October 25, 2014

BrandingBlog Radio: The Art Of The Offer with Craig Arthur

The terms of a sales offer and how you position it in the minds of customers is paramount to determining success. Craig Arthur, our Australian marketing expert, joins me this week for a look at a few examples where tweaking the offer has made a big difference in sales…sometimes in the very existence of the company.

We talk about the solar industry, auto sales, cell phones and give the example of how changing the offer in the early days made a difference in how Cabela’s grew from a kitchen table home-based biz to a multi-billion dollar retailer.

I didn’t get all the details of that very first Cabela’s offer exactly right because I was going from local folklore. I found an article that will give you even more depth if you’d like to read about it. It’s a great story.

I hope you enjoy this podcast. If you have any questions or would like to recommend guests, please do so in the comments.

Are persistent sales events symptomatic of corporate greed?

My Wizard of Ads (WOA) Partners and I have a presentation that shows with amazing clarity the profitability of “relational” customers versus “transactional” shoppers. Most retailers believe that traffic is the magic. “Get me enough people and I’ll be fine,” they tell their ad reps.

So then, are SALE events simply traffic-builders? I don’t think so, but I’d sure welcome your opinion as well.

You see, it starts with a focus on profits, not customers. Shareholders scream to the board and CEO that profits shall be forthcoming. The CEO starts screaming down the chain because his bonus is dependent upon the actions of everyone else. The VPs and directors of the different marketing channels scream at the buyers. The buyers scream on down the line until it reaches the sales staff on the retail floor and the operators on the phone banks. Suddenly, there’s no one left to scream at…except the customer. Call in the ad agency…better yet, let’s go direct to the media. “We need screaming SALE ADS! Let’s create some traffic!”

Ah, now we’re talking! TRAFFIC. Lots of folks start coming in because you’ve just told them how willing you are to stab your best customers in the back to cover the greed of those screaming lunatics in the glass towers.

The buyers bought too much because of the screaming. The sales staff didn’t sell enough because all the best showroom space was taken up by the discounted stuff. The loyal relational customer comes in and finds that the merchandise she paid top dollar for last month is now 65% off. She’s fuming. Next time, she’ll wait for the sale.

If the motivation of the company is greed, the result will be persistent sales events.

If a genuine interest in helping the customer is the motivation of the company, there will be no giant sales events (with the possible exception of an annual inventory reduction event to actually get rid of the honest mistakes of the buyers).

The focus will be on enriching the customer experience in all marketing channels and through every contact with the company. Profits will surely follow in the trail of happy customers.

What do you think?

Pimp my Blind

One of the strategies we use for our clients is called business topology mapping. It involves taking a totally unrelated business model and finding a way to apply their tactics in your own business.

Here’s an example and a free idea for my friends at Cabela’sPimp My Ride is a cool show on MTV right now.  MTV finds some poor kid with a crappy car and sends out rap artist Xzibit to pimp their ride. Basically, they take the junker and turn it into a customized dream car for the owner.  Cabela’s could find some poor hunter with a lousy goose pit and award him a total makeover.  Call the show "Pimp my Blind." 

Maybe instead of a rap artist, you could get Ted Nugent to host the show. I can see the pimped out blind:  Satellite TV dish inside of a decoy…plasma TV monitors for each hunter connected both to the football games AND to horizon-scanning cameras to keep a look out for the birds.  Full underground kitchen, the works.

Why let MTV have all the fun?

Cabela's News

Three announcements last week from Cabela’s that I didn’t have a chance to blog:

First, they announced their plans for their first store in Colorado. It will be along I-70 in the vicinity of Wheatridge and Golden. The concern here is what effect it will have on the Sidney store, where the parking lot is usually filled with Colorado license plates on weekends. It’ll be a great move for the company, but will definitely put a hurt on the local store. When I was in local radio here, I tested a plan to bring new traffic into the Sidney store. It worked great. I still have the PowerPoint. Maybe a little retail pain will get some attention. There’s no doubt they’ll have to do some things differently in Sidney once the Colorado store opens. Of course, the easiest thing is to just shrug and pretend there’s nothing to be done about it and start reducing payroll. Everyone in town hopes they’ll at least make an effort to re-strategize this store. Notwithstanding the payroll, it’s a major contributor of local half-cent sales tax revenue.

Second, their 3rd quarter earnings report was released. They’re making more money, but were disappointed by a 3% decline in same-store sales. You can listen to the conference call on www.cabelas.com.

Thirdly, they’ll be putting together another public offering, but this time all of the selling shares will be offered by existing shareholders. Read about it here.