Category: Marketing (Page 2 of 3)

Sidenote to the two movie-centric posts prior to this one: With the Loews-AMC merger, AMC’s MovieWatcher customer loyalty program arrived in New York City for the first time. I had a MovieWatcher account in high school, and not unlike my Blockbuster membership I held onto my card for years. So when AMC appeared in my neighborhood, I went digging into my old wallets, found my card, and tried it—online, no less. And what do you know! My account is valid and I’m still in the system.

The account balance was empty, but I felt remembered, and I got a good chuckle out of my card’s longevity. I now use it every time I go to the movies and am once again partial to AMC theaters in my area.

Customers are as easily sated as they are angered. May as well aim high.

The Blockbuster Video near my old apartment closed last fall. Not enough business in a land of early-adopting downtown Manhattan folks using VOD and Netflix, I guess. The missus and I liked renting DVDs every so often, but we learned to do without.

Now that we’re uptown, we were pleased to discover that the Blockbuster in our new neck of the woods is still open and doing a brisk business. We were less pleased when the store said we had no Blockbuster accounts. The clerk made us fill out a new-customer form and hand over ID and a credit card to rent a movie.

Here’s the thing. I’ve been a Blockbuster customer for approximately 17 years, since around the time I first got a driver’s license. I was one of the first people to have their then-impressive “universal account,” which amused me to no end when I used my Pennsylvania-issued replacement card in New Jersey. I was a happy customer when they let me start verifying my ID with my driver’s license so I could stop carrying the Blockbuster card altogether, and my account followed me from New Jersey to Pa. back to Jersey and into New York, including an account merge when I got married. All without incident. Never a late fee, never a lost-video charge, just half a lifetime of contented membership.

Frustrating and ironic, then, that after all these years I have disappeared from their system. The only reason I can find is that they probably purge accounts after a year of inactivity. If it’s been a year since I rented from Blockbuster, well, that’s because they closed my local store. And when I became able to return to the chain, a slow and aggravating barrier existed, when in fact they should have welcomed me back with a smile, and perhaps a coupon to re-engage me. A company swinging from its heels like Blockbuster should know that. So much for loyalty.

(“Breach,” by the way, was interesting but only decent.)

Chain retailers face a big decision when expanding into new markets: do they implement standard pricing or local pricing? Standard pricing is just that: a $58 shirt at Banana Republic is $58 whether it’s in New York, St. Louis or online. Local pricing allows for variances in market conditions, such as rent, traffic, competition, cost of living, etc.

Petco has chosen local pricing for its Manhattan stores. The result? Amy and I go out of our way to not shop there. And by “out of the way” I mean “drive to a pet store deep in New Jersey where poop bags are 55% less expensive than they are in Union Square.”

A basic pricing comparison:

Natural Balance Pet Food, 5 lb. bag

– At Whiskers in the East Village: $8.99

– Online at petco.com: $6.99

– At Petco Union Square: $9.99

Van Ness Grab Bags, 40 count

– At Petco (formerly NJ Pets), East Hanover, NJ: $2.99

– Online at petfooddirect.com: $3.08

– Online at petco.com: $5.99

– At Petco Union Square: $6.49

Frontline Plus, 3-month supply, small dogs

– From our veterinarian: $40.00

– Online at petco.com: $40.99

– At Petco Union Square: $62.99

Now, I live in a hot neighborhood in an expensive city, and I understand that Petco needs to pay the bills. I also know that my local Petco is constantly busy, which means the pet owners in my neighborhood are either less price sensitive than me or don’t comparison shop as much (probably both).

But what I really know is that Petco Union Square has product markup that exceeds 100% on some items. That’s just outrageous. Even my Food Emporium’s cereal, a notoriously expensive item in Manhattan, doesn’t cost twice as much as the Kellogg’s in my parents’ supermarkets (although it comes close).

End result? I don’t go to Petco much anymore. And long lines or no, that sort of reaction is something Petco’s new owners might want to consider.

Frank Bruni, having visited new restaurant Butterfield 8 in its opening days, asks: “Like other new restaurants, Butterfield 8 was charging anyone who came through the door full price. And if a restaurant is going to do that, shouldn’t it take full responsibility for the quality of the experience it provides? Shouldn’t it be ready to roll?”

Yes and no. The same could be asked of Broadway shows in previews, and the first year a new car or computer is on the market. They all charge what the market will bear—in Bruni’s case, retail price less $10 after mistakes were made.

And indeed, theaters in preview often serve up discounts to entice people to fill the seats. But a hot ticket is more than willing to charge full price, because people are willing to pay it. The same goes for new restaurants with buzz: 5 Ninth and Butterfield 8 (obviously the hip trend is to throw a number into the restaurant name) have full reservations and busy dining rooms, so they happily operate in dress rehearsal mode, right down to the cost.

Bruni should be impressed with the out-of-the-box apparent success of the new restaurants, and pleased that his industry’s consumers are willing to support such endeavors. In an expensive new launch, full pricing early helps defray costs and encourages profitability. More power to them.

It Rings, Sings, Downloads, Uploads. But Can You Stand It?, in The New York Times, starts with an anecdote that describes me perfectly: “You would think that he’d be wildly enthusiastic about the new third-generation, or 3G, cellphones that play video and music. But instead, he seems less than impressed—a reaction that could spell trouble for Sprint, Verizon Wireless and other providers that have spent billions of dollars upgrading their networks to lure customers to their high-speed 3G systems.”

Indeed. I was invited to the Sprint Power Vision Ambassador Program not long ago (see Consumerist‘s offer and reaction). Sprint delivered to me a shiny new Samsung multimedia phone with full access privileges and six months of unlimited usage, free of charge. I found it exciting to be a part of a beta program, and intriguing to be an ambassador, a chance for me to play BzzAgent from the inside.

Instead, I’ve turned out much like the article describes. The phone, while robust, is difficult to navigate. The features, while included, require my activating a subscription, making me skeptical of fees and reluctant to say yes to anything. And while I do want a new phone, I have hardly used my free ambassador toy, since my old phone does what I want it to do (make calls, send text messages and take the occasional photo) just fine. The Times is right: convincing ordinary phone service subscribers to bump their services is going to be an uphill battle.

Interestingly, the ambassador program has left me feeling like a bit of a heel. I was handed a cell phone with the works, free, in exchange for discussing it on my blog, and this is the first it’s come up. I hope to figure out Verizon’s call forwarding so I can turn the Sprint phone into my primary for a while. But then there’s a phone book to migrate, and that 816 number they gave me, and I’m not sure if and when I’ll ever use the streaming video….

Memo to media and other companies: make life difficult for customers at your own risk. BusinessWeek this week exposed the direct impact of Sony’s rootkit fiasco, noting that sales of Van Zant’s “Get Right With the Man,” one of the discs affected, plummeted from 887 to 25,802 in Amazon.com sales rankings in the last three weeks. Trey Anastasio’s weekly album sales have fallen by more than half.

In the Internet age, consumers respond heartily and rapidly to positive and negative changes in the commercial landscape. Easy video downloads on iTunes? Boom! A million sales in a few short weeks. Music CDs exposed as harmful to personal property? Bam! Sales fall through the floor.

Expect to see more and more of these effects as the general populace becomes more attuned to corporate habits, thanks to the simplicity of exposing the good and bad via email, forums, and blogs.

Gillette announced today a five-blade razor that includes a “precision” blade in the back and a second lubricating strip. Consumers like me, still uncertain of the utility of our lubricated Mach 3 blades, are going to be a hard sell.

More deliciously, Gillette has apparently stolen its product concepts from its own parodies: check out The Onion’s Fuck Everything, We’re Doing Five Blades, from February 2004. “What part of this don’t you understand? If two blades is good, and three blades is better, obviously five blades would make us the best fucking razor that ever existed. Put another aloe strip on that fucker, too.” Ouch.

(links courtesy of Jay)

This just in: points accumulated in JetBlue’s TrueBlue frequent-flier program expire after one year (see point 4.4 in link). One year!

JetBlue awards up to 12 points per leg of travel and a free trip comes at 100 points. One would therefore have to make a minimum of five round-trip flights between the coasts, or as many as nine short-hop east coast trips, within a 12-month span to achieve a free flight.

Most airlines have expiration dates on their frequent flier miles of two to three years. I have been flying Virgin Atlantic occasionally and accumulating miles in their Flying Club program since 1999; the expiration period renews every time I fly. As a result, I am using a stash of Flying Club miles this summer. For years I’ve called Virgin Atlantic my favorite airline, and the mileage generosity is one small component.

For JetBlue to wipe out my flight history with them smacks of disinterest. Such a short expiration period is a “what have you done for me lately?” stance that doesn’t sit well with me. Mind you, I’m a JetBlue shareholder, and their conservatism (read stinginess) within TrueBlue is likely one of the reasons JBLU is one of the few airlines turning a profit.

But 12 months? On an airline packed with leisure travelers and with a rather truncated route map? Within my spectrum of travel habits, JetBlue may as well not have a program at all.