Tuesday, May 19, 2009

Going Back On Your Word Without Seemingly Losing Positive PR

So you want to run a huge marketing stunt to get big publicity. . . positive publicity. This new product is really going to change things around. . . even though it's the exact same product you've been selling for years.

You start adverstising the product. It's new, it's great, (it's exactly the same as the product we've been selling for years!). But wait! You have a special offer! Something never thought of before! A discounted price!

So you need to make a bigger splash to get the customers to come in droves (to buy the exact same product you've been selling for years). You go on the the biggest show on tv (market your product on this show and the success is guaranteed!)

So you go on the show and offer your product for free! Lo and behold, the customers come in droves. Suddenly you're thinking, "Oh suck! We're giving away way too much of our product! What were we thinking?! We can't be giving away this much product for free." Truly, I agree. I go to the store and see a boatload of people loading up on the free product. Problem is, once they realize it's exactly the same as the old product they realize there's no big reason to come back and pay for it beyond their usual habit of paying for it.

So you're the Company and you're losing boatloads of money and can't figure out what to do to stop the bleeding. What do you do? Offer a raincheck! Make customers jump through outrageous hoops to get the raincheck. Offer "sincere" apologies but the demand is too overwhelming so the free offer is no longer valid. . . for now. Of course, the vast, vast majority that might've taken advantage of the free product will not jump through all the hoops necessary to get the "rain check", and thus you have just cut a huge liability off the books.

Funny, I walked in to KFC tonight and all I could see were posters everywhere about their new "grilled" chicken and bounteous amounts of grilled chicken for Sale! (I also noted a prominent sign about the availability of a raincheck because they couldn't offer it for free like they had promised on Oprah!) The hoops you have to jump through for the raincheck were truly not worth your time for a $4 meal. Thing is, I did go in time to get the free meal a couple weeks ago. . the grilled chicken is exactly the same as their fried chicken! I checked the calorie count tonight and the difference really isn't that big (after all, in the end you're still eating fast food). So the demand is too overwhelming to give away the supply for free but there is bounteous amounts of supply for sale? That doesn't add up! I guess it's probably a good call to cut off the free coupons because I'm pretty sure they wouldn' t recoup those costs with increased sales of grilled chicken (again, because it's exactly the same as fried chicken). Best option is to just cut the sunk costs and reduce the liability of future free meals.

So what's the lesson of the day? Accountants run the world! :) and chicken tastes like chicken.

1 comment:

Dr. Lordeslupe said...

I agree! Glad for the new blog. I heard its not that great anyway.