Gillette Flunks the Giggle Test
Razor Wars: Little Schick cries foul and the giant is nicked
Look over the saga of Gillette vs. Schick-Wilkinson Sword, and you do not find two rivals vying for share of shaver market.
This latest decision in favor of Schick is but one small victory in what is a truly nasty, all-out war between a corporate Goliath (Gillette with 90 percent market share) and David (Schick). The conflict is not only being waged in the media and on retailers' shelves for the whiskers of the American post-pubescent males, but also in courtrooms on both sides of the Atlantic.
To follow their endless litigious antics is to believe the only ones making money are the lawyers. Think again.
When Procter & Gamble bought Gillette last January for $57 billion, Gillette's CEO, James Kilts, came away with $185 million. This was chump change compared to Warren Buffett's one-day haul of $645 million.
Today's column is not about patent infringement suits and counter-suits or mergers and acquisitions.
This is about advertisers--and their agencies--making horses' asses of themselves.
The Holy Grail of Advertising: The USP
When a new product or service is introduced, the brand manager has to create a summary sheet describing its physical characteristics and the size and make-up of the universe of prospective buyers. In addition, a media plan must be created that outlines the most efficient way to reach the market (e.g., print ads, TV, direct mail, point-of-purchase promotions or, most likely, a combination).
It is then up to the advertising agency to come up with the USP--Unique Selling Proposition or main benefit--that sets this new product apart from the competition and makes it so desirable that the potential buyer simply must have it.
Examples of USPs:
Rolls-Royce: "At 60 miles an hour the loudest noise in this Rolls-Royce comes from the electric clock." —David Ogilvy, 1957
Volkswagen: "Think small."—Doyle Dane Bernbach, 1959
Clairol: "Does she … or doesn't she?"—Foote, Cone & Belding, 1957
Ivory Soap: "99 and 44/100% pure"—Proctor & Gamble, 1882
Gillette: "Look sharp, feel sharp"—BBDO, 1940s
Gillette M3 Power Razor: "Gentle micropulses stimulate hair up and away from the skin"—BBDO, 2005
Does the copy pass the "giggle test?"
The giggle test is a legal term. Is a claim legitimate, lawyers ask, or will it cause the judge to giggle?
Beards are tough. A close shave requires softening the face with plenty of soap, water and shaving cream and using a razor to push the skin down, causing the hairs to stick out, whereupon they are sliced off with one, two, three or four blades. The only men who would not understand the giggle test--that a battery-powered razor would raise facial hair--would be members of the castrati, who have little to giggle about in the first place.
For the rest of us, the idea that a battery-powered, vibrating razor "raises facial hair" is preposterous.
Nevertheless, from the moment it was introduced, the M3 Power became America's best-selling razor.
The Cost of False Advertising
As a result of its excesses, Gillette must field an army of fixers to relabel millions of M3 Power packages. According to AdAge.com:
In court filings, Gillette said there are about 3.2 million M3 Power packages on store shelves, backrooms and warehouses, plus another 1 million in its own warehouses and another 2.3 million partially completed packages that will need to be relabeled. Gillette estimated the cost at $400,000 for putting stickers on packages in its own supply chain and another $1.2 million to send people to stores to put stickers on inventory there.
This is on the heels of Gillette's restickering millions of razors in Germany after losing a similar suit to Schick there.
Humorist Dave Barry described the halcyon days of the single-blade razor as "The Golden Age of Not Having Razor Companies Introduce Some Ludicrously Unnecessary New Shaving Technology Every Ten Damn Minutes."
A False USP on a 120-year-old Product
The search for the great USP is not restricted to a new product. Listerine came on the market in 1879 as a disinfectant for surgical procedures. In 1895 it was reformulated as a powerful oral antiseptic and became one of the first prescription products to be sold over the counter. In 1923, Labert & Feasley came up with a classic ad showing a very pretty young woman with the caption, "Always a bridesmaid, but never a bride." The implication was her bad breath kept her from a trip down the aisle.
For many years, Listerine was sold as a remedy for sore throats and colds until the Federal Trade Commission forced the company to run ads stating that Listerine would not cure a cold or sore throat.
Fast-forward to 2004. I use Listerine, and I use dental floss. The little sticker on my bottle claiming that Listerine was as effective as dental floss in fighting plaque did not pass my giggle test. Nor did it pass the giggle test of Manhattan Federal District Court Judge Denny Chin who ruled in favor of Johnson & Johnson's claim that the statement posed an unfair threat to its sales of dental floss. The result: Listerine had to spend $2 million sending 4,000 workers around the country changing the stickers on bottles and removing ads hanging from bottle necks.
In short, the advertising greats who kept clients on the straight and narrow path to integrity and profitability are gone--David Ogilvy, Bill Bernbach, Rosser Reeves, Ted Bates, Bruce Barton, Bill Benton, J. Walter Thompson, Raymond Rubicam and Leo Burnett.
Mourn their passing.
And beware of the new breed. They can get you into trouble.
In the words of the Poznak Law Firm (see "False Advertising: The Basics," below):
Although your use of the latest hot marketing and sales strategies may improve the bottom line of your business, you may get into hot "legal waters" if you do not exercise the proper restraints.
Letters to the Editor
In response to, "The Wall Came Tumbling Down," which was published 6/21/05:
Here is a quote taken from Frederick Reichheld's excellent book, "The Loyalty Effect," that shows the other side of the coin.
Reichheld cites the example of State Farm and its reaction to losses sustained due to hurricane Andrew:
"The need to keep losses under control led many companies to cover the claims required by their contracts in South Florida, then refuse to renew customer policies to avoid future losses. State farm took a radically different view. It had no intention of canceling customers it had expended so much energy and expense to acquire and maintain, most of them for many years. Indeed as State Farm sees the world, it would economically irrational to destroy the value of the company's investment in a large block of high-quality customers. Most important, disloyalty to customers would be philosophically unacceptable. Loyalty is a two-way street. Moreover, loyalty must be seen to be a two-way street. How could State Farm possibly expect its customers and agents to remain loyal if the company did not demonstrate loyalty when the chips were down?
"When Andrew blew the roofs off houses because contractors had not properly anchored them to their frames, State Farm paid its customers more than their policies required in order to bring the houses up to code. When a Wall Street Journal reporter asked why the company was willing to overpay, … State Farm's General Counsel replied, 'We will be insuring the homes in the future, and we don't want them damaged in the future.' State Farm expects its customers to stay with the company for years, so this approach will save everyone money in the long run."
I've also attached a slide that I've used in presentations about the economic underpinnings of loyalty from Reichheld's book. I've circled the bars that represent the insurance industry. As you can see, a small increase in retention generates a whopping increase in net present value of the customer base.
But you obviously already know this.
So, how to increase loyalty? By providing REAL VALUE to customers. And that's the creative rub--figuring out how to deliver value on an on-going basis--the substance of loyalty building, not the form of it.
As always, thank you for your thought-provoking opinion. And a pox on the dumb bastards who insure Mrs. Jack 's Nissan …
--Robert (Bob) Blinick, with BlinickDIRECT
Could I please make a suggestion?
Your newsletter uses the "Times" font for body text, and in an email on a computer screen it is very hard to read. Could I get you to consider using a font that was designed for screen readability and is generally considered the most readable font for screen, Verdana? If not Verdana, at least a sans-serif font? If you do, I know I for one will be much more apt to read your newsletter. Thanks in advance.
--Mike Schinkel, president of Xtras Inc.
In response to "Breeze Through Airport Security! (Hopefully.), which was published 6/23/05:
You know that I haven't had a job since 1969. Here's some reflex items to your entrepreneur piece.
1. Establish multiple exit plans in the initial planning stages of a venture to include:
a. Exit plan for "failure" or "learning experience"
b. Exit plan for moderate success
c. Exit plan for major success.
2. Money is **never** the (real) problem of a business launch. NOTE: Money managers always have money to invest in "sure things." The "real problem" in business is usually something else.
--James Johnson, with IRMCO
More Takeaway Points to Consider
* Is the copy in compliance with the Lanham Act?
* It is in compliance with state statutes such as the Illinois "Uniform Deceptive Trade Practices Act?