Marketing | Environment | Culture

Tag: Word Of Mouth

Groupon Investing in Traditional Media: Smart Play?

This morning I met for coffee a friend whose website I’m writing.  It’s a pretty casual shop that opens at 7am; the owner was still getting everything together at 7:05am.  Part of the process: firing up the music.

“I can’t think of it … what’s the radio on the internet?” she asked.  “Pandora,” I immediately replied without thinking twice.  “Yeah, that’s it,” she said, adding “I like Slacker, too.  It’s deeper.”

Pandora’s built from the Music Genome Project, which started in 1999.  In its current form with which you’re probably familiar, the website itself started in mid-2006.  In less than 5 years, then, “Pandora” has come to mean “radio on the internet” on a fraction of a moment’s thought.  I don’t even use Pandora and the connection is instantaneous.  That’s an important and impressive achievement.

If Pandora’s growing by anything but word of mouth, social networking and maybe some online banners, I”m not aware of it.  I’ve never seen an ad for it in any form.

Meanwhile, “the fastest growing company ever” is now “experimenting with what’s now typically referred to as traditional advertising – TV, print, radio, outdoor billboards – to maintain momentum.”  The former quote comes from a Summer 2010 story in Forbes; the latter comes from this week’s Ad Age.  Both are about everyone’s darling, Groupon, the company that can say no to Google and its $6,000,000,000.

Groupon, Collective Buying Power, logo, corporate logo, social coupon, group

Groupon and Traditional Advertising: Is that what it takes to be a premiere brand, a true household name?

Written by Rupal Parekh, the Ad Age piece is built on the fact that Groupon tried to buy Super Bowl ads, but settled for title sponsorship of the Super Bowl pre-game show because the in-game inventory has been sold out for months (at $2.8-3M per :30).  It goes on to detail their engagement with Crispin Porter + Bogusky for creative and talks with cable networks about their new agency Starcom.  It seems like they’re embracing establishment in hopes of becoming a premiere brand.

Attention traditional media: put Groupon on your “new client that’s ripe for courting” list.

Neither LivingSocial, Groupon’s chief competitor, nor Facebook, which has 50% more users at 600M than Groupon at 400M, has spent any serious cash on traditional media.  Apple, on the other hand, can’t be avoided if you watch an hour of prime time network television.  Google falls somewhere in between, but much closer to LivingSocial and Facebook.  Microsoft also falls somewhere in between, but much closer to Apple.

It’s worth noting that Pandora passed the 400M user mark more than a year ago, a mark Groupon hit at a much faster pace, achieving it in 2010.

Questions for You

Is the Super Bowl a smart play for Groupon?

Is traditional advertising still a basic requirement for a brand to become top-tier, to become a true household name?  Do the spend and presence add credibility to a brand?

Does Groupon need an agency, a creative shop and traditional media?  If so, why?  If not, how might tens of millions of dollars be better spent?

I’d really like to hear what you think – please leave a comment below.

Way Beyond – Excellence in Customer Service

BedBathBeyond

So, you want customer loyalty.  You’d like to enjoy the benefits of positive word-of-mouth, the single most powerful form of advertising.  Here’s an idea: strategically organize yourself around customer needs and interests.

Two ways that Bed Bath and Beyond has earned my family’s loyalty:

1) Absolutely no-hassle returns

On two separate occasions, years apart, and in different states, Bed Bath and Beyond has gone WAY beyond.  The most recent experience involved an $80 Cuisinart coffee maker.  We’re not sure when we bought it – maybe four or five years ago … who knows?  Who cares!?  Bed Bath and Beyond sure doesn’t.

One morning, my wife flicked the “brew” switch and was met with no brewing and the smell of burning plastic.  Not wanting to throw it out, she offered it up to Bed Bath and Beyond for return to and refurbishment by Cuisinart.  With no receipt, no evidence that we purchased it at a Bed Bath and Beyond, and no idea when we’d actually purchased it, the customer service person directed her toward the coffee maker section of the store, had her pull a brand-new version of the same model, and exit the store with it.  No paperwork to fill out – just a brand-new coffee maker.

A few years back, we enjoyed an identical experience with a $40 or $50 tea kettle – owned it for several years, traded it in for a brand-new version of the same model when the handle came loose.  No questions asked and no paperwork required.

That’s an experience worth talking about.  Design a policy that provides that experience to lots of people and you’ve created a word-of-mouth machine.  Before writing this, I told the story to at least a dozen people with enthusiasm.  You can’t buy that kind of advertising.  At worst, it cost them $60 (or whatever their purchase price from Cuisinart is).

2) Nearly no-rules coupons

Bed Bath and Beyond issues lots of coupons (typically 20% off) and lets you use them quite liberally.  Just about the only restriction: you can’t combine them for 100% off an item and some brands sold in-store opt out.

Expiration dates?  They don’t matter.

Only got one coupon?  Take 20% off the highest-price item you’re buying, not the lowest.

Multiple coupons in a single transaction?  No problem – it’s encouraged.

When they show up in the mail, hang on to those Bed Bath and Beyond coupons.  Next time you need a new set of towels or you want to give a dozen Snuggies as gifts, bring them all in and enjoy 20% off every item you buy, provided you’ve got that many coupons.

Important to note: the prices are reasonable with or without the 20% discounts.  In contrast, Kohl’s seems to mark up many items in order to have them constantly “on sale.”  Also in contrast, Kohl’s spends a ton of cash on prime-time television.  Bed Bath and Beyond gets by and even thrives on direct mailing of coupons.

Other observations

In general, the store is reasonably well organized.  It’s got enough solid sections (kitchen tools, cookware, appliances, glassware, bedding, towels, carpeting, etc) to bring you in, each with a reasonable range of brands, styles, and price points.  Plus, they’ve got a ton of unexpected items between sections (think: “who-invented-that!?” type gadgets).  It’s often a pleasant, entertaining and productive shopping experience.

I’d never have expected to write this kind of a post, but a store that will have me walk in with a years-old, non-functioning product and walk out with a brand-new one without any questions or any paperwork is serious about their customers … and that’s something I appreciate.

© 2022 ethanbeute

Theme by Anders NorenUp ↑