Walgreens leaps on the "value" bus! Smart or Silly?

With the U.S. economy stuck in neutral, Walgreens Drug Store has taken a leap onto the "value" bus by launching a national campaign to promote its private-label branded health and wellness products according to the New York Times. 

Walgreens believes that value is defined as "quality and affordability"; a definition most consumers would share.  

However, while private label or "generic" brands have always been synonymous with affordability, they've not typically been associated with quality.  So only time will tell if Walgreens is able to convince consumers that its brands are just as effective at treating health related issues as the bigger brands.

According to the Times article, "Of 1,006 adults in the United States surveyed by Walgreens and the Opinion Research Corporation in January, 84 percent said they purchased store-brand over-the-counter medications when they were available and 36 percent said they had increased their purchases of store-brand products in the last year, according to a statement provided by the company."

While the reliability of an in-house study can be dubious, if Walgreens' research holds true, the drug store stands to reap huge benefits from its new campaign.

Though Walgreens has always advertised its private label, those campaigns have typically been limited to the use of Sunday circulars or in-store signage says the New York Times.  Therefore, it will be interesting to see if a much larger campaign has a negative impact on the co-op dollars Walgreens receives from the very companies it is now going toe-to-toe with. 

Assuming the private label campaign is successful, Walgreens probably won't care.  But if it falls flat or if major suppliers begin moving product through other retail or distribution channels, how will a lack of consumer options impact Walgreens' bottom line?

Walgreens' integrated campaign is web and social media heavy, focusing on 25-54 women and moms; a very cost-conscious crowd.  Look for the Walgreen's ads on your favorite fashion blogs and parenting websites.

The Customer Lifecycle: Are you moving them along?

I recently read a white paper on the 7 Steps of Effective Customer Lifecycle Communication by Right On Interactive (www.rightoninteractive.com)

While I already understood the concepts behind the customer lifecycle, I hadn’t read any updated research on the subject since graduate school. I expected that as I read the white paper, I would ascertain some new ideas on managing the customer lifecycle that may lead to a new or evolved perspective on the subject.

What I learned was that the philosophy behind the customer lifecycle hasn’t changed much in the past several years. So I really didn’t need to reevaluate my viewpoint. However, it did result in a reevaluation of our marketing strategies to ensure that they are still appropriately focused on the customer lifecycle. I discovered that our programs are sound, but that there are stages within the customer lifecycle that may require a little more attention.

The goal with any customer lifecycle program is to move customers (or prospects) along the stages within the lifecycle (which can be defined by you). The further along the lifecycle you can move prospects or customers, the more likely you are to convert or retain them respectively.

The basic stages to an acquisition lifecycle are:

1. Initiate – Identify prospect
2. Develop – Engage prospect
3. Convert – Customer makes purchase

The basic stages for a retention lifecycle are:

1. Adopt – Customer consumes product
2. Value – Customer gains value from product
3. Advocate – Customer begins promoting product

According to Right On Interactive, there are seven steps to consider when launching your own customer lifecycle communications program, with number 1 being the most important in my book:

1. Define the stages of your own customer lifecycle
2. Select the highest priority stage to migrate to the customer lifecycle communications methodology.
3. Develop a baseline measure of the churn rate within this stage. Analyze the key touch points that best identify a constituent’s propensity to engage in a deeper relationship.
4. Develop the customer lifecycle communications plan for this stage
5. Determine how to allocate your resources to support the customer lifecycle communications strategy and automation roadmap.
6. Automate the customer lifecycle communications process. It’s okay to ‘think big; start small.’
7. Measure the outcomes against your customer lifecycle baseline and analyze improvement opportunities.

In closing, just remember this: it’s easier to acquire customers than it is to retain them, but it costs less to retain customers than it does to acquire them.

Newspapers: Love Reading them; Hate Buying Them

I read in last week’s Washington Business Journal that the Washington Post Company’s fourth quarter profits more than quadrupled from the same quarter one year ago. However, most of the net profit came from divisions other than the newspaper, which like many print publications around the country is struggling with digital media competition. In fact The Washington Post’s print advertising revenue was down 23 percent in 2009.

Call me old fashioned, but while I am a huge consumer of digital media and a major proponent of social media, I’m also probably part of a dying breed of news junkies who still subscribe to two daily print newspapers (as well as four magazines). Up until about a year ago, it was three prints, but I finally had to cut the Wall Street Journal loose since I just didn’t have the bandwidth to read all three, and could access the WSJ online when needed.

While I enjoy reading the newspaper, I must admit, I don’t fully understand some of the pricing strategies that are used by a few large print publications. One would think that they would be discounting advertising rates to incentivize frequency buying. However, the rates seem to be much higher today than they were a few years ago when there was less competition. I can buy TV and radio combined for less than some newspapers charge. And let’s be honest, why does anyone still use line inches as an ad measurement formula? Seriously!

They also make it more difficult to place your ad where you want it. What ever happened to good old fashioned customer service?

For the past few years, we have been placing regular ads in the classified section of the Washington Post promoting Goodwill’s job training programs. Recently I tried to place an ad and was told that I could no longer place the ad in the job listings page. I had to place it in the "training programs" section. I told them that our research found that many of the applicants for our job training programs discovered us while looking for jobs in the Post jobs section, therefore it was important that our ad continue to be placed there (plus the job training section is difficult to find). People don’t go to the paper looking for job training. They go to the paper looking for a job. Through our ads, they then learn that free training programs are available to them through Goodwill and decide to apply.

While I wasn’t happy about moving our ad, I was willing to give it a try. After all, it seemed I had no choice. The result was a much smaller number of applicants for our programs. Given that the change in ad location is the only variable that could have led to such a drop in applications (especially in today’s tough job market), I see no reason to continue placing ads in the Washington Post. If they can’t give me the placement that is going to generate results, why make the financial investment? I simply don’t understand the strategy behind forcing customers to place ads in areas that won’t benefit them. How is that providing value to the customer and incentivizing them to return?

Hmmm….do you think that might be impacting their ad revenue?

I’m just saying…