The Not So Sweet Center

I wrote a blog post about a year ago titled "The Moldy Middle" which went into detail about how companies that target the statistical "mean" are doomed to fail primarily because they try to be all things to all people, and end up becoming irrelevant to anybody.

Recently, Seth Godin posted a blog about this subject entitled "The paradox of the middle of the market." In this blog, Mr. Godin actually says it is OK to seek out the middle because he believes that this is where "profits meet scale." Now, Seth might be right for a short period of time, but over the long haul all the things that he lists will come to saturate a organization and eventually paralyze its ability to respond to any changes in the market.

I respect Mr. Godin immeasurably, but find it hard to believe that he still believes that there is a monolithic "mass market" of middle of the road anything. Oh how the old ways die hard even with enlightened individuals.

News flash: There is no middle of the market! It does not exist and if you want to succeed in the "new" economy, you better figure this out really soon! GM did not, Chrysler did not, and most airlines still cannot (except maybe Southwest and JetBlue). You have to live by the motto "Differentiate or Die!" if you want to ever reaching your true goals of sustainable profits. Actually, you have to focus on fringes (Differentiate or Die!) in order to get recognized. As soon as you reach your goal of being just vanilla is when the competition starts eating your lunch (i.e. Sears, K-Mart, Xerox, Mercedes, etc.). As soon are you target the middle, you become average, and NO ONE likes that!

Remember, it is NOT important to be the largest. It IS important to be the most profitable.

Comments

The Moldy Middle

While taking statistics during my quest to get an MBA and while earning my engineering degree, the professors always emphasized the importance of finding the statistical mean of any population by using the Central Mean Theorem (a.k.a the highest point of the Bell Curve). As an engineer, this was essential in order to maximize throughput, minimize cost and waste, and ultimately make a better, faster, cheaper widget. A funny thing happened on the way to the dark side of marketing. I discovered that the only thing in the middle of the road was quite literally dead road kill. I do not know if you remember stores like Bradlees, Ames and Service Merchandise (just to name a few), but they all folded because the environment changed and they were caught trying to service the mythological “average customer.” Part of that change came when Wal-Mart began its juggernaut with the discount department store. Wal-Mart did two things right: 1) Focused on “mobile” consumers, and 2) Fo...

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The Profit Prophet

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