In 1975, an Oregon-based engineer named Tim Leatherman took a road trip through Europe in an ill-fated Fiat. The engine went awry and he couldn't find pliers (or a spanner, for that matter) to fix the seven-year-old hatchback. Most of us would have left it at that, but instead Leatherman returned to the US and spent seven years developing a pocket-sized multi-tool that could be used anywhere for a myriad of tasks. By 1983, he founded the Leatherman Tool Group, which according to the company is "one of the most successful garage start-ups in the history of garage start-ups."
To date that successful start-up has grown to 450 employees and sells over a million units per year, enjoying a +55 percent share of its market. The Leatherman product extends to 15,000 multi-tools for customers in over 80 countries. These customers range from plumbers to mountain climbers, performing such essential tasks from cracking open a leaky pipe's inspection valve to twisting open a bottle of cabernet. Leathermans have been carried to the top of Mt. Everest, traveled across the Atlantic by dory in the 2001 Atlantic Rowing Challenge (which Leatherman sponsors), and gifted to presenters at this year’s Academy Awards ceremony in the US.
In 1989, Canadian Bruce Tretheway and his family went to South Africa hoping to import Leatherman tools to African shores. The brand, and the product itself, was unknown in Africa at the time, and its relative expense meant that Tretheway had to single-handedly create a brand niche for his product. Today, over 45,000 Leatherman tools are sold per year to buyers throughout Sub-Saharan Africa in South Africa, Namibia, Botswana and Swaziland.
In South Africa, Leatherman prevails over its market segment almost unchallenged despite the relatively recent proliferation of competing, well-known overseas brands such as Buck, Bear, Victorinox, Stanley and Gerber, as well as a plethora of cheap Asian knock-offs.
Leatherman tools have engendered a wide and loyal following here, where Tretheway and his team have deployed what they call an "educated, passionate salesforce, rather than uneducated, uncaring discounters." South African game rangers, contractors, outdoor enthusiasts and do-it-yourselfers swear by their Leatherman tools and daily put them through their paces in one of the most rugged regions in the world. One South African farmer in the outback wrote to the International Leatherman Newsletter that, "without [Leatherman tools], living here seems inconceivable."
Part of Leatherman’s differentiation from its competition is to introduce absolute support to not only its customers, but also the stores that promote its products. The Leatherman tool is meant for daily use and customers who have managed to break or damage theirs have been encouraged to bring it back to the point of sale, where store managers send the tool to Tretheway’s Cape Town office for free repair.
Tretheway’s offices include a workshop where hard-wearing Leatherman tools from across the country are repaired, re-tooled or replaced free of charge. "Customers [in South Africa] were not used to free service," says Tretheway, “and we improve and fix their Leatherman tools so they work longer and better." This personal support has resulted in a loyal following: one retailer contacted as research for this article stated flatly that representatives from Leatherman's competitors "are not allowed in my shop."
Indeed, this feature of customer support has created an emotional bond with Leatherman customers here in South Africa. Tretheway and his team, all wearing distinctive yellow Leatherman T-shirts, routinely set up Leatherman booths at local trade shows where people can bring in their tools for on-the-spot repair jobs. These mobile fix-it booths are an important sales vehicle for Tretheway, enabling potential Leatherman customers to see just how far the company goes to support its product. "[The booths are] a way people can see the product is for real," Tretheway says. "Customers are not used to actually seeing people care about something that does not make money."
The effort that it takes to ensure that every single Southern African Leatherman owner has a tip-top product has created what Bruce calls "A long term winning situation, where people care about the Leatherman tools." Tretheway claims that this is crucial, as South African retailers now offer a bigger variety of multi-tools than is available anywhere else in the world except for, possibly – and surprisingly – Finland. Big discount chain stores in the US, he posits, offer only a few multi-tool brands, whereas smaller regions, like South Africa and Finland, are not hamstrung by franchising demands.
Things may look rosy now, but when Tretheway arrived In South Africa in 1989, he discovered that getting people to "realize [the Leatherman tool’s] value was difficult." He sold his first consignment of 1000 tools by literally going to farm shows in the agricultural heartland of South Africa and pushing them one by one to gadget minded planters and ranchers. Tretheway initially captured a position for the Leatherman through "over-advertising" and "overwhelming the customer with support." His goal from the start was to "create a position for Leatherman as the ultimate multi-tool in South Africa," and he immediately began investing over ten percent of his net revenue in magazine advertising.
After three years of effort – and only a few thousand sales – Tretheway found that the Leatherman brand name started to find its place among farmers and outdoorsmen who could use Leatherman multi-tools to do everything from fixing hunting rifles to gutting fish. Tretheway and his son Chris had also made the crucial decision to form meaningful, personal relationships with every shop owner that sold Leatherman products. These retailers he refers to as "partners," and he and his salespeople routinely pop into their sales establishments for a visit, listening to what the retailers have to say about Leatherman products, buttonholing customers and collecting Leatherman tools that need repair.
In this way, the Tretheways and the rest of the sales force have differentiated their brand from the others – so much so that most Leatherman retailers report that the tools, despite costing as much as three or four times that of the competition, dominate multi-tool sales throughout the region. Tretheway's philosophy has been that "the customer is not wrong, regardless, and this is a winning formula if you have a winning product that will sustain their interest."
As far as advertising is South Africa is concerned, Nicole Meiring, Tretheway's marketing coordinator and office manager says "We targeted the prime magazines in a specific market and spent a lot of money to break into that market." After advertising in magazines like Getaway, the Outdoorsman, and Farm Market, sales have developed a "momentum." Now, she points out, the focus is on the promotional market. "We do laser engraving right here, so the client gets the complete product." From a marketing perspective, Nicole feels the "support Leatherman gives is key. “We try to get our retailers to follow suit and realize the [25 year] guarantee is for real."
Since 1989, Tretheway's sales have escalated. In 2000 he racked up 56,000 sales, though 2001 saw a slight drop off to about 45,000, thanks to the sudden decline of the local currency against the dollar. Despite these numbers, Tretheway feels that perhaps only two percent of his market has been tapped. He points out that most Leatherman tool owners have more than one, meaning that repeat business from established customers ought to help expand South African sales.