Bed Bath and Beyond

Bed Bath and Beyond has always been a fun store to walk around in. It has great products, a nice layout, and lots of things you can't find anywhere else. Most of the stuff is of a higher quality than big box stores, and the price reflects that. This has made it particularly vulnerable during the recession. So, they've resorted to couponing. But not just any couponing... extreme couponing.

20% off coupons are everywhere. They're robust. They're generous. They make me want to go to the store. I asked an employee how many people show up with a coupon in their hand. Without a pause she said, "everyone."

Unfortunately, this last quarter has been dismal. Couponing has gotten people into the store, but forgoing 20% of revenue has created a skewed effect upon the top line. In his analysis, Jim Kraemer said that their biggest struggle right now is to get off couponing. He's right in that they're trapped. But trying to turn off the coupon switch may not be the answer. It may, however lie in other switches.

Take their stock, for instance. If people aren't insisting upon high quality, then diffusing the stock with a selection of lower quality items (and lower wholesale costs) that don't affect the consumer surplus may help eat into that 20% hit. If there's only a slight difference between a $30 towel at Bed Bath and Beyond and $7 towel at Target, it may be time to close that gap a bit.

Without being involved in the company and it's management, I can only offer superficial answers. However, extreme couponing may be a permanent 'on' switch, and investigating other switches may yield an answer.

But one thing is obvious... get rid of all the coupons and they'll be getting rid of all the traffic.

http://www.bedbathandbeyond.com

Carmel Limo

Carmel had been a major force in the NYC limo business for quite some time. They do a fair amount of couponing, but one small thing does a lot of work in driving their success. The phone number is 666-6666. You can't forget a mnemonic device like that. Also, they're incredibly reliable. So a good experience, plus an unforgettable number equals repeated business.

Now, they've created partnerships with other limo companies in other cities. So when you book a trip to the airport, they ask if you'll need a car on the other end. Smart play.

http://www.carmellimo.com/

Songify

Songify is an app that auto tunes anything you say into a pre-programed song. To promote this app, Songify has been taking famous viral videos and mashing them up in a way that resembles the product. Some of them are awesome.

Like this one:
http://www.youtube.com/watch?v=FCSBoOcGFFE

And this one:
http://www.youtube.com/watch?v=9QS0q3mGPGg
(Notice the almost 37 million hits)

That's one cheap ad campaign.

http://www.songifythis.com

Sun Bum

This small company is entering the highly saturated and very disorganized sunblock market. The large players such as Neutrogena, Coppertone and Banana Boat have focused their distribution channels in drug stores and supermarkets. Consequently, these large distributors have made it too competitive and not cost effective for smaller outlets such as surf shops to carry sunblock.

Enter Sun Bum. Similarly to SkullCandy, they have found a way to exploit the unused distribution channel of surf shops by creating a line of sunblock with great packaging, a surf culture brand, and serious sun protection products aimed at those who spend time in the sun the most.

I still can't figure out how they printed the bottles with the woodgrain matching perfectly around the entire bottle.

http://www.trustthebum.com/

Chicago Air & Water Show

If you're in Chicago, and you're trying to figure out what to do this weekend, nothing will help you decide like an F-22 buzzing the city while you walk to lunch.

Two days before the Chicago Air & Water Show, F-14s, F-22s, and The Blue Angels do some laps around the city. I don't know if there is a logistical reason for the flights, but I do know that they are an amazing promotion for the upcoming show. Seeing those planes during a regular workday will most certainly make hanging by the lake a top choice for weekend plans.

http://www.explorechicago.org/city/en/supporting_narrative/events___special_events/special_events/mose/chicago_air_and_water.html

Continental Tire

Most tire companies offer offsite demos to their salesforce. In the tire business, it's well understood that most consumer choices are made at the dealer, much of the time involving the help of the salespeople. Continental has decided to make these offsite demos the bulk of their marketing plan. The company treats their salespeople to lavish offsite demos, where they get to drive cars with different tires, comparing and understanding the product deeply. Continental is forgoing other marketing efforts and are achieving stronger top line at a fraction of the cost of consumer-facing marketing.

http://www.businessweek.com/magazine/continental-sells-to-tire-salesmen-in-the-us-07072011.html?chan=magazine+channel_news+-+companies+%26amp%3b+industries

Prince

Prince did a 21 night stand at the Los Angeles Forum. All tickets were $25. A lot of people who couldn't afford a typical $100+ concert ticket price would be able to see this amazing show.

This was an extremely generous effort by everyone involved (including Ticketmaster who have waived their fee). Sure, Prince saved some money by not having to travel, and the Forum had been pretty slow, so they weren't losing much in the way of opportunity costs. But still, at $25 a seat there was no way anyone came out ahead.

To make this gesture work, Prince and the producers had to put together some pretty creative economics.

They had to create enough supply to find the equilibrium at the $25 price point. If he only played a few nights, the supply shortage would have caused the resale value of the tickets to go through the roof, and the $25 price point would have become meaningless. 21 nights allowed there to be enough tickets over enough time so that everyone who wanted to go would be able to get a ticket, and the resale price wouldn't rise much, if at all.

Brilliant, classy, generous, and creative.

http://www.lopeztonight.com/episode_recaps_and_highlights/prince_talks_music_life_and_the_internet.php#content

Goodwill

My friend Neil pointed out this great initiative from Goodwill, which was created by BBDO SF. They teamed up with Levis to put an extra note on the care tag of their clothing. What a smart, unexpected way to create a message for Goodwill, and at the same time, rack up brownie points for Levis.

http://www.goodwill.org/press-releases/levis-and-goodwill-partner-to-launch-a-care-tag-for-our-planet/

Angry Birds Rio

This is a great way to promote the movie Rio. The free version comes with two free levels, which is really just enough to give me enough curiosity about the movie to make me want to go see it. The full version is available for $3. I do wonder how much the development costs are for the Rio version, and if it'll pay off.

But it's a cool creative tie-in nevertheless.

http://www.youtube.com/watch?v=-7gIpfrQdAI

The Street

Marek Fuch's column on The Street attacks what he considers faulty media coverage about stocks. It's called 'They just don't get it.'

The name of this column, thrown on the homepage of The Street everyday, not only paints The Street as an authority with insights that most people don't have, but it also gives you the feeling that paying attention to The Street will help you find great buys in the market. This simple column title goes a long way to support the overall branding of The Street.

http://www.thestreet.com/video/11042784/they-just-dont-get-apple.html#825315083001

B & L Auto Body

After getting into an accident, I had to make a quick choice of body shops. My wife and I started by looking at body shop reviews on Yelp. B&L Auto Body's reviews were through the roof, and this made the choice very easy. Our insurance company had their own recommendations, but none of them rated as highly on Yelp as B&L.

Although B&L had been around for quite a while, the owner, Gino, told me that his business really took off when Yelp came around, quickly spreading word of B&L's high-quality work. In fact, Gino told me that he saw business increasing and didn't know why. Not being a big social media guy, had never heard of Yelp. It was only after Yelp contacted him to let him know how good his reviews were did he have his answer to the increased business.

Now, B&L has a Facebook fan page, a website, and an online loyalty program, and they continue to make sure they provide the customer service and level of work that will result in great Yelp reviews. As Gino explained to me, their advertising is free as long as they take care of their customers.

No marketing is more authentic and truthful as that.

http://www.bandlautomotive.com/

Enterprise

I was in a van along with 4 other pissed-off customers, being driven to an Enterprise location 15 miles across the San Fernando Valley. I had just dropped off my Saab for service, only to find that the local Enterprise office had no cars. This doesn't sound like a company with big scores in customer service from JD Power. And this isn't the first time something like this has happened. It seems that every experience with Enterprise consists of repeated apologies, followed by being escorted to the last car they have on the lot, which is frequently something bizarre like an extended Econoline van or a bare bones pickup truck.

How can a company that consistently offers this level of customer service still be successful? Cost leadership. If a cost cutting measure that adversely affects customer service saves more money than the potential loss of customers costs, then it's still probably a good way to go. In other words, if pissing me off because there are no cars costs Enterprise less than having a fleet of excess idle cars laying around so I can have my choice of rides, then I better be prepared for another cross-valley trek. Enterprise is a private company, so looking deeply into their operations is difficult. However, I've found evidence that Enterprise has mastered this cost leadership position, and this may have contributed to their explosive growth.

Enterprise has a customer service tracking method called 'Top Box', which tracks customer service with follow-up phone calls. If a customer is completely satisfied, then that customer is considered a 'repeat customer.' By obsessively tracking customer satisfaction, two things are accomplished. First, they can continually test different cost saving measures against customer service, to see how much that measure is impacting customer service. They can then adjust the measures accordingly, until the ratio between cost saving vs. customer service is optimized. The second benefit is that they can use top box as a marketing device that speaks to their obsession with customer service.

Another piece of evidence also point to a possible cost leadership strategy (besides my 15 mile trip across the valley). First, is a recent scandal that Enterprise found itself in back in 2006. Enterprise ordered a fleet of new cars built specifically without side airbags. The omission of side airbags saved Enterprise $11 million, and, unless a customer got into a serious accident, would not impact customer service in the least. The problem occured when the rental cars were put up for sale as full feature cars, and purchasers discovered the missing airbags.

Although I admit I'm jumping to conclusions, and there may be other types of strategies in place, I do so to make a point: A well managed cost leadership strategy is a sound strategy. Creativity can play a part in this as well, by creating programs that will prevent customer service from deteriorating under the cost leadership strategy. This means ideas that will be appreciated by customers, but won't cost much to Enterprise. The cost leadership strategy, although effective and profitable, is, by nature, constantly tempting fate. The company is always seeing how much they can get away with, and at some point they will misstep, as they did with the airbags. Creative and novel ideas can insulate Enterprise from the risk of backfire, so the smiling, apologizing salespeople aren't always scrambling to satisfy customers.

http://www.enterpriseholdings.com/

LeapFrog

My mother-in-law bought our 4-year-old daughter a VTech kids laptop computer. It has 4 games that challenge her to solve problems such as spelling a word, counting, and stuff like that. The problem with this thing is that the user interface is pretty confusing. Neither my wife nor I could figure out how to get the cursor to point at the right object.

Having had some experience working on LeapFrog, VTech's competitor, I know pretty well that Leapfrog products have much better interfaces, and are much easier for kids to enjoy.

Here's the problem. In the store, there's no opportunity for my mother-in-law to differentiate the two brands. Both have a 'try me' feature, but I doubt most people will mess with each long enough to see the difference. And the sale is lost to other factors such as price.

This is where creative should have been brought in at the product development stage. Solutions could have been created to make Leapfrog's user interface more apparent in the store. Unfortunately, the agency was left at the end of the process, after the packaging was done, after the in-store was worked out, and after an existing branding platform was already in the works. The branding was going one way - making your kids smarter, while the true competitive advantage is in the computer's ease of use. There's nothing wrong with the branding, but each product could have used the agency's resources earlier in the process to help evangelize each advantage, and incorporate those advantages with the overall brand idea.

http://shop.leapfrog.com/leapfrog/jump/My-Own-Leaptop%22/productDetail/More-Toddler-Toys/SCOUT19150/cat80052?selectedColor=&selectedSize=&navAction=push&navCount=0&categoryNav=false

Skullcandy Pt. 2

I needed new headphones. So I stopped by FYE which is a CD store (the sad state of affairs in that place is another story) and looked for a set of Skullcandy. As expected, I found the little skull logo dominating the rack in all sorts of styles and colors.

However, a few other brands looked similar. I immediately assumed a bunch of second adopters have moved in, until I noticed on the back of one of the packages – in the fine print – read 'a product of Skullcandy.'

Skullcandy has branched out with their fashion concept, and are creating other looks with the same products, clearly attracting people who don't want a skull sticking out of their ears. 2XL, Ink-D, and a few others are all Skullcandy products. And buried in the corner is Sony.

That headphone rack is a work of art.

http://www.2xl.com/

Playboy

Playboy is releasing an entire archive of every issue on a 250GB hard drive. It's well packaged and, with the company in decline, nicely utilizes one of their last remaining product differentiators - history. They're offering a naked romp through time for $300.

http://www.thestreet.com/story/10935634/1/playboy-releases-full-archive-hard-drive.html?cm_ven=RSSFeed

http://www.playboyarchive.com/shop/HardDrive.htm

Delta/Google

Everyone hates airlines, and it will take more than an ad campaign to change their image. But there's an interesting opportunity here. In the context of such a low bar, the smallest gesture from an airline will be seen by customers as a huge deal. Tomorrow, we'll be flying Delta, and through the new TSA nightmare, a connection in Atlanta, a packed plane, no food, baggage fees, etc., we'll be getting free Internet, compliments of Google. This helps Delta look just a bit better than the competitors.

I'm sure there are a thousand other small, inexpensive gestures that could help an airline put some meaning behind their (so called) brand. Run one less branding spot that touts how committed they are to their customers, and put the money towards giving everyone onboard a free drink for the duration of the forgone spot's expected media buy. Go one step further, and work out a deal with a liquor company to make their product the free drink.

Maybe that free drink will go a lot farther than the ad.

http://www.msnbc.msn.com/id/40345269/ns/travel-travel_tips/

Apple

This teaser came to my attention not through an ad, not through social media, not through banners, but through good, old fashioned PR. All of the news services picked it up, as well as all the rumors, and immediately delivered it to my iGoogle homepage. Of course, this is pretty easy for Apple, but I'm still amazed at how fast they can work the media channels.

http://www.thestreet.com/_yahoo/story/10921575/1/apple-preps-for-itunes-announcement.html?t=SVM-OK&pos=4

http://www.cnn.com/2010/TECH/innovation/11/15/apple.itunes/index.html?iref=allsearch

Wal Mart

Wal Mart just finished a study, based upon their own sales data that contradicts Ben Bernanke's assessment that inflation is not on the horizon. Wal Mart found that, based upon an 86 item cart of basic household supplies, prices have increased .6% in the last two months. Wal Mart is a big enough supplier to be able to make an assessment of the nation's economy based upon its own data.

Sometimes, an existing company can be an amazing resource for something completely different.

http://www.cnbc.com/id/40135092

Wenger SwissGear

Wenger makes the original Swiss Army knife. They also make a whole mess of other products including boots, watches, tents, and backpacks. The products are nicely designed with a feeling of quality, and offered at a low cost. You can get a great looking backpack for about $40.

This is a solid example of a competition theory called consumer surplus, which is the dollar measure of what something is worth to the consumer, minus the actual price. The expensive-looking design and implied quality from their association with the Swiss Army Knife raises the expectation of cost. When the customer flips the tag, They are pleasantly surprised by the lower than expected price. This creates a large perceived value (or in economic terms, a large consumer surplus).

The lower price tag doesn't signify a 'race to the bottom' price war with every other brand. This is competition for perceived value. Even if other brands are cheaper, their products are going to have to be pretty interesting to beat Wenger's consumer surplus, and beat Wenger to the sale.

Steve Jobs does the same thing in his keynotes. He spends an hour showing how amazing a new product is – making it look like something that should be pretty expensive – and then at the end hits everyone over the head with a price that is below what they expected. Even if it's not that cheap (and most Apple products are more expensive than their respective competitors) the consumer surplus that Jobs has created is huge.

Pretty creative if you ask me.

http://www.wengerna.com/

Call of Duty: Black Ops

Clearly, Activision threw out a rule that consistently rendered video game advertising on television pointless. The rule was to have about 12 seconds of game footage in each spot. 12 seconds of game footage is nothing more than a bunch of quick, frenetic cuts that are hard to follow. Add the mandatory 5 seconds for the end frame and ESRB rating and you're left a whopping 13 seconds to communicate anything unique about the game.

This isn't the way to use traditional television advertising. The new Black Ops spot is. Make a piece of film so huge and unique that it pays tribute to the size of the game launch, and don't bother with any game footage. There's more than enough of that online, and every gamer will obsessively crawl through every second of it.

http://www.youtube.com/watch?v=Pblj3JHF-Jo

http://www.callofduty.com/blackops

2011 Ford Explorer

I've always had a theory that with car advertising, long copy print was a good way to go. People in the market for a car do a ton of research, and will read just about anything to help them figure out the best way to drop $30,000 to $40,000.

This is why I like the new Explorer work so much. The bulk of the new campaign is happening on Facebook and YouTube, not TV. By taking advantage of people's willingness do research, Ford is packing tons of information about every feature on the new Explorer into simple videos and posts. A TV spot couldn't do this. Social media can, and at a fraction of the cost.

http://www.facebook.com/FordExplorer

Tequila Avion

This is a really unique product placement. Unlike a typical Michael Bay movie scene that incorporates a bunch of brands that have nothing to do with the plot, Avion made a deal with HBO to portray their product as a small startup in Entourage. The beauty is that most people thought the tequila was fictional.

http://www.thestreet.com/video/10905446/tequila-avions-real-entourage-breakout.html?puc=_tscrss&s=1#654255545001

http://tequilaavion.com/

Oakley

Oakley put a pair of $160 sunglasses on each of the Chilean miners as they came out, not only protecting their eyes from the light, but making them each look completely bad-ass. This article is about how they did it.

http://www.chron.com/disp/story.mpl/life/main/7247255.html

The MFA is the New MBA

This article makes a case that trained creative thinkers are needed in all sorts of business applications.

http://blogs.hbr.org/cs/2008/04/the_mfa_is_the_new_mba.html

Skullcandy

Skullcandy makes headphones with a boarder/DJ image. But what's so unique is that the brand's role isn't just geared towards hip kids. The image "allowed the products to expand into unusual outlets that never carried headphones before."* Skate shops, used record stores, and so many other outlets that never carried headphones now carry Skullcandy.

The brand serves the distribution, and the distribution creates the success. I have yet to see an ad for Skullcandy. But that awesome little skull is everywhere. Target, Best Buy, skate shops, and even the campus store at Northwestern.

Brilliant.

Here's something else that they do. In keeping with their boarder image, their warranty covers damage done to the headphones by the user. If you smash your headphones during a wipeout, they'll send you a new pair for 50% off. That's pretty cool, and really supports the brand.

Great name, too.

http://www.inc.com/partners/sap/profile-skullcandy.html

http://www.skullcandy.com/