This week M&S announced a drop in year-on-year profits of 34% due to lower sales and heavy discounting to get customers through the door. This got me to thinking about discounting and BOGOFs… they work, in the short term – yes – but aren’t they rather indicative of lazy thinking and reactive tactics? If you had a budget to give away discounts wouldn’t you want to have fun with it?
Consumers love getting things for free but if we want to really impress our customers shouldn’t we give them freebies in the context of:
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a changing consumer society which is becoming based more on experiences, on status stories, than on gaining more stuff; and
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the situation they are enjoying or enduring – when the going gets tough (like now) customers appreciate any gesture of kindness and understanding and return this empathy with brand love.
Two things today’s consumers crave are status and convenience. If approached creatively perks and special offers can not only attract footfall, but also build a sense of uniqueness and specialness, and spark masses of PR and blogger attention.
In the US, customers are mad about Ben & Jerry’s “free cone day”.
Closer to home…
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Orange customers can reserve event tickets on their phones 48 hours before they go on sale
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When O2 customers buy tickets through their website they get VIP perks at the event
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Commuters pick up free daily newspapers on their way to work
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The Royal Mail (in collaboration with Tim Milne’s Artomatic) sends registered members a box of free interesting stuff each month called Matters Box.
Consumers give free love to each other too – see C2C love overflowing at Wikipedia.
Got any great free love examples?
(see Trendwatching.com for more on Free Love and the Perkonomics trend)
Give us more of this Jenny – this is liberated thinking at its best. What a good thing you play for our team!!!
Tim — 8 November 2008 @ 9:10 pm
Totally agree with this sentiment – recently I had a swanky meal at a swanky restaurant, and our main courses were quite severely delayed by a private party. When they came, the maitre d’ assured us that he’d ‘make it worth our while’. We’d had a large meal, so we just ordered 2 desserts between three of us. The ‘making it worth our while’ was to give us TWO more desserts – complimentary. That left me feeling that they hadn’t paid much attention to what we as customers would value – did they really think that we hadn’t ordered dessert because we didn’t want to pay for them? They had made their own interpretation of what would feel like an adequate compensation, and it left me feeling that this was a rather simplistic view. I can think of so many other ways of making us feel that they were truly embarrassed and contrite about the level of service that evening – their BOGOF isn’t one of them! How about asking us what we’d have liked? taking a percentage off the bill? a complimentary dessert next time we dined there? a small sum to the charity of our choice? What would have made a difference to you?
Fiona — 10 November 2008 @ 9:30 am
Fiona’s experience reminds me of a long weekend away Bev and I had many years ago at a hotel which shall remain nameless as it has subsequently undergone a transformation and is now wonderful and one of our favourites. So much was wrong from cleanliness (or lack of it) through quality of service to the food that I was moved to write to the manager to complain after we got home. He wrote back very apologetically and offered us a complimentary night’s stay … The old joke about second prize being two nights stay came to mind and we didn’t take him up.
Tim — 12 November 2008 @ 6:16 pm
Interesting – two linked but separate ideas here – making customers feel loved and dealing with unhappy customers. Back in my very early youth (!) I worked in the typing pool at a big state-owned company in the customer relations department. The organisation was still state owned but preparing for privatisation. There was a big backlog in complaints and they were struggling to get on top of them. The organisation was in transition in other ways too – everyone had a PC with word processing capability and there were standard paragraphs the ‘customer relations executives’ were supposed to paste into their letters but most of them preferred to carry on old style and dictate. It was fascinating because the organisation had invested a lot in new technology but had neither trained the people who needed to to use it nor redesigned the roles (i.e. the audio typists) that te technology was meant to replace so there was no incentive to use it. The manager had been given extra staff to shift the backlog and no one was really looking at productivity. The women doing the audio typing were easily capable of being retrained into the standard response letter drafting. Even as a second year undergraduate with no experience of organisational planning it amazed me how they could be so inefficient. I thought at the time that they should change the way they worked and become more efficient for less resource.
In terms of the compensation offered to complainants the usual thing was to give them vouchers towards another product so nothing creative there either!
Off topic -It is the only time as I temp I was ever in a typing pool – it was a real ‘us’ and ‘them’ culture and the executives did not speak or relate to the typists other than to drop work in the in tray – we were in a separate room but with a glass wall to their big office so they could keep an eye on us. Audio typing is a pretty awful way to spend your day because it is really isolating.
Isobel Bowler — 13 November 2008 @ 1:02 pm