Andrew Gross is a battled tested bedding veteran who held an EVP position at SSB and was a board member and SVP of marketing for Serta.
During his time at Serta, the brand moved from #3 to #1 while doubling EBITDA. He and his team introduced iComfort gel-memory foam, widely considered the most successful new product in category history and ultimately a profitable $500MM+ franchise.
When Andrew told us about the best business book most people haven’t read—one he’s used for years—we perked up. The New Lanchester Strategy introduces a framework for how to think about market competition. In this episode Andrew walks us through the three principles of Lanchester strategy and brings the topic to life with examples from the mattress business.
Listen or watch for part 2 as Andrew talks about the future of the mattress business and how to apply Lanchester strategy.
FULL TRANSCRIPTION
Mark Kinsley: Quinn, I really like your shirt. I can see the logo Nationwide. Marketing here. Right there. Yeah.
Andrew Gross: How about that? Thank
Mark Quinn: you. Nationwide. Yeah, they send us free stuff. That’s pretty nice. I
Andrew Gross: didn’t get a
Mark Quinn: shirt, . Oh yeah. I know that to not be true. There’s evidence of you in this shirt. We have mugs from them.
We’ve got all kinds and memories.
Mark Kinsley: Don’t forget the memories. Maybe that’s supposed to be like a traveling shirt. Maybe you’re supposed to pass it on to the other mark after
Andrew Gross: you’re finished up. Maybe I should,
Mark Quinn: I’ll, I’ll send it to you. That’s what I’ll do. Well, as soon as I get
Mark Kinsley: my own, we can make sure and wear them October 18th to the 21st, which is when Nationwide primetime is gonna be in Vegas.
Okay. So ever get everything got rescheduled and shifted forward. But we have dates on the calendar, so if you want to go to one of the premier events, it’s October 18th through the 21st. So grab your calendar right now. Mark it down. Nationwide Primetime is when it, it’s crazy to me. I think the first time I.
We did 20 interviews with different nationwide members and I said to them at the end, I said, you know, really nice to meet you. I loved hearing your story. Come see us in Vegas. Like, come see me at England or at Vegas market. And at least half of them said, we don’t even go to market like we do all of our buying right here at Nationwide Primetime.
So you have thousands of independent retailers out there that come to this event. Last time we gave a big fun speech. You and I had Oh, yeah. Had clothes on, dressed up as
Mark Quinn: rappers as we normally we were wrapping. That’s pretty good stuff. You, you know, Kinzie, what I like about it is, um, I, I’ve, I’ve, I’ve said this before, I felt like a, a little bit of a moron because I didn’t realize, How incredibly big nationwide was their footprint.
And then these live events, I hadn’t been to one, so my first prime time was like, wow, I can’t believe I’ve been missing this. And then the other part of it is talking to everyone. They’re like, oh my God, yes, we come. Number one, they’re fun food’s, great entertainment’s awesome, but the money that they save themselves and their business absolutely pays for the trip that they take there.
So I love that. It really isn’t a. Plus the fact you and I keep talking about, it’s a, and it’s, it’s an experience. You get there and you talk to people, you’re in the hallways and you learn about what they’re doing. And that is where the real value to that is. So everybody check it out. 18th through the 21st and it’s at the
Mark Kinsley: Venetian, right?
It should, yes. I think it is at the Venetian. If you said it, it must be true.
Mark Quinn: It say it like you believe it, that’s all.
Mark Kinsley: And you check out all the details@nationwideprimetime.com. And you know the cool thing that people are also gonna see when they’re. , one of our, our brand new sponsor, which is a vendor partner of Nationwide.
We have a brand new sponsor to announce today on the show. This is brand
Andrew Gross: new, this dun
Mark Quinn: dun dun kinsley. Door counts. Door counts. What the hell is the door count? .
Andrew Gross: Okay, I’m gonna,
Mark Kinsley: I’m gonna, here, here’s what I’m gonna do. I’m gonna give the worst sponsorship launch promotion of all time. You ready for? I think we should.
Yeah, I think we should. This is gonna be the worst. They may fire us after this. Door counts is not for you. If you wanna ostrich your way through the world, if you wanna put your head in the sand and you don’t know, wanna know what’s happening in your store. If you don’t know, wanna know how many people are coming in and what is then happening with each person in relation to your sales team.
If you don’t wanna know, don’t get door counts. If you want to increase your sales and you wanna, you want a picture of whoever’s coming into your. And you wanna map that picture of that person to a salesperson so they can make sure and not, not only know how many people are coming into your store, what are your conversion rates, how are your people handling follow up?
It’s all there captured in this system. But it’s funny because we talked to Jerry and the team at Door Counts and some people don’t want to know, and that shocked me. But 700 retail doors across the nation right now have door counts and are beating their competition in their marketplace because of this system.
Do you
Mark Quinn: know, it’s one of the hardest things when I’ve talked to retailers, it’s one of the hardest things to really capture is close rate. You’re much better off not knowing kinsley. You’re much better off guessing at it. You’re much better off. Crossing your fingers and hearing the door count buzzer and listening to your salespeople go, no, I didn’t get 10 guys in here.
I get five of them Were like u p s people. And that’s what a lot of salespeople tell you. But, uh, anyway, of course what gets measured gets done and these guys have a really cool way of doing it. So it’s video attached to the actual visit to the store. Um, they get to go back in, Hey, let’s face it, they’re not getting bombarded unless you’re like on a Saturday and it’s super busy, but you can go back in and go.
This is what happened to the customer. You do the cr r m, you get ’em into your funnel. Not only do you sell them, but you can make, uh, a few notes. And so the next time they come in and you put their name in the system, it like automatically populates and you know what you sold them and little notes about all that.
But most importantly, you know what, how effective your traffic is. And we talked about it. We did the speech at Nationwide. Traffic matters. It’s the biggest deal for retailers today. So getting them into your store, that’s only a piece of the puzzle. The other piece of that puzzle is what are you doing with them?
How effective are you? How good are your people closing and how are you putting them in the customer pipeline to market to them later on? So yes, we’re having a little fun. It’s better to not know because then you can just say, Hey, I don’t know.
Andrew Gross: It’s, it’s, it was the UPS
Mark Kinsley: guy that came in 300 times that
Andrew Gross: day.
UPS guy
Mark Quinn: who may be flirting with some of
Andrew Gross: your people you never know.
Mark Kinsley: Well, it is a, it’s a super cool system and, and we, we talk about, um, our relationship to our sponsorship, to our sponsors, and we only want to curate things we think are really cool. And we talk a lot about driving foot traffic.
Maximizing that foot traffic once somebody’s in your store is so critically important, especially in an environment where people are limiting their exposure, maybe going to fewer stores. The, the conditions in which we’re. The cool thing is Door Counts has an amazing team. It’s all built on Oracle. It’s cloud-based, works on any device.
Access it from anywhere and a 100% money back guarantee. Check out door counts.com. You can always drop us a note too and we’ll get you connected to the right people. Just uh, go to our contact form@mattresspodcast.com. We’ll get you hooked up
Mark Quinn: beautifully. It started out kind of rough though. I mean, selling people out of it, I, that’s an interesting way to do it, but I like it.
It’s, it is just contrast, but you know, who is not a contrast to anything we do because he’s, he thinks a lot like we do. Kinsley. Is this guy on my screen? He’s down here. Where is he for you?
Mark Kinsley: My screen. He’s over
Andrew Gross: there.
Mark Quinn: Okay. Well anyway, it’s him,
Mark Kinsley: but on the podcast he’s just, he’s just a voice. He’s a voice behind the curtain, right?
Andrew Gross: That’s right.
Mark Quinn: Andrew Gross. The, the great and wonderful and powerful, Andrew Gross. Hey, Andrew. How
are
Andrew Gross: you doing? Good. How are you guys doing?
Mark Kinsley: Really good. It’s great to have you here. If you don’t know who Andrew is, he’s somebody that’s been around the mattress business for a long time, uh, former E V P at Serta, and now the owner of 12 squared L L C consultant.
But here’s, here’s where I really want to. I remember one of the first times I met you, Andrew, I came to the Serta showroom and, and we were grabbing content, uh, for Sleep Geek Back when we did that. And you were telling us about this new advertising campaign and it was around the Serta iComfort brand and it was the lady and her crazy husband and pretty much anything he did, she was laying on the bed and she was comfortable with that.
She’s like, I’m comfortable with that. And you were kind of describing the spots to me as they were airing on a screen behind. and you kind of casually said, oh yeah. And, and she pets the bed. And I go, well, hold on a minute. What do you mean pets the bed? D describe all the commercials when you go back and look always petting the bed.
Tell us that story and why
Andrew Gross: that happened. Uh, sure. Well, first of all, that was really, uh, fund campaign. We actually shot a couple of ads that we didn’t even originally storyboard, but that the, uh, creatives came up on the set the day before. The ad, but, uh, we knew that, uh, listen, the product was iComfort.
Comfort was the end benefit and comfort was a very tangible thing. And we just learned through all the work we did in communications, that when you had tactile experiences with the bed, it just lit up consumer’s eyes. So whether you call it pet, the bed, lying in the bed, the hand print, et cetera. , we just found that those tactile things, because you’re, you’re watching a piece of film, you can’t experience the comfort yourself.
So the most, um, uh, sensitive part of the human body in a PG rated format is your hands. And, um, that’s what we found. We found that that’s the power of it. So, okay, so we said that she had the bed, but.
Mark Kinsley: So were you actually putting consumers, some sort of device, uh, that monitored their, their eyes or their brains in some way and they were watching the commercials and you saw what res made their brains respond?
Or how were you kind of gathering that data?
Andrew Gross: Uh, well actually the, the commun, the, the partner we used to use at the time to measure communications testing, which I knew way back to my Unilever days, had an interesting way of breaking up commercials into scenes and doing picture sorts and then understanding from.
what people remembered in terms of attention and where they had the greatest emotional response. And we found any tactile moment, had the greatest emotional response. And then the other thing he taught me, and uh, if you ever saw kind of one of my sales speeches, I gave this, I gave this talk a couple times, is about the, a thing called the sensor sensory humunculus.
Now go Google that. Uh, there’s, there’s a PG version and an R-rated. . But basically what it is, is it, it is a, um, model of the human body based on the senses. And when you look at Humunculus, the biggest thing you’re going to see are the hands. And so his point was is that the touch is such a powerful thing.
And if you look at a lot of communication, the thing that resonates most is most about touch. That’s one of the problems in this pandemic. We can’t hug. . Right. Um, and so we took that insight and that learning and said, if we’re gonna be about comfort, we need to communi, keep these tactile moments in our communication.
Mark Kinsley: I, I, I talked about, um, in, in, in a similar context about this idea of, of touch and relationship and contact. Yeah. And, uh, . If you look at the movie Planet of the Apes, , why do people like the apes? And they don’t like Hu? The human beings and the human beings talk a lot, but the apes in the movie, forehead to forehead, lots of touch, lots of lots of contact, physical contact.
Mm-hmm. . And you end up liking them more even though they don’t say as much, or, you know, you’re not even relating to your species at that point. So what a, what a great insight. I mean, And the application are, I say a lot because
Mark Quinn: the apes kill a lot of people in this show. So the fact that you, you, you like them better than the human says something to me.
What? You like ’em in spite of the fact that they’re killing all these people, right? Uh, no.
Andrew Gross: They, they’re, yeah, but they have a more sympathetic cause. But, but I think what mark’s so true that’s so true when Mark’s talking about is, yeah, there’s this tremendous power. in, in touch and being and being close, and particularly when you’re in a, in a space around comfort.
We just saw that was really powerful. Um, and so that was one of the things that we always tried to communicate, um, in our advertising. Now we had to have some fun with it, whether it was with the accounting chief or I’m comfortable with that campaign, but at the heart of it, you know, there was a human truth underneath that.
And that’s one thing I always found as important, regardless of what industry I worked in, is you gotta find, yeah. Once you know those fundamental human truths, they, they. , um, across anything you’re trying to sell. ,
Mark Quinn: Andrew, you, you came into the switching gears. Um, yeah, and, and I, I think you’re right. The fundamental truths do apply everywhere.
And you came into our industry, uh, from outside of the industry, Unilever, right? Yeah. So you had lots of time in marketing, and I always think it’s fun to look back at moments where you, you got into the mattress category and um, you had fresh eyes at that point. What were your initial thoughts about the category?
Do you. Right when you got into it initially, and then how did that evolve over time?
Andrew Gross: Yeah. Um, well, I mean, it’s funny, Mary, cause I joined Serta, it was in oh six, right? So they had just consolidated the brand like two years before, uh, sold the private equity. So the, you know, it was right before the great recession hit, right.
The industry was an all-time high and I got recruited because they needed somebody that understood. Strategic marketing more. Um, I thought the sheep were a powerful asset, and when I came to the industry I was like, you know, why are all these people talking about all these different differences in mattresses?
And, you know, everything was about, it wasn’t necessarily about the consumer, it was about the product and the sales relationship and the service relationship. And it took me a little while. What I, what I learned was one, that there was this opportunity to take. consumer understanding that I had working in, um, you know, package goods and apply it to bedding.
But there was another part which said, you know what? Relationships are really important. This is a blind product where people, you know, the, the sales relationship is incredibly important. The o the other thing that I learned is, is that, um, you know what? Degrees in education, all that stuff doesn’t matter.
There’s, you know, uh, lots of wisdom. that you, that people have in a business like this that they’ve collected over the years. That’s incredibly powerful. So one of the things that I did when I, when I got to cert, is I went out and talked to a lot of people. And what I learned is, you know, some of the things that I might have thought weren’t right and that, you know, the importance in this business is it just wasn’t a, a consumer relationship.
It was about the retail partners, about the sales associated. It was a multi, you know, a multi-touch model. And then the other thing is I learned a lot about. I mean, you know, working for a guy like Bob Sherman, uh, and the approach, remember our philosophy at the business at the time as we grow our business by growing our retailers’ business.
And that model of saying, being service oriented and putting the, you know, your partner in front of you and saying if you make them successful, you’ll be successful, was incredibly powerful and successful to our growth. So, you know, there were a lot of things that opened my eyes and fortunate. At least I was patient enough and I think the, you know, the business and I, and I always give Bob a li credit for being patient enough for me to figure that out.
Mark Kinsley: So you talk about, , you approaching the business from a learning standpoint and going out and just talking to people and uh, and trying to get a sense of, like you said, it’s a multi-touch model. What actually works? What, you know, are there minds in this minefield and how do I avoid stepping on them? Um, as you’ve navigated.
uh, outside and inside the mattress business. I know we talked about this, but you have, you know, so a framework and some principles that you use in looking at business, and I really wanted to kind of bring those to the surface for people to, to learn from and understand. Talk about the, these principles and, and some of the unexpected, um, books, I guess, that you’ve, you’ve read over the years that, uh, others may not
Andrew Gross: have.
Yeah, it’s funny because people might say, listen, isn’t this guy, he was a, he was a marketing guy that marketed hair care and then he came into the industry as a marketing guy and now he is gonna talk about, um, some of the principles of warfare. But at the end of the day, you know, business is warfare in a way, and it’s a battle for market share and for the hearts and minds of consumers and retail partners.
So, um, you know, many years ago I was working on an innovation project.
In those days, it took long time for market research to come. It was a good time,
which is this book called, The new L strategy. Sorry, it’s backwards. You can’t read it. Um, and that led me digging a little bit deeper into this guy Manchester and his military theories and how you apply it to business. So, simple story. So there’s this guy Frederick Manchester. He was a pioneering British, uh, automotive engineer, airline, uh, engineer.
In the 18 hundreds and early 19 hundreds, he invented a lot of, uh, the major components of the British automotive industry. He, uh, was an advisor to Daimler for a while. Uh, he had a big impact on aircraft development for your World War I. And so he gets to World War I and he sees some of his, uh, you know, the aircraft he worked on being used in battle.
And he starts thinking about, well, why did, uh, certain battles go different? . And since he was a mathematician, he starts to think about, well, how do I come up with some theories around this? And he basically came up with two laws. And when you think about those laws and apply those laws to business battles, it can unlock a lot of things.
So there’s, so the two laws are, there’s the, basically the linear law of combats. So think about ancient hand-to-hand combat. So, uh, you know, the, uh, ancient Greek warriors, Egyptian warriors, middle Ages, whatever, think about Lord of the rank. . Um, and basically what that said is, is every soldier, you know, has either got a, you know, a sword or an ax or something like that, and the end of the day, who’s gonna win the battle?
It’s really based on how many soldiers do you have, assuming that they’re all just about as good. So, if the, uh, Kinsley Army has five soldiers, and the Queen Army has three, and assuming they’re equally as adept, and the end of the day the Kinsley Army’s gonna win, and they’re gonna have two soldiers left.
Um, then when he figured out in modern warfare, it works a little different because if I give you both a machine gun, you, and, and the reason why in ancient warfare is cuz one person could only fight one person at a time. But in modern warfare, you can fight more than one person at a time. So what he found is, is that if the Kinsley Army had five people and the Quin Army had three people and they went to battle machine guns, the Kinsley Army would actually end up winning with four people.
And that’s because he’s found that he basically had to square the number of troops to get what their actual effective fighting force was. And so that’s called the N squared law Modern battle. And so you take those two principles and you start to think about how you wanna go into business compact. and you start to think about, well, am I going to business compact on hand-to-hand basis, or am I fighting mar modern warfare where I have all these tools that are shooting at people in different directions?
And from there he came up with kind of three big principles. And you know, later on we’ll get into kind of how you applied them. And his, his first principle was, is whatever you do, you need to be number one. Because at the end of the. , only the person that goes into battle with more resources, whether that’s more troops, more dollars, more advertising, or really much better people is going to win.
And so your key when you’re in business is you gotta figure out a way to carve up the market in a way where you can get to number one, where you can have enough resources you can put against something so that you can get to number one, and then you can build from. . Think about when I joined Serta, the strategy that Sherman and team used to roll up all those licensees, right?
They want Mark, uh, licensee by licensee, bought them, went into that market, figured out a retailer that they could partner with and may not be number one, but could get them to number one, right? And only there did they build up the strength over time ultimately to, uh, control the brand nationally and then take it ultimately to leader.
The second part is, so you, you, you wanna, you know, you wanna fight to win. I, I mean, you, you, you, I would say the first part is you wanna be number one, whatever you do. The second part is you gotta focus your effort. And that’s really hard. You know what, we’re all creative people and we have lots of ideas, but you have to figure out where you’re gonna focus your effort.
I heard, uh, mark Kinsley, you, you said in an earlier podcast about how you gave people one goal per quarter to, to focus on, that’s all. Focusing your effort, you gotta figure out what can I do really well? Where can I focus that effort against the weakness of my competition so that I actually can make progress?
Um, and in some cases that might mean I want to get my competition in close quarters where I can fight ’em hand to hand because then I don’t need as much of an advantage if I have to fight ’em in the modern role with machine. So you gotta focus, figure out where to contract, uh, um, where to concentrate.
And the third principle is you only go into battle where you think you can win. It’s too often that we think in business or life, you know what? As nice, we showed up, uh, and we put up a good fight. You gotta think about where can I, where can I compete? Whether it’s a product, whether it’s a market, uh, whether it’s a particular, uh, segmented product line in a store.
Where can I compete where I can? because if I’m gonna commit my resources to go to battle, I wanna figure out where I can actually win cuz. And then with that, that’s how you build the momentum. And so I tried to take those principles when I learned that from this book to heart and think about where are we really gonna focus?
How are we’re gonna differentiate ourselves? How are we gonna concentrate that resource so we can win? .
Mark Kinsley: All right. Give us some examples of that. So you have these three principles laid out. Yeah. You wanna be number one in whatever you do. Concentration of effort is key. Battles are fought to be won.
Whenever you wore EVP at Serta. Yeah. Very involved in iComfort. And there was a lot more going on behind the scenes that we probably didn’t get to see. How did you apply these things? Because you know, during that time, cert went to number one. Mm-hmm. ,
Andrew Gross: listen, there’s a lot of reasons. , uh, you know, I think we and that team were successful and really at, at that time.
Uh, certainly a lot of it had to do with, you know, the strength of our sales organization, the leadership under, under Bob. Um, I think our ability to capitalize in the weakness of our, our, our competitors and some of the mistakes they made, particularly coming out of the Great Recession, but also the big moves we’re able to make with things like iComfort.
So you think about it with iComfort. , uh, at that time, and you talked, you, you asked a question about, um, observations coming in the industry and, and Mark and I, I remember one of the first times I met Mark when, when he was at Leggett, , uh, one of the things he was working on was what we call the innerspring strategy.
You remember that Mark? I do. All right. Trying to figure out a way. So, you know, Tempur-Pedic was on the rise. Memory foam was on the rise. Clearly that wasn’t a time in Legg its interest. So trying to figure out how do we defend all the great things that, um, innerspring products are about. And remember, we were gonna do all this testing and all this messaging, and I know that ultimately resulted in the claim that Innerspring sleep.
One
Mark Quinn: of them. Yes. But that was definitely part of the tenant for sure. Right, right.
Andrew Gross: Well, part of the problem was, is that when I went around and talked to people in the industry, a lot of people talk about memory foam and say, well, you know what? I’ve been in this business since waterbed days, and memory foam is just gonna be like waterbeds.
You know, I have, uh, you know, a cousin who bought a memory foam bed and they didn’t like it, and now it’s in the guest bedroom. , you know, at the same time I was talking to consumers and consumers were saying, well, I love this stuff. And um, and so a part of that was the realization to say, you know, listen, you can’t just say that this is gonna be like a waterbed, it’s a significant segment of the market and it’s gonna continue to grow.
Um, but it hasn’t been fully capitalized or exploited. So when we put our mind to it to develop, uh, iComfort, , we said, well, how do we tack this segment of the market and how do we do it in a, in a unique and different way that we can create space for ourselves? And we did that a few ways. One is we looked at the product and at the time the perception was, and I’m not gonna get in the whole battle about, you know, what was true or not, or whatever, what’s perception is that memory foams love time.
They also, people perceived, it felt like quicksand in some. . Um, at the time, you know, temper was the dominant player in that segment, and their products generally sold over two or $3,000. So people said, well, it’s expensive. And if you looked at the way the industry was structured at the time, there was a huge business below a thousand dollars and there was a big business about $2,000, but there wasn’t as much business between 1,002 thousand.
So we looked at it and said, okay, there’s a weakness of the product we can attack if we really focus our effort against. , there’s a segment of the market that we can attack if we really focus on and, and grow, if we focus on a thousand to $2,000 segment. And then the, uh, third part was thinking about, well, how do we enter?
And we, we kicked a, we kicked around a lot of models. We thought, you know, at the time, maybe we do a very high co-op model because the major player at the time didn’t give a lot of co-op, but we couldn’t figure out how to make the numbers. and we thought about, well, we’re gonna launch a lot of national advertising, but we couldn’t necessarily, you know, commit to all that national advertising.
So what did we end up doing? We focused on display and we said, well, we’ve got a great product. It looks great. Um, and we’ve got a demonstrable way to show that it delivers a cooling benefit. Consumers are coming to the store looking for this kind of product. Um, but how do we get their a. So we built, um, you know, the most, um, elaborate display that anyone had ever built in the industry before, right?
It was backlit. It had a, uh, l e d lit eye sign amongst other things. And people would walk into a store and whether or not they thought they were gonna look for this product or not, they were like, what’s that thing over there? And so you talk about those principles, we said, you know what? We can’t fight an Air War to launch this.
Well, we can fight a ground war in store if we put all our resources there. And that’s where we put ’em in year one.
Mark Quinn: You know, Andrew? I, I think so. The, the way I recall the whole iComfort launch. Yeah. And I wrote about this pretty extensively back in the day when I was blogging, but Leggett and you got a, kind of arrived at, at two conclusions that were very similar.
Number one, it did sleep. . So there was a temperature thing, and then the other was it, it slept like quicken. You got sucked into the bed. And so our kind of conclusion from that was active support, not passive support, right? So it moves with your body, it returns energy, right? So you didn’t feel constricted.
So, um, we were definitely on the same page and I do remember fondly those conversations. Um, I learned something from them for sure. The other thing. Sirian Simmons had all taken a swipe. Memory foam launches prior to iComfort and every one of them, um, failed to some degree. If you, if you put iComfort up as the measuring stick of what is, what is success, right?
What does success look like? It was certainly iComfort, but it, for me, it wasn’t just that you got the, the, the point of sale, right, because you definitely did. , um, Barb, uh, did a great job in, in, in Leona and you and the rest of the team with the, the trade dress and the way the look beds looked. And they obviously felt good, but it was also about, um, you know, obviously the product.
So that’s one part of it. It was about the messaging. , right? So you, you hit the sweet spot on the messaging, and you did drive that with national exposure, right? You guys were the first people to come out as one of the big S brands, an investment spend on top of all the co-op you guys were putting out there to your big customers.
You spent on top of that to drive a message into the market. And it was those things, all of those things together. Everyone else who had come out with memory from, in my opinion, Prior to that point, didn’t get all of those things right. They got a single aspect of that. Right. And you guys were the first ones to put it together and you got paid big because I, I don’t recall, maybe one-sided beds lifted off the same way, but I don’t recall ever a product launch being that successful.
I iComfort absolutely crushed everything that was in the market
Andrew Gross: at the. . Yeah. Well, thanks. Um, and you’re right, we did hit on all cylinders, but there was a, but there was a sequence to it. Mm-hmm. . Um, and the reason why I highlighted the in-store thing was cuz in the first year, that’s where the, you know, the bulk of our, you know, discretionary marketing dollars won.
And then the second year, because we had made that investment and now we had that real estate secured in the. , that’s when we were able to turn on the national advertising in a much bigger way. Right. So it goes back to, you know, how did you apply those principles? Right? How did you kind of carve up the battlefield in a way to say, all right, here’s the weakness of our competitor.
We’re gonna focus on that. Yes. We came up with a very creative idea and solution for it. We created a great product and a great look and a great display. And then when we went to market, we said, here’s the place where we can own as a point of. . And then once you e established that and then you had the sales momentum, then you could broaden the battlefield, right, and start to play against those broader laws.
So it was an application in a way of some of those kind of battlefield principles around how do you think about the ki, what battlefield you’re on, what gain, what laws you wanna play under, and then really how do you concentrate and focus your.
Mark Kinsley: Andrew, when you look back and you think you know, cuz Quinn is absolutely right, if you don’t do certain things correctly, you’re not gonna be able to compete.
You’re gonna have, uh, you’re gonna have some chinks in the armor. You’re gonna have a weak leak in the chain. But whenever you distill it down to the one piece of the puzzle that you had to do correctly, and specifically out of the gates, it came down to in-store display. . Like, if you didn’t get that right, the rest of it wouldn’t work.
Andrew Gross: Um, I, that was, it’s certainly one part of the equation, but I think that’s the thing that kind of put us over, over the edge. Um, you know, you had to have all the other pieces together in terms of, you know, um, what’s the idea, what’s the product, what’s the display in marketing execution? But my, my point was, is that the, um, I think the thing that made, that gave it the.
In the, in the initial first year. Give, gimme an example. We talk about how fast we moved. I mean, I think we committed to really going after this thing in the spring summer of 2010. And by the fall of that fall, um, you know, we were, we were really starting to move along, but we really didn’t finalize the product and display ideas until like October, November.
And then by December we had the prototypes ready to. and I remember we had the four initial models. We had ’em set up in our headquarters. We started bringing retailers in and just walking into that room and looking at it, they were like, wow, this thing is gonna be a home run. Just based on that presentation.
Didn’t matter. We hadn’t shown ’em any video or anything yet, uh, on our communication for it, but just the presentation. So my, that was my point around, you gotta pick, what’s that one, one area where you can really win the battle. And I felt in year one, where we won that battle was right at the point of purchase.
Mark Quinn: There’s a wow moment for that. Yeah. And, and the other thought of it, of this too, Kinsley and I talk a lot about the, the old book 22 Immutable Laws of Marketing. Yeah. Right. And, and I know you’re a fan cuz we’ve talked about it, but you talked earlier in this podcast about principles and we believe that very, very much as well.
One of the principles is, um, that you need to be first to. . And if you’re not gonna have that advantage, then you need to create your own category. Well, you guys did that, you kind of did two Tempur-pedic. What Tempur-Pedic did to innerspring, which was, they said Tempur-Pedic. They said Innerspring is the old way to make a bed.
It’s old technology. Um, in, in like comfort was kind of at the same time banging the same drum. , you guys kind of came in and said, memory foam’s fine, but we aren’t that we are something else. We are something new. We are something innovative. We are something with gel. And you really did kind of create a new category.
Andrew Gross: Yeah, I mean we, uh, actually I give, uh, give Bob Sherman credit. One of the things he said in the meeting is, well, you know, memory foam hasn’t really changed since, uh, you know, we landed men on the moon in the sixties and that actually became the opening of our launch. What we said is we, we kind of positioned all that the NASA association, which was meant to kind of imply that it was advanced based technology, which is all part of the lo of the development of memory foam.
But by then we’re 40 years beyond the moon landing. So we’ve kind of used that to reposition that product as being dated. and now it’s been reinvented. So yeah, when you, when you’re not, you know, when you’re not first in creating a category, you have to figure out how to kind of reposition the established category and create a new category.
Now, unfortunately, we did that and then as you know, within, uh, a year, year and a half, there were dozens of gel memory foam products.
Mark Kinsley: What did that do to iComfort? What did that do to the category that you created?
Andrew Gross: I mean, we definitely, I mean, if you went back and looked at the ISPA numbers from that time, expanded that thousand, $2,000 segment. The challenge there, and, and I think this is one thing that, you know, I regret in terms of how we, we thought about it, was thinking about how fast the market would follow and how we had to stay ahead of the market.
So clearly what we were able to build on momentum and the business with, you know, launching, uh, i I series and hybrids and the adjustable base program, et cetera. Um, the struggle was just to stay ahead in memory. because what happened was is you know, that that whole category and that attribute around adding gel got copied in different watered down ways, but didn’t matter.
Um, you know, it kind of watered down a bit bit of our messaging, uh, but at the end of the day, I think it helped open the door to increase, you know, the penetration of, of foam products overall in, in the category and started to drive those price points. And now you fast forward today, I mean, I know that, you know, doesn’t report those numbers, but if you look at the overall penetration of foam versus spring, and I’m gonna take hybrid out for a second.
It’s increased substantially from where it was 10 or 15 years ago.
Mark Kinsley: One question I have about the iComfort display, because you took what could have been broad warfare or maybe World War II style and you brought it down the hand-to-hand combat World War I style. and that hand-to-hand combat was on the retail sales.
Through the vehicle of display. And I think about, you know, you, you talked about getting some of those partnerships lined up in each market that could help sir to become number one. And I think about the way that retailers, merchandise retailers many times wanting to be seen as the brand or the only brand of significance, maybe the curator.
What was it like and what kind of resistance did you face and how did you overcome that to get retailers to actually adopt the usage of that display buy into. And not really want to con wholesale control that retail display environment like
Andrew Gross: many do. Yeah. You know, and that was a challenge because I think, uh, you know, going into it, there were some people that said, why would you make that big an investment?
Many times retailers have their own controls, they don’t wanna mess up their floors. But we figured one, if we went so far over the top, it’d be hard to resist it. And there were some people that resisted at first, but when they saw the momentum, I. To, to give you an example, we originally budgeted to make 2000 of those things.
Um, and we ended up making over 20,000,
Mark Quinn: um, which 2000 would’ve been a big win for
Andrew Gross: sure, would’ve been a big win, but 20,000 was over the top. I mean, that became part of my job, was trying to manage the logistics of figuring out how we could make more of these things and get them where they need to go. . But the end of the day, what we were able to show is, uh, to the retail partners, how this was in their interest.
How if we could, you know, expand the pie for them by growing this middle market segment. Right. That was, was below where Temper was. And so yeah, we took a little share from them, but at the end of the day, we expanded the category because we are expanded this a thousand to $2,000 price segment. Um, and that put money in people’s.
And we did it, you know, with a presentation that, you know, I think many of them over time felt like, well, that actually enhances my overall presentation on my floor. It makes me seem a little bit more innovative as a retailer. ,
Mark Quinn: Andrew, you had some great wins at sort of, there’s no doubt. Um, and what we’d like to do next is talk to you more about, I mean, you’ve been out of the industry for a little bit of time.
You’ve had an opportunity to look at what’s going on. We wanna pick your brain, talk to you about where things are today, how they’ve shifted, and kind of where you think they’re going and, uh, thoughts from you in terms. , you know, who, who are the big winners gonna be? Uh, what are they gonna be doing? What strategies are they going to use and how do we come out of this covid thing successfully?
And, uh, what is the next, you know, six months to five years look like? How
Andrew Gross: about that? Uh, well that’s a pretty open-ended question. I mean, uh, , I wish anybody had a crystal ball and what the next six months are gonna look. . But you know, I, and I’ve been doing some work from, everything from working with an online newsletter startup to some work with C B D startups, which is a whole nother, uh, crazy industry.
And so I’ve seen, uh, you know, and observed a lot of trends and, you know, there’s a few things I see. So, one, I think there’s a huge opportunity.
Mark Quinn: And you know what, before we go, we are gonna cut here and we are gonna go into the next podcast episode. Will you hang around so we can record another one and put that one up as well?
Sure. Good. And you’re gonna save all of that for us. Kinsley, any other final thoughts to wrap this one up?
Andrew Gross: Well,
Mark Kinsley: nothing like a hard stop like that. Um, , sorry,
Mark Quinn: Andrew, I had to stop you, man. I wanted to save the good stuff.
Andrew Gross: No,
Mark Kinsley: I know, I know. It’s okay. Alright, so we’re, this is what we’re doing. We’re doing a two-parter with Andrew Gross.
Uh, Andrew, thank you for part one. Um, what we wanna do in the next one, let’s, let’s hop into some of those predictions. Uh, let’s start it that. And then we’ll talk about applying some of these principles from the Manchester model to your business, whether you’re an independent retailer, maybe you’re on the product side or in the industry in some other capacity.
So, we’ll, we’ll start off with some industry predictions and then we’ll get into application. How about that? Sure. Cool. But for now, let’s just play some funky music.
