Marketing execution is all about the detail.
I was talking to a potential client this week. She asked me what value I could bring to her and her company as a consultant? After all, she thought marketing was pretty obvious and just common sense, so why would she need me?
In principle, I agreed with her on the sentiment. Most people have a good idea about what marketing is and what they want to do to reach their customers. However, I explained that, it isn’t about what you want to do, but more about how you do it.
It’s all about
Effective Marketing Execution.
Almost any marketer will tell you about campaigns that didn’t do well, through poor execution. It’s all part of the learning experience. Some examples, however, go far beyond poor performance and actually threaten company viability.
One of those shocking examples was the Hoover Free Flights promotion which ran in 1992.
The goal was to boost sales volume of surplus washing machines and vacuum cleaners. The British division of the Hoover Company promised free airline tickets to customers who purchased more than £100 worth of products. Initially the offer was for two round-trip tickets to select destinations in Europe. This proved highly successful in clearing the surplus.
As with most voucher-driven promotions, relatively few customers actually redeemed the vouchers, so Hoover thought it would be a good idea to expand the offer to include destinations in the United States.
However, at this point, the consumer demand increased enormously in response to the fact that Hoover was now offering around £600 worth of airline tickets, for an outlay of just £100. As a result, the Hoover factory had to hire extra employees and add shifts to meet the demand for the cheapest qualifying vacuum cleaner.
There are even reports of some customers paying for the appliances and then leaving them behind in store because all they wanted was the proof of purchase required to claim the free flight offer.
It was estimated that enough people tried to convert their vouchers to tickets to fill 500 Boeing 747s (the largest capacity passenger planes at that time). Ultimately, the £30m in extra sales that the promotion attracted was far outweighed by the c£50m that it cost to pay for the airline seats, as well as legal fees to settle the claims of those (the majority) who did not receive their tickets.
So where did it go wrong? I think it is clear that the marketing model which predicted response and ROI, failed to account for the change in customer response rates that occurred when the campaign offer changed significantly.
A perfect example of a badly executed campaign that had a serious impact on company profitability.
Another lesser known example of poor execution was drawn to my attention this week in a BBC Podcast of last week’s episode of The Infinite Monkey Cage on Radio 4. In it, they talked about another botched marketing campaign, this time involving the soft drinks giant, Pepsi. The podcast claimed that the marketing failure was due to the inability of some people to envisage the true scale of large numbers.
In the mid 90’s, Pepsi launched a campaign “Drink Pepsi, Get Stuff” which allowed customers to earn points on every Pepsi product they bought and then exchange them for Pepsi branded products, such as T-shirts, hats and other gadgets. The promotion was a roaring success and resulted in a boost in sales volume.
However, it also resulted in a law suit.
One customer, John Leonard, saw the Pepsi advert about the promotion – it showed a teenager on his way to school and highlighted items that one could buy when collecting Pepsi points. (e.g. Pepsi T-shirt – 75 points)
The closing scene of the advert showed a Harrier Jump Jet landing at the school with the words: “HARRIER FIGHTER – 7,000,000 PEPSI POINTS” on screen.
Leonard, a 21-year old business student, did a little research realised that the cost of the Harrier giveaway was actually a bargain for only 7,000,000 points. He had discovered that the cost of a Harrier Jump Jet was about $33 million. This meant that, depending on which Pepsi products he bought, the Harrier would still only cost about $7 million in real money.
He picked up a Pepsi Stuff prize catalogue and scrutinised the Terms and Conditions of the promotion. In the small print, he read that, if a person already had 15 Pepsi Points, they could purchase an unlimited number of additional points towards any item they wanted for just $0.10 each. This meant that the cost of 7 million points was actually only $700,000!
As a result, the following year, Leonard sent 15 Pepsi Points, an order form for “ 1 Harrier Jet” and a cheque for $700,008.50 to the required address..
Pepsi’s initial response was to return his cheque, with some free coupons and the message that the Harrier wasn’t on offer as part of the promotion. However, Leonard wasn’t giving up that easily. He had received the backing of 5 unnamed investors (who probably didn’t expect to receive a Harrier jump jet, but perhaps a large out-of-court settlement). He then sent a formal legal letter stating that he had followed the rules of the promotion and if he didn’t receive his “prize,” that he would take legal action.
This letter was responded to by the advertising agency that had made the advert featuring the Harrier, not Pepsi themselves. They stated that they couldn’t believe that anybody had taken the advert seriously. They did, however, update the advert to state the Harrier would now cost 700 million Pepsi points.
Still undeterred, Leonard sued Pepsi for fraud, breach of contract and deceptive advertising. Whilst he didn’t actually win his case, it did take three years of various court hearings, including an appeal, before it was finally settled.
The warning from this is clear.
Carefully think through everything in a marketing promotion and ensure that your business can deliver on the offer and meet demand, especially if it is a roaring success!
Having spent the last three years working in Financial services, I am more aware than ever before that diligence is a fundamental part of any marketing promotion.
The FCA Handbook COBS (Section 4.2) states that any company must ensure that a communication or a financial promotion is fair, clear and not misleading. So, no Harrier jump jets allowed here!
Effective Execution is about experience, focus, diligence and an analytical attitude to success.
As a Consultant or Start-Up mentor with your business, you can tap into my 30+ years of experience to help you deliver on your business objectives, whether they be marketing or more general goals. Be diligent!
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