March 19, 2007

thesher 2.0

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For those of you who may not remember, last December Stormhoek released an online voucher for 40% off any wine or champagne in any Thresher store. And it went viral. Besides making the national news, it generated £15million [Fifteen million pounds] of business for Thresher in only a few days. Besides that, it trebled Stormhoek sales for the time it was running [and not just in Thresher, but everywhere in the UK].

So yes, it was a good outcome. Which is why I want to do it again. Another good outcome is always welcome around here etc.

Sure, you could argue that Thresher virus was also a fluke. We had zero control over the outcome, all we did was post it online and see what would happen. But that's why they're called "viruses": Because they're unpredictable. If they were predictable, we'd call them something else.

Anyway, I pitched Jason on it already. He's pretty skeptical that we can make it happen again- "Lightning never strikes twice" etc. But I'm thinking it might just work because:

1. There are a lot of people who already know about the last voucher. So there's a level of baked-in "fame" already there.

2. There are already a lot of people out there who used the first voucher. They know what they got out of it, so they might be willing to use it again for similar reasons.

3. The people who missed it first time around might be willing to have a go this time.

In short, I think there are enough people out there wiling to have another go at redeeming the coupon one more time, even if this time the story isn't as newsworthy to break into the mainstream media machine like it did last time.

Thoughts?

Posted by hugh macleod at March 19, 2007 10:16 PM | TrackBack
Comments

I think it is unlikely that it will work again in the same way. One of the keys to the success of the last voucher was the timing - Christmas.

We (British consumers) have been conditioned to look for bargains, particularly at Christmas, and particularly in wine. One of the things that made the "virus" work was that it fed on that herd instinct to shop for a deal. I doubt that any other time of the year would generate the same drive to shop.

Also, it relied on a misunderstanding of the every day deal Thresher offer (effectively 33.33% discount compared to 40%) and this was covered, latterly, by several media. The result was that some shoppers felt cheated. Not the best way to try and hook them in again.

Your blog, and the Stormhoek brand, are great assets, and I think you could come up with another incentive that was a little bit different this time and one that maybe focused on something other than the discount-mania of current wine marketing, no?

Posted by: Robert at March 19, 2007 11:17 PM

I think it'll work better the second time - mostly for the reasons you identified. Plus the fact you have a larger audience now. Add to that the fact the voucher will have a kick-ass Gaping Void Cartoon on it, and it can't lose (it *will* have a kick-ass cartoon, won't it?)

Rob

Posted by: Rob La Gesse at March 19, 2007 11:58 PM

Discounting doesn't seem very imaginative to me. Everybody likes a good deal, but what is it really doing to build brand value? It may actually be devaluing the brand.

Posted by: Jim at March 20, 2007 1:40 AM

One thing that Daimler-Chrysler has learned in the last couple years is that if you train your consumers that there are incentives at regular intervals you risk cannibalizing your regular sales. For a while there they were saying that they would not be offering incentives, instead they were lowering the MSRP of vehicles. Consumers didn't bite though because they were expecting 'Employee Pricing' or '0% financing' and held off on their purchases.

You wouldnt want to inadvertently hurt sales by having customer 'wait until the next time their is a coupon' when browsing the aisles at Thresher.

Posted by: Adam at March 20, 2007 3:41 AM

Coupons like the voucher work best when they are special, unexpected, and rare. Once people begin to expect coupons, the discounted price becomes the expected price and people shift buying habits to wait for the promotions, which depresses the average price, with potentially minimal or no increase in sales.

This was the perspective that shaped Wal-Mart's everyday low prices, which they credit for a large part of their success over the K-Mart "coupon economy", where the coupon distribution costs more than outweighed the promotional value.

So, you might get a good response, but every time you tap the excitement, you lessen its potential. I'd wait several years before trying it again.

Posted by: Joe Andrieu at March 20, 2007 4:25 AM

Oh hell yes, do it.

I for one would make use of a voucher again, and whilst you don't have Christmas this time around, I would imagine that the voucher would still have an expiry date.

I think your instinct is right about this one, Hugh.

Posted by: Mike R at March 20, 2007 6:40 AM

Too much of a good thing? I think people "went" for the Threshers voucher because they thought they were getting one over on a "big" company. Threshers were certainly happy with the PR etc no matter what they said.

Robert is right that the blog and Stormhoek brand are great assets - if you wanted some PR from this then i would consider writing up the story for a newspaper - the "My mistake cost Threshers £xm" type article. Won't obviously have the same impact but would give you some exposure.

If you were going to do the voucher again then i think it needs to be pitched differently to consumers. The message should be along the lines of "we made a mistake before and it worked out well in the end. This time we know what to expect (so shelves will be stocked) and we want you to pass it on to as many people as possible."
I'm not sure it is going to work but you need to be honest with consumers as to why you are running the deal again.

Posted by: John Dawson at March 20, 2007 6:57 AM

Go for it!

Posted by: Kath at March 20, 2007 7:03 AM

Make it 80% off and you'll be on the news again.

Posted by: Mark McGuinness at March 20, 2007 8:30 AM

I think it is happening already. Anyone got the Eurostar Telegraph Eurostar offer password email in the last week? ;)

Posted by: Neil Major at March 20, 2007 9:26 AM

IMHO the very thing that made the last campaign a success may be the thing that kills the viral effect .

With baked-in fame, sure you'll get plenty of repsonse, but as good as before? I'm not so sure. People are wise to it. For me, what makes the viral concept work is the WOW factor.

Unless you came up with another totally unique viral idea, I would struggle to see how it can be anywhere near as successful as the previous version.

Posted by: Paul Fabretti at March 20, 2007 9:45 AM

Just don't do it like this:

http://perfectpath.wordpress.com/2007/03/17/klewless-pruf-ridder-rekwired/

I think you've still got a way to go with this one before you can be accused of jumping the shark

Posted by: Lloyd Davis at March 20, 2007 10:11 AM

Hugh,

Screw the naysayers - where's my frigging voucher....?!!

C'mon. Gimme the damned thing I need my Stormhoek fix.

Posted by: robert at March 20, 2007 11:08 AM

I printed a couple of dozen vouchers and gave them to friends, but never made it to Threshers myself. This time I'll print even more, and go myself.

Posted by: Chris at March 20, 2007 1:34 PM

Hugh, long time reader first time writer (always wanted to say that sort of thing)...

I'm unfamiliar with your previous discount (discounting your current post) but would seriously weigh the value of your objectives before doing this.

If you are trying to get publicity and eventual brand recognition for Stormhoek, then this is probably not the way to go as old news is no news. If you want to bump up your sales (at the cost of margin) then yeah do it...

I like what you have done with your blog. It's the only means that I've looked at your company brand and it has a positive effect on me. Should I see a Stormhoek brand here in Mpls. MN I'll probably give it a shot.

Overall, my advice is to improve your brand and products through what you've done on your blog. Any marketer worth his/her salt knows that steadily devaluing your brand is product suicide. Update us on what you decide though!

R.ed

Posted by: Robert John Ed at March 20, 2007 1:57 PM

I think what's said about discountings impact on brand image is a good point as well as the comment on having your customer become acquainted to having discounts around certain periods and thus holding off. However, I think at least with the latter, this market is a bit different given the price of the items, the type of item it is, and the temporary inventory.

With that said, I think you are pretty spot on with your assumptions. At the best, it works as good or better than it did before because of everything you've mentioned. At the least, it only generates a few extra sales?

I could be entirely wrong, but if you want it to simply boost exta sales, then I think it's a win/win either way.

Posted by: Nathan at March 20, 2007 2:06 PM

Hmm, When I first heard about the vouchers, it wasn't in relation to stormhoek or anything. It was apparently this voucher that had been 'leaked' and that normal consumers weren't meant to have.

So a bunch of people had a go to see if they could get away with it.

If you tried it again now, I don't think the same would happen. People would sense that it had been done on purpose more, and so I don't think would jump at it as quickly.
It might still have an effect, but I don't think it would be anything like the same degree.

Posted by: Adrian at March 20, 2007 2:13 PM

Firstly, there are far too many Roberts around here. Time for a bit of personal rebranding I think.

Secondly, it would appear that those who think about the branding impact believe (like me) it is a bad idea, and those who most crave discounts say it is a good idea. Point proven?

What would be the reason for "doing it again"? If it is to prove you can create another viral campaign, I'd love to see it, but I suggest that trying the Thresher "whoops this should not have gone out so widely and have been downloaded so many times from our Stormhoek friends' website" approach may not work. Try something else. How about a viral campaign to sell bespoke suits?

If it is to raise the profile, and sales, of either Thresher and/or Stormhoek, use your creativity and reach for something better.

I do recommend that you read the whole thread on the site I link to on my own blog post (you probably don't want it here) to see what reactions it engendered last time, admittedly amongst a subset of 'higher end' wine drinkers.

Posted by: robert at March 20, 2007 5:42 PM

Go for it - but with a different slant. Highly time sensative? For Stormhoek bottles only?

Posted by: Andrew at March 21, 2007 12:32 AM

Since the more opinions you get, the wiser the crowd gets, I will also offer my view, but be warned: I have a technical background and know nothing about marketing.

You guys are creative enough to come up with something else. You did money for Christmas and love for Valentine's. Maybe you should try fame. Or hope.

I think the WOW effect wears off. Discount alone makes sense if the product is too expensive, which Stormhoek isn't. I would try to repeat the "your chance to be part of something special" idea, which was (at least for me) the coolest aspect of it.

Posted by: Tiago Silveira at March 21, 2007 12:24 PM

Henceforth this Robert shall be known as: The Bob Formerly Known As Robert

I actually prefer to be called Robert. So that is it then. I remain he, and all you other Roberts can scrap amongst yourselves for another monicker.

MacLeod, where are the bloody vouchers? Hurry up, the cellar is emptying fast!

Posted by: The Bruce at March 21, 2007 1:20 PM

40% off wine = success. plain and simple. of course it will work. i'm guessing people want to have that conversation again - you just need to give them the opportunity, hugh.

Posted by: cp at March 21, 2007 1:27 PM

If you can offer 40% off to everyone with a printer and still be profitable, you are probably charging too much. Why not give everyone those reasonable prices all the time, instead of pushing vouchers and getting slammed with orders a couple times a year? Even out the cash flow with steady business.

Posted by: Dan at March 21, 2007 3:04 PM

Easter is the second "Big Dinner" at our tables, the second big conversation and the second big wave in the retail tide. If it moved purchasing power from a supermarket aisle into Threshers once it will do it again. There is a chance it will be bigger this time because the residual awareness from version 1 will push the wave of reaction faster. Its like series 2 of a cult show getting bigger ratings even though its not as good as the original. Series three is always a dog though and should be avoided.

Posted by: Clive Birnie at March 21, 2007 5:24 PM

Over the last few months when I give presentations on social media, small world experiments etc I mention the voucher. I would say 50 - 60% of the audience heard of it but less than 15% took it up. Reasons for non-take up are varied but 'never got around to it as Xmas shop in x' is high up the list.

I would say you 'lost' sales as many bottles went into the main Xmas food shop at Tesco's, Sainbury's et al.

Try it. What have you got to lose? Even £1m in extra sales will give you a great ROI.

Put an extra Easter bonus in it. Do a Willy Wonka. Find the special label to enter a draw for a free trip to South Africa to help pick the grapes and make the wine. 10 runners up get original cartoons from you and 3 get a meal with S staff in London (WineGeeks meet TechGeeks?). Go have fun with it. Life is too short not too.

Posted by: adrian moss at March 21, 2007 8:20 PM

well being on the front line so to speak (I run a threshers) so far its not been anywhere like the buzz that we had last time..
Last time around I did around £4k in sales. this time round ive seen three coupons for a combined total of about £200...

Firstly, xmas is so much bigger an event...

Secondly... last time a lot of people took time out to critise us, saying that we added pounds to every bottle of wine and we still cost more than the supermarkets (i know for a fact this is not right.. i make a point of checking prices on a weekly basis for that very reason).. we also had a lot of press saying it was only a 7% discount on top of buy 2 get 3rd free.. people cant do there maths.. ;)

Thirdly.. the sheer volume of discussion over the last voucher means that customers are struggling to find the voucher.. i have had a few complaints that customers can only find webpages related to the december offer and cant find the current one on google (i found it easy enough although its taken a while cos the thresher website seems to be up the swanny)

Fourthly - no champagne... That was a massive part of the appeal last time... Yes my wine sales where sky high.. but champagne was out of orbit...

Finally.. last time everyone thought it was a mistake that they where getting something they should be, so they dived in on it.. this time they know the deal.. Viral Marketing has headed into the dictionary... People where never going to react in the same way...

i was never ever going to be anywhere near as big, and certainly from where im standing its not (now watch me get completely and utterly hammered tommoro and run out of wine...)

:D

But have fun with the vouchers...
(Spose i better say that opinions are mine and not that of thresher blah blah blah....)

Posted by: dim at March 27, 2007 11:25 PM

One final comment that i should have made in regard to...

Quote "If you can offer 40% off to everyone with a printer and still be profitable, you are probably charging too much. Why not give everyone those reasonable prices all the time, instead of pushing vouchers and getting slammed with orders a couple times a year? Even out the cash flow with steady business."

Its not all about that.. for me as a manager i was faced with on the last coupon many many customers that had never been in a threshers before.. That was my opportunity to sell my shop as a business and myself as a manager.. At the time i had buy 2 get 3rd free prices around the store so i simply told them to take another 10% off.. i was honest with them from the start.. 99% of those people who had never visited did not even know we did the offer.. So i was able to make them aware... AND THEY CAME BACK...

My margin over the period was hammered.. But to me its about getting people in.. then if i do MY job i can impress them enough with my ability and my knowledge to hopefully STOP them going back to tesco or majestic or wherever it may be... THAT IS WHERE THE MONEY IS MADE.. not on the vouchers..

Again.. only my opinion.. :D

Posted by: dim at March 27, 2007 11:29 PM