When I started my management-consulting career at 26, having sold my network technology company to Andersen Consulting — the world’s largest consultancy (now called Accenture), I really had no understanding of any industry. I specialized in technology that was applied to many industries, yet most of the revenue of our company came from industry-specific knowledge capital and methodology.
What does that mean? Well you don’t know an industry without digging deep into it. I can tell you that I ran some very large projects and was working at the executive-office level with Fortune 500 companies of that era, like Bausch and Lomb, Xerox, Kodak, Time, McGraw Hill, ADP and a number of amazing companies all in different industries. When we were brought into a company, it was usually to provide them strategic consulting to address major shifts in consumer thinking and how to adapt to them. In most cases customer behavior was quite different between industries.
Creating brand recognition is an art in this industry.
The level of competition and the scale of these large corporations allowed them to have large teams of people perform analysis and research on how to improve their short- and long-term profitability. Management consultants, who would work at many corporations in one industry, would gather valuable insight into what one corporation may consider its winning business proposition versus another in that industry.
They would use this to create knowledge capital and ultimately sell this insight back to the corporations needing it. When I was with the big firm, the adult industry would have been considered “products” and this would include all of the big brands of products we see on TV, etc. I’m sure we all would agree that data collected from these companies, and the thinking that would go into a strategic improvement, would probably be faced with many challenges in our world. The adult industry is not taken seriously by many professions and individuals, and the morality police are blocking us at every turn.
I think today we are facing a very interesting set of new challenges in our industry. The mainstreaming of our products brings new opportunities and a higher bar for just about every aspect of the business — this includes more advanced supply chain management, more targeted but mainstream marketing strategies, strategic planning that considers consumer behavior, and quality control, and more. Though there will be lessons we can learn from other industries, our industry has enough uniqueness that we will need to figure these things out on our own. A company in almost any other niche industry has access to resources to give insight and reduce risk and will not have to break-in the trail.
One area where many adult companies will face a critical challenge at a mainstream scale is brand recognition. We all know the person who pays all of our bills is the person buying the product. To get a loyal customer, you need brand recognition. Yet to really get a message to this person is easier in other industries, for us using the channels they rely on is very difficult. The morality police confines us, and as a result, even on sites like Amazon, Facebook and Instagram and in mainstream magazines, and not too long ago, even on Google, you faced stigma and limitations on how and where you could promote your products.
Creating brand recognition is an art in this industry. This challenge becomes even more difficult with the three-tier re-sale process of using a distributor as your promoter for your brand. They sell to the retailers, who then also need to keep the information chain alive to sell the product to the consumer. Many companies also find other ways to get the message to the retailer and customer — such as through on-the-road training, brand ambassadors, incentive programs for salespeople, and more. These are all tools that every industry uses. But it is no secret that the real challenge is the consumer, who is now discovering the power of buying our products from non-adult online stores and our business model does not support this in such a way to capitalize on the customer relationship. It’s hard to get a brand ambassador to get an appointment with Amazon or Walmart.
Of course, you can argue that in fact, our industry is completely set up to support the online model. After all, drop-shipping has simplified the distribution process for online retailers. With even mainstream brick-and-mortar retailers struggling with thousands of stores closing, right now, the manufacturer whose brand equity is not the priority of these channels is losing. This is the challenge. The manufacturers actually have the ability to have power in this industry, and this is unusual. In most industries, the retailers hold the brand power. Yet we manufacturers are losing power, as the Amazons of the world devalue the brand by selling non-branded products in huge quantities. Except maybe for a few brands, most consumers would not even know the brand of their favorite sex toys.
Currently, I would say brands are not what consumers buy in our industry; they buy recommendations or by first impressions and reviews typically. If I were a management consultant to a manufacturer in this industry, I would play out a few scenarios assuming a couple of huge retailers started selling knock-offs of our products. At least at pharmacies you almost always know the brand of the original product that their white-label brand is modeled after. I doubt many people would be able to pass a test naming the brand of even five of our industry’s most popular products. This actually makes the whole industry vulnerable to a major disruption. I think what our industry needs is a focus on branding. Established brands with loyal customers and strong reputations will drive higher revenue, expand their audiences and strengthen their positioning. Branding power will also keep retailers brand-focused and reduce their tendency to sell knock-offs.
From a customer relationship management perspective, our industry is no different than any other and we need to treat it that way with deep understanding of our customers, their desires and new trends on the horizon. This is a strong way to protect ourselves against disruption and other challenges that mainstreaming can create.
Steve Callow is the inventor, designer and CEO of Florida-based Perfect Fit Brand. Established in 2011, Perfect Fit is the manufacturer of innovative, high-quality and easy-to-use sexual health aids and sex toys for the full gender and sexuality spectrum. Callow founded the company based on the principle that sex toys should not only look and feel great, but must, above all, perform.
