It's Pronounced Chookshaw

The semi-professional blog of Albert Ciuksza Jr.

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Groupon is Bad for Everyone

Yoga should be peaceful...

Yoga should be peaceful…

Yoga. It’s more popular than ever, with studios popping up on nearly every corner. Everyone does it. Hell, Troy Polamalu does it.

So does my wife.

My wife also used to buy Groupons (I’ve since convinced her to stop). And, unlike most Grouponers, who buy them for the awesome deal, my wife tends to go back to those places. She is the ideal situation for the small businesses who choose to do the daily deal dance.

Unfortunately, her recent experience with Groupon — and a business that didn’t understand what it was getting into when it chose to offer one — is a classic case study for why it’s easy for everyone to lose in the pursuit of new customers or a great deal.

The story goes as follows — my wife bought a Groupon for the yoga studio near our home (Yoga on Fremont) for $65 that gave her 20 classes. Unfortunately, due to a crazy schedule (she’s a physician) and lost password, she didn’t redeem any of the classes before the March 19th, 2013 expiration date.

In the early days of Groupon, having it expire meant that the entire value of the deal had been lost (i.e. she had paid $65 to get nothing in return). However, with lawsuits, the threat of lost customers, and any number of other factors, Groupon changed its terms of service such that the paid value never expires. This gave the business a way to limit some of the cost damages of offering a Groupon while insuring the customer against losing their money. Win-win.

When my wife went to the studio, she brought her Groupon with her, expecting to apply it to individual classes ($14 each) until she ran out of value. The owner, however, stated that the company policy for the expired Groupon is to honor what the value the owner received ($31.50), not the entire paid value. Despite a couple of emails between my wife and the owner, including my wife sending the actual Groupon that includes the text “The amount paid for this voucher ($65.00) with Yoga on Fremont NEVER EXPIRES” at the very top, the owner would only honor the $31.50 earned from the sale.

I don’t blame the owner of Yoga on Fremont for not wanting to lose any more money on her daily deal. Groupons are a horrible financial decision for small businesses. However, like most deals with the devil, you don’t get to change the rules when things get uncomfortable.

The net result is this — my wife is upset and won’t ever return to a yoga studio within walking distance to our home. She’ll get a refund, but does that really matter? And for the business, they’ve chosen to alienate a customer that could have not only become a loyal one, but a customer who works at a hospital that serves the community and regularly recommends yoga (and yoga studios) to her patients.

So, if you’re a small business thinking about doing a daily deal, just don’t do it. The implementation is difficult, you make 20%-25% of the revenue you normally would on a sale, and the Groupons tend to create more problems than new customers. And, if you’re someone thinking about buying a daily deal, please reconsider. It might be a great short-term buy, but it hurts the local small businesses you’re hoping to frequent for years to come. It’s a bad long-term deal for everyone.

BA323 #4: Bonus Journal – Value in Purchasing Decisions

What dimension of value do you use to make purchasing decisions? How will that change in 10 years?

What's the value?

What’s the value?

In last Wednesday’s lecture, we talked about the critical importance of value. Beyond simply the dollars and cents of it all, value is often defined by qualitative goals (how you feel) rather than something more quantitative (getting x amount of utility for $y).

Broadly, we identified four dimensions of value:

  • Performance – how well something is perceived to work
  • Price – what it costs vs. what one gets out of it
  • Relational – individual, personal relationship with the company/brand
  • Status – the reflected glory of owning/using the company/brand

In class, I asked what one dimension of value the students most often use to make purchasing decisions. I was surprised when most students mentioned performance and status rather than price (looks like the poor college student caricature might be waning).  At the end of class, I offered a bonus journal to further reflect on that question as well as share what they would expect to value ten years from now.

For me, price tends to be the first value on which I make purchasing decisions and that hasn’t really changed much in the last ten years. However, the way I look at price has changed, and has allowed me to also begin to look at the other areas more readily, particularly performance and relational.

Ten years ago, I was a year out of college and working in my first job trying to figure out how to pay bills. I left school with a mountain of debt, a car payment, and ancillary expenses like my cell phone and credit card debt. Like many recent graduates, I wasn’t making a lot of money and had to often settle for lower-quality, low-price products. In the following ten years, I had a few different careers, including one as a not-quite-successful entrepreneur, which made financial resources even more scarce. Even after getting a new job, it took years for me to settle the financial challenges that resulted from that setback.

Now that I’m a bit more established, I’m also aware of the importance of good quality, whether it be in vehicles, clothes, housing, etc. As such, I balance other areas of value, particularly performance, more heavily than I once did. I’m also incredibly loyal to certain companies or brands, especially in my community, so the relational value is more important to me now.

In a decade, I expect that I will still be financially prudent, though the other dimensions of value will likely be even more important or will trump price. Despite my experience in marketing, the status bug will likely bite me as I expect to have access to more financial resources, for better or worse. Even if I know I’m being duped, I likely won’t be able to resist.

What do you value now? Ten years from now? Do you think it will be the same?

BA323 #3: Journal #1 – What’s So Hard About Entrepreneurial Marketing?

As promised, I’m following the class with my own journal entries/blog posts about the subject. Our first is:

What’s so hard about Entrepreneurial Marketing?

As we covered in class, Entrepreneurial Marketing is (for better or worse) more than just the Four Ps (Price, Place, Promotion, and Product for those of you who can name three-of-four and inevitably forget one of them). Unlike traditional marketing, which can simply focus on who is going to buy the product, entrepreneurs must market to a variety of stakeholders: suppliers, customers, the end users of those customers, market intermediaries (gatekeepers that might exist in your market), investors/potential investors, and business partners/employees/potential employees. Each group requires its own strategy and tactics, all when resources are incredibly scarce.

Sure, the money problem is obvious, some of it can be overcome with good research, strategy, and tactical execution. What isn’t quite as easy is balancing multiple priorities among a diverse group of people who often have competing interests. Not only must entrepreneurs focus on selling their product or service, they must also be constantly thinking about how to market their business to raise money (through equity or loans). Finally, they must do this while promoting the overall image of the company, ensuring that suppliers and talent are both on-board as partners in the company’s success. Not an easy task.

Interestingly, most entrepreneurs seem to do this automatically. They work to build relationships with all of these people and tend to manage those relationships well. However, many entrepreneurs can suffer from tunnel vision — maybe focusing too much on sales while neglecting investors, or working hard to raise money without making sure the customers are happy. Coming back to the money issue, entrepreneurs often don’t have the capital to recover from a major error when marketing to any one of their diverse targets. This makes attention to all marketing strategies incredibly critical.

Personally, I find maintaining relationships with market intermediaries to be the most difficult, since they are acting as gatekeepers and offer third-party interference with your customers. When these relationships are good, they’re excellent. When they’re bad, they can make an entrepreneur’s marketing job much more difficult.

What do you think? What would be your biggest marketing challenge?

BA323 #2: The Sound of Your Own Name

Customization done well…

In Dale Carnegie’s How to Win Friends and Influence People, he says that the sweetest sound in any language is the sound of a person’s own name. In entrepreneurial marketing, it’s even more true.

I was reminded of this when I received a catalog from pc/nametag, a small company that makes custom name tags for events and sells other premiums that are often handed out at trade shows. As you can see in the image, the front cover was printed with my name on it as it would appear in one of their products (they also assume I’m an All Star, #1, and an Achiever … that’s just pure flattery). This would be the first time my name has been on the front of a catalog and, I have to say, it’s well done.

When running a start-up or small business, it takes a lot to cut through the noise and overcome natural skepticism from customers who are likely being courted by a multitude of vendors. However, with market research and a little creativity, this company was able to get my attention rather easily (and tell you about them as well).

Advances in digital printing technology have made individual customization cost-effective, presenting an incredible opportunity for companies looking to make an impact. And, despite the advances in email marketing, there is something much more remarkable about a well-developed custom print piece (anyone can create an email blast with a name form field). The lone exception was a marketing piece I once received from the American Marketing Association that made my name part of their url (i.e. albertciuksza.marketingpower.com, but it is no longer active). I thought that was an excellent way to get me to visit their website.

For companies that don’t have the financial resources to make a big splash, it’s important to remember that you don’t always need to make a big splash to be effective. Sometimes, you have to play to your target’s sense of self and say the sweet sound of their own name.

BA323 #1: Preview of My Entrepreneurial Marketing Course at St. Vincent College

Yikes. A bowtie.

I’m only an adjunct, so I won’t be required to wear one of these.

I couldn’t be more excited about the opportunity to engage the students at St. Vincent College, my undergraduate alma mater, in the newly-minted Entrepreneurial Marketing course that has been added to the Entrepreneurship minor under the McKenna School of Business. To some extent, I’m incredibly jealous of the students pursuing this minor and wish I had the chance to integrate this track into my studies when I attended 11 years ago.

One of the ways that the students will explore the material is through nine journal topics that will be submitted over the course of the next four months. In the spirit of fairness, I will be exploring those same topics here on my blog and will adhere to the same deadlines (though not for a grade). You’re welcome to follow along and critique my own thoughts through this journey in the comments section.

Finally, I thought it might be useful to mention a few of the themes that will be sprinkled throughout the course. Regardless of the tactical discussions we will have, there are a few takeaways that are absolutely critical to marketing in the entrepreneurial context:

  • I use the phrase “marketing in the entrepreneurial context” because I believe that these principles are as applicable to the corporate world as they are to early-stage and small ventures. Despite often blockbuster budgets, corporations are beginning to realize that they can’t just throw money at their marketing departments and expect customers to open their wallets.
  • Entrepreneurial marketing is different than traditional marketing in that there are more targets and, therefore, more people to consider when building and executing a strategy. While many marketing professionals in more traditional roles can focus on the customer alone, entrepreneurial marketers must consider customers, end users, suppliers, competitors, potential and current investors, the current team, and talent attraction.
  • Resources are somewhere on the scale of scarce to non-existent. This requires a completely different and creative approach. This means being personal and selling yourself as well as your concept. This is an unavoidable aspect of new or small ventures, and one of the most challenging aspects of entrepreneurial marketing.
  • There’s a common assumption that entrepreneurial marketing instantly means using social media. It’s just not so. While the entry costs to social media are low (platforms such as Facebook, Twitter, YouTube, and Pinterest are free), the time costs associated with those platforms can be prohibitive. Like any other tactic, social media has to be analyzed on a strict ROI basis.

A few other random things:

  • After arguments with editor friends, I use the Oxford comma, regardless of how little care Vampire Weekend might give to it.
  • I will likely drink four cans for Diet Dr. Pepper each class.
  • I’m going to experiment with Skype to virtually bring in speakers who have had their own experiences and successes in this space.

I’m looking forward to the adventure and hope the students are as well. Class begins Wednesday, January 16th and ends May 8th.

With QR Codes, You’re Probably Doing it Wrong

Can we bury QR codes? (Image from WTFQRCodes.com)

Can we bury QR codes? (Image from WTFQRCodes.com)

I’ve been hearing that QR codes are going out of style. Through three experiences with bad QR code management last week, I learned why.

The worst example was Macy’s, a company sophisticated enough to know better. My fiancee and I had stopped by to register for our wedding last Wednesday night to take advantage of a promotion that would give us a chance to win a gift card between $50 and $2,000 (note: we were told that everyone who opened a registry that night would receive a $50 gift card just for showing up, a nice little bait-and-switch by Macy’s). In order to enter, we had to scan a QR code.

I pulled out my phone to scan while my fiancee downloaded a QR code reader (showing just how ineffective the whole QR code thing can be). I scanned the code, which took me to my browser. I waited. And waited. And waited.

About three minutes later, a non-mobile-optimized site loaded informing me that I had not won anything, though I was given a star-shaped sugar cookie for my troubles. My fiancee had no better luck with the same load time. Already frustrated by the special trip we made to the store for the non-existent gift card, the poorly-executed, anti-climactic contest gave us good reason not to use Macy’s for our registry.

My second experience was in the new Gateway Center subway terminal, where I saw an advertisement for KeepPGHMoving, a marketing campaign to build awareness for a potential transit crisis in Pittsburgh. On the ad was a QR code, which I scanned to get more information. Again, I was taken to a full-load site (complete with javascript) rather than a mobile one. As a supporter of public transit, I was frustrated by the poor execution.

Finally, a confession — I’ve made the exact same mistake on a marketing piece for the Pittsburgh Impact initiative, a program I run for my day job. Last year’s version of the piece contained a QR code, which pointed to the initiative’s website, PittsburghImpact.org. Once again, the site to which the QR code was pointed was not mobile-optimized.

QR codes could be a very good marketing tool if marketers didn’t use them poorly. In fact, had Macy’s had created a mobile site for its contest, I think it would have been a well-executed way of entering. However, between the inconsistent application of QR codes with respect to mobile platforms — really the only time a QR code would be used — and the potential security risks associated with the codes, I can see why they’re falling out of favor.

If you insist on using them, here are a few pieces of advice:

  1. Give a good reason to scan the code – I hate the phrase “call to action”, but it’s exactly what you need to make the QR code an effective marketing tool. Don’t just give information, give an incentive to scan the code in the first place.
  2. Point to a mobile-optimized site – No flash, no large javascript, just quality design for the small screen that’s easy to navigate and gives the user an opportunity to interact with the site.
  3. QR codes are inherently place-driven – If you’re using a QR code, you’re targeting someone who is getting from one place to another. Only use them if you’re providing some value to someone on the move.

For some great examples of marketers’ poor QR code usage, check out WTFQRCodes.com.

Why I Love the Steelers’ Throwbacks

Pittsburgh Bees or Jailbirds?

Pittsburgh Bees or Jailbirds?

After a day of hearing all of the complaining about the Steelers’ newly-unveiled 80th Anniversary uniforms, I figured I’d come out of the bumblebee-loving closet and confess that I unequivocally love the new unis.

Now, obviously, they’re an aesthetic disaster. Black and gold is a hell of a study in contrasts, and the inch-plus alternating stripes are tough on the eyes. Adding the self-contained black numbers in a black-outlined white box makes the top half painful (potentially only saved by the black logo-less helmet). It gets worse below the waist, with doesn’t-match-anything sand pants and striped black and gold socks. I mean, seriously. They’re horrible looking.

Barry Foster in '33 Duds

Barry Foster in '33 Duds

However, I love the fact that the team is celebrating its history in an honest way, showing off one of its earliest looks even if the uniform is hideous. At a time when NFL teams are releasing alternate uniforms on a regular basis in the name of revenue generation, the Steelers picked a look that they had to know wouldn’t sell well (as of today, the jerseys are not for sale at the team shop). And this time, they actually had a choice, unlike the NFL’s 75th Anniversary, when all teams were required to wear uniforms from their founding.

Sure, the Steelers have dabbled in the alternate jersey universe, wearing the black-and-gold classics from the late 50s and early 60s (which, by the way, were pretty sweet despite the gold helmets). But this time around, it will be great to see what the games might have looked like in the early days of the NFL, even if that means 380ish-pound Casey Hampton has to squeeze into one of these puppies.

So thank you, Rooney family, for having the guts to put your boys in these monstrosities. I can’t wait to see them in action.

Celebrating Success at Work

We need to celebrate.

We need to celebrate.

We need more celebration at work.

Real celebration. The scream-at-the-top-of-your-lungs, carry-the-coach-out-on-your-shoulders kind of celebration. Wins matter and we need to acknowledge them

As my team filmed a viral video for our social media marketing class (below: please watch a million times, we’re competing for views against other MBA teams), I was reminded of a conversation with Buddy Hobart (www.solutions-21.com) about how world-class performers celebrate their successes. Why can’t we celebrate like a football team would when we land a big deal? Why do we settle for a “thanks to so-and-so for great work” in a snoozefest of a team meeting?

httpv://www.youtube.com/watch?v=IqvoFbIbpkE

Gen Y is often accused of wanting to be coddled, having an extreme need for constant positive reinforcement. But, really, who wouldn’t want to have a team so excited about your success that they’d give you a Gatorade bath after a major career achievement?

One of my favorite things about Pitt is that we celebrate successes. We reward good work in business plan competitions, post successes on the rotating announcement boards that are located throughout the building, and congratulate each other in the halls. It’s not major out-and-out celebration, but I think it’s a great culture to build.

How do you celebrate at work? How could you do it better? Would you stretch your goals a bit more if you know your work would be celebrated?

Premium Has to Stay Premium to Save Print

A little over a year ago, I wrote a piece on the Pittsburgh Post-Gazette’s then-recently-launched PG+ and how the model might be able to save print. The model of PG+ was simple — take a couple of its most popular blogs, most notably sportswriter Dejan Kovacevic’s PBC Blog, and shift it behind a $3.99/month (or $36/year) pay wall. My assessment at the time was as follows:

From my experience, the so-called ‘freemium’ model seems to be working for the P-G. Why? Because there’s genuine value to the experience. While superficial sports coverage and local news can be had easily and for free, the type of in-depth information that their paid site provides is well-worth the $4/month. In addition, I’m beginning to feel a sense of responsibility to the newspaper industry — like public radio, I know that these media are needed in a strong, well-informed democratic society (an interesting article suggested anecdotal evidence that the decline of the newspaper industry is having some impact on campaigns). While I think as much information as possible should be free, I have come to terms with the fact that I need to contribute my share.

Within the last year, much progress had been made at PG+. The site generally abandoned the blogs focused on subjects outside of sports (it seems subscribers were overwhelming consuming sports content) and Dejan Kovacevic was promoted to a post where he would write for all sports as well as run the PG+ operation. I had adjusted my morning routine accordingly, reading his pre-dawn PG+ blog post as I woke up each morning.

About three weeks ago, Colin Dunlap, the reporter who replaced Kovacevic on the Pirates beat, abruptly resigned. Last week, Dejan resigned after 25-plus years with the Post-Gazette to move to the competing paper, the Pittsburgh Tribune-Review. Within a month, a good bit of the value I had gotten out of the PG+ subscription had been lost. In addition, the print side lost a good bit of its top-tier baseball talent just as the Pirates are enjoying re-surging interest as the team flirts with .500.

From a purely marketing perspective, this has been fascinating to watch. Fans at the PG+ have used the comments function to threaten to leave or ask for instructions on how to cancel their subscriptions. Other members are wringing their hands at the possibility of supporting the Tribune-Review for reasons that have nothing to do with sports coverage. And Dejan Kovacevic, after championing the PG+ for more than a year despite its many faults, has taken to tweeting “site is free, comments easy to use” when referring to his new home.

In order for the PG+ to survive, it has to stay valuable to its rabid sports fan consumer. In its first chance to do so, it failed, as Dejan broke a story about a Pirates trade at 10:23 PM last night, about an hour and a half before the PG+ posted the news. Experience matters and, at this point, the PG+ doesn’t have the team to break those kinds of stories.

A year ago, I asked if premium can save print. I strongly believe the answer is yes, but it has to be able to provide exceptional value, like exclusivity, in order to be viable. I plan on continuing my PG+ subscription but worry that there will be enough defectors that the Post-Gazette decides there isn’t enough value in the model to keep at it. Let’s hope that there continues to be excellent sports coverage at the P-G and that they’re able to find the talent to make the PG+ a worthwhile investment.

The Brazenness of Qdoba’s Opportunistic Marketing

There are few things that are such obviously good news like a team of Navy SEALs successfully killing Osama Bin Laden. While it might not mean much operationally (the U.S. has successfully reduced the influence of Al Qaeda since September 11th), it is a great moral victory for the ten-year effort to root out terrorism around the world.

Leading up to the announcement and throughout the day, from the Phillies-Mets game last night to the front steps of the White House in the early morning, crowds are shouting “USA! USA!”. The spontaneous reaction to the news was overwhelmingly patriotic and a cathartic reaction to a ten-year battle.

Given this context, I was surprised to find the following email in my mailbox this morning:

Chanting USA! for a $1? Really, Qdoba?

Chanting USA! for a $1? Really, Qdoba?

Don’t get me wrong, I appreciate companies that are nimble enough to respond to current events. However, I feel like Qdoba stepped over the line here. We’re witnessing our nation celebrating a moral victory. It seems crass to exploit it to sell a few burritos.

For the record, I don’t envy companies that are competing for attention in the age of social media. There are landmines everywhere, as Kenneth Cole learned when his company was lambasted for attempting to take advantage of the events in Egypt to promote a new clothing line earlier this year. Even more challenging, companies need to be edgy just to get attention. It’s tough out there.

Being difficult, however, isn’t an excuse for getting it wrong. While I might join in the chorus of “USA!” that’s happening across the country, I won’t be doing it to get a buck off at a burrito joint. There’s a difference between being edgy and being opportunistic, and Qdoba landed with a thud on the wrong side of that line.

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