Keeping an Eye on the Message

Companies need a razor-sharp focus to survive global competition and win the attention of consumers dizzy from information overload, veteran marketing strategist Jack Trout says.

In his new book, “The Power of Simplicity: A Management Guide to Cutting Through the Nonsense and Doing Things Right,” due out from McGraw-Hill this fall, Trout argues that simplicity is the secret weapon in the battle for market position. Without a focused, simple message, a company will lose ground to competitors, says Trout, who has authored or coauthored several marketing best-sellers. Trout, since 1994 the president of Trout & Partners Ltd. in Greenwich, Conn., will present his latest marketing strategies at The Times’ Small Business Strategies Conference this weekend.

In a recent interview, Trout talked about competition, positioning and why he was wrong to predict the advertising business would one day win the same level of respect given to the field of medicine.

*

Question: How has your concept of marketing evolved since your first major book, “Positioning: The Battle for Your Mind” (McGraw Hill, 1981)?

Answer: First, positioning is an old concept that we continue to add to. The second thing we have changed, that has changed in the business world, is the growing level of competition. Competition in the old days was like a tea party compared to what it’s like today. That certainly has caused me to change and to evolve some thinking that lines up with things in a new era of competition.

Q: How does a company compete in this new era?

A: As the world has gotten more complex and competitive, what is emerging to me is essentially that the ultimate sophistication now is simplicity. That is the weapon. You’ve got to learn how to simplify and keep things tightly focused on that simple differentiating idea. If you don’t have a differentiating idea to use as the cornerstone of your business and strategy, then you better have a pretty terrific price. There is nothing in the middle. It’s critical you understand that. Then it’s a question of “How do I differentiate?” Even advertising agencies don’t understand this. They want to get cute, they want to get into slogans. That’s not going to help.

Q: Hasn’t differentiation been a basic concept for a long time?

A: It’s always been a concept, but, in a way, today it’s more important because of the incredible level of competition out there. People could get away with being a little soggy [in the past]. But today it really is all about taking ownership, about differentiating an idea in the mind of your prospect, then staying with that and building a major program around that, then not changing it. It’s funny, you talk to advertising people today, they tend to say, “Well, all products are the same, but we’ll get emotional and make people like me,” which is what’s behind all this weird advertising today. I say, no, it’s the exact opposite. You’re assignment is to differentiate that product.

Q: In a 1981 book, you and your former partner at Trout & Ries Advertising predicted that advertising would soon earn the respect given the professions of law and medicine.

A: Guess what? We were wrong! What’s happened is the opposite. These idiots are undermining the business. Every damn large account seems to be in review every six months. Agencies are being fired left and right. Nobody is happy. The advertising business has not adapted and understood what we’ve been talking about for 25 years. They have not become strategically oriented.

Q: Has the Internet affected your marketing philosophy?

A: Not much. It’s mostly hype. To me the Internet can be a distribution asset. But the bad news is what everybody is now understanding, is the Internet squeezes your prices down to a nub. . . . It’s a great source of information. But as a marketing tool, all it does

is squeeze prices down to nothing.

Q: In recent writings, you warned that the danger of losing marketing position is especially great for companies today. Why is that so?

A: Here’s the thing, it is so competitive out there that when you make a mistake your competition almost instantly gets your business and then you don’t get it back. Case in point: General Motors. GM used to have almost half of the U.S. car business. They made a terrific run of mistakes that carried into the ‘80s. They made cars that all looked alike, priced alike. Really jumbled the brands. They wake up one morning and they had lost about 11 share points of their business. That’s now about $2 billion or $3 billion a point. That’s about $30 billion in sales that is gone, see. The Japanese, everybody else had climbed all over them. Today, 10 years later, do you realize 11 share points is now almost 20 share points? Not only have they not gotten any business back, they have continued to lose more. That’s the point. When you lose business because you have made a mistake, you don’t get it back unless your competitors make big mistakes. And you can’t count on [competitor] stupidity as a marketing strategy.

Q: What’s the answer for a small company interested in guarding market share?

A: Don’t make mistakes. Know the hell what you are doing. Be strategic. Know the essence of what makes you successful. Don’t try to become everything for everybody.

Q: What differentiates your new book, “The Power of Simplicity”?

A: We get to the essence. First of all, you have to understand that people have always been afraid of being simple. I call it “the curse of Simple Simon.” To be simple was to be stupid. What we are discovering is to be simple is to be brilliant. In a complex world, simplicity has enormous power.

The book gets into the essence of what makes business successful: strategy and differentiation, the essence of the organization. In very simple terms it cuts across all aspects of business.

Q: What’s behind the move toward simplicity?

A: People are bewildered. They get confused and overwhelmed by the complexity, and the global economy and the Internet are not making it easier. They turn to all these people who are very quick to take their money, but that’s not what they need. What they need to do is use their damn common sense. Everybody has it, but business people leave it in the parking lot when they come to work. I say in the book: “Trust it. It will tell you what to do.”

Also, if you read “Positioning” and some of the stuff we have done, what’s at the heart of that is simplicity in the way we talk about owning a word in the individual’s mind, like Volvo, safety. BMW, driving. So it’s something we’ve been working on for a long period of time.

Q: Do you have any advice for start-up companies?

A: It’s like with a big company, the problem is, again, what is your differentiating idea? What is it? What are you bringing to the party here? Obviously, you have to have that in hand because generally you have very limited resources. So it’s critical that you know exactly what you are and what you’re about and what is going to separate you from all the other folks out there. What you don’t want to say is, “I want to be what the big guys are.”

Q: What has been your biggest challenge in surviving and thriving all these years?

A: The essence of [my success] has been developing a unique approach to business strategy, which is positioning, but then continuing to evolve it and develop it. . . . The world is always evolving and changing. So you have to be on top of it. What you don’t want to do, though, is change your stripes. You keep the essence but you improve, you modify, you strengthen.

*

Jack Trout will give a keynote address at 2:30 p.m. Saturday at The Times’ Small Business Strategies Conference at the Los Angeles Convention Center.