In the Clear: How Customer Segmentation Drove the ClearVue Success Story
How Customer Segmentation Helped Create The ClearVue Story
In 1989, ClearVue was a $60,000 per year product sold by a small Massachusetts glass company that was being taken over by Brooks O’Kane, who was handed the responsibility of growing the business by his father-in-law. At the time, O’Kane knew very little about customer segmentation, but he realized that he would be in for a tough fight — a true David vs. Goliath battle. Yes, O’Kane thought that he had the superior product, but he had superior competition, too. And they wouldn’t go down without a fight.
As a result, ClearVue was at a crossroads. Thankfully for the company, O’Kane chose the right path by making a crucial decision based on customer segmentation research that would ultimately cement ClearVue’s place in the industry.
In the late 1980s, the glass cleaner market was sized at $160 million. There were three established entrants: Windex, Glass Plus, and SOS Glass Works, which combined to control 75 percent of the market. The remaining 25 percent was filled by private label and regional competitors. The market was mature, and the larger competition had plenty of resources to fight any new entrant.
So, O’Kane started by evaluating the market. When he took over ClearVue, it was being made in a tub in the back of his glass company. It had never been advertised, but it had gained a small and loyal following. Consumers would even write fan mail praising the product and come up with novel uses for it. As he read these letters, O’Kane felt he had a winner on his hands. But the challenge he faced was how to take on the Goliaths of the industry?
Here is what he did:
- Product: It all starts with a best in class product with a winning value proposition. Clearvue was a better glass cleaner and it was cheaper. Another chief distinction was that it was a clear solution, while the competitions’ products were dyed blue.
- Packaging: As Steve Jobs proved with the original iMac, you can sell a commodity for a profit if you package it attractively. Brooks invested in a higher quality plastic bottle which was clearer and when filled with the colorless ClearVue stood out from the competing products. He worked with a graphic designer to create a two sided label so people could read about the ClearVue story on the back of the bottle. They could claim an industry “first” and start a trend.
- The Sales Pitch: Everyone loves an underdog story, and O’Kane told anyone who would listen about the humble beginnings of ClearVue. After much lobbying, he was able to get interviewed on the local Boston TV show called, “Chronicle.”
- Pricing: O’Kane was advised to keep the price low in the beginning. Since glass cleaners were a commodity, a low price would be essential to encourage trial use by the increasingly price sensitive public.
- Promote, Promote, Promote: Brooks made sales calls to the local New England grocery stores, thinking they were the most likely outlets to give his product a shot. He sought advice from industry experts on how to hone his pitch, and it worked. Within a few months, he had scored deals with the three largest grocery chains in the region.
From there, O’Kane even went knocking on Walmart’s door. When his traditional approaches failed, he wrote Sam Walton a personal letter telling him he was a young guy who was starting out who had a killer product and just wanted a chance. Eventually, a buyer from Walmart got back to him and ordered 15,000 cases.
All was going well. O’Kane had grown ClearVue into a multi-million dollar operation. But there was one problem, the competition was waking up and it fought back with killer discounts and copycat products.
Customer Segmentation to the Rescue
Brooks had two lines of business: the mainstream grocery business and the Automotive business. On the surface, the Grocery market was large, and offered a better opportunity to showcase the brand. But as he had discovered, the Grocery competition was fierce and the consumer was very price conscious.
The story was different in the Automotive market. It wasn’t nearly as concentrated, and the automotive consumer was not nearly as price conscious. They were willing to pay a premium for car care products that worked. So, Brooks made what would be a fateful decision to concentrate on the automotive market. It was the right call, too. ClearVue became a hit in its market segment and remained so until it was recently sold to Turtle Wax. O’Kane’s customer segmentation strategy ultimately proved to be a life-altering decision.
As my business professor at Brandeis used to always remind us, “You don’t steal Superman’s lunch!” I think that lesson applies here. By avoiding a long entrenched fight with national brand glass cleaner competition, Brooks gave ClearVue a steady foundation upon which it could grow.