Data on Donuts to Make You Go Nuts

Dunkin’ Donuts will roll out a loyalty program later this year.  (Shockingly, this will not be automatically included with residency in Massachusetts or Rhode Island.)

Anyone who has spent time in New England (or the Northeast in general) understands that this is an idea whose time is overdue.  Dunkin’ Brands’ Vice President of Global Consumer Engagement didn’t give away too much when chatting about the new program with Ad Exchanger, but this part was pretty interesting:

We look at the consumer base and there are a number of options for them to consider when making the decision on where to get their coffee, whether that’s in the morning or the afternoon. We wanted to not only reward them, but provide incentives, and ways to drive frequency and customer retention… [T]hat’s where every marketer wants to be — where they know exactly who is buying, when they are buying, what they are buying and what triggers they need to make them potentially buy more. We see it the evolution of driving a more comprehensive CRM opportunity with Dunkin’.

They may not know it, but it’s a direct copy from the 2012 Obama campaign: tap into an audience’s excitement, then gather as much data about what causes that excitement to translate into action.  Every cause has its champions, so ever would-be mob leader needs to think this way.

At least in theory, Dunkin’ Donuts will run a loyalty program that looks like a Presidential campaign.

J.C. Penney: Remembering The Golden Rule?

After a year and a half of missteps, J.C. Penney may have gotten something right with their new commercial:

Remembering the Golden Rule

Here’s a fun fact: the first store opened by the J.C. Penney company was called The Golden Rule.  The idea was to run a business where customers were treated fair and square.  This could have been a running theme over the past year, as the new “JCP” sought to push low price points.  The disastrous mis-marketing of the last year instead tried to divorce JCP from any connection of the pre-2012.

That was a mistake.  This ad, on the other hand, mixes old images of J.C. Penney stores with modern Instagram-ish clips of young customers.  The final image of the commercial includes the company’s full name, J.C. Penney, rather than the JCP square logo that had punctuated previous ads.

The design is still minimalist, but there is no doubt that the commercial embraces J.C. Penney’s past.

Owning the Mistake

Frank apology ads are usually the domain of politicians.  This ad makes as frank an admission as a company can in a television spot.  Most of J.C. Penney’s failure came from trying to dictate to consumers how to shop; this level of honesty sends a message that the company understands why customers left and won’t insult their intelligence by  pretending like the last year and a half didn’t happen.

Will It Last?

It’s easier to make a good commercial than to save a business that has alienated many customers.  The last 18 months showed that customers do not hold blind allegiances to their department stores, and that their shopping habits are not set in stone.

Those customers might come back to J.C. Penney, but there real challenges remain for a department store still stuck between the discount prices of Target and Wal-Mart and the loftier tags of Nordstrom’s and Macy’s.  Johnson may have been a bad CEO for the company, but there were plenty of others who didn’t know how to turn the rudder, either.

At least they should have an idea about what doesn’t work.

Failure at JCP

Ron Johnson is out as J.C. Penney’s CEO.  The hallmark of Johnson’s short tenure was a radical shift away from the mid-range department store that J.C. Penney had been for years in favor of the more cosmopolitan “JCP,” an attempt to identify at once as both upscale and discount.

The failure is predictable to anyone who has observed JCP closely.  (I have, because I have owned stock in the company, had old friends who work at corporate HQ, have shopped there almost religiously since I knew how to spend money, and most importantly because my Dad and sister worked there for a combined 44 years.  Most of that time belongs to my Dad.)

Johnson’s background involves Target and Apple, and that’s telling – especially the Apple connection.  The most obvious visual changes was the stylized retail environment and the iPhone-powered mobile checkout units that replaced some counters.  The pricing structure famously moved from a sale-driven model to more stable prices that were never slashed – not even for Labor Day or Memorial Day.  There were more nuanced changes, too: St. John’s Bay left the shelves.  The styles got trendier and skinnier.  The labels came to dominate the product; buying “Arizona Jeans” was more important than buying a pair of jeans.

It sounds a bit like Apple, doesn’t it?  Remember the late Steve Jobs’s War on Flash;  The Apple mogul said he didn’t care what websites like YouTube used, he didn’t think Flash was worth supporting on iPhones, iPods, and eventually iPads.  Apple customers must accept that Apple sets the rules for the walled garden.  And they do: Apple is a very large and valuable company.  Here’s the problem, though: Apple customers are different from typical customers.  They are early adopters, and are even willing to spend more for style points.  They don’t necessarily spend like drunken sailors, but price is not the main driver.

If an Apple user were more price conscious, they might end up buying a cheaper Dell or HP laptop over a MacBook, or an Android phone or tablet instead of an iPhone or iPad.  In fact, that’s probably a big reason Android enjoys higher market share than iPhone.

J.C. Penney legacy customers have shopped sales and sought low prices for generations.  Changing the store’s philosophy would have worked if they were the only player in the space, or if JCP customers had the unwavering loyalty of Apple disciples.

Stuck in between discount clothing stores like Wal-Mart and Target and higher-end department stores like Nordstrom, there’s no doubt that J.C. Penney needed a facelift.  Johnson tried to perform a face lift, breast augmentation, and liposuction at the same time.  One wonders if Johnson ever shopped at J.C. Penney before his time as CEO.

A better strategy might have started with more in-depth analysis and testing in select markets before rolling out national shot-in-the-dark initiatives like the the “No Coupons Ever” debacle.  Had Johnson been more patient, he might have been able to carry out smaller changes, such as incorporating online sales into the in-store shopping experience or redesigning the retail environment without alienating the core shopper.

Instead, Johnson’s year and a half of leadership led to a rudderless company that somehow felt it could dictate terms to its customers.  Brand loyalty, for most people, extends only so far as price; not every brand can sell the way Apple does.  Learning that lesson cost Ron Johnson his job.

Black Friday/Cyber Monday: Media Holidays

As much as Thanksgiving kicks off the Christmas/Winter Holiday season of family, friends, and good cheer, Black Friday and its partner Cyber Monday have become the official kickoff of the unofficial shopping season that turns all that good cheer into stress, anxiety, and insomnia.

But it’s all bunk, or at least it is now.  You’ve heard of “Hallmark holidays” – invented celebrations that exist only because greeting card companies want to sell more cards and trinkets.  Right now, Cyber Monday and Black Friday are “Media Holidays”: They exist only because constant media attention feeds the perception that these non-events are actually events.

The evolution makes sense: for years, Black Friday was the most optimum day to do Christmas shopping.  The day after Thanksgiving is either an official day off or a vacation day for many workers, and after a day of turkey and relatives, people wanted out of their houses.  Depending on where you get your information from, the moniker comes from either retail sales finally going into the black for the year or Philadelphia shoppers behaving like, well, Philadelphians.

The advent of online shopping meant online shopping during Advent, and thus came Cyber Monday – that first day back at work when office workers would get back to their desks and shop online.  Part of it was procrastination for those still suffering a hangover from the leftovers (or maybe a leftover hangover), but part of it was because in the early days of Amazon, the best internet connection many people had was the one at their work desk.  Often, the T1 they plugged their business computer into was exponentially faster than the dial-up NetZero that their family used for limited connectivity at home.

The reality is that advances in residential broadband, smartphones, and mobile networks have made the concept of Cyber Monday ridiculous, especially given that many retailers’ “Black Friday” sales extended from the Monday before Thanksgiving through the weekend and almost all were available online during that same time frame.  And there’s really no reason to go outside at all if most of the sales are available online – you can do just as much shopping in your pajamas watching Christmas movies on Black Friday as you can bundled and waiting in the black of night for some kid making just over minimum wage to unlock the doors at Target.

What keeps these non-holidays going is the media element. Much like many places of business that aren’t selling things, Thanksgiving weekend is slow for many media outlets.  Black Friday deals and images of shoppers camping out make for ready-made content on every news program, from the local news up to the national networks.  Social news helps too: tweets and status updates that come with the voluntarily miserable experience of shopping at some insane hour with family and friends are fun to read.

Black Friday (and Cyber Monday) provide an interesting yearly phenomenon that fills time on the news – so interesting that both days continue to outlive their original purpose.

Wal-Mart? More like Wal-Men.

The Supreme Court ruled earlier this week that lawyers could not claim to represent every single woman who worked at Wal-Mart ever in a gender discrimination lawsuit against the World’s Biggest Retailer.  It’s probably worth noting that the Supreme Court is mostly male.

Now, the intrepid Center for Responsive Politics notes that Wal-Mart gives more in political contributions to men than to women.  On the surface, this might look like an organization starved for attention trying to inject itself into a media cycle.  But maybe they’re onto something.

Maybe Wal-Mart is actually advancing the cause of men over women as a core tenet of their company’s mission.

In her dissenting opinion, Justice Ginsburg noted that though 70% of Wal-Mart’s hourly employees are women, only 30% of management are chicks.  (I believe Justice Ginsburg actually used the term “chicks” as well; at least that’s what the NRSC tweeted.)  Clearly, Wal-Mart has a habit of moving men up their own corporate ladder; and if CRP is to be believed, that philosophy extends to the political realm as well.

Wal-Mart’s shadow mission – beyond providing low-cost goods – must be to ensure there are as many men in positions of power within society as possible.  Sam Walton’s vision for America – and possibly the world – was a society run by a brotherhood of males while women are cast into the shadows of society and used only to breed more humans.

That’s the only solution that makes sense – right?

Will you go the f*** to a bookstore?

CNET has a neat interview with author Adam Mansbach, who wrote the now-viral release valve for frustrated parents, Go the F*** to Sleep.  Between YouTube videos of the leaked galley copy and an audiobook version read by professional badass Samuel L. Jackson, the book has been shared, forwarded, posted on Facbook walls and – ultimately – bought.

The leaked galley copy made its way around the web awfully quick:

Mansbach, a novelist, never intended the world to be able to see his book, for free, online, and before the print version was available. “To show how Web-savvy we were, ” he says self-deprecatingly, “We were trying to do cease and desist orders at first.”… And clearly, there’s more to the success of “Go the F*** to Sleep” than its accidental marketing campaign. Mansbach realizes that it’s the product itself, which touches a deep nerve with parents, that’s at least as important to its success. As the full PDF version of the book circulated, he says, “People were able to see that we delivered on the promise of the premise. That it wasn’t a one-note joke. It was beautiful, an art object.”

Mansbach notes that while he doesn’t support piracy in general, it worked in this campaign.  Like a new band that got discovered giving away downloaded songs on MySpace five years ago (or Napster ten years ago), there was a value in giving away content.  Since most purchases of the book will probably be gag gifts for parents of infants or young children, having the book out there doesn’t hurt sales.  No one is going to skip out on buying the book because Samuel L. Jackson spoiled the ending.

Piracy is wrong, because a writer should have control over his or her own work.  That said, the accidental marketing ploy represents something that every political or product campaign sees as the Holy Grail: people genuinely liking what the campaign is trying to sell and telling their friends.  That only works when the content is good – and when the content is good, letting it speak for itself may be the best marketing there is.

Beck vs. O’Keefe

Glenn Beck was almost immediate in his criticism of James O’Keefe’s latest video adventure, and the media is picking up on it this week:

“The problem with this whole thing is does James O’Keefe have enough credibility to continue to do” undercover video journalism? Beck asked his listeners. That kind of journalism, he said, is “just really not something that you necessarily want to get into.

Beck, of course, is a media trailblazer himself, who rose to national prominence through his revolutionary and original radio program.  He created a similarly original television program and online magazine.

With others from the right falling all over each other with admiration for O’Keefe’s NPR sting, Beck stands out as a rare dissenting voice.

But more than that, O’Keefe’s brand of activist journalism is simply more interesting than Beck’s platitudes from behind a microphone.  For months, critics have been crowing about Beck’s flagging ratings.  O’Keefe is a threat to Beck from a pure business standpoint.

After all, if you were Fox News, what would be more likely to get ratings – Glenn Beck’s chalkboard with notes about the GDP or James O’Keefe sending someone with a hidden camera into a government office?

Why 2010 is the Year of Facebook

Time Magazine ignited some controversy this month by naming Mark Zuckerberg their Person of the Year.  Zuckerberg deserved the award, said Time, for “connecting more than half a billion people and mapping the social relations among them, for creating a new system of exchanging information and for changing how we live our lives.”

Indeed, Zuckerberg did all that – but he arguably did so in 2003, when he invented Facebook in his Harvard dorm room.  So why is he the person of the year seven years after actually making this contribution to humanity?  Or did Time discover Facebook only weeks after their grandmother, as “Julian Assange” suggested?

There are actually two questions here, so there are naturally two answers.  Question 1 is why Time gave Zuckerberg the award this year; and Question 2 is why 2010 is The Year of Facebook.

Culturally speaking, the last half of 2010 is a perfect storm of Facebook hype.  The Social Network was a big hit and created some preliminary Oscar buzz.  The next time you watch live TV, watch how many commercials end with URLs for a Facebook page.  And Zuckerberg scored headlines with his pledge to donate half his fortune to charity and $100 million to Brick City, NJ.  The success of social gaming in 2010 is linked directly to those games using Facebook as a platform for popularity – even non-gamers have seen their friends’ Farmville, Cityville, or Mafia Wars updates pop up in their own news feeds.

In short, Facebook is everywhere in a way it hasn’t been in years past.  But why is 2010 REALLY the Year of Facebook?  It turns out, there are some numbers to back it up.

Facebook’s traffic numbers surpassed Google’s in 2010.  That indicates a huge difference in how people are consuming information – instead of searching the internet and relying on Google’s algorithms to tell them what’s important, they are relying more and more on friends (a point I made yesterday in a post on Pundit League).  Trusting friends is something people are most likely predisposed to do; Facebook makes it easier to do that.

More important, Facebook continues to report increases in ad revenue.  It’s one thing for a website to have a good and popular idea; it’s quite another for a website to make money.  That Facebook has proved it could do the latter is no small feat and guarantees solvency for the foreseeable future.

So 2010 was more than just the year when America collectively noticed Facebook; it was the year when Facebook set down stakes as a permanent entity that gave legitimacy to its foothold in the public consciousness and culture.

And for that, Mark Zuckerberg really is the Person of This Year

Will politics turn Gowalla vs. Foursquare into Facebook vs. MySpace?

In the world of location-based social networks, Foursquare has been the early leader, closing in on four million users.  Gowalla and SCVNGR have been battling for a distant second place.

Gowalla’s move to cut into the lead came back in August, when it released a set of tools for campaigns – tools that many campaigns have been taking advantage of.    Last week Politico’s Morning Tech followed up on the campaign toolkits:

Since the tools launched, Gowalla tells us, hundreds of political events, such as a rallies and town halls, have been created on the location-based service and thousands of people have checked into these events. And Gowalla users like to share which events they’re at on other social networks, too. About half of people who check into political events on Gowalla push out their status, comments and photos to Facebook, Twitter or both social networks.

And it sounds like interest in the politics-geared tools is growing. Gowalla says it has already started talking with both Democrats and Republicans about using its service for the 2012 elections. In Gowalla’s home state of Texas, the tools have gained traction with several candidates competing in local races.

Gowalla smart to take the long view, since location-based tools probably won’t be as prevalent until the Republican presidential primary campaigns.  But since those campaigns will start on November 3, Gowalla is equally smart to start catering to campaigns now.  At the same time, Foursquare has been somewhat deaf to calls for better political engagement, such as Jordan Raynor’s “I Voted” badge concept.

Foursquare still has a dominant market share of close to 70-80% (by the rough numbers).  But in the early days of online social networking, MySpace was similarly dominant.  The key is that the location-based market in 2010 is similar to the social network market in 2004 – it isn’t mature yet.  By most counts, the top three location-based networks boast five or six million users – or 1% of Facebook’s membership.  There are simply an awful lot of people who haven’t plunged into the location-based markets yet.

So what are the current also-rans to do to expand the location-based market – and make sure the new recruits choose something other than Foursquare?  By targeting campaigns, Gowalla is actually recruiting political activists – passionate users who will join their network (or possibly even switch from Gowalla) in the pursuit of a bigger goal.  By starting in 2010 and targeting 2012, Gowalla isn’t just executing a political strategy, but a business strategy as well.



Your own private Facebook

It’s a bad day for the World’s #1 Website – it turns out that Facebook has been hemorrhaging personal data through third party apps.

The cynical reaction to this might be to blame the Facebook users – after all, if you join a website built to share personal information, then you will wind up sharing personal information.  The analytical reaction might be to ask what harm was done – after all, the people harvesting Facebook info are really just trying to serve you ads that you will be interested in so that you will click on them and be introduced to a product/service/organization/cause/candidate you like.

Then there’s the reality-based reaction.  And in reality, people who took all the steps Facebook prescribed for protecting private data still had their information out there.

And following that line of reality-based logic, it means changes for Facebook – changes which could range from fixing the glitch and letting everything else well enough alone to renovating how your Facebook account  interacts with apps.

In other words, any organization with a Facebook presence should keep their eyes open for the next few weeks and months – and be ready in case they need to make any changes to keep interacting with their followers.