The topic for this Foodie Friday is the grocery store. Think for a minute about where you do the bulk of your grocery shopping. Is the merchandise that it carries substantially different from one of its competitors? My guess is that it probably isn’t. All the national brands are there and the same person who stocks the snack or bread aisle at your store might have left a competitor twenty minutes earlier. So why do you go?
We had a Wegman’s open here. The lines to get in were HOURS long. I’ve never shopped at a Wegman’s but those who have proclaimed their undying loyalty. There’s been a rumor floating around my neighborhood (since confirmed!) that a Publix will be opening in the not too distant future. People who’ve missed their sandwiches and service are swooning. In the case of these two stores, they separate themselves from everyone else in very clever ways; Wegman’s via setting themselves up to feel like a European marketplace and Publix via their signature subs.
Some of it is just smart branding. While my local Harris Teeter and Lowe’s Foods both make various types of sausages in-house, Lowe’s brands the entire operation as The Sausage Works and gives each type of sausage a clever name. They even sell “My Sauageworks” tee-shirts (and you can imagine the looks I get when I wear mine in public). They pride themselves as being the Best Of The Wurst and are constantly inventing new flavors such as their newest, The #63 Philly, which they describe as a brotherly love blend of chicken sausage, mozzarella, green peppers, onions, mushrooms, and spices. No commodities here but while both stores sell the same basic sausages, Lowe’s goes the extra mile and can market behind it.
I think may business sectors have become quite commoditized. When I was running a sports site, we would often remind ourselves that people can get a game score or most statistics anywhere. The only way we could compete was to provide something unique, better, and in-demand. I think every business needs to think of itself in terms similar to that, even if you really do have unique aspects baked in. It won’t be long before someone has what you have and maybe is offering it on better terms.
Why do you shop where you shop? If “better prices” is the only answer, that store might have trouble the minute a competitor decides to price match. It’s much harder to match a better experience or unique merchandise, no matter what business you’re in. Don’t you agree?
I went to one of the warehouse club stores yesterday to make some bulk purchases. If you’ve ever been in one of them – Costco, BJ’s, Sam’s Club, etc. – you know that one feature of walking around the place is that there are usually free samples. You can taste the latest and greatest in meats, cheeses, and frozen things to cook while you’re too busy to make something yourself. That got me thinking about the fact that you really don’t see a lot of sampling elsewhere.
I’m a fan of the free trial. It gets customers walking through your door and using your product. What I don’t particularly like are those “free” trials that require you to fork over your credit card. Free means without strings, right? In particular, if you’re a business that is built around what I think is the gold standard – recurring revenues – you ought to be spending a good chunk of your marketing dollars on free trials.
It’s relatively simple math, right? What’s the lifetime value of a customer? What does it cost you to offer up a free trial – a visit, a free month, whatever? What is the conversion rate of those freebies – how many of the trials become regular customers? Recurring revenues are predictable and generally pretty stable. I bet you’ve signed up for subscriptions of some sort and forgotten you’ve done so or don’t use them as often as you thought you would. For a business, that’s a customer without costs, and that’s a nice margin!
When I talk to people who are looking at franchise opportunities and who don’t have a particular brand or industry in mind, I usually talk to them about the businesses with recurring revenue models. Things like cleaning services. Not a sexy business, but very profitable and that, in part, is because of the recurring revenues. Same thing with spa businesses or some hair salons that feature memberships. Are those businesses that can offer a free trial? Maybe if you’re an out-of-the-box thinker. Giving a converted customer the ability to give away a free trial to a friend is another great way to expand your base at very little cost.
Here is the thing about free trials leading to recurring revenues. As with any business, you have to maintain a high level of customer service. After all, when someone’s credit card is getting dinged each month and your business appears on their statement, it’s an opportunity for them to reconsider. If they walk away, no amount of free sampling will get them back most of the time. Everyone loves something for nothing. The opposite – nothing for something – is very much NOT true!
The big news this Foodie Friday is the return of the McRib sandwich. It’s only going to be around for a limited time and only at select McDonald’s stores (which is about 10,000 of them). If you’ve never had one of these babies, it’s a pork patty formed to look like pork ribs (but boneless) on a bun with pickles and onions and a fair amount fo a sweet barbeque sauce.
I’d be very dishonest if I said this concoction appalls me since I’m a fan of the thing, or at least I was before I both quit eating a lot of carbs (45g in this baby) and lived in a place where real BBQ pork sandwiches are easier to find than a decent deli. When it hit the market back in 1981, it was a dud. It’s been released every so often since into a limited number of outlets and it sells out.
There is something any business can learn from the McRib or the pumpkin spice craze at Starbucks or Dunkin’. It’s the smart tactic of giving customers a reason to come back. There is a restaurant here in town that I patronize on a regular basis. The food is quite good but there are rarely any specials. It gets boring, frankly. I’ve tried pretty much everything on the menu. Something special might get me to make a special trip as opposed to the every 10 days or so when I want a really good burger.
There is something else. Here is a quote from a marketing professor at Northwestern:
For fast-food chains in particular, which rely on familiarity, holiday items can offer consumers some variety. “You need consistency because that’s the brand mantra,” said Chernev. “But no matter how much you like something, consuming something different … increases the enjoyment of what you consumed before.” Chernev says it’s a neat marketing ploy: Although a specialty item may be exciting on its own, it can also remind consumers how much they like the basics.
In my mind, it’s like how being on vacation often reminds you of how much you like being home if that makes any sense. In any event, every business needs to think about how a special product promotion (vs. a sale price promotion) can provide an overall lift to the business. Got it?
I’ve been thinking about writing this rant for a few weeks now. I’ve refrained, hoping that what’s prompting it will go away but it hasn’t so today, I rant.
I spent nearly my entire professional career in some sort of advertising-related business. I sold media. I was a media publisher. I’ve bought advertising on behalf of consulting clients and my own businesses. I’m pretty well-acquainted with how the business works. It’s rare, therefore, that something ad-related surprises me but this has. Lincoln is running an ad called “Sanctuary” for its Navigator vehicle. It features Sarah Vaughan’s recording of “Make Yourself Comfortable,” a song I like from an artist I like as well. At least I used to.
I will be the first to admit that I don’t watch a ton of non-news or sports programming via traditional TV. You can pretty much find me on a news channel or sports channel if it’s old-school TV or a streaming service otherwise. I bring this up because what I’m about to rant about isn’t caused by my rapacious consumption of TV.
I have seen the aforementioned ad at least once every half hour for the last month. In fact, I’ve seen it far more often than that, often once every few commercial pods. I am now at the point where when I hear the thunderclap that begins the ad I reach for the remote. I am sick of the song. I have so tuned out the ad that I didn’t even notice that it’s Serena Williams sitting in the car. I could see this happening if I was on a ton of channels in lots of different programming but I’m not. I’m about 10 more impressions from setting fire to the next Lincoln I see.
Who do I blame? Let’s see. First, the media buying agency who apparently has never heard of frequency-capping. When your ad is running every 10-20 minutes FOR HOURS on the same channel you’re well into overkill. Second, I blame whoever sold this schedule. Maybe it’s a ROS deal (run of schedule/station) and they’re just filling pods with creative to run up the bill. You might be making a few bucks but you’re losing at least this loyal viewer. Third, I blame the client. Aren’t you looking at the reports? Aren’t you running research that tells you reach isn’t increasing while frequency is off the charts? For the love of all that is holy – make another commercial – you’re killing me.
OK, I feel better. But if you’re a marketer and you’re not asking your people about frequency distributions and commercial wear out, do yourself and your prospective customers a favor: ask ASAP. Deal?
Let’s start with a question this Foodie Friday. If I offered you two carrots, one of which was had a label that said “non-GMO” and the other didn’t, which carrot would you choose? “GMO” as I’m sure you know means that this food wasn’t made from genetically modified crops. Would that make a difference in your selection?
It’s a trick question, actually. There are no genetically modified carrots in the marketplace, at least not yet. Neither are there GMO strawberries. That won’t stop you from finding carrots or strawberries labeled as non-GMO though. You’ve also probably seen that many chickens are labeled as “raised without antibiotics” while others don’t bear that label. Does that influence your thinking? It shouldn’t: antibiotics have been banned on chicken farms for over a decade.
Some labels in food can be horribly misleading while others are not. “Organic”, for example, really does mean that the food was grown without synthetic pesticides and fertilizer. It’s a legal term meaning that there are penalties for its misuse. You might think that non-GMO foods are organic and, therefore, better for you. Unless they also say they are organic, non-GMO foods are conventionally grown using synthetic pesticides and fertilizers.
Why I bring this up in a business blog is that the misuse of these and other terms in marketing is not due to confusion about them. It’s due to the willful deception of the consumer by an unscrupulous marketer who at best is just jumping on a bandwagon and at worst is looking to charge more for an inferior product. Your “cage-free” chicken still lives indoors in a jammed coop and those “free-range” chickens for which you pay a premium probably haven’t been outside either. It just means that they have access to go outside if they can find and get through one of the few doors in the henhouse.
I’m a fan of clear, enforceable labels in all products, not just food. What the hell does “skin organics? mean on a cosmetics label? Chemical-free sunscreen? Not possible, yet some brands are labeled just that way. The labels don’t write themselves and as marketing people, we need to hold our customers’ interests paramount. Their health too since it’s rather difficult to get a dead consumer to buy much of anything. Make sense?