Escaping the Mephisto Waltz

Let us go on a trip.

We’re going to travel 400 billion light-years to a galaxy called NGC 6240.

What distinguished NGC 6240, when first discovered in 2002, was that it contained two supermassive black holes—previously it was thought impossible for the two to coexist within the same galaxy.

Yet that coexistence comes at a price for both of them: astrophysicists observe that these two massive forces of suction are gradually pulling each other closer and closer together until eventually they get sucked into each other and become one and the same thing. Astrophysicists refer to this mutually assured dance of death as The Mephisto Waltz.

But as marketers we don’t need to travel 400 billion light-years to see The Mephisto Waltz—we can see it on our screens and in the high streets around us all the time. We can see brands in the same category obsessively watching what each other does and responding like with like.

One brand does a stripy version, so the other does a stripy version; one does twisty caps, so the other does twisty caps; one brand has a close-up shot of a radiant woman with flawless skin, then they all have a close-up shot of a radiant woman with flawless skin.

They are, albeit unwittingly, locked in a Mephisto Waltz all of their own, one that brings them closer and closer to each other. As a result, these brands get less and less differentiated, and more and more similar—with a consequent erosion in price differentiation, profitability, and loyalty.

If you are a market leader, being locked in The Mephisto Waltz is not necessarily a threat.

You don’t really want a highly differentiated competitor whose success would be difficult for you to counter; you are in many ways much more comfortable with a second-rank player who does essentially the same as you; they will always be vulnerable to the superior cost-efficiencies and marketing budgets your scale can create, and the pricing, distribution, and communication dominance you can drive through the consequences of that scale.

But if you are a challenger, somebody who wants to grow by changing the way consumers think about the category, rather than simply being a fast follower, success lies in actually reversing The Mephisto Waltz and putting some clear distance between ourselves and the established brand.

We cannot compete against the scale and reach of the market leader by allowing ourselves to simply respond to what they do. We have, by definition, to find a new set of reference points and introduce new criteria for making choice to the consumers, which they won’t find satisfied by the existing players.

This means that we won’t become a successful challenger by studying market leaders, and just emulating them on a smaller scale. We will need to find an entirely different kind of Operating System altogether.

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