Can someone please explain…?

Looking for reason in all the wrong places.

Archive for September, 2009

Costco Direct Mail Fail

Posted by jlsimons on September 24, 2009

I just received my membership renewal notice from Costco, and I was astounded by their blatant failure to apply one of the most basic rules of direct marketing:  give me a reason to buy!

There were at least 3 offers to upgrade my Gold Star (or Basic) Membership to an Executive Membership for an additional $50. The most prominent of these offers was a Yes! box on the reply “portion” (their lackluster word, not one my agency would ever use) of the renewal notice.

Since Gold Star Membership only costs $50, I was intrigued to know what extras I would get for double the price.

I looked on the front of the notice. Nothing. They spent a whole panel encouraging me to sign up for exclusive online offers and shop online, but not a single word about why I should upgrade my membership — at the exact moment in our relationship when I was about to take action to renew my membership!

I looked on the back of the notice, where they directed me to find instructions for upgrading to an Executive Membership. Sure enough, there were instructions… but no list of features and benefits or any kind of explanation of Executive Membership.

I looked at the inserts. There was one for Ameriprise Auto Insurance. Nothing there about Executive Membership.

There was an insert for the TrueEarnings Card from Costco and American Express Card. And miracle of miracles, it mentioned that with the TrueEarnings Card, you can earn 1% in addition to the 2% rewards “you’re already earning” with your Costco Executive Membership. But nothing else.

Just for fun, I went to the Costco website and looked up Executive Membership. Here’s what I found:

Executive Membership is our highest level of membership. Executive Members enjoy an annual 2% Reward on most Costco purchases, as well as additional values on member services, such as lower prices on check printing, auto loans and identity protection; larger Costco Cash card amounts for mortgage, real estate and home equity transactions; an account bonus for money market and online investing accounts; free roadside assistance for vehicles covered through the auto insurance program; and extra travel benefits.

That’s not a bad offer: Cash rewards, better benefits, extra features. At 2% cash back, I can even figure out my annual purchases and see that if I spend over $2,500 a year, the upgrade more than pays for itself. And that’s not even including the value of extras and account bonuses.

It’s a good story, one that might have convinced me to upgrade my membership, if it were anywhere at all on the Renewal Notice.

Direct mail isn’t rocket science. There’s a set of time-tested basic rules, a wider set of tested-into best practices, and some basic mindsets. A good direct marketing agency (like mine, Tanen Directed Advertising) knows how to apply these time after time to generate predictable, successful results.

But it doesn’t take a direct mail expert to know that if you want to upsell someone to a product or service that costs twice as much, you’ve got to give them a reason why.

Did they just forget? Were they trying to drive me to the website or the phone to get more info because they’ve tested into it and learned that they actually upgrade more memberships that way? Or did their lettershop screw up and fail to insert the buckslip extolling the features and benefits of upgrading to Executive Membership?

Since this blog is based on the premise that if we knew the reasons behind some seemingly incomprehensible choices those choices would make more sense, can someone please explain to me why Costco thought they could get me to fork over an extra $50 without telling me why? (And Costco, if there isn’t a good reason, give me a call. My agency can really improve your membership renewal mailings.)

Posted in Business, CRM, Directed Advertising | Tagged: , , , , , | 3 Comments »

Are you my baby’s daddy? Oops… just kidding!

Posted by jlsimons on September 14, 2009

Have you heard the one about the beautiful blonde Danish woman named Karen who went on YouTube in search of her baby’s father, a tourist with whom she had a one night stand a year and a half ago? Turns out it was all a hoax, courtesy of the Danish government tourism bureau, VisitDenmark.

I found out about this on Mashable, perhaps the greatest blog covering all things Web 2.0 and Social Media. According to Mashable, the video got over 800,000 views on YouTube before it was taken down. If you hurry, you can still see it here on this Australian 9 News site.

More from Mashable, “…by her own admission, the woman in the video is an actress named Ditte Arnth Jorgensen and the baby is not hers. According to Danish newspaper Ekstra Bladet, it’s a hoax created by the Danish government’s tourism agency… It seems that the Danish government opted for quite a radical approach in luring tourist to the country; as they say, any publicity is good publicity.”

Now, it’s easy to get outraged by the hoax, as comments on the YouTube video proved. There were people who felt sorry for Karen, and then felt abused when they found out it was a hoax.

Setting aside the moral issue, I’d like to look at it from purely a marketing point of view.

I’m not against hoax marketing, if it’s done right and delivers a high degree of value to the people being hoaxed. Sega’s Beta-7 is a classic of the genre. FastCompany did a great post-mortem article about the campaign and Campfire, the viral agency that created Beta-7, and before that, the Blair Witch Project, reporting that:

“Beta-7″ ultimately clocked some 2.2 million followers and, for $300,000 (excluding TV spots), helped Sega top sales projections by 25% in a category overwhelmingly dominated by Madden. Along the way, however, Campfire had done something else: It proved that a young, cynical, media-saturated audience just might be willing to listen to marketers as long as they showed some respect. “The virtue of their work,” says ESPN’s Daly, “is that if you’re on the side of the equation that believes [the hoax], then it’s fascinating, and if you’re on the side that gets that it’s not real, then it’s just great entertainment.”

I think the key to successful hoax marketing is best summed up by Harry Anderson, the actor/magician who played lovable con artist Harry the Hat on Cheers and Judge Harry T. Stone on Night Court. Back in the 80′s I saw his live act at Caroline’s, basically a celebration of misdirection and the con. In bit after bit, as he tricked us while blatantly telling us he was tricking us and still got away with it, he made the point that you can take a victim’s money as long as you entertain him for it.

The Danish video certainly delivered entertainment value. It was compelling and engaging. It might deliver a great ROI and boost Danish tourism. (It even had a bit of mischief of which Harry the Hat might have approved: the word “Ad” is in the background as part of an innocuous piece of art.)

But the message it delivered was that the Danish Board of Tourism is willing to dupe you into visiting their country. If they’re willing to do that, what other practices may they condone? Bait and switch hotel packages? Cab drivers who overcharge tourists for trips to the airport? “Official” currency exchanges with rip-off rates?

And how’s this for a mixed message? In the video, Karen says that it was a discussion of “hygge” — the Danish word for a warm, fuzzy, cozy, comfortable feeling of well being (according to Wikipedia) — that led to the one night stand. (Don’t you feel warm and fuzzy knowing that the Danish government is willing to lie to you to get you into bed with them?)

What kind of tourist do you think an advertising message like this will attract to Denmark? If I were a Danish woman (or the father of one) I’d be appalled at my government right about now.

In the end, just because you can use an advertising tactic doesn’t mean you should.

So can someone please explain to me why VisitDenmark chose to advertise the warm and fuzzy nature of their culture with a hoax that is exactly the opposite of the brand character they were hoping to portray?

Posted in Branding, Business, Marketing, Media, Misleadership, Social Media, Value for Value | Tagged: , , , , , , , , , , | 4 Comments »

Consumer Reports vs. consumers reporting

Posted by jlsimons on September 8, 2009

We had to buy a microwave oven the other day, so I did what I always do before making a purchase: I went online to Consumer Reports.org to do some research. I’m not alone: according to the Pew Internet and American Life Project, of the 79% of adult Americans who use the Internet, 81% “look for information online about a service or product (they) are thinking of buying.”

Not all of those pre-purchase researchers go to Consumer Reports, but my wife and I do, just like my parents have always done. This time, though, I was shocked by the results. (I apologize that I can’t link to the results, or that I won’t be mentioning them in this article, but CR is a subscription service, and I don’t wish to violate the terms of use.)

In their Microwave section, Consumer Reports rated various countertop microwaves from multiple manufacturers as Best Buys, and I read the rankings on all of them. Then I noticed Customer Reviews for each model — and that the Average Ratings for the top models were glaringly bad. In fact, the average reviews for all the models rated were bad. As I read the reviews, one common thread emerged:  the customers, all of whom are Consumer Reports subscribers, not only disagreed with the CR ratings and reported reliability, but were genuinely upset that CR had given them information that led to an unsatisfying, and in many cases disastrous or even explosive results. I lost track of the number of “Shame on you, Consumer Reports” type comments I read.

I read all of the reviews, desperately searching for a Microwave that had a positive result. One review mentioned that they eventually found a good microwave by reading the customer reviews on Best Buy, even though the units rated well on BestBuy were not rated well on CR.

So I went to BestBuy.com, read the reviews and found three microwaves that didn’t sound like they’d blow up or die inexplicably whether within or outside of the warranty period. Then I did what Pew says most Americans who research products online do: I went to an actual brick and mortar store to make my purchase. (One side note: while in the store, I heard a Best Buy employee interacting with a shopper. When asked about the GE models, he said something like, “I’d recommend anything we sell except for the GE’s. They’ve been having quality problems for the past few years.” Now I’m not saying that CR rated GE products highly, or even at all, or that there were customer reviews on the CR website that singled out GE for quality problems; I’m simply saying what I heard in Best Buy.)

I left the store, happy and secure in the knowledge that my choice was backed up by the real experiences of real people — a feeling that I used to get from basing my choices on reviews in Consumer Reports.

Before you dismiss online customer reviews as the exclusive domain of malcontents, consider this survey by Bazaarvoice and Keller Fay, user review and WOM experts, reported here on Search Engine Watch:  “…79 percent of reviewers write reviews to reward a company for the quality of the product or service they bought, with 87 percent of the reviews being positive in tone… 97 percent of review readers find the reviews they read to be accurate.”

Customer Reviews are one of the most utilized forms of consumer generated content. When it comes to buying cars, JD Power’s 2008 New Autoshopper.com Study reports that 70% of autmotive Internet users utilize consumer generated content when shopping for a car, with 63% using customer ratings and reviews. (You can download the study here.) Search Engine Watch blogs here that customer reviews are one of the most important sources of product information, second only to word of mouth from a friend.

And before you dismiss the value of Consumer Reports, please consider that they were honest enough to print customer reviews that not only disagreed with them, but openly questioned the validity of their ratings. Those reviews sent me in a direction that led to my satisfied product purchase.

Will I ever use Consumer Reports to research a product before purchase again? You betcha! CR is still a great resource for product and category information, and their testing facilities still provide data that can’t be gotten anywhere else.

Will I ever skip the customer reviews and just read the ratings? What do you think?

But this whole experience leaves me with one unanswered question: Can someone please explain to me why there is such a consistent, category-wide disagreement between the ratings of the professional researchers at Consumer Reports and of the consumers reporting their own experiences with the same products?

Posted in Business, Marketing, Misleadership, Relationship Marketing, Social Media | Tagged: , , , , , , | 6 Comments »