Are you a prize or just a product?
Krispy Kreme marketing
By John R. Graham
There are still plenty of companies that
can’t seem to get the message that customers have
changed. They cling to the notion that the goal is to get
customers through the door and get their orders.
Outmoded? To be sure.
Even with prices cut to the bone —
and beyond — sales of computer equipment are dismal. Of
course manufacturers can sell more cars if they load up the
incentives. Take them off, and sales drop.
But life is different elsewhere. Take
Krispy Kreme donuts, for example. As the company invades Yankee
territory from its Deep South base, first-hand reports are
amazingly consistent. “I waited for two hours to get
those donuts,” customers say with pride, suggesting
standing in long lines for donuts is something of a badge of
honor. And, no one ever comes away from a Krispy Kreme shop
with less than a dozen.
Who would think that donuts could make
prized gifts? I remember the day a co-worker returned from
vacation somewhere in the South. Before coming back, she called
to say that she was bringing a box of Krispy Kremes with her.
Since there were no Krispy Kreme stores in the state, this was
truly a special event. She beamed when she presented her
precious gift.
Krispy Kreme is the Coors beer story all
over again. Even to this day some of the Coors legacy lingers
long after it was readily available outside of Colorado. For
years, there was no greater gift than a six-pack of Coors.
Anyone who thinks selling is about making
sales really doesn’t get it. It isn’t what’s
inside a Krispy Kreme donut that creates the demand. It’s
what’s inside the customer’s head that makes Krispy
Kreme Krispy Kreme.
Whether the “secret yeast-raised
recipe from France” is so all-fired wonderful makes no
difference: customers think those donuts are the greatest,
almost heavenly inspired. Don’t laugh, even a donut can
have a cult following.
Frankly, that’s marketing —
and that’s what makes sales. Krispy Kreme,
Harley-Davidson, Maytag and Apple have discovered the benefits
of engaging their customers. They don’t scream their
deals in ads, bang on doors, send barrages of (instantly
deleted) e-mails, telemarket people to death, offer gimmicky
discounts or use other antediluvian tactics that continue
to be employed by Neanderthal-like sales executives.
Engage the customer
Engaging the customer is not even on the
same screen. So, what’s it all about? For starters, it
involves a process of entering into a conversation with them,
letting them know what you’re doing, why you’re
doing it, and then making it possible for them to respond when
they are ready.
Krispy Kreme does it. Just go to the
company’s web site.
Read the history and notice the collectibles that are for sale.
That’s part of the conversation. And it’s why
sending out endless email solicitations not only turns people
off, it makes them angry. On the other hand, emails from
customers and prospects that ask questions, describe problem
situations, and want your suggestions can be valued
communication. Conversation turns people on. That’s
engagement.
Companies like Krispy Kreme, Apple, and
others work at figuring out new ways to create excitement that
builds customer pride. They refuse to be dull. San
Francisco’s MacWorld Expos draw 60,000 true believers
from all over the globe. Millions of others follow the event on
their computers. Is it necessary to remind anyone that
Macintosh computers and Apple products are more costly than
their PC counterparts?
If anyone says, “Yeah, but Apple
only has 5 percent of the market,” the answer, of course,
is “think different.”
Restoration Hardware has built its success
by engaging customers in conversation. Watch what goes on
inside any of the company’s stores. People move slowly,
looking at items, talking about them, touching them.
Particularly men — who refuse to be dragged to a mall!
There’s no Wal-Mart rush — no grab-and-go —
at Restoration Hardware.
What the customer learns, feels, and
experiences leads to the purchase. Restoration Hardware is not
about nostalgia as such, although this may be the way it
appears. It’s about helping customers become part of
something warm, comfortable, perhaps even bigger than
themselves.
Restoration Hardware customers are quick
to talk about their experiences. It’s engagement and
it’s powerful in attracting customers. If you notice,
companies like Restoration Hardware and Harley-Davidson never
talk about customer loyalty. They have it.
Get smart about marketing
In contrast to all this, there’s
bankrupt United Airlines. Far from being alone in the world of
financially strapped carriers, it has come up with a
proposition that’s raising some eyebrows. The company is
investing $50 million in an ad campaign.
Why would a bankrupt business deliberately
go out and spend all that money running ads? Is this a prudent
way to use limited resources, particularly when employees are
being laid off? On the surface, the plan sounds almost
irresponsible.
According to a USA Today story,
United’s advertising plan makes good sense to the counsel
to the committee representing unsecured creditors. “They
require loyal customers and need to keep up with the
competition which are always advertising,” he said.
In fact, a case could be made for spending
more than $50 million, but at least this may be a good start if
(and the if is important) the advertising helps differentiate
United by specifically aligning itself with the values of those
who fly.
While doing this, the company also needs
to reassure business and pleasure flyers that it will be there
to serve them. Should doubts develop, the customers will
disappear. Just as much to the point is the fact that
competitors are busy working to take customers away from
United.
The advertising story isn’t about
“warm and fuzzy.” What counts is getting on the
same wavelength as those who fly by identifying what they
don’t like about other airlines and answering those
issues clearly and directly.
This has not been the way airlines have
promoted themselves, however. They decided what would help them:
reducing the space between the rows of seats until leg room
all but disappeared and the seat back in front of you was
literally “in your face.” American Airlines
addressed that issue and took out a row or two to widen the
space so that flying American is exceptionally comfortable, a
fact that helps sets it apart from the competition.
According to reports, United’s ads
will focus on the future and won’t mention bankruptcy.
Do what the customer wants
Now, what do Krispy Kreme and United
Airlines have in common? A lot. Krispy Kreme is faced with
severe competition, just like United. But unlike the airlines,
Krispy Kreme doesn’t cut its prices to promote
“cheap donuts.” And they haven’t done
everything possible to alienate their customers. The airlines,
on the other hand, have focused on angering their customers:
• Using deliberate
“stratospheric pricing” for business travel.
• Using staying over Saturday night
as the criteria for lower fares.
• Eliminating food service and
substituting tiny bags of tasteless “sticks.”
• Pushing the seating rows closer and
closer together.
• Making the seats narrower.
• Making it difficult (read:
impossible) to get accurate information when flights are
delayed.
Even the stilted little speeches before
taking off and landing are all the same. “Thank you for
flying [insert name of airline]. We know you have many
choices…” And then there are those deadly words
used by every airline: “Let us be the first to welcome
you to [name of city] or whatever the final destination may
be.”
Wouldn’t it be refreshing to hear
the flight attendant say, “Hey folks, we’re here.
Let’s give the pilots a round of applause for doing a
great job. We know it was a long flight and we’re going
to get you off this plane quickly so you can get home. Sally,
Mike and I had fun serving you. How did we do? You were just
great. Thanks for coming with us and we hope to see you again
soon.”
Why not have a little fun with the
passengers? This doesn’t mean being less businesslike.
Why not make us laugh? We would not only remember you but we
would tell everyone what a great time we had on your airline.
It not only makes sense but it’s good marketing.
And while we’re at it, why not get
rid of all those 1950s pilots’ uniforms? Think different.
How about a leather flight jacket and white silk scarf (retro
to be sure), or maybe a cowboy outfit for airlines serving the
West.
If there’s a member of the flight
crew who can carry a tune, have a little sing-along. In other
words, lighten up and make us feel we’re going on an
adventure instead of the usual “cattle car”
approach. Customers might even feel a little excitement and
help others over a fear of flying.
Of course, there will be those who say,
“We can’t do that. That’s just plain
quirky.” Is it so crazy? It might help if Buick took the
lemon out of its mouth long enough to suggest in its
advertising that its Rendezvous is a silly looking vehicle. And
although it may look a bit nutty, Rendezvous owners just smile
smugly because its so comfortable, well-built and fun to drive.
All of this can be summed up in a few
words:
• Differentiation determines a
company’s destiny with customers.
• What customers value is all that
counts.
• You can never do enough to help
customers believe in you.
• Interacting with customers brings
them over to your side.
All of which is to say, “It’s
a Krispy Kreme world.”
John R. Graham is president of Graham
Communications, a marketing
services and sales consulting firm. He is the author of four
books on marketing and sales, including Break the Rules of
Selling, and he writes for a variety of publications and speaks
on business, marketing and sales topics for company and
association meetings. He can be contacted at 40 Oval Road,
Quincy, MA 02170; (617) 328-0069; fax (617) 471-1504; or at
j_graham@grahamcomm.com.
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