Retail Anthropology - The Science of Sales

Am I the only one who thinks the "WOW, THAT'S A LOW PRICE!" TV ads for an office supply chain are obnoxious and irritating?  And not in the obnoxious manner that you want to show them to your friends, but in the "Fast Forward/Change the Channel" sort of way.

I'm going to suggest that it's one of those campaigns that is going to flame out in a hurry and here's why...

It's an institutional ad, not a promotional ad.  An institutional ad is the "We have low prices, next time you need office supplies come to our store" sort of ad.  A promotional ad is "This weekend only, 50% off on all copier paper!"

A promotional ad can afford to be obnoxious - you might argue that it NEEDS to be.  Because it needs to catch your attention, right now, to get you to take specific action, right now.  And it's only going to be running for a very limited time.  After the weekend sale is over, the ads are done - it's on to the next campaign.  So a little loud, obnoxious, silly behavior can be excused (and if well-executed even admired) in a promotional ad.

But an institutional ad is different.  Institutional ads run a long, long time.  There is no specific call to action other than "If you need us, and you will, we're the ones you call."  The Geico "15 minutes could save you 15% or more" ads are a good example of that.  And if your institutional ad is annoying and obnoxious people will despise it and turn it off.  They won't be amused, they won't share it on Facebook, if they refer to it (and you) at all it will be with disdain.

Perhaps in a blog post about bad advertising choices.

Link: http://www.thestreet.com/story/10646834/1/mcdonalds-to-offer-free-wi-fi-access.html?cm_ven=GOOGLEFI

McDonald's has offered 2 hours of WiFi in its restaurants for a $2.95 charge for a while now and while I don't know how successful it's been for them now they're taking it to the next level by dropping the $2.95 charge.  But....is that really a good idea?

McDonald's CIO David Grooms says it's part of their efforts "to become a destination".  I'd argue that McDonald's is ALREADY something of a destination, but one of the fundamental components of McDonald's is not to sit around on the hard plastic chairs watching unhealthy people scarf down two more Big Macs.  It's speed.  You can get in, get predictable food that tastes o.k., spend very little money, not worry about your kids annoying the other patrons, and get out. Fast.

How much money does Microsoft really make when you buy something off the Dollar Menu?  Well...less than a dollar per item, you can be sure of that.  So how do they make money?  Volume.  "Billions and Billions Served".  You can make a lot of money, 72 cents at a time, when you serve hundreds of those items an hour.   So how does it serve McDonald's interests to have all of their tables filled with folks on laptops, already satieted with their $1 double-cheeseburger and enjoying free refills on their $1 Coke?

One key factor in restaurants is called "Turnover".  How quickly you turn the tables over - get one set of patrons fed and happy and then out of the seats so you can put a fresh set of patrons in the seats.  Nothing slows down turnover quite like giving the patrons a reason to stay in their seats longer. If that reason is because they're enjoying a cup of $4 coffee or $20 wine from your bar, then that's good for restaurants.  If that reason is because they are hanging out on Facebook for free, then that would be bad.

Various articles about this move cite McDonald's competition with Starbucks.  But there's a big difference between the two.  Starbucks revenue model is based on selling you a $7 coffee, and then tempting you with all sorts of pricey add-ons.  Look around a Starbucks sometime at all of the ways you can spend your money while you're there.  Coffee mugs, aprons, coffee makers, even CDs of the music they're playing in the restaurant; and all of them premium-priced.  What does McDonald's sell?  Fast food.  Emphasis on the FAST.

As a techie I'm glad to know there is now (or will be in January) a new destination I can pull up to in order to get my laptop online when I'm on the road.  As a business guy though it doesn't make sense to me that a business that relies upon volume to make their profits would offer a service that almost by design fills their tables with people who aren't spending more money.

We'll see how it works out, but I think it's an odd decision.

You can reach Ben M. Schorr at bens@rolandschorr.com or by phone at 808-782-6306.

 

 

Link: http://www.nytimes.com/2009/11/12/business/smallbusiness/12guide.html?pagewanted=1&_r=1&src=tw

This is really clever:

Aim at Potential Customers Only

Some guys use Facebook to find single women. Chris Meyer used it to find women who are already engaged. Mr. Meyer, a wedding photographer in Woodbury, Minn., had had little luck with traditional advertising. A full-page ad in a bridal magazine generated zero leads and a trade show yielded only four bookings, barely covering the cost of his booth. But Facebook proved a digital bonanza. Mr. Meyer aimed at women ages 22 to 28 who listed their martial status as engaged in the Minneapolis-St. Paul metropolitan area. He estimates that he has spent about $300 on Facebook ads in the last two years and has generated more than $60,000 in business. He says about three-quarters of his clients now come to him through Facebook, either from ads or recommendations from friends.

Because Facebook gathers, even encourages, this sort of status update it's trivial for him to advertise to that demographic.  That's a good example of thinking creatively about how to reach your market.  If I had anything to do with the wedding business I would have already stopped reading this post to go on Facebook and do the same thing.

Unfortunately this doesn't work as well for all businesses.  There isn't, for example, as easy a way to reach people with car problems.

-B-

Our street has a private trash service. We're slightly off the beaten path and the city trash trucks don't come up here. So twice a week a trash truck, complete with large, leathery, laborers hanging off the back, climbs our hill to collect our rubbish.

This morning they were making their semi-weekly pickup and the elderly lady who lives next door to me happened to be walking up her driveway. Upon seeing her one of the roughneck workers raised a hand in greeting, flashed a big smile and chirped out "Good morning!" She returned his greeting. Moments later, he had climbed back onto the back of the truck, and as it pulled away he added "Have a nice day!"

It was a little thing. Basic courtesy I suppose. But he was so friendly and cheerful that he made a good impression on my neighbor and on me. He may not have a business card or a tie, but he just advanced that company's customer service image a long ways. You can bet that I'll remember that if their contract ever comes up for discussion.

Are your employees leaving a favorable impression of your company? Customer service is EVERYBODY'S job.

Here's an action item for you: Allocate some time, every week, to quietly observe how your employees interact with your customers. From the sales people to the service people, right down to the guy who empties the trash bins and the parking attendant in the lot. Try to catch somebody doing something RIGHT. Then praise them for it.

-B-

I recently had the opportunity to deal with United Airlines telephone service folks and I have to say - it demonstrated all of the stereotypical problems people complain about when dealing with outsourced phone support these days.

"To Be Hung Up On Without Speaking to a Person, Press 2"
First of all it answers the phone and dumps you into an automated attendant. There aren't too many options, which would normally be good (never keep your customers sitting there through long lists of options) but unfortunately NONE of the default options seemed to apply to a person who missed a flight (which I did).

Guessing at the option that seemed the most likely presented me with a sub-menu of options which also didn't seem to apply to my situation. Again, not a huge problem but it was exacerbated because NONE of the options were "Speak to an Agent." It had become clear that the automated system wasn't going to understand my problem and that I'd need to try and talk about it with a human being, if I could find one.

Finally, by repeating "Can't I just talk to somebody" I eventually got the system to prompt me with "Would you like to speak with an agent?" I don't know if the colorful explicative I inserted into my query helped or not.

I'm all for automated attendants for simple queries - like flight status or such, but give your users an easy way to escalate their problem to a real person if it doesn't fit easily into one of the automated slots.

Fail = No easy way to get to a person.

Thank You For Calling Me - How May I Read From My Script To You Today?
Once I finally did get to a human being they were singularly unhelpful. Oh, they tried, but it quickly became obvious that they had only a limited understanding of the United Airlines service (and air travel in general) and were operating mostly under a pre-written script which they were reluctant to deviate from.

One suggested that I switch to a flight that was leaving in 30 minutes, AFTER establishing that I was still at the hotel some distance away from the airport. After telling me that I essentially needed to sprint to the airport and that every second would count he then attempted to sign me up for a Mileage Plus Credit Card. I hung up as I dashed out the door. As expected I didn't make the flight he recommended.

Another suggested she could rebook me on another flight...that would get me to my destination two days later.

A third told me that NOT cancelling a leg of my trip (which was still upcoming) would be considered a change and thus subject to fees. After a long, and increasingly heated, discussion during which he was unable to explain why NOT changing a reservation would be considered a change and subject to fees I finally hung up on him as well.

When you put customer service folks on the phones make sure they understand your service offerings and are able to offer real solutions to your customers. It's a really bad sign when a customer hangs up abruptly on your customer service people feeling like they did not get any assistance.

Fail = When you reach a person the person reached isn't capable of understanding a situation that doesn't fit neatly into their script.

Your telephone support reflects heavily on your business and especially in a field as intense as air travel (travelers who call customer service often have a more serious situation than somebody calling Taco Bell customer service, for instance). Make sure you get it right or you're going to have a lot of angry customers choosing your competitors next time.