A Lesson From Taco Bell: What Makes Freebies Valuable?

Recently, Taco Bell offered it’s 6 million Facebook fans a free taco redeemable with no strings attached at any participating location.  Interestingly, only 3% of fans took up the offer.  So, what is it that makes a freebie valuable?  What made Taco Bell’s offer so unappealing to its Facebook fans?

For starters, a 99 cent taco lacks the perceived (and real) value that gets a person excited about receiving a prize.  While its great to win anything, 99 cents is easily replaced.

This blog thinks a lack of exclusitivity is what made the promotion fail.  Though it may be true that a promotion corresponding with a new product launch may have increased the perceived value of the giveaway, I do not believe it was the number one deterrant to it’s success.

So what was? 

In my opinion, it was the effort required to redeem the prize that was the biggest problem.  When you think about successful promotions like Tim Horton’s Roll Up the Rim to Win campaign, customers can redeem prizes instantly.  Taco Bell put too many barriers in place for customers to the point that, even if they wanted the free taco, it wasn’t worth the effort.  When it comes to promotions, instancy is the name of the game. 

Though the online landscape has opened doors to interaction between brands and customers online, instant access to physical products has been a barrier to the success of numerous campaigns.  Brands must figure out a new approach to these types of giveaways if they wish to make them worthwhile going forward.

Mobile Publishing: Mygazines

In an increasingly mobile world, the need for content on Smart Phones and tablet devices can’t be ignored.  But how much should companies be investing to stay on the cutting edge?   With mobile applications still in their infancy and the cost of app development seemingly unmanageable for most small companies, the search for reasonable alternatives begins.   

Mygazines offers a great option for anyone from a freelance writer to a large publishing company looking to make their content mobile-ready, at a reasonable cost.  The service has some impressive marketing functionality as well, with options for content sharing, social media integration, built in RSS feeds and video integration.  The only catch is that the services requires a browser to launch; which takes most e-readers off the market.

Today, the need for app development may be dependent on a number of factors including; industry specific requirements, the types of content being displayed and the price customers are willing to pay to get what they want.   For everyone else, there’s solutions like Mygazines to meet customer needs without breaking the bank.

Price Sensitivity

With gas prices higher than they’ve ever been (and the obvious consumer discontent associated) it got me thinking about the threshold that exists for price increases. Gas is obviously a commodity that people need to get around, but at what point do people get so frustrated with the cost that they look to alternative forms of transportation? In some cases high prices are bearable and not worth the additional effort necessary to change a daily routine. However; there has to be a threshold at which people decide enough is enough. In most cases that threshold will probably be dependent on the cost of switching to a different brand or in this example, method of transportation.

Often publishing companies that operate on a subscription model battle with the best approach to annual price increases. As a product’s readership decreases the price needs to increase to maintain consistent revenues. But at what point will the customers that purchase the product look for an alternative because the cost of the product is simply no longer worth the value they receive in return?

The Van Westendorp Price Sensitivity Meter is an approach to researching pricing that asks the following 4 key questions to set a range within which people will continue to purchase the product in question:

1) At what price do you begin to think a product is too expensive to consider?
2) At what price do you think a product is so inexpensive that you would question the quality and not consider it?
3) At what price do you think a product is getting expensive, but would still consider it?
4) At what price do you think the product is a bargain?

In the digital age, one thing publishers have struggled with is putting a value on “content”.    Most consumers expect that the cost of a book be significantly less on a tablet because there are no costs associated with a physical product.   By implementing a Van Westendorp Study, you can more effectively use customer feedback to set prices in the range that optimizes sales and keeps customers satisfied.

Top 5 Ways to Stay on the Cutting Edge

With the pace at which the online landscape is evolving, it’s easier than ever to become complacent and fall behind competition.  Businesses that are making the transition online need to recognize the importance of paying particular attention to factors that are likely to affect the future direction of their industry.  The following is a list of what I believe are the best ways to stay on the cutting edge and position your organization for the future.

1.  Know What Your Competition is Doing

While we’d ideally like to be ahead of our competition, knowing what they’re doing today will give pointers to where they are headed.

2.  Listen to Your Customers

They may not be able to tell you exactly what they want, but gaining insight to how they’ll use your products is essential to building irreplaceable solutions.

3.  Hire for technical expertise

Today everything is happening online.   If you don’t have the technical expertise, you’ll be left in the dust.  Even worse, the longer you wait to adapt to new technologies the harder it will be to get back into the game.  

4.  Do as an Entrepreneur Would

With the pace at which businesses and technologies are moving today, bureaucracy should be avoided at all costs.  Put decision making in the hands of people capable of making the right decisions and give your products a chance to grow.

5.  Involve Organizational Youth in Decision Making

A colleague recently told me that he heard “if you want to understand why Blackberry Messenger (BBM) is so popular, you’ll have to ask your kids”.  The youth may not have as much experience, but in many cases they’re closer to the innovations that will allow your business to flourish. Don’t forget their voice.

Aflac Looks for New Voice

Known for it’s strong social media presence, Aflac (and its trademark duck) recently entered some unfamiliar waters… hot water.

After making a number of insensitive cracks about the recent disaster in Japan, the voice of the Aflac duck was relieved of his duties.  As a result, the insurance company was in need of a new voice to represent its brand through the various social media platforms that it has been active on over the last several years.  However; what could have been a public relations disaster has been parlayed into a creative social campaign designed to find the next voice of the Aflac duck.

Aflac’s quick response to the situation distanced the brand from the opinions of  the its former spokesperson.  While incidents like these are unfortunate, the company’s deep involvement in social media allowed it to reach customers quickly to involve them in a search for a new voice.  This involvement has not only helped people forget about the recent comments, but will also undoubtedly lead to a voice that customers can resonate with.

Guy Kawasaki: Enchantment

In the video below, marketing guru Guy Kawasaki talks about his latest book “Enchantment:  The Art of Changing Hearts, Minds and Actions”. Guy discusses what he views as the pillars of enchantment; likability, trustworthiness and great cause.

It’s clear that while marketing contributes to the bottom line, it’s great products that are the cornerstone for any company’s success.  Marketing can optimize the success of a product offering, but without quality products it’s unrealistic to expect enchantment be achieved. What makes your products great?

The Key to the SME

The key to the SME?  Turn-key, easily implemented solutions.

Small to medium sized enterprises generally do not have the time or the man power to focus attention (or scarce resources) on functions that fall outside of their “core business”.  In these types of organizations the marketing manager may have responsibility for the company’s human resource function, or the CFO may also serve as general counsel.  With more responsibility, each employee is forced to prioritize the tasks they believe contribute most significantly to the bottom line. 

Companies that cater to the SME market need to provide affordable solutions that save their clients’ time.  Groupon has found a way to turn group buying power into an opportunity for consumers to test products and services that they would not typically have the opportunity to experience.  Group buying networks exist for some B2B products and services as well, but could a similar concept be applied to a wider range of offerings?  While this could account for the “affordable” part of the equation, easy implementation and fufilment might be more difficult propositions.

The SME continues to be a relatively underserved market.  Though they do not have the same resources as a large multinational, they will spend their money on solutions that they believe will improve their businesses.  With over 2 million small businesses in Canada – they may still be worth your time.