Jon Michaeli’s Blog


Why are big brands like Starbucks and Pepsico so darn sloppy?

Snap3So I’ll start off by admitting that I’m in a bit of a funk today. I don’t have much of an explanation, except that it’s Monday. The weather’s actually quite nice for early May in New England.

Right to the point. I have two beefs, and I’m going to cover them together, because neither is worthy of a post on its own.

My first one re-visits Starbucks’ pricing. I’m already bitter that not all Starbucks (e.g. airport locations, Barnes & Noble stores) accept my Starbucks card (yes I understand why), so I pay 40 cents extra for soy milk. Today, I ordered a tall latte with an extra shot (a regular tall has only one, so what’s the point?) and I realized I paid the same price as a grande (which has 2 shots), except a grande has quite a bit more steamed milk. I looked more closely at the latte pricing and noticed that adding a shot to a grande makes it more expensive than a venti (which has 3 shots and also a lot more milk). Yes, I’m familiar with the concept of volume pricing, but in principle the regular price you charge for a larger size should at the very least be higher than the price for the smaller size. Why? Forget business sense. Because if you don’t follow this common sense principle, consumers are bound to be bitter once they figure it out.

The other one strikes a chord, because it relates to a personal pet peeve I’ve already blogged about twice in my Turner Broadcasting and BMW posts. Pepsico already has egg on its face over the Tropicana fiasco. And now, a chief marketing pitch for the new Gatorade drink G2 has an obvious grammatical error (see Google search results image at top). The page and tons of other ads are plastered with the phrase “Less Calories” (instead of “Fewer Calories”). This should never have made it past even the most junior copy editor. Truly embarrassing!

What is Twitter’s saturation point?

Want a perfect example of hockey stick growth? Just take a look at Twitter in 2009. Unique visitors have climbed from ~2mm at the end of 2008 to ~10mm by the end of March, 2009. That’s a monthly compounded growth rate of 70%!

Twitter’s base platform is rudimentary at best, which is why 3rd parties have built ad hoc services, such as TweetDeck, TweetVolume and TweetPhoto (the most recent addition) on top of Twitter to help users manage and enrich their posts, organize their streams categorically, integrate with other social networks, and monitor chatter for CRM purposes.

But, as a tool to reach new customer prospects – especially for a bootstrap that cannot afford to hire a team of social media specialists – I cannot help but feel Twitter will soon follow in Facebook’s steps as cluttered, overwhelming, and tough to navigate. Granted there are some key differences. Perhaps two of the most important in Twitter’s favor are 1) The hurdle for participation is extremely low, and 2) Twitter simulates a real-time one-to-many conversation. That said, Facebook has its own strengths (e.g. more of a community feel, more robust in functionality acting as a one-stop destination site). Anyway, try creating an application and/or fan page as a cash-constrained startup on Facebook these days and see how little traction you’ll get without assigning a leading agency and devoting 24/7 to the project.

We’ve seen this before in the digital era. Look no further than email, where it’s now virtually impossible to gain mindshare. Lists quickly get stale, staying whitelisted gets ever more challenging, and standard email open and click thru rates have plummeted to the low single digits. Implement best practices such as list cleansing, personalization, database triggers and contextual targeting, and you’ll do somewhat better, but again there’s an opportunity cost for your effort.

No I’m not debating that new Web 2.0 techniques are quickly going the way of their digital predecessors like email and display advertising. But the fact that SPAM and “posers” cannot be eliminated beyond a certain point, the sheer volume of traffic will create tons of competition and “noise.” This is the very reason why I am not a big fan of social media outreach as a standalone strategy, especially for brands at the outset of generating awareness.

I’m far from the first to advocate for integrated marketing, but aside from its value as a multi-touchpoint, consumer life-cycle grounded strategy, I believe it is an effective solution to this problem. There’s no debate that understanding your customers and prospects, finding a way to effectively communicate your value proposition, and stating your goals are a prerequisite. But I believe the next best step is working within an initial budget and ROI goal to develop a “shtick” or hook that is compelling, differentiated, perhaps edgy, but definitely buzzworthy. This offers the best chance of plugging in to the influencer crowd of the social web, and it is in their hands to determine whether your brand is destined for true virality. But, for creative concepts to truly lead to successful execution, I believe the message (focused, simple and consistent) should be distributed across mediums and communication channels, leveraging other digital tactics, grassroots initiatives, and even more traditional methods, including microsites, street/stunt/event marketing, media outreach, and mobile ad campaigns.

VistaPrint – Great Product, Awful User Experience

I admit I’ve used VistaPrint several times now for business cards, address labels, even invitations for my wedding brunch! Plain and simple, the quality of the product is excellent, the prices are very competitive (you can get 250 free business cards and only pay shipping), and there are almost always web coupons on couponcabin, retailmenot and the like. (If you’re a repeat customer, you’ve likely received these coupons directly with your merchandise).

BUT, if I were not a savvy internet consumer, I would be extremely frustrated (at the very least) and angry (more likely) at the overly aggressive cross-sell and upsell tactics used on the website. As I understand it, VistaPrint heavily relies on this for its success.

Don’t get me wrong, as a marketer I strongly advocate increasing transaction size while you have a visitor captive in the shopping cart funnel (and even before). But VistaPrint takes this way too far; they clutter the screen with tons of add-ons, making it difficult to differentiate between your selections and their recommended items. Navigating to the final purchase page takes way too much time. At one point they even force you to choose between 2 options, one reconfirming only your items and another with their selections added. And if I’m not mistaken, the latter is placed at the top of the screen, requiring the user to scroll below the fold to see his original order. It’s truly a miracle if you make it through with only the merchandise you intended to purchase.

And it doesn’t stop there. After you complete the transaction, for a limited time, VistaPrint offers a discount on additional quantities of the same merchandise and other related items. The first time I experienced this, I was really PO’d feeling as though I had paid too much.  Now I’ve learned to game the system and place half of the original order at the higher price, then add the other 50% afterwards at a lower price. (Note: it takes only one extra click of the mouse to do it this way). I’m assuming VistaPrint doesn’t want to encourage this type of behavior, but who wouldn’t quickly figure this one out?

I’m left scratching my head. How has VistaPrint been able to get away with this for so long? They appear to be the market leader, but similar services are available, so at least to some degree, competitive forces are in play. Are VistaPrint’s prices so attractive that consumers simply tolerate it? Do they have far more variety and customization options? Do they market better than everyone else? Do they primarily target SMBs who can often make use of their complementary product recommendations?

I have to believe that ultimately in targeting individual consumers, companies must follow the guiding principle – “Generating higher sales at the real detriment of user experience may increase near term sales, but will be unsustainable in the long run.”