Bottom-Line Marketing Blog

Bottom-line Marketing

A perfect plan for failure

12 May 2013 · By Joe Talcott

Before presenting an exclusive offer to one small group of consumers, i.e. new subscribers, consider the possible impact on your entire customer base, i.e. loyal customers. Otherwise, you risk cutting off your nose to spite your face.

There is an oft-used expression in business seminars and courses: “If you fail to plan, you plan to fail.”

I’ve never been a big fan of this axiom, since some of the biggest successes in history have come from situations in which there was no plan in sight.

As Sir Alexander Fleming wrote, “When I woke up just after dawn on September 28, 1928, I certainly didn’t plan to revolutionise all medicine by discovering the world’s first antibiotic or bacteria killer. But I suppose that was exactly what I did.”

That discovery of penicillin has saved millions of lives, including my father’s in 1944. So, not having a plan does not condemn one to failure. But I have recently become more aware of businesses who seem to have an actual “plan to fail.”

It’s not some scheme to cheat the tax collector. In fact, it is probably done without much thought. But the result is the same nonetheless. They are doing things in their businesses that have a negative effect on a large number of their customers.

Let me give some firsthand examples.

About a month ago, I was traveling overseas and booked into a hotel for a few nights. In this hotel, Wi-Fi Internet access was included in the room charge. (I hesitate to say “free Wi-Fi,” because I am a marketer and I know that it gets paid for by the customer. But it was certainly better than being charged extra for the use of the wireless service). The service was relatively fast and easy to connect.

I was due to return to the same city a couple of weeks later and, because of this experience, I booked the same hotel. This time, however, the Wi-Fi service struggled to provide dial-up speeds.

I rang customer service. The representative said, “Wow. The hotel is really full tonight. There just isn’t enough bandwidth to handle everybody.”

The next morning, I spoke with the hotel manager and told her that when their hotel is relatively empty, the service is great. But when the hotel is full, the service is terrible. In a world of social networks, this meant many more people will pass along bad reviews rather than good ones.

The second example came a few weeks later, back in Australia. My wife and I visited a well-reputed restaurant for dinner. The restaurant was full of the hustle and bustle of a successful eating establishment.

We were greeted by a friendly hostess who seated us at the table we had reserved. That was the best service we received that evening.

The rest was remarkably bad. We waited nearly 90 minutes for our order to be delivered. Our waitress stopped at our table a couple of times and apologised. “I’m very sorry,” she said, “but we’re just incredibly busy.”

I thought restaurants wanted to be busy. It is a variation on the expression, “If it weren’t for customers, we’d run a great business.”

Both of these instances (and I bet you’ve experienced others) are examples of businesses that have, almost certainly unwittingly, planned to give the largest number of their customers a bad experience.

This happens when a wireless Internet service provides an adequate service to the average number of hotel guests. Or when staffing levels in a restaurant are managed to the average number of diners.

The result is exactly the opposite of what you’d want to happen. The best service is provided to the fewest customers and the worst service to the most.

There is a variation of this which has application to news media businesses and many others. We often provide giant incentives to people who subscribe to our newspaper or digital services. Loyal customers are specifically excluded from receiving these incentives (“offer applies to new customers only”).

We provide the best deal to the smallest number of people — those taking up the offer — and taunt the largest group, our current customer base, with an unattainable offer.

As we evaluate the services we provide or offers we make, it is more important than ever that we look at the big picture. What are the implications of “buying” new subscribers and then treating them with disrespect once they’ve signed on? The news media business cannot afford to do this.

A colleague once made this point quite well by asking me, “When should you tell your wife that you love her?” When? I replied. “Before someone else does,” he said.

We need to make sure we’re telling our current customers that we love them. And we need to demonstrate that love.

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The “Bottom-Line Marketing” blog aims to bring together the principles behind marketing with the real-world experiences of newspapers transitioning to newsmedia companies. Our bloggers are some of the leading marketers at the world’s leading newsmedia companies today, most with experiences with packaged goods and brands such as McDonald's and Disney. They will aim to show how marketing – often under-utilised in the news industry – improves the bottom line (even a baby's bottom).

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Distinguished Executive-In Residence
Rutgers Business School
Newark, USA
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Cedar Rapids, USA
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Senior Vice President & Head of Strategic Marketing
Singapore Press Holdings Limited
News Centre, Singapore
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