How a Lose-Win Strategy Can Help You Win Customers
In the classical business model, we all say we want a win-win relationship. But is there such thing as a true win-win relationship? Isn’t there always an ending where one party feels that he/she could have gotten more?
But traditional marketers and operators as well finance team in organizations reject the concept of lose-win immediately.
Recently, when I was helping a few restaurant chains find the next big local store marketing idea, I suggested a series of micro-ideas. One of the micro ideas I proposed was:
A SIMPLE LOSE-WIN IDEA
Instead of approaching the high school athletic director and signing the school up for fund raising, why not target for individual students. Every high school student will arrive at the age when they are able to get their driver’s license. That means if we have two high schools in a trade-area, and each high school has a class of 150, then every year the restaurant has opportunity to “touch the lives of “ nearly 300 students in a very special way. So what was the recommended in store promotion? A student gets to eat for free with two friends on the week they get their first driver’s license.
WHY THE IDEA IS BRILLIANT (my personal opinion, of course)
This is a simple idea that needed no media dollars to promote. Successful implementation in the store is what one needs to spread this viral message.
Now why with friends? We all know that teens today move in herds, and there are hardly any occasions in which a teen goes and eats alone. Only giving the teen with a new driver’s license the free meal, and not their friends too, would fall in the win-win category and not lose-win, as the teen who eats free will be bringing business to the store as their accompanying friends have to pay. Teens will see through it and realize that this is another marketing gimmick, where, in other words, the store is promoting a much used buy one and get one free offer. That discovery completely takes away from the teen-connectivity to the offer.
Instead, an unconditional eat free with two friends offer is slightly bizarre in today’s world, and the teens will be trying to figure out the catch. There are no catches, and the no-catch part will make this deal an emotional connection for the brand.
So now that we have a teen with their two best friends enjoying a free meal at the store, the experience will be etched in the memory of the teen forever as “one of the cherished firsts in my life.” And in that cherished first memory, the brand gets planted in a unique favorable positioning.
MARKETING GUY: How can I do this without capturing the information from teens? The promotion fails as students will come and take advantage of the offer. Effectively we will be feeding every school in the high school three times.
Marperations Response: Teens today build relationship on their very own terms. Instead of looking at the lost opportunity to collect teen information, this promotion is capturing a lifetime moment in the teen’s mind. The teen will think, “the day I got my first driver’s license, I ate free with my two best friends at restaurant xxx.” Isn’t that priceless?
OPERATIONS GUY: Can we do it at off-peak times only? I do not want more stress of ‘comping’ (meaning free food) during times when operations is stressed. Can’t we do the new driver eats free IF a friend pays full price? And, what if 40 teens come the same week? That will really hurt that week’s sales.
Marperations Response: A celebration cannot have limitations. Offering this only at off-peak is very transparent, and teens will see that they are offered the special when the restaurant has surplus food. And the idea of friends paying full price is another way of doing BOGO (buy one get one free) offer and that is already there. That cannot be the gift for a special moment. And now about the unlikely event of 40 teens getting their license the same time, isn’t that a jackpot for the brand? The synergy of the positive energy will be more than individual teens coming on different days.
FINANCE GUY: This would result in a $15 loss or write-off per occasion. On an average we would feed every student in the high school nearly twice a year and that makes it nearly a $6000 loss. What is the ROI of the $6000 spending on LSM?
Marperations Response: Yes, ROI can be calculated very easily. All one needs to do is to calculate the lifetime $ that the teen will spend at different similar restaurants and then estimate how much this “special moment” will make the teen choose the restaurant. If this makes the teen spend $20 for just one month at the restaurant and assuming there were 200 students in the high school, every year this has the potential to generate $4000. And of course that is for one year. Hence the lifetime ROI of this well over break-even.