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Borders Failure and Blaming the Internet

We always enjoy great case studies on why a business succeeds or fails. Good ones always teach better ways to run a business, and the best ones help you see other companies in a different light (good or bad).

Annie Lowrey of Slate did a great job describing the causes leading to Borders’ failure. Ms. Lowrey correctly points out that “the Internet” wasn’t to blame; instead it was a number of large missteps by this former big-box retailer.

I could go into details, but this article is so good I recommend you just read the article on Slate.com.

Posted in Go-to-Market Strategy, Uncategorized.

By sorange
July 21, 2011

1 comment

Dell Earnings Surpass Expectations – For Now

Dell’s earnings announcement today gives a great look at the thin-margin realities of the PC industry. Despite surpassing Wall Street’s expectations for Dell’s Q4 of 2011, analysts are skeptical that the company can produce similar margins moving forward.

Dell executives expressed confidence that the company could sustain the boost in profitability, but some analysts questioned that premise…many analysts still need convincing that Dell’s turnaround effort is bearing fruit. “I still don’t think in the long term they can sustain gross margins based on lower input costs because that will get competed away,” said Michael Holt, an analyst at Morningstar.

Dell’s formerly vaunted supply chain advantages have been matched by key competitors, and PCs still make up a higher percentage of revenue for Dell compared with Hewlett-Packard.

For a brief overview, we recommend the following article in the New York Times:
http://www.nytimes.com/reuters/2011/02/16/business/business-us-dell.html

Posted in IT Industry News.

By Scott Orange
February 15, 2011

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Groupon Admits Mistake – Lesson Learned?

Looks like five days after its Super Bowl fiasco, Groupon finally owns up to its mistakes. Here are some snippets from CEO Andrew Mason from Groupon’s blog:

Five days have passed since the Super Bowl, and one thing is clear – our ads offended a lot of people. Tuesday I posted an explanation, but as many of you have pointed out, if an ad requires an explanation, that means it didn’t work.

Well said – this is a great litmus test for any marketing campaign.

We hate that we offended people, and we’re very sorry that we did – it’s the last thing we wanted. We’ve listened to your feedback, and since we don’t see the point in continuing to anger people, we’re pulling the ads….We will run something less polarizing instead. We thought we were poking fun at ourselves, but clearly the execution was off and the joke didn’t come through. I personally take responsibility; although we worked with a professional ad agency, in the end, it was my decision to run the ads.

All good points.

…While we’ve always been a little quirky, we certainly aren’t trying to be the kind of company that builds its brand on creating controversy – we think the quality of our product is a much stronger message. (emphasis mine)

If that’s true, it’s too bad the quality of Groupon’s product wasn’t linked to the company’s goal to introduce itself to a larger audience.

Overall, it appears Groupon sees where it went wrong. But will it know what to do better next time? That remains to be seen.

Advertising doesn’t have to be tricky – it’s all about understanding your audience, connecting with an effective value proposition, and delivering both in a memorable message to be acted upon. Groupon would have done better to base its ad strategy in solid market intelligence and proven ad techniques.

Promoting Groupon should be fairly easy – who doesn’t like saving money while going to restaurants and concerts? Given all this, I’m hopeful that their next outing won’t be so offensive and prove far more effective at reaching new customers.

Posted in Go-to-Market Strategy.

By Scott Orange
February 15, 2011

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Super Bowl Ads: Where Groupon Went Wrong

I had resolved to leave my computer off during the Super Bowl, but Groupon’s tasteless Tibet ad changed all that. It warmed my heart to see posts on Facebook and Twitter confirming how badly this ad backfired.

The offense to the Tibetan people has been well-covered, so I’d like to take this opportunity to talk about Groupon’s offense of sound marketing principles.

1. Know Thy Customer
If Groupon truly knew its customers, it would never have run the Tibet ad. According to Groupon, 85% have degrees beyond high school and nearly 70% make over $50,000/year. Perhaps the company felt that an educated, upwardly mobile audience would get the humor – but that’s looking only at demographics. What about psychographics – what people think, value, and act upon in their lives? How would Groupon subscribers react to a joke about Tibet to sell online coupons? As they say in trial law, don’t ask a question to which you don’t know the answer…

2. Who Are You?
According to Groupon’s blog,

“…we realized that in spite of how much we’d grown, a ton of people still hadn’t heard of Groupon.”

This was Groupon’s chance to introduce itself to a much broader audience, so you would think they’d stick to core principles like: who are you, why you exist, and why we should care. Unfortunately Groupon made a poor first impression here.

3. Wasted Space
Super Bowl advertising is all about capturing share of mind and leaving a favorable lasting impression. You can entertain (Budweiser), inform (Verizon), change attitudes (Chrysler), etc. but what was Groupon doing, besides alienating its audience to the tune of millions of dollars down the drain?

4. Bad Decision Making
Groupon’s blog shares how they arrived at the Tibet ad:

“…we decided to give in to our Napoleon complex and invade the rest of the world with a proper Super Bowl commercial….. Our peculiar taste in humor made it really hard for outside agencies to come up with concepts we liked. This time around, we had better luck with the ad firm Crispin Porter + Bogusky… we gave them a shot at pitching us concepts, and they came up with an idea we couldn’t resist blowing millions of dollars on.”

Any CEO with a “Napoleon complex” should probably be kept at a safe distance from ad agencies, don’t you think? Ad agencies often pay close attention to the person writing the check, and this episode smacks of a bad case of the Emperor’s Clothes. That line about “our peculiar taste in humor” should have read: “our CEO’s peculiar taste in humor.” My question is, why was the ad written to the CEO’s taste? Shouldn’t it have been geared to the tastes of a typical Super Bowl audience? (cue the Budweiser dog commercial…) And where was Groupon’s marketing department when all of this was unfolding – why didn’t someone in a senior marketing role take the CEO’s aside and say something?

Conclusion
Although I like textbook cases of marketing (good or bad) and see the value of mistakes as teachable moments, Groupon’s spectacular failure didn’t need to happen. The company failed to understand its subscribers and the Super Bowl audience, looked foolish in front of 110 million viewers, and failed to make the case for Groupon’s service.

This was not a case of hindsight being 20/20 – if Groupon had taken the time to understand their audience and what message they needed to see in these SuperBowl ads the entire fiasco could have been prevented.

Hoping you take the time to understand your audience, focus your messaging, and keep your Napoleons in check.

Posted in Go-to-Market Strategy. Tagged with , , , , .

By Scott Orange
February 14, 2011

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NewGrowth Consulting News

We’re pleased to announce some major changes to the NewGrowth Consulting web site. We’ve just completed a major re-design to reflect our growing healthcare IT practice and lots of great case studies.

Posted in Healthcare IT, Online Research. Tagged with , , .

By sorange
June 22, 2009

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Market Research Blogs – Anything Good?

Conventional wisdom says there are few, if any, good blogs on market research. I’ve bought into this belief in the past, but a couple of weeks ago decided to put the question to fellow researchers on LinkedIn.

I posted to LinkedIn’s Answers forum, under Market Research and Definition. The full post and answers can be found here.

Posted in Market Research, Online Research.

By Scott Orange
September 30, 2008

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Business Intelligence – Ready for Market Research?

If we look at the current BI landscape today, there is intense competition for tools serving large enterprises. Whether Business Objects, Cognos, Hyperion, Microstrategy, etc. tool vendors are all clamoring for a piece of the enterprise BI market.

But as much buzz as BI generates, I don’t see a lot of ready-made solutions for market research and virtually nothing for one-off research. One key problem for market research is the generation of quality reports with a minimum of customization, and that’s precisely where today’s BI offerings miss the mark.

It’s hard to believe the opportunity isn’t there – countless firms conduct market research and create custom reports as one-offs, and firms like Tableau come close in providing a tool that’s easy to use for spot analysis.

Perhaps this is the best indication of where the BI market really stands. If BI requires multiple servers and building reports by hand, you can bet this industry niche is nowhere near maturity.

P.S. – if somehow I’ve missed something, let me know!

Posted in Uncategorized.

By Scott Orange
February 28, 2008

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What NOT to do in Online Research – Part 1

We do a lot of online research for our clients, and therefore take an active interest in trends, techniques, and best practices. Lately, however, I’ve seen a number of examples of what not to do.

Here’s one example: recently I received an e-mail from a leading regional lifestyle magazine, inviting me to participate in an online reader survey. The subject line of the invite reads as follows:

“[Name of Publication] Readers: What is your foundation?”

This magazine covers topics such as natural health, personal growth, spirituality, environment, etc. so “foundation” in this context probably means something like “core values,” right? The body of the invite reinforces this:

“Please take our Reader Survey! Tell us who you are, what your life is all about (well, at least some of the foundation), and what you like. Upon completion of the survey you will be asked if you want to enter a drawing to win some pretty great gifts.”

And then I clicked into the actual survey. I got demographic questions, questions on readership, and questions on product usage to demonstrate to their advertisers. But what about my “foundation?” Or, “what my life is all about?” Nothing. Nada. Zip. All the magazine wanted from its readers was a fat, juicy reader profile to sell to their advertisers.

There’s nothing wrong with that purpose, or most purposes for conducting market research, as long as your selling argument to participants is consistent with your survey content. In the above example, the survey questions did not accurately reflect the subject line and body of the invite; instead, it felt like a classic bait-and-switch.

By not delivering on what was promised to survey participants (at best), or misleading the true intent (at worst), this magazine risks losing credibility and trust with its readers. And these are the readers who cared enough to respond! That doesn’t help their business, and it hurts researchers and users of market research because participants who are misled or feel their time is wasted become less and less willing to participate in future research efforts.

I have found that a key reason customers participate in surveys is because they want their voices to be heard by the executives responsible for serving their needs and empowered to make important improvements. This magazine missed a wonderful opportunity with its survey to truly listen to its readers and learn what their lives are all about, while still collecting information of interest to advertisers. That would have built a closer connection with readers, and in turn created even more value for the advertisers.

Stay tuned for another installment. And in the meantime, tell me what you think. I promise to listen. : )

Posted in Market Research, Online Research. Tagged with , .

By Scott Orange
November 9, 2007

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New Additions to Blogroll

I’d like to call your attention to two new entries on our Blogroll – Visual Business Intelligence by data visualization author and consultant Stephen Few and The Dashboard Spy, a blog on enterprise dashboarding.

We’ve been doing a fair bit of work on dashboard reporting for sales and market intelligence of late, and we’ve found both these to be good resources. Enjoy!

Posted in Uncategorized.

By Scott Orange
September 29, 2007

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What Everyone Should Know About Rankings and Ratings

Rankings and ratings are essential questioning techniques for market research.  Here’s a quick look at what each one does and when to use it:

Ranking questions ask the research participant to place several variables in priority order – #1, #2, #3, and so on. Each variable ranked is either higher or lower than the other variables – no two share the same ranking. It’s a good way to measure choices, such as a favorite color. Rating questions ask participants to assign a value (importance, performance, satisfaction, etc.) to each variable individually. Here two variables can share the same rating, and often do.

As to which is best for your research project, it depends on the study objectives.  Ratings are often best for separating “must haves” from “nice to have” features.  It’s the freedom to assign a value to each individual variable – even if the respondent believes 5 out of 15 variables are “most important”.

Rankings are generally best if you already know which features are “must haves” – then you can ask respondents to choose one variable over another (such as notebook price vs. battery life).

One point to keep in mind about rankings is they can get confusing for the respondent.  Most of us don’t think about the top ten features we want in a new rackmount server, and respondents can get bogged down thinking about which feature should be at which rank.  We recommend no more than 5-7 variables be ranked for online surveys and a maximum of 3-5 variables for telephone interviews.

Posted in Market Research.

By sorange
June 30, 2007

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