Marketing Tales and Fails

AirBNB is one of the most forward-thinking companies in the world. They flipped the hospitality industry on its head while not owning a single hotel, vacation spot, or rental. And they put their money where their mouth is. This isn’t some empty platitude they paste on the wall of their headquarters to pay lip service to HR. That’s why in 2015 AirBNB’s CEO Brian Chesky gave over one million dollars in ten dollar increments into the accounts of 100,000 people connected with AirBNB. He did this with one requirement: Use the money to commit one act of hospitality for a stranger.

Episode 4: The Magical Powers Of Toothpaste

How a Marketer Invented The Tactic Of ‘Magic’ In Advertising and How You Can Use It Too.

Did toothpaste from the 1920’s contain magical powers to improve relationships?

No, of course not.

But that didn’t stop a marketer named Claude Hopkins from using magical imagery and copy to promote Pepsodent toothpaste.

Hopkins used slogans like “Magic lies in pretty teeth” and insinuated a better smile with cleaner teeth will lead to better relationships.

While this is pretty commonplace these days (think Gillette) it was revolutionary for the time.

It led to 30 YEARS of dominance in the toothpaste industry for Pepsodent.

That kind of domination is almost unheard of.

Russell Brunson says all marketing revolves around three basic themes: health, wealth, and relationships.

Remember that in your marketing strategy.

And no, you don’t need to go over-the-top with literal magic imagery.

Don’t worry about selling people on what your product DOES, focus on how your product makes people FEEL.

Episode 3: Marketing The Crab Population To Extinction

Never underestimate the insatiable appetite of the average crab lover.

There are close to 750 Red Lobsters in the world, with most of them in the U.S.

But if it weren’t for a boneheaded mistake back in 2003, there would probably be many more.

That’s right, a business decision gone wrong 17 years ago is still reverberating.

For twenty-some-odd dollars, Red Lobster offered an all-you-can-eat snow crab legs meal.

And while this was a fan favorite for many crab obsessed consumers, it was a massive overreach. Red Lobster banked on temperance by customers, and to make up losses with side dishes and desserts. 

They got neither.

With snow crab costing the company around $5 a pound, by the third refill, the restaurant chain was losing money.

And if you’ve ever eaten crab legs, you know they ain’t too filling. So people were sucking down a record number of crabs.

But as the promotion went on, it caused a shortfall in the global snow crab population, resulting in the wholesale price per pound to increase.

They broke the seafood market in half with this deal. In fact, crab fishing is heavily regulated by the government. They cap how many can be plucked from the seas each year. So demand skyrocketed and supply dwindled.

The deal attracted a lot of heavy eaters who failed to turn into longtime customers. Much like the ‘groupon effect,’ they came, they ate, and they split – both their pants and the restaurant.

And for the Red Lobster regulars, they were upset with the increase in wait times and order placement. Many hit the bricks for good. 

Red Lobster lost over $1 million every month in 2003 because of the disastrous promotion. $405.9 million dollars in stock value was lost thanks to nervous investors as well. The stock in their parent company at the time, Darden Restaurants dropped 12% with analysts downgrading. Red Lobster almost went bankrupt as a result.

And with so many customers leaving and never coming back, it’s impossible to truly calculate how awful this promotion turned out to be. 

The president of the company Edna Morris left as a result and the global crab population was pushed almost to extinction.

Well, not really. But it took a hit for sure.

So was this just a horrible business decision or marketing failure?

Well, both. The strategy was clearly about getting butts in seats and hoping to earn more revenue from other menu items.

Maybe this was an instance of marketers outsmarting themselves and not taking into account the economics of the offer.

Maybe it had more to do with Edna Morris previously serving as the head of Quincy’s Family Steakhouse, where all-you-can-eat deals were more economical because beef is much more filling than crab.

We may never know.

But the big takeaway is to make sure your marketing ambitions align with business objectives and to look at your plan from every angle possible.

Episode 2: The Ford (D)Edsel

In 1957 Ford Motor Company launched a new ‘mystery car’ to create buzz in hopes that a clever marketing campaign could create dollars out of nothing. 

Well, maybe by today’s standards if you like the SUPER retro look. But by 50’s standards, it was pretty much the same as every other car, including other Ford’s.

In a yearlong marketing campaign, Ford required their dealers to keep the model hidden before it went on sale.

Ford declared ‘E-Day’ on September 4th, 1957, boasting sales would go through the roof thanks to meticulous market research.

They believed there was a market for mid-level cars for consumers who wanted to trade up from the cheapest cars.

They even sponsored a television special called ‘The Edsel Show’ in an attempt to counter what would soon be bad press.

In all, Ford spent over $250 million in manufacturing and marketing.

The idea was to create a futuristic look for the car. They even convinced the NY Times to declare “The Edsel will be radically different.” They pitched the car as ‘perfect’ and ‘The Car of the future.’

But, it wasn’t. Not even close.

Initial comparisons included an observation that the vertical grille looked very much like a toilet seat.

People didn’t even know what an ‘Edsel’ was. It was actually named after Henry Ford’s only child, Edsel Ford. 

2 years after its launch the Edsel was shelved, costing Ford hundreds of millions of dollars. Although Ford sold around 100,000 Edsel’s, it fell well below their initial projections.

Episode 1: Finger Lickin DISASTER!