The CAIPS Retriever

Census 2006: Statistics Canada and marketing

Do you know that Census Day was May 16? Do you know why all that information is being collected? If you live in Canada and you do not know, it is because of Statistics Canada's botched marketing campaign. Statistics Canada missed to (repeatedly) inform us of two important aspects:

• The benefits of being counted in the Census;
• The legal consequences of not returning the completed questionnaire.

A simple carrot and stick strategy. Instead of creating awareness and thus improving response rates, Statistics Canada is now forced to spend on collecting questionnaires from an uninformed population.

Here is another example of unwise government spending. Three weeks after completing the questionnaire on the Internet, I received in the mail an unaddressed postcard abut "counting myself in". No household that had completed and returned the questionnaire should have received this card. Yes, it is about cut trees, underused computers and wasted taxpayer money. But, instead of learning from professionals how to do marketing, Statistics Canada imposes on marketing subcontractors to have experience in working with the government (or to be already imprinted by bureaucratic, inefficient work).

The French fries truck: Toronto's sublime marketing on a dime

Go to Nathan Phillips Square to find this French fries truck just in front of the City Hall. You can get dogs, burgers, sausages and fries. The French fries truck has been in business for more than twenty-five years, closing each day only when running out of gas. During lunch, people queue in front of it. It is not uncommon to see thirty people queuing. Few, if any, spill over to imitators.

The French fries truck is a sublime example of little-money and lots-of-professionalism marketing that I wanted to share at an YMCA workshop with people contemplating their own startups. Keep in mind this is not about finding a great business idea but about making a business great, irrespective of its size or industry.

No competitors, just imitators

No competitors, just imitators

A few quotations from the blogosphere offer hints at what consumers perceive as value and at their reasons for patronizing this business:

• "The most food for the least money"
• "Good and bargain"
• "High value, low price"
• "Always excellent"
• "One of Toronto's crown jewels of fast food"
• "Excellent and fun"

Five sublime marketing principles

By definition, low-cost marketing has to be creative. Marketing wise, no two successful small businesses are the same, but finding those underlying, unifying principles shouldn't be a challenge. As long as your customers are your main concern, almost everything you do is marketing. So, what are those marketing principles?

• Product quality: This reduces your competitors to imitators, as mentioned.
• Constant product quality: Raise the bar and keep it up.
• Service quality: In this case, fast food is fast and with a smile on its face.
• Pricing: Stay busy with the above three and forget about inflation. Get profits out of increased turnover.
• Focus: Keep your business scope within reach of your business model. For your customers, a truck is better than a fleet.

AirMiles: marketing prehistory

The term prehistory usually describes that (long) period in human evolution before written history became available. That is, before writing was invented. Figuratively speaking of programs that are entirely obsolete, I argue that marketers can discover marketing prehistory in Toronto, Ontario. The sad thing is that - unlike archaeologists - marketers can see prehistory directly; they do not need to dig underneath the earth. For instance AirMiles, a database marketing program so badly conceived and executed that it belongs to bygone ages of marketing.

What is database marketing?

The advent of industrialization and mass production imposed on marketers the challenge of mass marketing. Personalization, an essential characteristic of good marketing, was lost because marketers had to sell undifferentiated products/services to huge numbers of customers. Later on, computers helped reinstating personalization through database marketing. With it, each customer had her own computerized and readily accessible record and could be offered as good a personalized approach as that of Mom and Pop's stores.

NB: database marketing is not fake personalization. It merely extends the individual's natural information storage capacity (what we call memory) and ensures that everyone on the marketers' side has access to the same wealth of customer knowledge. However, the computer is only an instrument; it needs to be instructed what to do because it will never invent something on its own. So, the ball is still in the marketers' court.

There is a plethora of database marketing programs out there. Credit cards, airlines or hotel chains are well-known examples of companies offering programs that entice customers to exchange benefits with voluntary participation in database marketing programs. Since in the world of consumer benefits discount price is the undisputed king, it is no wonder that the best marketers tied database marketing to discount pricing.

Why is AirMiles prehistory?

Database marketing makes sense only when improving customer experience. But, considering only the rewards component, when using her AirMiles card in connection with a monthly budget of $300.00 in groceries and $50.00 in pharmacy products, the average Jane earns about 20 points a month. In order to trade a two-slice toaster (at 500 points), she needs to spend about $8,000.00 or wait for more than two years at her expense level - quite a turnoff.

Moreover, Jane only earns points for full $20.00 chunks spent. At the end of each week, the marginal fraction under $20.00 is discarded. The program combines lack of incentives with unnecessary meanness. Marketing would fare better without AirMiles.

How real database marketing works

For ease of comparison, the examples are limited to grocery and pharmacy shopping in the Washington, DC metro area.

Giant Foods' BonusCard and Safeway's Safeway Club

• Incentives: substantial instant cash discounts on lots of products. Savings show up on the receipt, both for the day's and year's purchases.
• More incentives: card, manufacturer and in store discounts add up. The stores even double manufacturers' discounts. How does 50% off sound?
• Being nice to customers: in theory, getting the discounts is tied to using the card. In practice, if you fail to present your card the cashier scans a dummy card for you. This way, you still get the discounts even though you pass the benefits of personalization.
• Maintaining the database in good health: a product mispriced in the cashiers' database - compared to the isle price tag or the weekly flier price - earns the customer an extra product for free, without any question asked.

CVS/pharmacy's ExtraCare

A marketing queen: good database marketing programs embed good marketing practices that in turn retain satisfied customers - and such is the case with ExtraCare. As the program promised, after shopping and using my card for a while I received personalized offers in the mail. I was offered further discounts on items I shopped most. Once, after tendering no other payment than discount coupons for my purchase it resulted that CVS/pharmacy still owed me a balance. To the cashier's glory, she did not falter and did not ask the manager to solve this complex problem. She just opened the cash machine and handed me the change. A marketing queen that cashier!

A less than free market

With marketing knowledge lacking, both companies and customers fare worse - no company has ever prospered without making its customers happy. Giant Foods, Safeway and CVS/pharmacy are good because they compete shoulder to shoulder in the Washington, DC metro area. But in Toronto bad marketing survives because of the market being less than free, lowering every newcomer's prospects - from getting a good job to getting a decent life.