Fifteen Years of Brand Positioning Gone in an Instant
From yesterday's Furniture Today:
The new executive team at United Sleep Products is rolling out a new flagship line here.
The Nature’s Dreams line of specialty and innerspring bedding retails from $799 to $4,999 and offers the strong values that dealers have come to expect from United Sleep, the company’s new leaders say.
The senior management team is in the United Sleep showroom at 114 N. Main St., showing the line to dealers and talking about their ambitious plans for the company, which they acquired in January.
Marc Werner, president and CEO, and Lisa Kaufman, chairman, are principals in Northlight Capital, a Chicago investment firm.
“We are repositioning the company,” said Werner. “We’ve come here with a new brand and a new product line. This isn’t your grandfather’s United Sleep.”
“We want to grow and become a national player,” said Kaufman.
The executives are getting involved in all the details of making mattresses. Kaufman, for example, picked the plush velour cover for the new top-of-the-line bed, the Bel-Aire Super Box Pillow Top, an encased-coil-on-encased-coil model which retails at $4,999. The cover has become known as “the Lisa cover.”
“This is absolute luxury,” Kaufman said. “You will not want to get out of this bed.”
United Sleep offers compelling values at all price points in its expanding product line, Werner said. “If you love me at $500,” he said, “you will really love me at $2,500.
“We will be the low-cost producer of high-quality goods,” he continued. “That is not just rhetoric. We are a low-cost producer, we stay very nimble, and we react quickly.”
United Sleep will create “a positive vicious cycle” by driving down costs and selling more units, Werner said. The company offers products that are of comparable or better quality than other bedding brands on the market, “at substantially lower costs,” he said.
The company’s slogan puts it this way: “Brand name quality bedding for less.”
Wow. Where do I start? Here's a gentle disclaimer: I used to be the Marketing Director for USP. In fact, I had a great five-year run there and I have no axe to grind. In fact, very few of the people remain from my tenure there, but this is a recipe for disaster.
The USP model has always been "Brand Name Quality for LESS." (Sidebar: Notice how they've even let their slogan slide?) The company was - as new owner Werner says - "a low-cost producer" and "very nimble." But the way a company does that is by focusing on the low to middle tier of consumer. When you do that in mattresses, you get the following:
1.) Fewer options. People don't expect them in a $500 bed.
2.) Less picky people. Customers will put up with stray threads on a $500 bed. They'll return a $5000 bed for the same thing.
3.) Less need for marketing. In fact, most of the money I spent was in training retail salespeople that we didn't waste money for signs, posters and advertisements that would drive up the cost of the product.
Now, USP plans to flip the funnel. To do so, they will need more options, more marketing dollars and the ability to cater to a pickier consumer. In and of themselves, these are not horrible things, unless you've spent more than a decade telling retailers and consumers that these were the very things you avoided to keep your costs low.
A friend of mine in the bedding industry mused that this could be a deadly error for the company. I wouldn't go that far: I just don't think their business is set up to satisfy that particular customer and those particular retailers, and so in the end they won't sell much product. The good news is that death by lack of luxury selling is a slower death than the one suffered by those trying to be the low cost producer (ironic, since that's where United's strength has always been).
So while I doubt this will be the end for USP, I'm quite certain it will be a period of lost profits, lost focus and lost marketing dollars.
Dirty Harry said it best: A man's got to know his limitations.