Bud Light In The Age Of Scientific Marketing
By now, nearly everyone is familiar with the incredible debacle of the sales and marketing group at Anheuser Busch. It has been the lead story for weeks and involves an advertising campaign featuring a Transsexual spokesperson. More recently, another major US Corporation, Target, has found itself embroiled in a similar predicament over the feature of transsexual items in the children’s section of their stores.
What is impressive is how these two giant corporations, both of whom build their franchise by catering to the whims and wishes of the American Public, got it so wrong. They misjudged how a majority felt about sexual identity. Both Busch and Target had hit the public’s “hot button,” assuming that the public would support these campaigns when they have recently created a couple of the most significant backlashes in public opinion.
These two missteps become even more remarkable when you look at how modern marketing has evolved. For me, marketing has been a central part of my career. Since stepping into the Board Room at EF Hutton, I’ve had one primary goal: gaining the most clients. Throughout my career, my job has focused on sales and marketing.
When I began as a cub Stock Broker, I was handed the phone book, sat down at the telephone, and began to “cold call.” That is, call up perfect strangers and ask them if they’d like to buy some stock. I’m sure it was agonizing for me and the recipient of my call. I knew nothing about them, and they knew less about me. So it was a one-in-a-million shot that the person on the other end of the phone would want to purchase stock. It was a random process.
That’s because we needed a way to learn about potential investors. We needed to understand their wants and goals. We were at the crudest, most basic level of “marketing,” that is one on one random sales. For those who might remember, it was the Fuller Brush Man model, knocking on doors and hoping someone would purchase a brush.
In the financial services business, it was Charles Schwab who revolutionized marketing. Utilizing mass advertising, principally ads in the Wall Street Journal, combined with a service desk connected to a toll-free phone number, Schwab had potential customers come to him. It revolutionized the brokerage industry. Suddenly brokers were busy writing orders, a highly profitable event, rather than “cold calling,” a random process.
Moreover, Schwab, the Stanford-educated MBA, began the scientific surveys of customers, determining what ad campaigns worked and what did not. Profiles of the average Schwab customer were drawn up, and office locations were set to the regions with the most investors. Marketing for Schwab and all the major retail firms had become scientific.
There was real depth to the “know your customer” rule. We not only knew our customers, but through scientific marketing, we now knew our potential customers. We could and did create a profile of those most likely to become customers. And so, we designed specific campaigns to make our firm as attractive to them as possible in the hopes that they would do business with us.
Then came the internet. In the mid-1990s, customers began using a new technology: the World Wide Web. And our role as marketers went into over-drive. The cost of acquiring new customers plummeted. In the 1970s, the average cost of advertising to gain a new customer was roughly $50. With the internet, that cost dropped to about a tenth of that level, about $5 in internet marketing per new client.
Moreover, with new research capability, thanks to Google, we learned even more about potential customers’ wants and needs. And how those desires changed in real time. When the markets were going up, we’d slant the marketing to how to maximize returns. When markets were declining, marketing switched to safety.
Suddenly marketing became real-time tracking of a thoroughly well-known prospect. It appealed to potential customers with just the right message at the right moment. There was no longer any guesswork.
What’s more, every major retail operation above the level of a 7–11 or a gas station has these same capabilities and resources. Even the occasional “cold call” you may receive today is due to a carefully researched profile of you and how you might react to that call.
How, then, did two of the largest, most successful, retail-oriented companies in the nation get it so wrong? How was it that both companies launched marketing campaigns that not only did not gain any new customers, they drove away customers? In the case of Bud-Lite, one of the most significant boycotts ever, and in the case of Target, a growing boycott appears to be a long way from peaking.
There can be only one answer; these were not accidental campaigns. Both Bud and Target know how to appeal to their customers. They’ve been doing that for a couple of generations. These campaigns run counter to the profile of their standard customer. At the corporate level, the decision was reached to go against what they knew their customers wanted. Executives at Target and Anheuser Busch no doubt knew there was a risk. Their patrons would not be pleased, but they undoubtedly hoped the reaction would be minimal. That was their mistake.
Exactly why upper management at these two Fortune 500 firms took this action, we don’t know. It may have been an effort to appeal to the fashionable “Woke Community.” Or, as Fox Business is suggesting, it may have been because certain Wall Street investors demand it. We may never know just why Bud and Target suddenly disregarded their customers.
But it is now apparent that upper management knew enough about their customers to know we would not approve.
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