New marketing: getting it right, getting it wrong
McDonald's increased foot traffic in its stores by 33% in one day by using FourSquare. This according to the company's head of social media Rick Wion, talking at a conference yesterday. It was a pretty simple trick, really. They placed 100 gift cards for $5 or $10 on FourSquare as check in bait. So if you checked in at McDonald's, you have a chance to eat for free. And if you don't win the gift card, hey, might as well grab something to eat. Check in McNuggets! You were also eligible for the cards if you followed/fanned the company on social media sites, which 600,000 people did. Total cost of the operation? $1000. Wion said that several people in the company's marketing department had never heard of FourSquare. They have now.
Update: Read Write Web says that, contrary to the Mashable report linked to above, it was a 33% increase in FourSquare check ins, not in feet at the restaurants.
But then there's the case of Posie's CafÃ© in Portland, Oregon. The proprietor, Jessie Burke, wanted to drive a little traffic to her place by using a Groupon discount. She offered a $13 credit for $6, intending to keep the $6. But Groupon wanted a big cut, 50%, so she was left with the $3, which didn't allow her to break even. The Groupon was a hit but that just made things worse as she would lose money on each sale until she was $8000 in the hole, unable to make payroll or rent, and dipping into personal savings.
Over the six months that the Groupon is valid, we met many, many wonderful new customers, and were so happy to have them join the Posies family. At the same time we met many, many terrible Groupon customersâ€¦ customers that didn't follow the Groupon rules and used multiple Groupons for single transactions, and argued with you about it with disgusted looks on their faces or who tipped based on what they owed.
Most of the customers never came back once they had their discount.
PLEASE NOTE: I am not saying that the success of the McDonald's campaign is good for society. I'm merely saying that in terms of people accomplishing a goal in a given area, in this case marketing, they were very successful.