How To Size Up Products And Services
The Show by its nature spotlights those products and ideas considered the latest, cutting edge, must-have, game-changers. Any company oriented long-term should pay attention to what can keep it relevant. What to embrace is another issue. The challenge in assessing all the pitches, ideas and products is to discern what will sustain your business, and what could amount to a costly flash in the pan. Two recent developments related to the automotive world serve as cautionary tales, and underscore that every business decision must evaluate endurance:
Toyota announced in February the end of its Scion brand, the cubicles on wheels hyper-marketed and engineered to a new generation. I read a headline rich with meaning, whether intended or not: “Toyota scraps its youth-oriented Scion nameplate.” Scion launched in the 2003 model year to much fanfare as a flagship for Generations X and Y auto consumers. Except the young trendsetters grew up and are now a little older and wiser with more money, which means they choose solid brands with more aforethought.
The new newer generation, hooked on app conveniences, obviously isn’t buying the Scion in enough numbers to create a profitable model line. So Scion is gone after only 13 years. I consider that a failure when measured in car years. If I were a Scion owner, I’d think I’d been had, as my car gets thrown on the automotive dustbin heaped up by goners such as AMC and Yugo, two other relics of passing consumer tastes.
Now look at the brands in the chauffeured transportation industry: Lincoln, Cadillac, BMW, Mercedes-Benz, Chrysler, Toyota (minus Scion), Audi, etc. Our grandparents would recognize those nameplates. Even the comparatively newer ones, such as Hyundai and Kia, already have a few decades of longevity in the U.S. and are positioned to last. They’ll likely still be around in 13 years.
When choosing how to reinvest hard-earned profits back into your business, it’s best to see which products and ideas have evolved in a measured, not abrupt fashion. What is the legacy of a product and its brand, or its company? What are its inspirational influences if completely new? What variables will determine its success? What are long-term plans? How has it adapted and met challenges? How has it bounced back from failures? Who’s behind it and why? Youthful trends are fickle and age out. Maturity matters.
The second development that should make us all pause is the fortunes of the ethanol fuel industry. Look no further than the Iowa Caucuses in February, where the one candidate bold enough to take on that state’s sugar-babied sacred cow of an industry, Ted Cruz, won one of the partisan rounds. As recently as seven years ago, ethanol was supposed to be a bio-fuel of the future with E-85 the progressive stamp of approval on vehicles.
Except, ethanol requires mass infusions of taxpayer subsidies, fails to save on carbon emissions, eats up cropland that should be used to grow food, thereby driving up food inflation worldwide, and is not that good for your engine.
Add the failures of ethanol to the fading allure of green vehicles overall due to lower gas prices, and you see an anti-trend brewing. Aside from special interest realms, much of the American public is either indifferent or hostile to ethanol. Many of us motorists know this, which is why when I pull up to a fuel pump with an ethanol 10% sticker, I drive off and buy real gas elsewhere. The lesson on the ethanol surge is that every trend or movement has a vested interest. Motives matter.
Sizing Up Sizzle
There’s nothing inherently wrong with a big splash for a new product, service, idea or trend. The test is whether substance amasses beneath the style. As transportation network companies (TNCs), new technologies and Millennials shape the market, the limousine industry retains the advantage of being what I will call an old business soul.
This industry succeeds on the eternal values of high service standards, safety and legality, client devotion, and established quality luxury brands. It always has to find better ways to provide one of the oldest services around: Drive someone from point A to point B. Such a business structure provides an informed perspective from which to evaluate new ideas and trends: Do they incrementally extend from past successes and experience, or are they fleeting, glitzy market spasms, likely to burst and then convulse?
At least the LCT Show is the best place to swap information and find things out for yourself. I’m relieved I’ve never heard of a limousine fleet owner springing for a sand-boxy little Scion. Fads eventually fall flat. Don’t let your business flatline with them.