Tag Archives: Sales

Say It Ain’t So! More Great Cup ‘a Joe Tech?

This morning, while putting gas in my car, I pulled out my mobile device and placed a mobile order for a Venti Latte (1% Milk and No Foam) with around 5 button presses on the Starbucks mobile app. When the gas was filled, I jumped in the car and drove 100 yards to the nearest Starbucks (I live in Los Angeles, after all…) and walked past a line of 18 people transfixed by their mobile devices while standing in line to grab my coffee that was just popping up on the counter. I still don’t get it. How can so many people not be using this great piece of technology?

What Starbucks has done – and Dunkin Donuts is following suit – by advancing a use of an app that is absolutely helpful in getting through your day rather than just being an occasional doldrums distraction, is a model for companies of all verticals to follow. By utilizing connectivity and UX in a hyper-intuitive way, they have not just made lives easier for people who only have the time to jump in and out for a coffee, they have used the available technologies to increase loyalty and gain an even stronger source of data to make their customers happier while boosting business practices. *Starbucks also gains a huge financial advantage as the customer has to have a balance in their app in order to participate – allowing the company to take on a huge amount of capital before they have to deliver the goods.

We’ll have to see if their latest program marrying the mobile ordering component of their app with a delivery service  delivers the goods that can scale. The great and innovative learning in this is they are piloting ideas that take industrial knowledge one step further to keep moving forward. I don’t know how many people will want to pay a multi-$$ surcharge for a cup of coffee to be delivered, or how many markets it would actually work in. But, if they can figure out how to provide the service in areas that make sense and are profitable… even better.

Of course, once more of the world catches on to the mobile ordering and goes straight to the counter, Starbucks will have to figure out how to deliver on greatly expanded expectations. But that’s a good problem to have. Until then, I’ll continue to enjoy walking past the line at the register while shaking my head in wonderment of when more people will make the jump.

Wonka Taught My 4-yo Everything About Marketing

So, maybe there’s no truth in my daughter learning anything about marketing while watching the 1971 Gene Wilder version of WILLY WONKA AND THE CHOCOLATE FACTORY, but there was certainly compelling content that could lead to a dissertation for anyone who cares to share on their way to a marketing degree. Though one of my favorite movies, I had not seen it in years.  It seemed like the perfect time to share with my daughter – since she had just completed being read the story in her pre-school. The magical moments remain, but what struck me most are the marketing concepts and case studies (good and bad) that play out in the film.

wonka

Here’s just a couple of concepts or case studies from the film:

Kick-off a season or product by giving away product to those who are most likely to come back and buy your product.

The movie start out with kids leaving school – presumably for the summer break – and running to the candy store. It’s clear that not everyone is allowed inside as we see Charlie Bucket on the outside looking in.  What he sees through the glass is the candy man effectively throwing candy at the kids and even welcoming them behind the counter to take what they want.

When we return to the store later, its much quieter and the same candy man requires payment for whatever is bought. That store cleaning at the beginning of the film must have been great for loyalty – and clearing out old inventory to make way for the Wonka Bar craze that was soon to be a boon to the candy business…

Create a promotion with such an insane reward that demand for product skyrockets globally driving sales far beyond consumption capabilities.

The placement of 5 golden tickets leading to a lifetime supply of candy made everyone go insane and those who could, bought more chocolate bars than anyone could eat. Add to that demand by inflating the re-sellers’ market (a box’s auction started at 5000 GBP) and you’ve not only increased sales, but you’ve increased the value of the brand exponentially.

We won’t harbor on the fact that it seemed, in the end, that Wonka seemingly had no intention of honoring the candy for life for all five winners.

Truly create an compelling experience and people will do everything they can to be a part of it.

After 20 years of Grandpa Joe, Grandma Josephina, Grandpa George and Grandma Georgina being bed-ridden, Grandpa Joe miraculously gets out of bed and, within minutes, is dancing in preparation for visiting the Wonka factory.

Throw off your competition by sharing news about the development of a product that is so secretive that everyone wants a piece of it – even if it has no long-term value.

Reports were coming out about the Everlasting Gobstopper as soon as the contest launched (if not sooner) and everyone wanted to know what they were. In this case, the evil competitor reached out to all five winners to entreat them to bring back a sample of the super-secret product.

On a side note about gaming rules and ethics, one has to question how he was able to be in the proximity of every single winner just moments after they won.  In fact, after finding that he was a Wonka employee, one can question the validity of the random-ness of winning…

Had anyone stopped to think about the commercial viability in the Everlasting Gobstopper, they would have realized that there was no future.  It would have done great sales at first, but you would not have been able to sell more than one to a person (or a family with proper cleaning and hygiene) because you could never finish sucking on them – they’re everlasting!

Create a theme park factory to draw crowds.  Even if you don’t allow visitors, the pent-up excitement will find its way into your sales.

It sadly drew parallels to Michael Jackson’s Neverland – where too few people got to experience it and be transported.

Did you see the amazement on the kids’ faces when they see the candy garden, the chocolate river, its boat or the sudsy car contraption that only traveled 20 yards?  That stuff was priceless and was created, ostensibly, to never be seen by anyone other than Wonka and his Oompa Loompas… But, those tales that would be told by the kids after they saw it and the demand it would have created would have only led further to propping up the brand’s image.

Epilogue

Much like this was all fantasy created in the mind of Roald Dahl or the filmmakers, there is always a bit of truth at its core.  We can pick out what we like and discard the rest.  We can gloss over the fact that the contract that Wonka had the minors sign without their parents’ signatures would not hold up if challenged.

The Quaker Oats company actually paid for the production as a launch point for their new candy bars that they were planning to go to market with. The sad thing is that the products got into market at the time of the theatrical release, but they all had to be recalled because they melted.

What is prevalent as the film relates to marketing is that a sense of wonder goes a long way toward its effectiveness. What happens in the long run is up to how strong the product actually is. A great story can launch a product, but a great product can launch a story and reach even greater heights.

Have The Dodgers Found Their Magic Sports Marketing Mix?

There may be no other entertainment property that can match Sports’ ability to trade on both nostalgia and hope.  Politicians may hope that they can – perhaps they have to work a lot harder to convince their fans that, however bad they were the year before, there is a chance they might become better. For that reason, it is impressive when a team’s sports marketing shines above the rest. They may be talking about different marketing angles at theSports Marketing Association Conference in October, but the true magic comes from the mix of talent and entertainment – which the Los Angeles Dodgers now have in spades.

Koufax

There’s a 24/7 machine of sports information across radio-waves and numerous cable or network channels. Home cinemas bringing viewers closer to the action than they could by spending more than their plasma screens cost in the first place. Yet some franchises are able to fill their stadiums or arenas time and time again.

The Dodgers have historically brought league leading numbers (or close) to the park until they ran into an issue caused by their previous ownership – apathy. That fan apathy plus the availability of games on TV led many fans to stay away or not even pay attention. It was something that was unheard of for a perennially solid team with a rabid fan base. Other teams (like the Marlins) might have won more championships recently, but their fans were getting burned by the ups and downs that lesser franchises find in the balance between owners making money and fielding winners. But, the Dodgers (thankfully) got out of a bad situation by being sold to a collective of people who seemed to care more about winning and fielding a solid team for the fans.  The fact that the face of the ownership is local legend, Magic Johnson.

The team struggled in the first year under the new ownership and I think I might be representative of the general public when I only attended one game after attending a lot more per season prior to the bad owner’s “regime.”  I was thinking this year that it might take a few years before I go as many times as I used to.

That thought change immediately directly before the Opening Day game on Monday. This change was because of something the team did to draw upon that mix of nostalgia and hope – again,  as only sports teams are able to. They leveraged both to drive excitement about the possibilities in an opening video that saw the ball passed from local sports heroes to entertainers and finally to Magic Johnson.  Not satisfied in having Magic throw the first pitch, they threw some drama by having the Dodger manager call for a pitching change – to one of the best pitchers in baseball history, Sandy Koufax. It was well written and perfect genius.

The excitement it generated fed into the belief that everything can happen – and that is sure to fill the seats and get more people to tune in.  It didn’t hurt that the team beat their rivals on that opening day game.  It will be interesting to see how the Dodgers repackage and build upon that video footage through the course of the year.  If done right, fans can remain excited without regard for the fact that the team proceeded to lose the next two games to the Giants. The beauty of sports is that there is always a point that we can look forward to next year.  Hopefully the Dodgers don’t drop the ball on the field or in their media plan and allow for any gains to be lost.

JCPenney Gets The Buzz But Misses The Point

Sarah Mahoney might have incorrectly or unfairly categorized JCPenney’s newest ad as pandering to the Right in her recent MediaPost entry.  Whether it is, in fact, the company’s attempt to counter any backlash that they have received from their same-sex marriage ads or not, they might be doing more damage than good – due to the buzz they are generating for the wrong reasons. The prodding of consumers to round-up their purchases to the nearest dollar for charity – with the proceeds going to the USO – is admirable but it doesn’t really do much for JCPenney in its latest push to move to greener pastures in the sales column.  I don’t think it has to do with liberal or conservative, Left or Right, Gay or Straight – as Mahoney suggests (specifically as none of those are mutually exclusive when it comes to charity, military or the USO.)  What it does do is further remove focus from the company’s switch to lower prices across the board.

Already, a head has rolled in just the few short months since JCPenney announced its new direction with always-discounted pricing rather than asking consumers to wait for sales to come. In January, an AP interview with CEO, Ron Johnson, clearly spelled out what their revamp was. In June, their President, Michael Francis – a seasoned marketer – was fired after five months on the job.

Could it be that it was because their lifestyle ads were compelling and welcoming, but missed the point about how you could go into a store any day and find great prices on products from major designers?  Did they not focus enough on their new offering of deep discounts on the first and third Friday of every month?  Most of the buzz I heard was the flak about Ellen DeGeneres being their spokesperson, followed by the image of two mommies in their Mother’s Day ad and then two daddies in the Father’s Day version. From a liberal perspective, it might have had a warming effect.  Unfortunately, it didn’t seem to have a heating effect on sales.

This is by no means a scientific analysis of what people are taking away from those ads, but on a surface review, they just don’t do enough to present JCPenney as a true competitor to its main competition.  They are certainly not the first store to have specific lines made for them (see Missoni for Target) and they are not the only ones to permanently drop their prices (see Falling Prices for Wal-Mart.)  Even when looking at the one ad out there about those Friday sales don’t make their overall strategy clear.

Sadly, it seems that they (JCPenney) are the only ones to have lost that point in well-meaning yet unclear advertising.

Minding The Fault In Daily Deal Sites – Prepare Yourselves

With the meteoric rise of Groupon since their launch in 2008 and the bevy of competitors that have sprouted up in an incredibly short amount of time, the very companies that can best utilize these forms of social marketing are still scratching their heads about how to use daily deals to their advantage. The thing is, there are so many options in this multi-billion dollar industry that we may have not yet seen the perfect solution – if one even exists.  But be assured, what works for some will not work for all – and it is not entirely the daily deal site’s fault.

When determining whether you want to include daily deals in your marketing mix, you need to set a strategy that works for your company.  Too often, companies utilize daily deals for awareness by providing huge discounts and then question the ROI.  Not to say that you can’t garner a strong ROI with daily deals, but you certainly can’t do so without a clear strategy or game plan.

After determining that your business would be best served by doing a daily deals program, here’s a few little tidbits you should consider:

1) THE PROGRAM
What are you looking to get from this marketing program?  Your specified end-goal should clearly define what type of program you should execute. Is it awareness, user-base, subscribers, samplers, or profit?  If its profit on the specific program you are looking for, you’re probably out of luck.  We’ll get into some basics of the participation later in the post, but figure that if 25% cannot cover the cost of your services plus a little profit, that end-goal is out of the question. 

If you are looking for awareness, user-base, subscribers or samplers, daily deals could be strong for you, but you need to make sure you can deliver and lead to repeat business.  Too often, the deals drive business for that one instance and, even if the consumer has a good time, there is no repeat visit.  Part of the solution to that is by coming up with a program that induces return visits or pass-along savings.

My wife is in the middle of a Living Social deal she bought with a friend for six classes to a new fitness program.  If she is ecstatic that she is halfway through and only has three classes left, I don’t think that’s what the business was looking for. She hasn’t felt strongly about the offering and, even at the discounted price, she’s wondering if the value is there.

Other deals we’ve bought – whether they are spa treatments or activities have rarely led to repeat visits. Had those experiences been unbelievable, we might have decided to return. So, no matter what the offer, you’ve only achieved part of your goal by getting them in the door.  Make sure the offer showcases what you do best to even have a chance of getting those return visits.

2) THE PARTNER
All deal sites are absolutely not created equally.  We’re not just talking about user-bases, we’re talking about type of user, its typical offerings and the general theme of the deal site. Depending on what type of business you are marketing, there might be specific genre sites that make more sense for you.  Even if it means that you’re reaching 1000 users instead of 100,000, that specific interested group could be a much stronger use of your money. Take the time to look at daily deal sites and compare what they offer, who they reach and what they charge. Also, weigh how they deal with maximums.  You don’t want to break your company by losing too much through the succesful sale of too many deals.

I always use the example of the bikini wax on Groupon.  I don’t need it, and even if I did, each company who offers it would hope that my sampling would turn to repeat business.  In addition to relativity of offerings, it leads to another point you should look at when determining which partner site you are going to run a deal on.  If a site runs so many deals like yours, you might end up getting people who just signed up for the latest deal.  Your chances of repeat business are slim because they might just wait for the next wax or massage – where they may be offered from.

Cost participation is another thing to consider. Figure that the general principle is that you’ll offer a service for half of the actual cost.  The site will most likely take half of that, leaving you with only 25% of the value placed on your product.  The model above is Groupon’s standard participation split.  You’ll probably find variances depending on how big, small, established or new a site is.  Ultimately, if your motivation is profit, you’ve got to set up for your offering to bring you a profit at a 75% reduction in cost.

Remember, the buzz site is not always the best return when it comes to your business, you need to be specific and stay in line with the strategy you originally set out.

3) THE PAYOFF
Perhaps too many businesses look to the deal as being the end all for the program.  If your goal is not just profit on the deal, then you’d better have a mechanic set in place to bring these consumers into your communications (through lists, groups, etc.) or find a way to convert them to subscribers or members.

I’ve redeemed far too many deals where the business never even asked if I wanted to be placed on their list for future news and specials.  That’s the easiest way to leverage the deals and a shocking few even choose to do that.

If you offer something that might be attempted only once, a solution could be to entice users of these deals to bring a friend with them later to receive another future discount.  The discount should be smaller than what the original deal, but think about it – you’re getting a new customer and even if you gave the same discount as the original deal, you’re making more money because there’s no participation.

There’s a number of different ways to leverage that sample or trial use that cost nothing more than the original outlay of the program. It’s up to you to play around to find what works best for your company and its newest clients.

When all is said and done, the product and services are key.  If you don’t have something you’re proud of, work it out BEFORE you do a daily deal.  Many of them provide a great opportunity to generate awareness and sampling, but you only get one chance to make that first impression.  It doesn’t matter how steep the discount, you won’t get them back again and you’ve totally lost.  As of yet, we’ve never seen a case study where a struggling company with sub-par offerings have been able to turn things around by offering a daily deal.

In most studies on daily deals, the business owners are quick to lay fault on the deal sites if their program does not work. Really, the fault is on business that go into this form of social marketing believing that everything they offer is going to provide returns.