Advertising Works

There was a programme on TV tonight (Professor Regan's Pharmacy), about the science behind homeopathy. Rugby players took a pain relief tablet that they thought was branded and then put one hand in ice water. Then (I'm guessing a while later) they took a different pain relief tablet - one they thought was own label - and put their other hand in ice water. They lasted about 8 minutes with what they thought was a branded pain relief, and less than half that with what they thought was an own label version. Turns out it was actually another branded product, same dose, leading to the conclusion that "Branding on painkillers seems to give additional pain relief." The advertising, packaging and brand name have a placebo effect, which when absent actually decreases the perceived performance of the product. A nice simple example of advertising effectiveness.

What Gordon Ramsay Could Learn From Ronseal

I have never bought the Sun newspaper. Not until today that is. I did because the front page exclusive suggested that Gordon Ramsay has been a naughty boy (again). The man who built his reputation on cooking from scratch with fresh ingredients, who told The Times that his idea of food hell was ready meals, who criticised restaurants serving reheated meals, has in fact been serving ready meals in his own eateries. It turns out that "up to 50% of the menu...could be done off-site." This means £2 meals made in South London and delivered to The Narrow, The Warrington, The Devonshire and Foxtrot Oscar by white van man where they are sold for £10 accompanied by the message that all food is cooked fresh on-site.

There is now a danger that regulars at these gastropubs will feel conned. That viewers of Kitchen Nightmares will watch in a different light. GR has built a powerful brand. A brand founded on his creativity in the kitchen, and his energy, but most of all on his consistent pursuit of perfection. He has generated a great deal of trust, the kind of trust that takes a long time to build, that earns you a £60m empire. But one of the four major components of brand trust (discussed in an earlier blog on Brand Trust) is Competence - do customers believe it does what it says it will do?

It will be interesting to see how forgiving the gastropub regulars will be. That may well depend on how GR responds to remedy this breach of trust. A good place for Gordon to start might be with the Ronseal brand - it does exactly what it says on the tin.

Spare Room?

www.spareground.com is a place where you can offer that extra bedroom, empty garage or unused field to people who need a bed for the night or somewhere to store their sports car or possibly to someone who wants to start an allotment. This is another example of how web-based communities are flourishing - organising themselves to create a marketplace where those with excess supply can meet those with the demand without following the traditional course of local newspaper advertising. One to watch.

A New Look at Pricing

US drivers now get half price parking in Manhattan if they drive a half size car. This latest innovation got me thinking. Once the preserve of Utilities, "pay for what you use" is seeping into other markets where an otherwise high cost can be more palatably priced. It's certainly something to consider afresh in your market as people look to cut back in whatever ways they can. Other products successfully targeted at drivers in recent years have been the "pay-per-mile" insurance policy and the "pay-per-hour" car rental clubs like London's Streetcar. But you can also pay-per-view films, pay-per-chapter for books, and per-song on iTunes, where once you had to buy the artist's whole album. And pay-as-you-go has made mobiles accessible to a much broader user base by including a younger age group where contract probably wouldn't have been a viable option.

What unit is used to price up your product offering? Could you change the unit to offer better value and retain customers through the credit crunch? For example, car parking has always been priced in units of time for use of a standard-sized space, and the success of mini-car sector means car parking space can now be priced in units of time and space taken. Have a go, see what you come up with.

When the Cost of a Refund is Too High

Refunds are about getting money back, about making you feel better when a service is below parr or you were sent something you didn't want. A "Big 4" supermarket sent me a home delivery and charged me for some duck legs that didn't get packed with the rest of my order. No problem they said we will issue a refund. So sorted....or so I thought. I've got no duck, but hey I can cook something else. Ahh! But it wasn't that simple. First you need to know that my refund was for £3. Here's what happened.

I got an email asking me whether I wanted the refund as (a) an e-coupon code to use with my next order or (b) a refund on my credit card, in which case could I call customer service. The thought of calling a call centre and hanging on the line to get a £3 refund filled me with horror so I opted for the e-voucher. It duly arrived by separate email. It was a complicated code. Of course I forgot to use it on my next order. Then when I did use it, it didn't get deducted by the checkout software. Call I'd been trying to avoid now duly put in to the customer service team. "Oh you have to click the "add voucher" button once you've put the code in...."

So, 2 emails read, 1 call to customer service at my expense, and 3 order deliveries later I finally got my £3 refund. God only knows how much it cost said supermarket in admin, let alone reduction in brand faith.