A name is just a name, and other lessons from expanding a business
Monday, October 17, 2016/
It takes courage to tell the other story – the one where things didn’t go as planned – and to share the hard lessons you’ve learned with others. A few months ago I received an email from Luke Taylor with just that kind of story about his company TPC. I thought it was a powerful cautionary tale, so with his permission here is his story of over-reaching and finding your way back to what you care about.
TPC (The Pest Company) had built a good brand and a growing roster of customers who were happy to spread the word. It seemed like the right time to take that goodwill and extend the name into some other areas. Plumbing, building maintenance and carpet care were just a few of the new service areas they launched under the TPC name.
Soon small building maintenance, electricians and other service people who were important customer groups started deserting the ship.
After all, why would they do business with the company for one thing when that same company is competing with them for their own customers in other areas?
Additionally, while diversification had seemed like a great idea, the loss of focus on the core business took a toll there as well. Taking stock, the leadership of the business realised that they had to go back to the core of pest control and recommit to their values of being “trusted, reliable and experienced”.
Luke says the real thing they are selling is good service and “when you use TPC the first time that’s just the start of a relationship”. It’s an ethos that has allowed them to rebuild confidence with their customers. Today the company is 16 years in business. They wound up the other service areas three years ago, have returned to a focus on pest control and are expanding again. And this time they’re staying centred on industry specific services in pest and termite management.
There are three great lessons for any size company in the TPC story:
- A name is just a name – it’s what you do that counts.
- Go into direct competition with your customers at your peril.
- Don’t be afraid to fail.
A name is just a name
It’s fun to think up business names. There’s a whole industry that will tell you the ‘right’ name is the ticket to success and riches. It’s also great when you’ve been in business for a while and people know your company name and tell their friends about you.
The problem is the name doesn’t have anything to do with why you’ll be successful or why anyone will tell someone else about your company.
I won’t go into all the ins and outs of naming again, you can read about that here, here and here. Suffice to say, in the beginning plenty of people had no idea why you’d call a company Nike and thought International Business Machines sounded incredibly boring.
Without what you do and how you do it, the name is just an empty shirt. And staying focused on those things, along with why you got into business in the first place, will help keep you grounded.
TPC thought their name was a passport to exciting new areas of business. It wasn’t. Sure companies like Google have billions they can use to have a few side bets, but even they often discover the limits of their name to make things successful (Google Glasses anyone?).
Go into direct competition with your customers at your peril
While this may seem like a statement so obvious it needs no explanation, it’s a particularly curly conundrum for organisations that straddle all sides of the business-to-business-to-consumer divide. From retail distributors who start their own online stores, to banks selling insurance.
The temptation of growth can often drive people to quite literally bite the hand that feeds them.
This is not to say you shouldn’t try to leverage your customers’ goodwill and sell them other products or services. But knowing who your customers are and thinking about the short and long-term impacts on those relationships by applying the ripple effect is a must before you try to do it. Goodwill has its limits and when you start taking their customers it will be come bad will in a heartbeat.
Luke from TPC notes that their walk in the diversification wilderness resulted in “a lot of heartache and pain to rebuild the brand back to what it really stands for”.
Don’t be afraid to fail
As I noted in the introduction, it takes courage to tell the other story. It also takes courage for SMEs to front up every day, face the challenges of their businesses head on and keep going. I know there are days when pulling the covers over your head can feel like the better option!
TPC is still in business today because it was willing to acknowledge it had made a bad call before it destroyed their original core business.
But it wasn’t a bad idea and taking that same idea and applying it to new services that are aligned to their core is delivering results.
Even if you make the wrong decision, if you know what you care about and align what you do and how you do it to that, you can find your way back home.
See you next week.
Michel is an Independent Brand Thinker and Adviser dedicated to helping organisations make promises they can keep and keep the promises they make – with a strong, resilient organisation as the result. You can find Michel at michelhogan.com or you can follow her on Twitter @michelhogan.