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BJ Bueno

How Groupon Goofed

CEO Andrew Mason is not having the best week of his career. Groupon, the rapidly growing web phenomenon that delivers localized deal of the day coupons to its membership, ran a series of ads during the Superbowl. They paid top dollar to be in front of millions of viewers.

In the most controversial of the ads run that evening, images of the Tibetian people and the troubled country flash of the screen. Timothy Hutton tells the audience, “the people of Tibet are in trouble. Their very culture is in jeopardy. But they still whip up an amazing fish curry.” His Groupon purchase allows him to save big in a nearby Chicago restaurant.

Other ads in the series included Cuba Gooding Jr. talking about the plight of whales, followed immediately by the joy of saving money on whale watching excursions, and Elizabeth Hurley coming razor-close to the edge of decency with a spot that began in Brazil and ended with discount waxing.

In a blog post Mason posted on Monday Mason tried to explain the reasoning behind the ads. They were intended to be ironic and humorous.

Any comedian will tell you that if you find yourself explaining your joke, the joke wasn’t funny. The public perception was that the ads mocked serious situations and trivialized the very real, very important causes that they care about. The ad has been called offensive and misguided.

Why didn’t anyone notice this before the ads played on one the most high profile venues imaginable?

Knowing Your Customers = Knowing Your Brand

Groupon failed a critical test when they approved this ad campaign.  Dominant organizations achieve their position by, among other things, making sure that every element of their operations remains in alignment with their Brand Lover’s values and beliefs. Customers want to do business with organizations that are like themselves. They want to find that common ground, a place where they are among friends and peers.

Groupon is building its brand overtly on the appeal of community and connection: individuals purchasing en masse enjoy discounts at restaurants, clubs, adventure excursions, and more.

By running ads that appeared in direct conflict with values held by their most loyal customers and those who had the potential to become loyal customers, Groupon introduced an element of doubt into the relationship.  Maybe, those best customers could find themselves thinking, I don’t belong here after all.

There are so many things that could damage the customer’s relationship with a brand.  Poor customer service, sub-standard products, negative reviews; the list is endless. Yet none of these are as powerful a deterrent as alienation.  Nothing will drive a consumer from a brand as a sense of betrayed ideals.

The hostile consumer reaction to the Groupon campaign comes from many levels. In a way, we see these intensely affected consumers reacting to a case of mistaken identity. We don’t like it when people turn out to be very different from what we were led to believe about them. Groupon had built a friendly, affable, we’re-all-in-this-together persona and shattered it with three minutes of snarky humor that screamed “What you care about is stupid!”

Can Groupon Recover?

Groupon has a difficult challenge ahead of it. Mason’s taken some strong initial steps by coming out and addressing the issue promptly. Acknowledging the problem is a good first step. Now it becomes critical for Groupon to connect in a more meaningful, engaged way with their best customers.

Developing a deeper understanding of what their best customers value most helps you pick marketing campaigns that will leave your customers laughing and skip the ones that will make your customers leave you!

February 9, 2011 by

Closing the Gap: Brand Modeling as a Decision Making Tool

Sportwear company Athleta built its reputation on yoga wear and gym apparel. Customers found the company online, and soon the fledgling firm had a strong following. Strong enough, in fact, to attract the attention of the Gap. Gap purchased the Athleta brand in 2008, hoping to become more competitive in a field they once dominated.

From all indicators, it appears to have been a good decision. The Athleta line has performed well for Gap, who saw sales in the relevant division increase $100 million dollars the following year. Athleta clothing was only available online and via catalog. Now Gap is taking the brand into the brick and mortar environment, opening a store in San Francisco in January.

This is a move that’s counter to a lot of the prevailing wisdom in retailing, which advocates leaving physical stores behind entirely.  The Athleta brand has been doing well already, which leaves the question to be asked: What went into the decision to commit the time, energy, and resources into opening a brick and mortar store for this brand? What makes the leadership at Gap confident that the risk is worth the reward?

Brand Modeling as a Decision Making Tool

The leadership at the Gap are no more capable of seeing into the future than the rest of us are.  They don’t know, with absolute certainty, that making the investment in a brick and mortar storefront (especially in pricey San Francisco!) will pay off.  But they’re not making the gamble blindly, either.

The Problem of Uncertainty

The largest problem business leaders have is the lack of certainty that confronts us each and every day.  There are very few decisions that we can make with absolute confidence. We don’t know the outcome of any decision until we make and implement the decision.

Consider the Gap’s position: there are so many factors that go into the success or failure of a brick and mortar store—and that’s before you factor in the impact of an established brand. While the success or failure of any one storefront may have very little impact on the Gap organization as a whole, it matters to the Athleta brand.  It’s critical to give the new venture the best chance for success.  The trick is knowing exactly what “the best chance” consists of.

Brand Modeling Identifies The Criteria For Success

At its essence, Brand Modeling is the systematic examination of what your best customers value most about your organization and understanding how to deliver more of that experience.  Additionally, you need to know what your best customers value in general, and in your category.

Gap is confident that they know what female apparel shoppers want. Toby Lenk, president of Gap Direct, Inc, which oversees the Athleta brand, said, “With this type of product, women’s active athletic product, it is really important to be able to feel it, touch it, try it on.”

Is the ability to engage tangibly with a company’s offerings enough of a draw to bring customers into the store? Is the point of a brick and mortar store to provide another sales outlet—or to drive more sales in an existing venue? Lenk reports customers spending four dollars on apparel in the brick and mortar setting for every dollar they spend online. It’s compelling information.

Brand Modeling allows us to take compelling information and determine the best way to make use of it. The Brand Modeling process delivers quantifiable, objective data that can be used to examine that conclusion and determine its validity. The richer and more complete the understanding of our best customer’s behavior and motivations is, the more we can introduce a number of variables into our engagement with them and project, with reasonable confidence, how our best, most profitable customers will react. That’s a powerful tool to have, especially when you’re trying to decide whether to open your next location in San Francisco, San Diego, or in “the real world” at all.

February 3, 2011 by

Lady Gaga as a Role Model?

Do business leaders have a lesson to learn from Lady Gaga? At first glance, it might not appear so, but that’s until you learn that the 25 year old singer is well on her way to earning over $100 million in 2011.

Forbes Magazine recently ran a piece detailing Gaga’s multiple revenue streams. Praised for being as shrewd and decisive as she is fashion-forward and creative, Lady Gaga has done some things exceptionally well. There’s wisdom in her approach that can be emulated by business leaders across the board.

Besides, she’s a snappy dresser.

Loving Her Little Monsters

Lady Gaga has, throughout the course of her career, made an explicit point of reaching out to and celebrating her fans.  Calling them her little monsters, Gaga connects with her fan base regularly, via Twitter and other social media platforms. There’s a continual emphasis on community, and when Lady Gaga talks to her fans, she makes a point of addressing them en masse.

This same sense of community, of belonging, of being part of a larger whole, is echoed in the success of some of the world’s most dominant brands.  Harley Davidson, through gatherings and events of the Harley Owners Group, takes much the same approach, albeit with marginally more chrome.

Apple aficionados revel in their sense of community, defining themselves as much by their choice of technology as their worldview, personal philosophy, or profession.

Let Your Best Customers Know They’re Your Best Customers

Lady Gaga uses every touch point to let her fans know she values and appreciates them.  She shouts it from the stage, she says it when she’s accepting awards, it’s written in the liner notes to her CD, and her website is loaded with messages of appreciation and gratitude. Fans are told that coming albums are polished versions of what they got to see first at live shows and concerts, before the world was watching every note. There’s an overt message of inclusiveness and celebration.

More than that, Lady Gaga’s messages are crafted and delivered in a way to resonate uniquely for her very best fans, many of whom think she’s speaking directly to them.  This connection underlies their fanatical loyalty. Business leaders who want to duplicate the same type of connection with their best customers need a way to find the same point of emotional resonance, delivering the messaging that buyers will find not only compelling, but meant exclusively for them.

“I am doing this all for you,” Lady Gaga pronounces, and her fans cheer with total abandon—because they believe it.

Can your organization say the same thing to its customers? Would it be believable? Can you, right now, point to three things that your organization has done to let your best customers know not only that they’re appreciated but that they’re the core, driving force behind every aspect of what your company does?

If you’re committed to growing your business and growing your profitability, all of your marketing and branding efforts must be discovering why your best customers love you. Like Lady Gaga, you must use constant, overt appreciation and celebration of your best customers. If for no other reason, treating your best customers better than anyone else creates more people who want to be your best customers.  And that’s music to anyone’s ears!

January 27, 2011 by

What Makes A Subaru A Subaru

2010 was not a great year for many car manufacturers. The phrase underperforming analysist expectations has been bandied about quite a bit. Projections for the auto industry’s growth invariably include the words slow and steady.

Except, of course, for Subaru. Sales of Subaru’s offerings, which includes the Legacy, Outback, and Forester, are up over 22% in 2010. Look back two years, and it’s a staggering 50% increase in sales.

While this has been happening, the US economy has been in rough shape. People who don’t have jobs or who no longer have easy access to credit aren’t shopping for cars right now. Consumer confidence may be returning – but it’s taking its sweet time getting here.

And Subaru has their best year ever.

Not only are they having their best year ever, they’re having their best year ever while running the Share the Love campaign. In this wildly popular incentive (now on its third year) Subaru gives away $250 to one of five pre-selected charities when someone buys a new car.

Subaru’s doing extremely well with a campaign that urges people to give away money during one of the toughest recessions this nation has ever seen. In a world that seems overrun with anxiety and financial stress, Subaru is making significant strides finding people who have a need to share what wealth they have.

Most companies will tell you they’re after companies who want to save money. Subaru chose to focus on the ones who want to give it away. And look – it seems like they’re winning!

How Did They Know To Do That?

Subaru is doing what successful, dominant companies do. They’ve learned who their customer is – and not just on that easy, surface level. Demographic data provides valuable insights, to be sure – but there’s no ready way to enumerate the ranks of people who would be moved to purchase one model of car over another when the differentiating factor between the two is the chance to donate $250 to help homeless cats find new families. To get that, you have to go deeper. You have to understand on a profound and fundamental level what makes your customers tick.

Brand Modeling begins with the premise that we have to know who our customers think they are. How do they see themselves in the world? What type of person are they – and what type of person are they when they like themselves the best?

Subaru hit it out of the park when they hit upon the concept of almost effortless altruism. Even a cursory examination of their target market – or a quick conversation with one of the growing legions of Subaru loyalists, who are happy to ‘share the love’ with you – reveals a strong tendency toward social and environmental activism. These are people who like to give, who like to contribute to the world around them and leave the place better than they found it. These are traits they value highly – and when they see a car manufacturer espousing those same values?

They’ve been given a reason to buy that no other car manufacturer has given them.

That’s why Subaru has had the best sales year ever, pure and simple. They’re giving their customers what their customers value most – and a pretty good car, besides.

January 18, 2011 by

The Magic of Mystery

Have you ever heard of the city of Atlantis, the Loch Ness Monster, Big Foot, or the Bermuda Triangle? Of course you have. Why? And why have so many people spent lifetimes exploring these so-called myths, trying to uncover their validity? The common factor woven through all of these stories is that they are endowed with mystery.

Mystery is a key element to all great storytelling, and people love to tell great stories. Hundreds of archaeologists have searched for the lost city of Atlantis, movies have been inspired by it, documentaries continue to be developed, and even psychics have gotten in on it. What is the mystery of their people? Of their lost culture? Of their way of living? Why are we so entranced by something that arguably does not have significant relevance to us? Although our psyche fears the unknown, that fear is balanced by the innate drive of curiosity: we want to uncover the wizard behind the curtain.

Without this element of mystery, our curiosity wanes. When you hear someone say, “I saw the ending coming,” you’re fairly sure they didn’t enjoy the movie, and odds are you probably won’t want to see it either. Mystery is the difference between a Sixth Sense and a Stir of Echoes.

The same principle holds true in business. Bad car dealerships apparently don’t understand the power of mystery. Everyone has heard the car dealership advertisement where nothing is left untold: “No credit, no problem. Every car, every model.”

Great companies, however, find ways to hide certain elements and let their customers discover them on their own. These companies show the tip of the iceberg, but their loyal customers love them because of the depths, which lie beneath the surface of the water.

Not every benefit that your company creates needs to be directly presented to your customer. Even though hiding some of your best attributes may go against conventional wisdom, by allowing your customer to discover certain positive qualities on his or her own you’ll increase the chances of the customer talking positively about you.

Mystery helps provide meaning to your brand; it allows people to learn something about your brand they didn’t know before. If we learn something new about a company that no one else knows, we are more likely to talk. However, if everyone already knows about a particular benefit, there’s no reason to talk about it. We talk and gossip about products, services, and brands because it benefits us; we gain status by providing new information. This basic, biologically-rooted drive helps explain why people naturally talk about that which is mysterious and unknown.

Just look at the word-of-mouth sensation that was (and still is) generated by Dan Brown’s best-seller The Da Vinci Code. This fictional story is chock-full of mystery and controversial talking points. The book tapped into a lot of unknowns and fed our innate drive for curiosity.

Pepsi introduced a dose of mystery when they launched Mountain Dew Code Red. They didn’t start with a full-force, our-ads-everywhere-you-look style campaign, or one anywhere close to it. Instead, they introduced the product into convenience stores, a primary destination for their teenager market, And 1 Mix Tape Tour, and the X Games, allowing teenagers to discover the product for themselves, in their own environment. And, they shared it with their friends, who didn’t get there first.

There are two things sure to kill word-of-mouth: (1) everyone knowing the secret or (2) no one caring about the secret. An almost cliché example would be the popular book/film The Secret, which again plays on the basic human need of curiosity. What is the Secret? Because the movie seems to have a secret that appears to be useful and beneficial, people continue to talk about it and we hear about it in the media. If the film was without substance (i.e., no secret), then people wouldn’t have even started talking. Because there was something of substance, Oprah and her weekly 49 million viewers spent a show talking about the practical applications of “The Secret.”

Three Ways to Create Mystery:

So what are some ways you can add mystery to your brand’s efforts?

  • Don’t say every benefit about your business in every business communication. If everyone already knows everything about you, they won’t have anything to tell their friends that their friends don’t already know, aside from how you may not have fully met their expectations.
  • Break a standard rule in your industry. Think back to the standard airline attire that flight attendants used to wear. Then Southwest Airlines breaks the rule and let’s their flight attendants wear shorts, a trademark feature of the airlines.
  • Steal one from your customers. Listen in to what your customers are suggesting and surprise them by actually doing it.

So if you want your customers to talk about you, surprise them. Delight them. Let them discover you on a totally new level. In essence, give your customers a reason to talk about you.

Learn more about the principle of surprise and the other six principles of Talk in Why We Talk: The Truth Behind Word-of-Mouth.

March 27, 2009 by

Beware of “Word-Of-Mouth Marketer”

Talk is cheap. Gossip is priceless. And while manipulated talk can be useful if you’re selling a film or a novelty that doesn’t need any staying power, it’s practically worthless if you’re hoping to build a brand.

Yet Word-of-Mouth (WOM) Marketing has become all the rage, with “water- cooler talk” becoming a barometer companies use to judge the success of their marketing and advertising campaigns. What were our numbers yesterday? How can we improve them today? If we can’t meet the short-term goals, who cares about the future? Unfortunately, these companies haven’t stopped to consider how driving short-term numbers may be killing their opportunity for long-term success.

Word-of-mouth is like any other form of media. Television is favored for its combination of sight and sound. Billboards are revered for their stopping power, print for its permanency. All forms of media, including word-of-mouth, disseminate information. Word-of-mouth is different from all other forms of media, however, because it is owned by the consumer. They control its content.

Some word-of-mouth marketers claim you benefit from word-of-mouth during specific windows of opportunity. That’s nonsense. Promotions and events have windows; brands have permanence. As long as consumers are benefiting from a relevant experience with the brand, they will talk. Consumers don’t need to be given a marketing cue card; they need an environment that allows them to draw their own conclusions and to define their own experience.

The problem with modern marketing is its overwhelming urge to quantify everything. If it can be measured, you can charge for it, and yes, size does matter: the bigger the measurable impact, the larger the monetary compensation for generating the result. The newest playground for metric maniacs is word-of-mouth marketing. The Word-of-Mouth Marketing Association declared in 2005 that it was now using word-of-mouth units to measure the effect of word-of-mouth on ROI. This is further proof that, to its own detriment, marketing has evolved into an industry more focused on making short-term money than on making long-term sense.

Numerous books on poker have been written to teach players the best ways to behave in certain situations, based on available statistics. However, watch any game and you’ll see that even experts stray from these rules. Why? Because the players in the game aren’t playing statistics, they’re playing other people. The best way to play isn’t always revealed by statistics.

Statistics reveal a glimpse of where people are, but they don’t tell you where people are going or how they will get there. It’s one thing to know what movies are making the most money, but that’s not the same as predicting which ones are going to make the most money. If someone could forecast that, the movie studios would be a lot happier.

Look at what’s happening: Big brands are paying big money to create “buzz” about their products. These companies then insist they don’t pay people to talk, which technically is true—they only give their “buzz” agents free products, coupons, and “points” if they do their homework and report back to the mother ship.

What do you think happens when the buzz campaign ends? Do you really think consumers keep yakking about a product when the incentive to do so disappears? Worse yet, the next product sample shows up in the mail and they’re asked to buzz on a new client’s behalf. That’s not pure word-of-mouth. It’s promotion attempting to use word-of-mouth as a media vehicle, which is no different than using radio, television, or direct mail. Ultimately, it runs into a dead end and is enormously risky for companies wanting to build lasting brands.

Promoting products is a totally different discipline than creating brands. True word-of-mouth is totally different than word-of-mouth marketing. Marketers are in control of communicating a message, but consumers are in control of building brands.

So pick your poison. If you want to sell product in the short term and aren’t worried about building a brand, if you’ve exhausted every other medium known to mankind, pick up the phone and call any of the self-proclaimed word-of-mouth marketers and buzz practitioners. They’ve got the metrics on their side.

But be cautioned: Once you pollute the word-of-mouth pipeline, there’s no turning back. If you’re marketing movies, selling novelties or liquidating books, have at it—these things are not likely to become brands and you will not need the power of word-of-mouth in its purest form. If you are relying on the consumer to turn you into a brand that is embraced by a legion of loyal evangelists, however, don’t pollute the best marketing tool ever to roam God’s green earth.

The above is an excerpt from Why We Talk: The Truth Behind Word-of-Mouth. (c) 2007 by Bolivar J. Bueno.

March 27, 2009 by