The Exorbitant Cost of Not Doing Marketing Research
Salesgenie.com's $2.7 million mistake, and how a major retailer avoided making a similar one.

Note to Salesgenie.com's CEO: A little investment in research generates a huge return.

Vinod Gupta, the InfoUSA CEO who owns Salesgenie.com, learned this lesson the hard way when he had to stop airing his television commercial after its debut on Superbowl XLII because of protests about its culturally-insensitive presentation of animated pandas with Chinese accents. It was an expensive lesson: The cost of airtime alone for a 30-second spot on Superbowl 2008 was $2.7 million. View the ad here at YouTube:

Gupta, who wrote and produced the ad himself, told USA Today (February 11, 2008) that next year, he'll test his ads with consumer focus groups. This year, he said, he only ran the ad by some friends. "None said it was offensive," he said.

A Major Retailer Discovers that Ideas are Beautiful, but Reality Is Something Else

Vinod Gupta isn't the only top executive to become enamored with his own creativity. The Salesgenie.com ad debacle reminded me of another marketing campaign developed by a retail chain leadership team. Fortunately, those executives had the good sense to test the materials before going public. I'll never forget the shock experienced by the campaign's creators when they saw the reactions of their intended audiences.

By the time I was retained, a seven-figure budget had already gone into the creation of advertising and internal communications materials that featured real employees. It was my job to test the communications with focus groups to determine if they were relevant and would produce the desired reactions and results.

The stores in the materials looked wonderful. Inviting. Immaculate. Smiling employees welcomed you. Salespeople exhibited pride in their work. Several mentioned their impressive employee benefits: health insurance, 401K plans and paid vacations. Others spoke of their aspirations to become store managers. These proud, joyful team members encouraged the public to shop at their stores and consider working with them.

I showed the employees in the first focus group the materials and asked the following questions:

"What's the main idea behind what you see?"

"Would you notice this ad if you were looking through a magazine?"

"How does this information make you feel about working there?"

Immediately I knew we had a major problem. The employees looked angry, confused and resentful. Sample responses included:

• "Those employees look way too happy. No one in my store smiles all the time."
• "These ads make me not want to go to work tonight... The benefits they are talking about don't exist. I've never heard of them."
• "These photos depress me. My store doesn't look anything like that. These are just pretty pictures. If it was really like this, I'd be proud to work there!"

The employees filed out. As I prepared for the second group, I popped into the adjoining room where a team of marketing and ad agency executives were watching through a one-way mirror. The creative director had a light film of sweat glistening on his forehead. No one looked at me. They were engaged in an intense discussion that absorbed all of their attention.

I showed the materials to the next focus group, which consisted of seven customers. I asked:

"Any immediate thoughts or feelings?"

"Is the ad clear?"

"How does this make you feel about shopping there?"

The customers were equally incredulous:

• "The ad looks is great, but the store I go to in my neighborhood always has stuff on the floor."
• "I like the way the employees seem to care about their customers. But if I go back to the store in my area and get the same shabby treatment I always get, I'll be mad. They're tricking me."
• "If the employees really receive all of these benefits, why do they look so miserable?"

Again I ducked into the next room to confer with my clients. Now the creative director was openly mopping his forehead and the marketing director had gone ash white. He whispered to his assistant, "Haven't these benefits gone national?"

The assistant whispered back, "Guess not."

Where the Reality Hits the Road

I said to the marketing team, "For now, the only thing we can do is to proceed with these focus groups and instruct the participants to react to the ads as if they are true. Our goal today isn't to poll them on their actual experiences in your stores; it's to get their responses to this campaign."

The team agreed that this was the best use of our time; however, it was clear that there would be some serious accountability checking back at home office.

I proceeded with the same questions to the remaining 15 focus groups. Then my team and I summarized our findings in a written report that we presented to the client two weeks later.

Upon reviewing the report, the client called me and said, "I must admit, this hurts. We spent a lot of money on those materials, but I'd rather know this now than after rolling out a national, multi-million dollar campaign."

As painful as the findings were, they served a valuable purpose.

• They spared the retailer from the embarrassment and potential liability of launching a campaign that promoted employee benefits only offered in certain regions of the country.
• They pointed out that the store chain had locations that were inconsistent with the quality, store appearance and service being advertised.
• They identified that this could indeed be a powerful campaign as long as the organization fixed these issues and got them right. After all, both the customers and the employees indicated that they liked real employees being featured in the campaign and they were attracted to the stores that were depicted in the ads.

The overriding benefit of testing your marketing communications is ensuring that your communications are meaningful to key constituents. In other words, the resources that you devote to research now will pay off in spades when you move forward with communications programs and materials that hit the mark. By ensuring that your marketing is compelling, you can stop pursuing – and start attracting – your intended audiences.

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Jenny Schade is president of JRS Consulting, Inc., a firm that helps organizations build leading brands and efficiently attract and motivate employees and customers. Subscribe to the free JRS newsletter on www.jrsconsulting.net/newsletter.html

© JRS Consulting, Inc. 2008