct competitive threat, like another wrap. Leaders are literally blind to emerging competitors. They see themselves as so far above everyone else that new competitors don’t need to be taken seriously.
As a recent example, consider how seriously the leading Republican presidential candidates took Donald Trump at first. While historically, a large change in market share may have happened slowly, the rise of Trump should serve as a warning that major shifts can happen faster today, even in building materials.
Four Reasons Why Large Companies Have Trouble With Competitive Threats
- The larger an organization, the more political it is and the less willingness there is to acknowledge a threat. Acknowledging a threat is usually not good for your career in a large company.
- The larger the organization, the longer it takes to see the sales decline on financial statements. This is because initially, the sales lost to a competitor are very small. The declines are usually blamed on the normal ups and downs of the market.
- Once a competitor is recognized, the technical leaders quickly prepare a report that pooh-poohs this new product and shows why it will never be a success. While their report is probably based on sound building science and testing, they often ignore the customer’s perceptions. The reason a builder or even an architect are considering a competitor has little to do with science and more to do with what “just make sense.”
- Large companies are not very nimble. Even if they recognize a threat, it takes a long time for them to react.
But this doesn’t mean smaller companies are without an Achilles heel. Smaller companies will usually see the competitor sooner but they may also not take it seriously as they are frequently run by inventors. To an inventor, their product is their baby, and no other baby can be as good as their baby.
It has taken Dupont a long time to recognize and respond to the threat that Huber’s ZIP System® poses to them. Their main competitors have been other building wraps, most of which were lower cost and lower quality.
Huber has become enough of a threat that Dupont is now going on the offensive. Most companies who attempt to go on the offensive do so with pricing and promotion. They avoid mentioning or acknowledging the competition. That strategy is less effective today as more customers get their information online rather than from a sales rep, dealer or distributor.
The few companies who try to go on the offense by setting the record straight with “the facts” however, are rarely effective at it.
How to Set The Record Straight
Setting the record straight entails more than a narrow-minded reaction. It demands a contemplated response.
Too little, too technical or too sales driven
An example of too little is when they produce a video or a page on the website or a blog post or a white paper. They produce one thing that they think will stop their customers from making the foolish mistake of buying the competitor’s product.
The response is frequently too technical. The information is presented from a scientific perspective or even from a third party. Customers no longer trust most technical data and aren’t really interested.
The response can also be too sales driven when it sounds like a sales person criticizing a competitor. The customer knows he is only hearing one side of the story, so it isn’t very credible.
All of these are destined to fail because they fail to see themselves and the competitor from the viewpoint of the customer. A little customer research is one of the most important, but frequently ignored, steps when you want to set the record straight. The only facts that matter are what the customer perceives to be true.
Here is an example of a typical, weak and ineffective response to a competitor where Royal Building products is attempting to steer people away from fiber cement siding.
Don’t Insult Your Customers
The biggest mistake you can make is to insult your customer. If a customer is considering or has already switched to the competition, they believe that this was a smart decision.
Most building materials companies attack their competitors in a way that makes the customer think, “they obviously think I am stupid to have made this change, and I don’t like dealing with people who think I am stupid.”
Put yourself in the shoes of the customer and look at your product and your competitor’s product from the customer’s perspective. There is a reason why the customer thinks this is a better choice. You should approach them with an attitude of, “I can see why this looks like a better solution because the other product promises (benefit). As with everything, there are pros and cons and problems that can arise. Have you considered these issues our competitors product?”
Huber Awakens The Giant
Dupont may have taken awhile to recognize and act upon the threat from Huber’s ZIP System, but they are doing a great job of it. If you want to respond to a competitor and set the record straight, this is a great example of how to do it.
What is Dupont doing right?
- This is a serious effort that involves and entire campaign using multiple forms of communications. They are using videos, white papers, Pay Per Click ads and more. It is not a single avenue of communication with the customer.
- This has been created and implemented by a team of smart marketing and creative people. This has not been relegated to a technical or junior marketing person.
- It is presented in a straightforward, easy to understand and believable manner.
You can see the video campaign here. You’ll see that there are a series of videos each going after a single issue.
The campaign also includes a series of downloadable whitepapers comparing Tyvek to the ZIP System.
Dupont is leaving no stone unturned as they are even using Pay Per Click advertising. If you type Zip System into Google, you will see Dupont at the top of the page, questioning the claims of the Zip System.
My only suggestion would be to acknowledge that, based on Huber’s claims, it still seems like a pr0duct worth considering. Without this step, it probably makes the customer feel that Dupont is telling him that he was stupid and gullible enough to have been duped by Huber.
If you decide to go after a competitor and set the record straight, this is one of the best examples of how to do it correctly. To be effective, you need to make a serious effort. No matter what you feel about the other company, keep the discussion about the products and what it means to the customer.
Probably Won’t Succeed
Even though I feel this program from Dupont is a great example of how to go after a competitor in effort to set the record straight, at best I think it may simply slow Huber sales.
Much like James Hardie came out of nowhere and successfully took on vinyl siding, Huber is doing the same thing to the housewrap market. Huber is a very good marketer and will probably continue to gain market share unless they face some catastrophic product failure like EIFS experienced.
Dupont also faces another and maybe even bigger challenge.
Dupont has successfully positioned themselves as the premium housewrap that costs more and is worth it.
With changing codes and the growing interest in improving the performance of the building envelope, Dupont now has a whole new group of competitors. Unlike the low-end housewrap competitors, these new competitors are serious, well-known, respected companies with high quality and high-performance products.
They are growing the market for a new level of air barriers that offer higher performance than the best housewrap at an even higher cost. The sales of these products are still very small compared to building wraps, but they are growing. Most of the market probably considers these products as more than is needed, but that is changing.
The risk Dupont faces is to allow these higher priced competitors to reposition Dupont from the top position to the middle. You never want to be in the middle, people either want the best or just good enough. Being in the middle confuses customers. It usually makes them feel they are paying too much for a “good enough” product.
Dupont and Gulliver’s Travels
There are also a large number of companies who are going after this market. I have a visual, in my head of the giant Dupont being tied down like Gulliver’s Travels by a bunch of competitors. Sto, Cosella-Dörken, Henry, Vaproshield, Tremco, Georgia Pacific, WR Meadows, Carlisle, Prosoco, Dow, Dow Corning, BASF, Grace, and Huber are the little people holding down the giant Dupont.
While Dupont has intelligently focused on one major competitor, it is hard to imagine them setting the record straight against all of these competitors.
The company that succeeds will not try to match Dupont’s formidable distribution and field support system; they will simply outflank them and make those resources irrelevant.
Dupont probably has comparable product technology sitting on the shelf, but is reluctant to release it as it will cannibalize the sales of their highly profitable existing products.
The Take Away
It will be interesting to watch the air barrier market evolve and whether Dupont can maintain its leadership. History says they probably won’t as they will allow one of the higher performance products to position themselves as the leaders in areas like fully adhered or fluid-applied membranes. Dupont will be thought of as the housewrap company that also has some high-performance barriers while another company will be thought of as the leader in high-performance barriers.
Even though I believe Dupont’s efforts will not be that successful, I still feel that this is an excellent example of how to do a “Let’s Set the Record Straight” campaign, if you feel that is a good strategy for you. Most companies only have one thorn in their side while Dupont is facing a whole prickly bush. If you only have one thorn, then this type of campaign will be much more effective.