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Jager or Pappy? The future of your business in a shot glass…

Previously I’ve mentioned that I think a philosophy of “different is better than better” could potentially be construed as consultant malpractice.  I’m fascinated that anyone would even suggest it.  It shouldn’t take the years of study that I’ve done on the subject to understand that the “different is better than better” viewpoint is a fallacy.

If I own a dry cleaners and start slapping every customer in the face…I’m different.  Is that better than being superior at cleaning clothes and delivering an ultimate customer experience?  Obviously not.

Distinction beats “different”…and requires that you become superior in ways that matter to your customers.

To emphasize the point, consider two brands of liquor — one with the emphasis on different; the other focusing on being better.

JagerJagermeister — the word means “Hunting Master” — is a European liqueur consisting of 56 various herbs, spices, and roots. It is, to say the least, something of an “acquired taste.”

In fact, Jagermeister’s lack of delivering a pleasant drinking experience has been used to make the point that Jager is so awful in taste…and its marketing is so good…it proves that people will flock to something different from the competition, even when the product is not “better” than its competitors.

  • But, here’s the critical problem — customers don’t STAY with you if all you are is different.

Worldwide, Jager’s sales last year were down a total of 5.6% — because it has crashed in the U.S. market.

Bloomberg Business reported last year that the new shot of choice is Fireball — a Canadian whiskey mixed with cinnamon — and quotes Dion Henderson, a bartender at Chupacabra Cantina in Austin, Texas, as saying that in their hip city, “Jäger is dead.”

Fortune reported on March 20 of this year that in 2014, Fireball had surpassed Jager — Fireball’s sales doubled and totaled $131 million versus $81 million for Jägermeister.  By the way, just about everyone would agree…while it might not be your choice to drink, Fireball tastes better than Jagermeister.

Much of Jager’s success could be attributed to the advertising blitz it went on, essentially spending so much money on promotions and spots pursuing customers, it was bound to gain market share.  Fireball, instead, decided to attract customers by spending little on traditional advertising and hiring a team to go to bars and pubs to offer Fireball shots for free. Nick Thomas, marketing director for nightclub Republic New Orleans, said,  “The difference is, Fireball did a really good job of focusing on sampling. They just put it in a ton of mouths very quickly.”

Perhaps it’s worth noting that providing free samples — even of booze — only works to drive more business when the product is not just different, but better, as well.  A free sample of a different — and inferior — alternative only speeds up my decision to never buy your product.

Jager, in the Fortune article, says they’re not worried — however, it is interesting to note they released a new version with…you guessed it…cinnamon flavoring.

(Remember in “Create Distinction” that one of the “3 Destroyers of Differentiation” is “Copycat Competition.” Copying your competitor is a desperation move, in many cases.)

At some point or another, just about every business — regardless of size — is going to have to compete with some new competitor that cuts price and tries to buy marketshare with ads and promotions.  If you’re just “different,” you may have trouble dealing with that onslaught.

However, if you have created marketplace distinction…well, do you think Apple is worried about a new competitor buying commercials to sell a new, cheap phone?

Is Fireball creating distinction — or merely trumping Jagermeister because it’s the “new different”?  That remains to be seen, doesn’t it?

However, the company that owns Fireball knows a thing or two about creating distinction.  Sazerac also owns Buffalo Trace Distillery — home of the legendary Pappy Van Winkle.Pappy

Pappy is, perhaps, the gold standard of bourbon — and one of the, if not THE, hardest to find anywhere.

In 1893, Julian Van Winkle started work for the W.L. Weller & Sons liquor wholesaling business in Kentucky.  By his death at age 89 in 1965, “Pappy” Van Winkle was America’s oldest active distiller.  His approach of blending the corn that makes bourbon with wheat (instead of the customary rye) was innovative at the time.

However, Pappy’s goal wasn’t to make different bourbon — it was to make the best bourbon.

That’s part of the reason that production has been very limited — about 7,000 cases a year. (Jim Beam, for example, makes about 7 million cases each year.)  The temptation must be great to vastly expand the production of Pappy Van Winkle bourbon; however, the Buffalo Trace Distillery resists.

How much does a bottle of Pappy sell for?  I just saw one of the 23-year reserve on E-bay for $66.  That’s for an EMPTY bottle!

Because it is so scarce, full bottles of the 23-year are selling at about $2300 — with the 20 at about $1500 or so, and the 15-year can be had for about $1000.

However, much like the halo effect that the iPhone had for the entire Mac line of products for Apple, other whiskeys made at Buffalo Trace benefit from Pappy’s success.

W.L. Weller was recently rumored to use the same recipe as Pappy — and it triggered a run on Weller’s and a rise in price.  Even the distillary’s namesake whiskey — Buffalo Trace — has enjoyed a surge in sales because of the distinction of the primary brand.

By the way, as someone who enjoys good whiskey — and having been fortunate enough to have had Pappy on three occasions — it truly is fantastic.  Naturally, everyone’s preferences and tastes are different.  However, I’ve never tasted a better bourbon than Pappy Van Winkle. (My favorite was the one aged 20 years.)

Here’s the point — being different can get customers to sample you, just as they did with Jagermeister.  Those customers then move on to the next fad, like Fireball — then, whatever trend appears next over the horizon.

Pappy, on the other hand, is distinctive in quality, production, and just about everything else.  In blind taste testing at the World Spirits Competition, Pappy scored an unbelievable 99 out of 100.

I see ads for Jager all the time — when was the last time you saw any kind of advertisement sponsored by Pappy Van Winkle?  Never — they don’t have to advertise.  They’re so distinctive, they allure customers to them…they don’t have to aggressively pursue or price.

Whether or not your product is poured into a glass, the results are still the same:

  • “Different” is about transactions — distinctive is about repetitive relationships.
  • “Different” is NOT better than better.
  • Being the superior choice — not just a different alternative — is a primary aspect of creating distinction.
  • Distinction is what causes disruption — and distinction is what generates loyal customers for life.

Which would you rather be?

A “different,” passing fad like Jagermeister…or a distinctive, enduring leader like Pappy Van Winkle?

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More Stories By Scott McKain

Scott McKain is a business leader, bestselling author, and Hall of Fame professional speaker.
Scott's latest book, "The Collapse of Distinction: Stand Out and Move Up While Your Competition Fails" reached the #1 spot on Amazon.com list of Customer Service Bestsellers! He is the author of two #1 additional business bestsellers (Amazon.com & 800-CEO-READ): "What Customers REALLY Want" (currently available in trade paperback) and "ALL Business is Show Business."
He is the Co-founder and Principal of The Value Added Institute, a think-tank that examines the role of the customer experience in creating significant advances in the level of client loyalty, and has appeared on multiple occasions as a commentator and analyst on FOX News Channel. His platform presentations have run the gamut from the White House lawn with the President in the audience carried live on CNN and NBC's "Today" show...to a remote outpost near the Amazon...all 50 states, seven Canadian provinces...and from Singapore to Sweden...Mexico to Morocco.
An inductee into the Professional Speakers Hall of Fame, he is also a member of "Speakers Roundtable" -- an elite, invitation-only group of twenty of the world's top business speakers.