Lies
You've heard to cracks about marketers being professional liars; no doubt you've been annoyed by them. At its best marketing is anything but lies; it's understanding one's customers and guiding the development of products that meet their needs and the programs that take those products to the market.
But marketing isn't always at its best, is it? In the last few weeks I've noticed a number of marketers who practice the art of deception. Let's consider some examples.
No doubt you've read about the Blockbuster Video late fee controversy. In case you managed to miss the media coverage, here is the summary: Blockbuster, trying to compete with outfits like Netflix, dropped late fees. Their approach was to rent you a movie. If you didn't return it by the due date, they assumed that you were keeping it, and charged your credit card. If you returned it subsequently, you got your money back - less a $1.25 restocking fee.
And that is the late charge. On the one hand, the lawsuits against Blockbuster are silly - people signed up for the plan and agreed to the terms. Of course, most of them didn't pay that close attention to it. So they wound up keeping movies longer than they wanted, then returning them, and getting hit with the fee. All according to the agreement - but if the customer feels cheated, does that matter?
Customer agreements that are technically complete but leave customers unaware of extra charges are a kind of deception. Blockbuster, addicted to its late fee revenue stream, couldn't quite give it up and left its customers feeling cheated - and created a wave of negative press about their practices. Score one for Netflix.
Do you read magazines? If you have a few magazine subscriptions, you may have noticed a new trend in how publishers sell magazine renewals. It used to be that a few months before your subscription expired, you'd get a mailer from the magazine informing you that the subscription was almost up, and that it was time to renew. If you ignored that, you got more, moving through a cycle from "renew early to save!" to "time is running short!" to "it's over, please don't leave!" So we were all trained to return those forms if we wanted to keep getting the magazine.
That's changed. Look at your magazine subscription labels. You'll notice that many of them no longer indicate when your subscription ends. Renewal notices almost never do. And they come out all the time; I recently got a renewal notice from a magazine to which I'd just subscribed for two years! In 2005, I do not want to renew a magazine that I'm already getting till 2007. I happened to remember that I'd just subscribed, but nothing in the renewal notice told me that I had two years left.
Is this deception? I think so. Publishers are trying to get readers to make a decision by hiding a key piece of information: the date the subscription ends. They know that if you have two years left, you're unlikely to renew at any price that isn't free.
Finally, let's take a look at those masters of direct marketing, credit card issuers. How often do you get an envelope from one of your card issuing banks with teaser copy telling you that "Important Information About You Account" is enclosed, only to open it and discover that it contains a cash advance check which you can use to borrow money at a rate that amounts to usury? Of course, you open them, because there might actually be important information in there - about one time in ten that turns out to be the case. In effect, you are forced to open the advertising mail because your bank is lying to you about the contents of the envelope. I just cancelled a credit card because I was tired of this; apart from simply not appreciating being lied to, I don't like those checks, as each one seems like an opportunity for fraud and identity theft if my mail disappears before going from my mailbox to the inside of my home.
Leaving out information is deceptive. Mislabelling your marketing communications is deceptive. You may see a short-term uptick in response rates or even sales from these techniques, but in the long term, they're bad for your business. Blockbuster saw some short term revenue from the new not-really-late-fees late fees, but at what price? Magazines may get more renewals, but I would bet that an equal number of readers get sick of it and let their subscriptions lapse.
If you're the kind of marketer that is focused on long-term sales and customer relationships, don't be tempted to trick your customers. Give them complete and accurate information, and sell your product on its value. It's a longer road, but in the end, you'll have a must more stable customer base.
But marketing isn't always at its best, is it? In the last few weeks I've noticed a number of marketers who practice the art of deception. Let's consider some examples.
No doubt you've read about the Blockbuster Video late fee controversy. In case you managed to miss the media coverage, here is the summary: Blockbuster, trying to compete with outfits like Netflix, dropped late fees. Their approach was to rent you a movie. If you didn't return it by the due date, they assumed that you were keeping it, and charged your credit card. If you returned it subsequently, you got your money back - less a $1.25 restocking fee.
And that is the late charge. On the one hand, the lawsuits against Blockbuster are silly - people signed up for the plan and agreed to the terms. Of course, most of them didn't pay that close attention to it. So they wound up keeping movies longer than they wanted, then returning them, and getting hit with the fee. All according to the agreement - but if the customer feels cheated, does that matter?
Customer agreements that are technically complete but leave customers unaware of extra charges are a kind of deception. Blockbuster, addicted to its late fee revenue stream, couldn't quite give it up and left its customers feeling cheated - and created a wave of negative press about their practices. Score one for Netflix.
Do you read magazines? If you have a few magazine subscriptions, you may have noticed a new trend in how publishers sell magazine renewals. It used to be that a few months before your subscription expired, you'd get a mailer from the magazine informing you that the subscription was almost up, and that it was time to renew. If you ignored that, you got more, moving through a cycle from "renew early to save!" to "time is running short!" to "it's over, please don't leave!" So we were all trained to return those forms if we wanted to keep getting the magazine.
That's changed. Look at your magazine subscription labels. You'll notice that many of them no longer indicate when your subscription ends. Renewal notices almost never do. And they come out all the time; I recently got a renewal notice from a magazine to which I'd just subscribed for two years! In 2005, I do not want to renew a magazine that I'm already getting till 2007. I happened to remember that I'd just subscribed, but nothing in the renewal notice told me that I had two years left.
Is this deception? I think so. Publishers are trying to get readers to make a decision by hiding a key piece of information: the date the subscription ends. They know that if you have two years left, you're unlikely to renew at any price that isn't free.
Finally, let's take a look at those masters of direct marketing, credit card issuers. How often do you get an envelope from one of your card issuing banks with teaser copy telling you that "Important Information About You Account" is enclosed, only to open it and discover that it contains a cash advance check which you can use to borrow money at a rate that amounts to usury? Of course, you open them, because there might actually be important information in there - about one time in ten that turns out to be the case. In effect, you are forced to open the advertising mail because your bank is lying to you about the contents of the envelope. I just cancelled a credit card because I was tired of this; apart from simply not appreciating being lied to, I don't like those checks, as each one seems like an opportunity for fraud and identity theft if my mail disappears before going from my mailbox to the inside of my home.
Leaving out information is deceptive. Mislabelling your marketing communications is deceptive. You may see a short-term uptick in response rates or even sales from these techniques, but in the long term, they're bad for your business. Blockbuster saw some short term revenue from the new not-really-late-fees late fees, but at what price? Magazines may get more renewals, but I would bet that an equal number of readers get sick of it and let their subscriptions lapse.
If you're the kind of marketer that is focused on long-term sales and customer relationships, don't be tempted to trick your customers. Give them complete and accurate information, and sell your product on its value. It's a longer road, but in the end, you'll have a must more stable customer base.
posted by John Whiteside at 4/20/2005 10:05:00 AM
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