Trade-Off by Kevin Maney
Book Review – Trade-Off: Why Some Things Catch On, and Others Don’t
Marketable business ideas often have two key characteristics: simplicity, and a way of categorizing products, brands, or companies. The Boston Matrix, for example, launched armies of strategy consultants who neatly fit businesses into buckets labeled, “cash cow,” “star,” “dog,” etc. Kevin Maney’s book Trade-Off has those two characteristics as well.
Maney’s premise is simple enough: brands or products must each have a combination of “fidelity” and “convenience.” Fidelity refers to the performance and desirability of the product, encompassing such areas as quality, prestige, features, and so on. High fidelity products might include a custom suit from Savile Row, a Ferrari, an Ivy League Education, and so on. Convenience includes characteristics like ready access, price, ease of use, etc. Wal-Mart, camera phones, and McDonald’s are all convenient.
Fidelity is often in the eye of the customer. A hot new restaurant may be seen as high fidelity, but as other hot restaurants are “discovered,” the latter will be the new high fidelity choices.
Maney’s key thesis is that successful products need to be positioned at one end of the spectrum: they should either be high fidelity (desirable, prestigious, high quality, etc.) or very convenient (low cost, very accessible, etc.). Products that are somewhere in-between, i.e., are neither the highest fidelity nor the most convenient, fall into what Maney calls the “fidelity belly,” not a good place to be if you want major growth.
Maney also says that it is virtually impossible to combine both high fidelity and maximum convenience. He points to Starbucks, which was launched as a high fidelity coffee experience. The first Starbucks stores were modeled on Italian coffee shops, which in addition to excellent coffee provided an strong sensory experience and a sense of community. Starbucks was wildly successful, and was even perceived as being a bit of a prestige item. As they expanded to every street corner, added products like eggs, and began opening stores in supermarkets and walkup kiosks, they lost some of their sensory appeal as well as their exclusivity. In Maney’s terms, they turned into less of a fidelity play and more of a convenience play. Their prices were still high, though, leaving them open to the true convenience players like McDonalds, 7-11, and Dunkin Donuts. Finally, their ex-CEO stepped in to restore their sensory branding.
Apple is an unusual success story in that it offers successful products at both ends of the spectrum. The Mac computer was, and remains, a high fidelity product: it’s sleek, expensive, easy to use, and desirable. The iPod, though, morphed as its popularity grew. It may have started off as the high fidelity (figuratively speaking) choice in music players, but as it became the dominant product in the category and Apple introduced ever-cheaper models, the iPod became a convenience product. Maney thinks that the entire Apple brand might have declined had not Apple introduced a new high fidelity product, the iPhone. It was both sexy and costly, and immediately became the high-fidelity mobile phone choice. Once again, though, Apple is being pushed toward the mass market by its own success – if everyone has an iPhone, it won’t be the high fidelity choice in that space. (Maney says that’s basically what killed Motorola’s leadership position in the cell phone business. When it was introduced, the RAZR was ultra-cool and highly desirable. When Motorola pushed it to mass-market volume, the RAZR became just another cheap phone.)
While in one sense Maney’s insights aren’t entirely unprecedented – I recall the term “stuck in the middle” being thrown around many years ago to refer to products that were neither the best nor the cheapest – I think Trade-Off is a solid read for product planners and brand strategists. Like the recently re-released Differentiate or Die by Jack Trout, Trade-Off forces one to think about how a product matches up to its competition. Understanding competitive positioning and creating true product separation is the first step to achieving breakout sales. As Jim Collins notes in the foreword, “The power of a strategic concept [such as the one Maney shares] lies first and foremost in giving us a lens and a stimulus for hard thinking and hard choices.”
Overall, Trade-Off is an excellent read. Maney’s style is engaging, and the book is filled with real-world examples of successes and failures that illustrate his points. Maney spent decades as a journalist, including an extended stint as the technology writer for USA Today, and this background is evident in the clarity with which Maney sketches his theory.
Here are a few reactions from around the blogosphere:
Ted’s Take: “All I can say is, “WOW!” It is smart; easy to digest; very helpful; and direct and to the point.”
Media Realism: “[Trade-Off] should be read by everyone involved with branding, advertising, and consumer behavior.”
Diana Page Jordan: “While this is a business book, and focuses on products like the successful iPhones and flunky Yugo cars, its brilliance is applicable to individuals.”