Is It Smart to Sue a Competitor?

In 1948, the N.W. Ayer agency came up with a terrific unique selling proposition (USP) for DeBeers, the South African diamond mining behemoth: "A diamond is forever." Sixty-five years later, this USP is on the DeBeers website, still imparting its message of strength and permanence. Rosser Reeves and the Unique Selling PropositionThe USP was first articulated by Rosser Reeves (1910-1984). A great copywriter, vice president and later chairman of the board of Ted Bates and Company, Reeves was the author of "The Reality of Advertising" (1961, now out of print). On his invaluable website, HardToFindSeminars.com, Michael Senoff describes Reeves' concept of the unique selling proposition. He defines a USP has having three parts: Each ad must make a proposition—"Buy this product and you get these benefits." The proposition must be unique—something your competitors do not, cannot or will not offer. The proposition must sell—it must be something prospects really want; it pulls them over to your product. In essence, a Unique Selling Proposition briefly and clearly explains a single quality about your product enabling it to stand out against the competition. For his client, M&M’s® candies, Rosser Reeves came up with: “Melts in your mouth, not in your hand.” Other memorable USPs: "BAGS FLY FREE." —Southwest Airlines (GSD&M, 2010) "We try harder." —Avis (Doyle, Dane Bernbach, 1983) "99 and 44/100% pure." —Ivory soap (Procter & Gamble, 1892) "Look sharp, feel sharp." —Gillette (BBDO, 1940s) "The pause that refreshes." —Coca-Cola (D'Arcy Co., 1929) "Tastes great, less filling." —Miller Lite Beer (McCann-Erickson, 1974) "Does she ... or doesn't she?" —Clairol (Foote, Cone & Belding, 1957) "Mmm mmm good." —Campbell Soup (BBDO, 1930s) "When it rains it pours." —Morton salt (N.W. Ayer & Son, 1912) "We'll leave the light on for you." —Motel 6 (Richards Group 1988) "The skin you love to touch." —Woodbbury soap, (J. Walter Thompson Co. 1911) "Breakfast of Champions." —Wheaties, (Blackett-Sample-Hummert, 1930s) The legendary 20th century copywriter Claude Hopkins wrote, "Writing headlines is one of the greatest journalist arts." Creating a USP may be a greater art. After all, a headline is for today. A USP can be forever. Last year, Zales® The Diamond Store—the country's third largest jewelry chain with 1,769 stores and more than 12,000 employees—came up with a nifty USP in the grand tradition of DeBeers: CELEBRATION FIRETMThe Most Brilliant Diamond in the World Oops ...British owned Sterling Jewelers—with 1952 stores worldwide and more than 17,000 employees—took serious offense and filed suit just before Christmas. Zales was charged with false advertising under the Lanham Act, and deceptive trade practices under the Ohio Deceptive Trade Practices Act. From Sterling's attorneys: Zales' claim that it has proven its Fire diamond to be more brilliant that any other cut of diamond in the world can be true only if its Fire diamonds have been tested against every other cut of diamond in the world. If Zales succeeds in being able to stretch its deceptive campaign through the holiday season, it will misappropriate many consumers whom Sterling will never have the opportunity to get back. In federal court, Sterling requested an immediate injunction against Zales' running its multimillion-dollar ad campaign plus millions of dollars in reparations. If Zale's USP were allowed to stand, Sterling might be forced into a public pissing match. "Ours are just as bright!" "Ours are brighter and we can prove it!" Rewind to 1919: the First USP and Pre-emptive AdvertisingOne of the savviest and most fun Energizer bunnies in the world of marketing is an elfin figure who sports a full head of hair plus a mustache and neatly trimmed beard—West Coast wizard Jay Abraham. He charges $25,000 per person to attend one of his marketing seminars and routinely sells them out. If you decide to leave after the first day, he'll give you all your money back. Few students take him up on it. He's made zillions for himself—and for a legion of clients. From Jay's website: Let me tell you a story. You may have heard it before, but it's a classic example of the power of preemptive advertising ... Back in 1919, Schlitz beer was the #10 beer in the marketplace. Claude Hopkins, the classic marketing strategist after whom I've patterned my life, was called in to salvage the marketing of this #10 beer and lift it to success. When he walked into the brewery, the first thing he did was learn how the beer was made. He toured the facilities and he saw that Schlitz was located right on the banks of one of the Great Lakes. And even though they were right there with this unlimited water source, they had dug five, 4,000-foot artesian wells right next to Lake Michigan because they wanted pure water. The brewers showed Claude a mother yeast cell that was a result of about 2,500 different experiments that had been done to find the quintessential yeast to make the proper taste. They showed him five different, three-foot-thick, plate glass rooms where beer was condensed and redistilled and re-condensed for purity. They showed him the tasters that tasted the beer five different times. They showed him where the bottles were cleaned and re-cleaned 12 times. They showed him the whole process. At the end, he was incredulous. He said, "My God, why don't you tell people the process that your beer goes through?" And they said, "Because that's how ALL beer is made. It's nothing special; it's nothing unique." And he said, "Yes, but the first person who tells the public about this will gain preemptive advantage." He got Schlitz to the #1 position in about six months—using preemptive advertising windfall profits are virtually assured. What is preemptive advertising? As a result of his dogged research, Hopkins was able to create a series of ads for Schlitz beer based on its purity. One line of copy in the ad: Every bottle of Schlitz beer is sterilized, to insure freedom from germs. While all beer manufacturers sterilized their bottles, Schlitz said it first and preemptively owned the concept of pure bottles. The best Schlitz competitors could say weakly was, "Uh ... gee ... Our bottles are also sterilized." Bye-bye Sterling LawsuitIn January of this year, John R. Adams, U.S. District Judge in Northern Ohio said Sterling failed to prove "irreparable" injury. The term "irreparable" was used no less than 12 times in his decision (opens as a PDF). The injunction was denied and the lawsuit tossed out. Takeaways to Consider In this case, the only people who made money were the lawyers. Before going to court with all guns blazing, check to be sure the preponderance of evidence and ironclad proof on your side. Or is it a case of a pissed off CEO? For example, I am happily married—and have been for 42 years. Yet I am inundated with spam urging me to get involved with Christian Mingle. The USP: Find God's match for you®. I find this to be deeply offensive and intrusive blasphemous bullshit—totally unsupportable by facts. Worth the time, money and angst to launch a lawsuit? Nah. The Zales-Sterling contretemps was covered in trade magazines and websites dealing with marketing, advertising and law. Chances are consumers were not aware of the spat. However, if a fight heats up and starts receiving extensive media coverage in print, on TV and the Internet, customers and prospects can be turned off. If I were Sterling's CEO, I would spend my money on a world-class copywriter to come up with a dozen USPs to test. One would hopefully kick Zales' butt and also those of Tiffany and Cartier as well. DeBeers still would be the diamond company with the best USP, however.

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Is It Smart to Sue a Competitor?

Denny Hatch

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