The Hoover Flights Fiasco and Unilateral Contracts

The Hoover Marketing Promotion

I have written in a previous post, How Not to Run a Successful Loyalty/Reward Marketing Promotion, about what has become known as the Hoover flights fiasco. To explain what happened briefly; in 1992, Hoover ran a promotion that promised two free seats on flights to Europe or America to any customers buying a Hoover product that cost £100 or more.

The promotion was enormously successful in encouraging people to buy Hoover products, but enormously unsuccessful in how much Hoover had to pay for flights. One estimate put the Hoover sales at £30 million and the cost of the flights at £50 million.

In my previous post I raised the question of why Hoover did not simple pull the plug on things when they knew the promotion was not doing quite what they wanted.

One answer, the PR answer, is that Hoover had already suffered serial PR disasters because of the promotion and how they were handling it. Pulling the plug would have just made things worse – exactly how much worse it could possibly have got is debateable, however.

I suggested that there might also be a second answer that is worth exploring, the unilateral contract answer. This answer is all to do with the nature of unilateral contracts, a type of contract that involves one person promising something in return for another carrying out an act.

It may have been the case that even if Hoover had cancelled the promotion sooner there would have been customers who would have been entitled to claim flight tickets because they had entered into a contract with Hoover to that effect, even though they had not yet bought a Hoover product.

 

English Contract Law

English contract law has historically recognised only bargains as creating legal obligations between two parties. A bargain involves an exchange: I give you something and you give me something in return. What we exchange may consist of an exchange of promises – such a contract is usually known as a bilateral contract.

 

Less often encountered, but still important, is the unilateral contract. With this type of contract what is exchanged is one person’s promise in return for another’s act. Rewards are good examples. If you see my advertisement offering £100 for the return of my lost dog (a promise) your returning the dog (an act) creates a contract.

 

In most cases, contracts consist of an offer and an acceptance. One person offers something that another person accepts. In a unilateral contract, the promise is the offer and the act is the acceptance. For example, I offer a reward for the return of my lost dog and you accept my offer by the act of returning my lost dog.

 

Usually, the person who makes an offer (often referred to as the offeror) can change her mind and cancel the offer. In technical contract language, the offeror is said to revoke her offer. However, to revoke an offer the law makes two stipulations: the offeror must communicate her revocation to the other party (who is known as the offeree) before he accepts it. This all seems to make perfectly good sense.

 

Unilateral Offers and Revocations

Let me give you an example of what could potentially form a unilateral contract. I promise you £1000 if you run and complete the London marathon. You make no promise to run the marathon; however, on the due day you are there in the starting line-up. If you complete the marathon; a unilateral contract is formed and I owe you £1000.

 

Just recall what I said about revoking offers: the offeror (I’m the offeror in the marathon case) can revoke an offer at any time before it is accepted by the offeree (you are the offeree in the marathon case) so long as she communicates that revocation to the offeree. Therefore, I can revoke my £1000 offer by communicating my revocation to you at any time before you accept it. If you think about it, this presents a problem where unilateral offers are concerned.

 

With a unilateral contract the question arises at what point does the acceptance take place? The acceptance is an act and an act is something that has a start and an end. An act is not instantaneous. In the marathon case, your act is going to be of several hours duration.

 

Although there are arguments to the contrary, in the marathon case the acceptance is likely to be when you cross the finish line because this is what I asked for – I asked you to run and complete the race.

 

Thus, if acceptance of my promise occurs only when you cross the line, according to the revocation rule I can revoke my offer at any time before you accept it – that is before you cross the line - so long as I communicate this revocation to you. We could, therefore, have a situation where you have completed 26 miles and some 350 yards when I jump out from the crowd and tell you my offer is revoked.

 

If I am allowed to revoke successfully my offer at this late stage, it seems unfair but it seems to be where the principles of contract law have taken us. Does English contract law really allow me to do this?

 

A Way Out of the Unfairness

I should guess that most people would say that allowing me to revoke my offer in the circumstances above would be very unfair. Contractual principles may appear to allow this but surely, many would say, you should be given the chance to finish your act once you have started it. The key points here are that you have acted in good faith in reliance on what I promised you.

 

It seems that English contract law would agree with this opinion. The position would appear to be that where there is a unilateral offer; revocation will not be allowed once the offeree has embarked upon the act. In most cases this seems pretty sensible. The position in English law was explained by Goff LJ in the case of Daulia Limited v Four Milbank Nominees Limited 1978.

 

The judge begins by saying that “…the true view of a unilateral contract must in general be that the offeror is entitled to require full performance of the condition which he has imposed and short of that he is not bound…”. Thus in the marathon case this means that you are entitled to you money only when you cross the line.

 

The judge continued by saying that “…there must be an implied obligation on the part of the offeror not to prevent the condition becoming satisfied, which obligation it seems to me must arise as soon as the offeree starts to perform.” Once you start to perform your act, therefore, I am unable to revoke my offer. Certainly, then, at the point the starters gun fires, I am unable to revoke my offer.

 

The question then is: what has this all got to do with the Hoover case?

 

The Hoover Case and Unilateral Contracts

Unilateral contracts are sometimes called “if” contracts or “if then” contracts because their form is always the same: if you do this then I’ll do that. If you run and complete the London marathon then I’ll give you £1000; or if you buy one of our Hoover products then we’ll give you two flight tickets from the UK to Europe or the USA.

 

Hoover had originally made their offer in August 1992 and it was set to run through until the end of January 1993. There is nothing preventing you revoking an offer even though you have said that you’ll keep it open for a certain period of time. Therefore, Hoover could have revoked their offer at any time before it naturally came to an end in January 1993.

 

What would the position have been had Hoover attempted to cancel their promotion – that is, to revoke their offer – in, say, December 1992? The question is whether such a revocation would be effective? From what was said above, a unilateral offer cannot be revoke once the offeree has begun the act that was requested in the offer.

 

The revocation would be effective with regard to anyone who had not begun the act of buying a Hoover before the point of revocation. Let’s say that the point of revocation was the 12 December 1992. That all seems straightforward enough doesn’t it. If you started the act of buying a Hoover product prior to that date; you’d be entitled to your flight tickets. But what would constitute the act of buying a Hoover Product?

 

The Requested Act

If the act of buying is handing over your money in a store then most of what follows is redundant. The act of buying, however, may be something more complex than that and may start even before you walk into the store. Let’s go back to the marathon.

 

I ask you to run and complete the marathon. It is highly improbable, not impossible but certainly highly improbable, that you’d simply go out and run a marathon without at least a few weeks training – perhaps 3 – 6 months training would not be unreasonable. The rationale for the rule against revoking once the act has started is that it is unfair to the offeree. It is unfair to the offeree because he relies on what he is promised and adjusts his position accordingly.

 

If I promise you £1000 to run and complete the London marathon your preparation for this may take up a considerable amount of time and be considerably expensive – you may need to buy sports clothing and who knows what else. Thus there may well come a point where your preparation is sufficiently detrimental to you – in terms of cost - that I will be unable to revoke my offer and deny you the opportunity to complete the act that was requested.

 

You can apply similar reasoning to the Hoover case. Let’s just stay with a fairly simple situation that could have occurred. It is quite conceivable that a potential purchaser may have decided that he would not buy a Hoover until the New Year. There could be any number of reasons why he might so decide. He may wish to save some money each week, for example. It is possible to think of multiple variations on such a theme as this that – should Hoover have cancelled their promotion - the fertile minds of customers denied their free flights might construct.

 

Conclusion

I’m not sure that the people at Hoover sat around discussing the jurisprudential niceties of unilateral contracts. I expect that the reasons that the promotion was allowed to run its course was that Hoover thought the PR damage was already pretty bad and a cancellation could only make things worse.

 

I’m pretty sure that someone did a calculation and came out with a worse case position in terms of the likely numbers of people who might take up the flights offer. However, I can’t believe that the figure of £50 million would have been arrived at and accepted.

 

I wonder, though, if someone with an astute legal mind might just have raised a warning about the problem of unilateral contracts. She might have reasoned that an early cancellation might cause greater problems. Hundreds, perhaps thousands, of frustrated customers might argue that they had begun the act of purchasing a Hoover. This would bring further bad PR, heavy legal bills and, potentially, defeat in the courts, should things have gone that far, in many cases.

 

 

It’s interesting to speculate what might have happened had Hoover cancelled their promotion. What is almost certain is that any ruling that a court made – should litigation have occurred - would have been restricted to a very narrow point of law, which would have focused a light on other contentious questions of unilateral contracts: Questions to which I will return in future articles.

 Garry Costain is the Managing Director of Caremark Thanet, a domiciliary care provider with offices in Margate, Kent. Caremark Thanet provides home care services throughout the Isle of Thanet. Garry can be contacted on 01843 235910 or email garry.costain@caremark.co.uk. You can also visit Caremark Thanet's website at www.caremark.co.uk/thanet.

How Not to Run a Successful Loyalty/Reward Marketing Promotion

This Is Marketing Genius

If I were to tell you that I've got a sure fire marketing strategy that you can use to increase substantially the sales of your products and services: would you want to hear about it? Of course you would.

If I told you that I'm going to give you the benefit of my advice free of charge: would that please you? Of course it would.

Let me then tell you what my piece of marketing genius involves. It involves a very clever loyalty/reward marketing scheme. A scheme that you might call a buy one get two free promotion. A promotion that involves you selling one of your products or services and giving away two of somebody else’s products or services.

Like I said; this is a sure fire way to increase your sales. It really is a little bit of marketing genius. I should consider charging outrageously for this advice.

Now that you are armed with this information: are you going to give my promotional scheme a shot? Of course you’re not.

I know what you’re thinking. You’re thinking that this is not a piece of marketing genius it's a piece of business suicide. Who in her right mind is going to sell one product or service and give away two others? Not just any two other products or services but two others that are from another company!

I appreciate why you might be a little sceptical, perhaps even a touch cynical. No marketer would ever dream of doing something like that: would she? Even if she dreamt up such a scheme, she’d never be foolish enough to run it by her bosses: would she? Even if she ran it by her bosses they’d never accept it: would they?

Surely running with a scheme like this would demand a catalogue of crazy miscalculations and a display of ineptitude on a colossal scale? Precisely. Let me, then, tell you about the Hoover flights promotion fiasco.

If you saw this offer: buy one Hoover get two flights free…

…would you refuse it? It is very difficult to believe many people would refuse an offer like that. Believe it or not that’s exactly the offer that Hoover made in the UK in 1992. And yes people found it difficult to resist.

The promotion promised two free seats on flights to Europe or America to any customers buying a Hoover product that cost £100 or more. It would be just a tad of an understatement to say that Hoover sold a lot of units.

The public went wild for Hoover vacuums. Something like 200, 000 were sold – or if you like about 500 jumbo jets worth of free seats. Hoover had to take on extra staff to meet the production demands. However, as The Independent reported in 1998, although there were winners – airline companies and the tax man:

“The cost to Hoover…was enormous. The [£30 million] of sales generated by the offer was dwarfed by the [£50 million] it spent on airline tickets. And the publicity heaped on the company was devastating. In the end Hoover paid the ultimate price…when its European arm lost its independence.”

If it’s too good to be true…

…it usually is too good to be true, but not if it’s Hoover offering flights in return for the sale of one of its products: back in 1992 this offer was true and it was good. It was good if you were a purchaser of a Hoover. It wasn't so good if you were any other stakeholder in Hoover.

The obvious question is how such a scheme got the go ahead? My guess is that it was a horrendous miscalculation. Those making the decisions probably had discussions around how many people would actually take up the flights and concluded that a large number of people simple would not take up their seats, particularly if the terms in the small print are sufficiently onerous. They hadn't counted on the Hoover purchasing public's tenacity. As the BBC reported:

‘The promotion was simply too generous. Spend just £100 on any Hoover product and two free return flights…could be yours - though only if you were determined enough to make it through the maze of small print and Hoover's travel agents' attempts to sell you profitable extras designed to offset the cost of the promotion.”

When it became clear that people were not being put off by the small print hurdles Hoover made the monumental PR blunder of putting further obstacles in the way of people wishing to fly. As Rob Page explains

“As the numbers of vouchers piled in to the travel agents, they created another rewards marketing blunder, they made it more and more difficult to redeem their rewards.  One of the biggest “Do’s” in loyalty/reward marketing is to make it easy and fun.  The agents were instructed to stop the bleeding by not accommodating travel requests (such as airports and travel days) and by strictly enforcing the small print.  Consumers were no longer having fun and demanded that their rewards be redeemed.
The outcome was a total disaster and Hoover’s Free Flights Rewards program quickly became a Free Flights Fiasco.”

A Great Marketing Disaster

The Hoover case is used in marketing classes all over the country – and abroad - as a perfect example of a marketing disaster and how not to run a loyalty/reward scheme.

One question that is less often asked is why Hoover didn't just pull the plug when things were going from bad to worse to career ruining calamity? If it is addressed, the answer that question that is usually explored is that to have pulled the plug would have added further PR woe to what was already a cataclysmic marketing disaster.

Another answer that might be explored in law schools rather than marketing schools is that it may well have been too late to cancel the campaign in many cases. Had Hoover cancelled the campaign they may well have encountered one of the thorny issues of English contract law.

The thorny issue is all to do with something called unilateral contracts. Had Hoover cancelled, some of its customers may have been able to argue that they were already contracted with Hoover for the flight tickets even thought they had not yet purchased a Hoover.

And that nugget of English contract law will form the subject of another post.

Garry Costain is the Managing Director of Caremark Thanet, a domiciliary care provider with offices in Margate, Kent. Caremark Thanet provides home care services throughout the Isle of Thanet. Garry can be contacted on 01843 235910 or email garry.costain@caremark.co.uk. You can also visit Caremark Thanet's website at www.caremark.co.uk/thanet.

The Apprentice, George Best, Sir Alf Ramsey and Belbin's Team Role Theory

The Apprentice

Do you watch The Apprentice? As it happens I don’t, but I know that a new series started on BBC1 last week (week commencing 13 October 2014). I know this because I read a very interesting review of the programme by Michael Deacon in the Daily Telegraph. You can read it here if you want. If you don’t want to read the whole thing I’ll give you the gist of what Deacon had to say. He suggested that some of the things said by the contestants are so absurd that they make David Brent sound moderate. Here’s a little nugget from Deacon’s article: 

“…a sample gem from Daniel Lassman, one of its (The Apprentice’s) contestants. “There’s no ‘i’ in ‘team’,” he advised the camera, exactly as Brent used to do. “But there are five in ‘individual brilliance’.”   

I can imagine how toe-curlingly, cringe-makingly embarrassing that might have been for you had you watched it. That was the thing about watching The Office; you’d start by thinking “what’s he (Brent) going to say”; then Brent opens his mouth and you start to think “oh God is he really going to say what I think he’s going to say”; and when he said it you just wanted to curl up and cringe. 

And yet as cringe-worthy as Daniel Lassman’s quote to the camera might have been; when I was his age (I’m guessing he’s in his twenties or thirties) I’d have agreed with what he said. I really used to think that the best teams were made up of individually brilliant people. But now I’m not so sure. I think I’m now inclined to the view that a great team may not necessarily contain the most outstanding individuals. 

George Best and Sir Alf Ramsey

Something very special happened on July 30 1966: England won the football world cup by beating West Germany by four goals to two. It’s been almost fifty years since that day and during that time the nation’s team has not managed to reach those soaring heights of footballing excellence again. 

Mention the names of any of those England players from 1966 to England football followers of a certain age and you are met with the wistful, glassy eyed look of one lost in fond nostalgic remembering. There was, however, one player who did not play that day. George Best was ineligible to play for the simple reason that he was from Northern Ireland.

In the opinion of many, Best is regarded as one of the most outrageously gifted individuals ever to grace a football field. When the Manchester United club scout, Bob Bishop, saw the teenage Best play for the first time, he told the United Manager, Matt Busby, that he thought he had found a genius: and he had. And yet it is highly debated whether Best would have been chosen to play for England even if he had been eligible.

Sir Alf Ramsey, the England manager at the time, firmly believed that you do not necessarily pick the best players available for your team; you pick the best team from the available players. This is all about achieving the right balance in your team. There may be better individual performers who will not perform as well in your team as less gifted individuals. Watch the following video from about 1:45 as Jack Charlton explains why Ramsey chose him to play for England.

Belbin’s Team Role Theory

When I first heard it said that Ramsey might not have chosen Best (had he been able to) I thought there were few sporting debates more ridiculous. However, as I have spent more time in management my views have changed. I think Ramsey, on the whole was correct. Everything in a team is about balance. This is what Belbin’s team role theory is all about.

Anyone who has been involved for even the shortest period of time in the process of recruiting staff will know that successful recruitment is far from an exact science. Experienced recruiters will tell stories of how they were absolutely convinced that a particular candidate was a perfect fit for the job only to be left bitterly disappointed by the same candidate’s actual job performance.

Team role theory is simple, appealing and feels intuitively correct. No individual has all the qualities a good manager needs. The ability to select the right people relates to how well a team achieves its goals. Many would agree that although a degree of homogeneity is important, a good team needs a combination of differences.

Belbin developed his theory at the staff colleges at Henley and Melbourne. He suggested eight, later revised to nine, team roles that successful teams require to be occupied. Belbin found that the best performing teams in business games were those that had an optimal balance of the roles.

The nine team roles are: The Coordinator, or Chair, The Plant (for creativity), The Resource Investigator (to explore opportunities), The Shaper (for challenge and drive), The Monitor Evaluator (for judgment), The Teamworker (for co-operative working), The Implementer (to get things done), The Completer (to deliver on time) and The Specialist (for knowledge and expertise). In some cases, one person may carry out more than one team role. To determine a person’s preferred team role, Belbin developed a questionnaire, The Belbin Team Role Self Perception Inventory (BTRSPI).

Belbin’s team role theory is not a magic bullet that will give you the ability to predict how well a candidate will perform in your organisation. It does, though, offer an extra recruitment tool that can provide a little more information about prospective candidates.

In Conclusion

I would once have agreed with Daniel Lassman from The Apprentice. I truly believed that to put together the best team you just found the best individuals. But not anymore. Whilst I will never believe that there would be no place for the genius of George Best in England’s 1966 team, I do believe Ramsey’s team philosophy was just about spot on.

Sir Alf Ramsey was an astute football tactician. He changed the way the game was played. He also knew a little about selecting team members. Whether he would have left out of his teams the sublimely talented Best is a debate that will continue. What is beyond doubt is that, Ramsey’s Belbin type selection system brought him success at the highest possible level in his profession. What might Belbin do for you?

Garry Costain is the Managing Director of Caremark Thanet, a domiciliary care provider with offices in Margate, Kent. Caremark Thanet provides home care services throughout the Isle of Thanet. Garry can be contacted on 01843 235910 or email garry.costain@caremark.co.uk. You can also visit Caremark Thanet's website at www.caremark.co.uk/thanet.

Content Marketing and the importance of a Content Marketing Strategy

What Is Content Marketing?

We British are more than used to being criticised for our food. We are sneered at by the French; scoffed at by the Germans, and made to salivate every time we walk into our local Indian restaurant. Therefore, it is somewhat galling that we insist on judging the quality of our very best restaurants by a French benchmark: Michelin Star awards.  

I know you will be well aware of Michelin Stars, although, like me, you may be a little unsure about precisely how they get awarded. You’re probably also familiar with the Michelin Guide. At any rate you will have heard of it even if you haven’t, in fact, read a copy of it. The first printing of the Michelin Guide, believe it or not, was back in 1900. It is a first class example of what in contemporary marketing language we call content marketing. 

Content Marketing Is Enlightened Marketing

There was a time, and it was not so long ago, when the emphasis in many marketing departments was on selling and not much else. Marketing was said to have a sales orientation.  I’m not saying that this orientation has completely gone from the marketing world. It is, though, true to say that marketers today generally take a more enlightened approach to marketing. And this demands an orientation that is much more customer focused.

Content marketing is uncompromisingly customer focused. The emphasis is on communicating with your customers: and this communication is manifestly not aimed at directly selling your goods and services to your customers. The aim of content marketing is to build customer loyalty. This is done by providing customers with high quality material that educates and informs, and is valuable and relevant for customers and prospective customers. 

Building customer loyalty was the aim behind the first Michelin guide. In the days when the Michelin Guide found its first readers, the term content marketing had not been coined. That phrase, it is suggested by some, dates from a meeting of the American Society of Newspaper Editors in 1996. 

Content Is King

Content always was king, at any rate good content always was, and always will be king. And for that reason it is the customer who rules. Content, however, is not just text, it is also images. We live in visual age, and we have been living in it long before social media platforms like YouTube and Pinterest. Commercial television and cinema have provided outlets for marketers’ and advertisers’ creativity for decades. 

Marketing thought leaders have been telling us for some time that a content marketing strategy is not something that should be happening in isolation from social media marketing. Content marketing permeates everything that a company does. If your social media marketing strategy is not leading to your customers being provided with interesting, valuable and relevant information, then something is wrong. 

A poor or non-existent content management strategy is not going to help you gain traffic to your website. Social media marketing is the process of getting web traffic through the use of social media platforms. It will be an uphill struggle to do this without good quality content. 

It is hardly surprising that some of the largest corporations have taken on board this thinking. Multi-National Corporations have become increasingly aware of the importance of having an integrated content marketing approach. It is not uncommon to see senior marketing roles in companies with such titles as Content Marketing Director, Chief Content Marketing Officer and Content Marketing Strategy Officer. 

When you think about it, a content marketing strategy is a perfectly rational approach to take; if for no other reason than different social media platforms require different types of quality content. Visitors to different sites will look for different things, and what works well on one site may work less well on another.  

In Conclusion

The Michelin Guide’s publishers knew precisely what they wanted to achieve. Using today’s marketing language; we should say that they had put together a pretty decent content marketing strategy. Michelin’s customers were a small but growing body of car drivers, a group of people who, the people at Michelin undoubtedly reasoned, wanted a publication that offered them information that they would find useful.  

Just like customers through the ages, Michelin’s customers would talk amongst themselves and to other prospective customers. The Michelin Guide would come to be seen as an authoritative text written by experts. This would encourage customer loyalty. In a sentence or two; that just about sums up content marketing.

Garry Costain is the Managing Director of Caremark Thanet, a domiciliary care provider with offices in Margate, Kent. Caremark Thanet provides home care services throughout the Isle of Thanet. Garry can be contacted on 01843 235910 or email garry.costain@caremark.co.uk. You can also visit Caremark Thanet's website at www.caremark.co.uk/thanet.

The Enlightened Marketing Lessons You Can Learn from Santa Claus

Introduction
Let me give you an example of enlightened marketing. Have you seen the film Miracle on 34^th Street? If you have you may recall the scene where Kris Kringle (played by Edmund Gwenn in the 1947 version) working as a department store Santa Claus starts advising customers where to go to find the toys that his store doesn’t have. It seems the store has hired someone who not only believes he really is Santa Claus but he’s also helping to drive away the store’s customers by advising them to go elsewhere.

However, it turns out that what Kris does is a very successful bit of company PR. Kris's conduct helps the store to be seen as a company which can be trusted and has the best interest of its customers at the centre of its business activities. The store’s sales increase all thanks to Kris. Okay, so this is part of a fairy story, but the principle behind what Kris does is what today we’d call an example of enlightened marketing.

What Is Enlightened Marketing

Kris Kringle may have been acting out of naivety or innocence. Then again he may have realised that a customer is for life not just for Christmas. (Don’t Santa’s customers come back time and time again?) He may have decided to do the store’s marketing for it and take the long view of things. The philosophy that underpins enlightened marketing, says mbaskool.com, is

"…that a company should make good marketing decisions by considering some of the long term factors in mind. Those factors should support the best long-run performance of the marketing system. Essentially Enlightened Marketing is broken down into five principles: 1. Consumer-Oriented Marketing… 2. Innovative Marketing… 3. Value Marketing… 4. Sense-of-Mission Marketing…5. Societal Marketing."

Let’s look at each of these principles in turn.

Consumer-Oriented Marketing

It’s very simple: businesses should look at everything through the eyes of the customer.

Without customers you haven’t got a business. That’s not to say that companies shouldn’t look after their staff. They should. But without customers you don’t need staff.  I know, I know: that’s a pretty trite thing to say. I’ll bet you, though, that even in the last few days you have had an experience with a company that has forgotten that its customers are the most important people in the world.

Have you visited a website that looks fantastic but was clearly designed for web geeks not you the customer? Have you tried to work out the best tariff for you mobile phone only to realise that it’s probably easier to have worked out the solution to Fermat’s last theorem.  You get the picture, don’t you?

To repeat a point: it’s very simple. Marketers must look through the eyes of the customer.

Innovative Marketing

When you’ve been in business a while it’s very easy to become complacent about what you do, especially when things are going pretty well. However, a company that adopts an enlightened marketing approach will never accept that things can never be improved. In other words, it is always seeking to innovate. It must be stressed, however, that innovations should bring about real and lasting product and/or service improvements. Scott Thompson of Demand Media says that if, for example

"…a product can be redesigned to last longer for the same price, enlightened marketing holds that this innovation will be welcomed by the consumer and ultimately rewarded by the market over the long term."

Value Marketing

It’s difficult to believe that any marketer would forget that the aim of marketing is to build long term customer loyalty. There are plenty of things that can be done to gain short term increases in sales, but when customers recognise that they are not really getting anything that has truly added value they’ll vote with their feet (or computer mouse) and go to a competitor. Real improvements that add value to the goods or services you sell will be rewarded with customer loyalty. Will Charpentier of Demand Media gives an excellent example of adding value in a way that delights customers:

"Enlightened marketing’s approach to real value goes back to the first time a baker put an extra doughnut into the box of a customer who ordered a dozen. The idea was simple: the bit of profit the baker gave away in a single doughnut was insignificant when compared to the profit from that customer’s return visits."

Sense-of-Mission Marketing

When it comes down to it, any business is in business to make a profit. If it’s not profitable, a business is not going to last very long. However, that does not mean that a business should focus on profit to the exclusion of everything else. Enlightened marketing demands that companies look to the wider interests of each of the stakeholders it is serving. Businesses are a part of the societies within which they operate and accordingly have responsibilities towards those societies.

Operating in an ethically and socially responsible way is not inconsistent with running a profitable business. On the contrary, it is an approach that will help secure a company’s long term success.

 

Societal Marketing

There is a dilemma that will face many marketers. On the one hand, they will want to provide what consumers want in the long term. On the other, consumers sometimes want what is not necessarily good for them or for society in the long term. A first class example of this is the provision of tobacco products. The evidence is overwhelming that such products are not good for an individual’s health and consequently can have a deleterious effect on society in general. And yet people want to use tobacco products.

Societal marketing dictates that companies should attempt to meet consumer needs whilst at the same time acting in a way that is good for society in the long run.  Carl Hose puts it succinctly:

"In this type of marketing, a company uses its socially conscious stance as a way to attract consumers who may appreciate the company's desire to market its products with consideration for society." 

Enlightened marketing is not something that is new. Kris Kringle was doing it well over sixty years ago. It’s probably true that it is one of those things that we have only more recently put a name to. Santa Claus may not be real, but enlightened marketing will bring real results.

Garry Costain is the Managing Director of Caremark Thanet, a domiciliary care provider with offices in Margate, Kent. Caremark Thanet provides home care services throughout the Isle of Thanet. Garry can be contacted on 01843 235910 or email garry.costain@caremark.co.uk. You can also visit Caremark Thanet's website at www.caremark.co.uk/thanet.