Coffee: Never Surprise Your Customers
caseysoftware.com
caseysoftware.com
Communicating the change ahead of time (given it's popularity and cost difference) would be the most prudent.
But in the end, I think they actually found a better approach: for regulars, the coffee is often free. Because they also bought other things, and helped reinforce the customer community and predictable revenue.
In services, grandfathering is a great way to rollout changes to pricing. But it doesn't work for companies with very little growth/where everyone is a regular.
Yet jumping to $2 is a 100% increase and that feels like a lot.
Probably better to stay with $1 and just treat it as a loss leader that gets customers coming back. See for example the $1.50 Hot Dog combo at Costco, which has stayed at that price for decades. They aren't making any money on it but customers have come to appreciate it and it nurtures loyalty.
Perhaps not the point you were trying to make, but they almost certainly are. Per the cofounder and (in 2018), CEO, Craig Jelenik:
> we [Costco] took it over and started manufacturing our hot dogs. We keep it at $1.50 and make enough money to get a fair return.
https://www.snopes.com/fact-check/costco-founder-kill-hotdog...
I'll grant it's possible they are making a profit, but note he doesn't say they are making a profit, he says they are making a "fair return." They could be losing money. Either way, in the scope of their store operations, it's not consequential on that basis. They do it to make customers happy. It generates good will. That is the "fair return."
Where a profitable company increased its profits, via actions that later lost customers and profits?
(The historical cases that come to mind for me of are companies that were already in the red, trying to turn it around.)
But of course that would do the same to their rep and is not where they make there money. Iirc 80% of profits are from memberships
In a way, yes, but the companies aren't sentient. Seems like people in management have become more out of touch and shortsighted over the past 10 years. Almost to the point where deliberately disregarding the customer is a sort of badge of honor, for example the bud light thing
And who's sick of the virtue signalling? Beer drinking straight dudes.
It's not just a culture war issue, it's an issue of gross incompetence in marketing and a failure to understand the demographics of their customer base.
They attempted to sell beer to a market with a historically low interest in beer. I don’t understand why marketing would be virtue signalling. Expanding to new markets is a thing businesses do. And we’re in an era capable of very targeted advertising, the only people who would have organically seen the ad are people who already followed that influencer so I’m still at a loss as to what the original customer base would be losing. Their experience was exactly the same, it’s nothing like the situation outlined in the article. But once it’s become a culture war issue sides must be taken. Maybe they should have anticipated right wing reactionaries capitalising on it.
> And who’s sick of virtue signalling? Beer drinking straight dudes.
Speak for yourself, man. It is not something that comes up in my life.
I don't think corporations have any standing to lecture regular people on what's moral. Corporations have literally zero moral standing
For context, I'm voting for biden this year (assuming he doesn't kick the bucket first), but if these shitty soulless "brands" want to lecture me on what's right and wrong I'll just buy a competitor. Their whole marketing department can get fired for all I care (assuming they weren't already)
Right, and my point is that I don't see where Bud Light was trying to do that.
If they'd launched a nationwide ad campaign saying "Bud Light drinkers, respect trans lives", I could see the argument. But they didn't. They merely partnered with an influencer that's trans to advertise to their followers. If anything to me that seems nakedly amoral, they're just a business trying to expand their market. Existing buyers of Bud Light would never have seen the ad so they wouldn't have had any moral messages foisted upon them.
Even more outrageous, to many people, is that men who claim to be women are taking over every space that is intended solely for the use of women. Including in places where it's demonstrably harmful to actual women to do so, like women's prisons, or inherently unfair, like women's sports.
So the backlash and boycott encompassed all of that feeling too. Interestingly this isn't just on the right, as it's often portrayed to be, but a sentiment being expressed by ordinary people across the political spectrum.
Is it? You think companies like Budweiser were surprised when people started posting videos using their beers as target practice? You think Gillette or Nike or Kuerig suffered from the viral destruction of bought and paid-for products? Heck no, it was calculated precisely to initiate this kind of performative outrage, all those suckers were baited into it and were caught hook, line, and sinker. In almost every case of right-wing culture war playacting, the sales of the companies being targeted went up. Nike made a billion dollars because of how angry people got that they featured a football player who kneeled for the anthem.
Same can be said for the “liberal tears” style of “tactical” coffee or whatever. They seek to provoke outrage specifically for the PR. Because let’s be honest, virtue signaling is happening at every level on every side of a given issue. It’s why most of the people driving giant pickup trucks or a Prius bought those vehicles.
Here’s a hint: companies don’t have values. They make money. That’s all. The sooner gullible people stop looking for companies to reflect their own weird biases back at them, the sooner they’ll stop using rage bait and virtue signaling to sell more of their crap. I certainly don’t want my beverage to have strong political positions about anything. I kind of think the people who do are the problem here.
> When it was all said and done, the ad correlated to an astronomical $8 billion in Gillette sales loss.
> Bud Light sales remain flat more than year after the brand faced a conservative boycott from consumers angered over its teaming up with influencer Dylan Mulvaney.
I'm not familiar about the Nike or the Keurig issue. I can't find a reference to sales results but I guess the demographics of Nike is woke people so they can afford to do that.
Budweiser and Gillette screwed up massively, probably because of wrong assumptions of their customer base. Like all large companies of office workers, they seem to drift left internally and right wing / libertarian people just shut up not to get fired. This of course creates a belief that everywhere is "progressive" and marketing people feel empowered to pull these stunts.
I'm sure some people were legitimately upset, I don't think they have a particularly valid reason to be upset, but people get upset for silly reasons all the time. And then 95% of the people were just like "I'm supposed to be mad because people in my tribe are mad" which is literally virtue signaling. I'm in the group too, see how mad I am!
Surely, objecting to the mere presence or visibility of certain groups isn't a customer preference that any of us should cater to
you bring in the word "should"... there's plenty of things that corporations shouldn't be doing that are far, far worse than not depicting some minority in an ad
Like apple, nike, etc relying on borderline slave labor for manufacturing. Or literally anything nestle is doing
> Bud Light had been kind of a brand of fratty, kind of out-of-touch humor, and it was really important that we had another approach
Two things: frats buy a lot of beer, so sneering at frats is essentially sneering at the customer.
Also, there's a good chance the average person who buys a lot of beer skews a certain political way. Or at least, if that wasn't the case this fiasco wouldn't have put such a dent in their market share
There really isn’t! In fact I can think of few drinks more universal among men than beer.
You note in the quote provided the VP said “another”, not “a replacement”. They were trying to appeal to a new market alongside their existing one. They underestimated the culture war outrage that would provoke but that outrage wasn’t actually based on anything real. The product remains the same, the price remains the same. Unlike in the article we’re discussing.
What? This is marketing, if the customer stops buying, nobody gives a flying fuck if it's "real". You think the VP's boss or the shareholders cared if it was "real"? If your job is to sell beer, and you're selling less beer, that's about as real as it gets in this context
The difference here is that the Bud Light product hasn’t changed one iota. You’re right that the sales figures are real but the outrage was an entirely manufactured thing.
Pretty sure someone mentioned nike above, the same people boycotting bud light are probably still buying nike. Even though nike is clearly a more socially progressive company (or at least, tries to come off that way). Why? Maybe because their products aren't as mediocre or replaceable
Because it turns out the manager just starts giving away the coffee for free, so whatever numbers somebody was pulling from the sales system were obviously incorrect.
The problem with "running numbers" like so many other metrics is that they are usually run by MBA types who have a weak grasp of math and don't really understand the customers' psychology (often work in corporate offices that are nowhere near the stores).
Dismissing this as "just running numbers" exemplifies management that has no idea who their customers are, their priorities, or why they choose that particular gas station over others nearby. It was rather obvious to the in-store clerks that the $1 coffee was a draw that often enabled another $5-10 in sales per visit, and since some of these people were daily customers, many of them contributed thousands annually. Try to get all of that back from an extra 1 dollar.
In the past year, the car wash was sold to some other owners, possibly a small chain. Price remained the same and service remained roughly the same, so I'd kept the membership. A few months back they randomly sent a text out to all the membership customers announcing the finalization of the ownership change. Up until this point, they'd never texted me before, but ok a change like that might be worth sending an unexpected "marketing text" to everyone. Suddenly every couple of weeks I'm getting new marketing text blasts to come by and make sure my car is clean for the upcoming weekend or some other stupid thing like that. Not to upgrade my membership, and not for any "hey we're running a promotion of 50% off the ceramic coating" or anything similar. Just annoying "it's a weekend, come get your car washed" texts, to a member where you don't even get any upsells when you come in to use your membership in the first place. They make more money if I don't show up and use my membership and they're spamming me without any offers that might even make it worth while. And now I'm annoyed.
They could have just not started sending out marketing campaigns to their members. Like I said, they don't have upsell options when you go through on your membership tag (they used to but that stopped with the ownership change). They could have sent a text saying something like "hey, we haven't seen you in a while and we wanted to remind you you're still paying for an active membership, come on by". That would feel personal, like they care (even if they don't) that me not using my membership is a waste of my money. They could even have made it a marketing blast with "as a thanks for sticking with us, we're going to give you a free/discounted ceramic coating" or some other extra on your next wash". But they didn't do that either.
So now, instead of me having a story to tell people about this awesome car wash place that really takes care of their customers, I instead have a story of a stupid car wash place that started annoying me for no reason at all. They've also incentivized me to re-examine the membership and other options in the area because of their decision to just start being stupidly annoying. All because probably someone somewhere in the decision chain saw some numbers that said if they blast thousands of texts out, that could turn into some extra hundreds in sales, and didn't even stop to think that some real human lives at the other end of that text and wasn't expecting or wanting that text.
I thought "no", which means they are still making profit on their food alone.
Or liquor stores I think.
> Costco officially restricted food court access to members in 2020
How much that's enforced is store by store, Costco makes a lot of profit off of memberships so there's an incentive to having non-members have a positive opinion of the store so that they one day become paid members.
The local pub had an expensive makeover
They now charge double for exactly the same drink, and IF I go in I have to be sure to say "No Ice"
If I go in .. my patronage has dropped through the floor.