Under the Influence with Terry O'Reilly - S9E09 - Search Parties: The Relentless Hunt For New Customers

Episode Date: February 27, 2020

This week, we explore the surprising ideas companies use to attract new customers. Like “Finger Lickin’ Good” nail polish from KFC. Or NASCAR’s partnership with Harlequin romance novels. The search for new customers is endless. And the resulting marketing is endlessly fascinating. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. This is an apostrophe podcast production. Your teeth look whiter than noon, noon, noon You're not you when you're hungry You're in good hands with Austin You're under the influence with Terry O'Reilly. Contragate. Bridgegate.

Deflategate. Sharpiegate. For every scandal, there is a gate. And that all comes from the granddaddy of scandals, Watergate. What did the president know, and when did he know it? On June 17, 1972, five burglars were arrested for breaking into the Democratic National Committee headquarters in Washington, D.C. The breaking occurred at the Watergate office complex, and the operation was orchestrated from room 214 at the Watergate Hotel.

It led to the biggest political scandal in U.S. history, as of this writing, and eventually resulted in Nixon's historic resignation. The scandal that brought down a president also left a permanent stain on the Watergate Hotel. It eventually fell into disrepair and was closed in 2007. But it was recently restored by new owners and reopened in 2016. While the exterior of the Watergate Hotel is historically protected and cannot be altered, the interior has undergone a dramatic and luxurious $200 million transformation.

But how does a cursed hotel try to attract new guests? Well, by embracing its scandalous history. It begins with your Watergate Hotel room key. The plastic key fob says, no need to break in. Thick bathrobes have two words stitched into them that say, cover up. Room 214, where G. Gordon Liddy and Howard Hunt ran the covert operation from, has been decorated by the costume designer from the TV show Scandal. Apropos, the room has a 70s decor and the walls are lined with framed Life magazine covers from the Watergate scandal, famous front pages from the Washington Post, and a copy of Richard Nixon's historic resignation letter.

There are also framed Nixonian quotes on the wall featuring lines like I'm not a crook and when the president does it that means it's not illegal. The desk in room 214 contains a 1970s era manual typewriter,

a reel-to-reel tape recorder, and a pair of binoculars. Pencils say, I stole this from the Watergate Hotel. When you are put on hold at the Watergate, you hear Nixon voice snippets from the infamous Oval Office tapes. The hotel's phone number is 617-1972,

the date of the infamous break-in. And if you want to have a scandalous stay at the Watergate, you can rent room 214 for $2,500 a night. When the hotel reopened, the Watergate break-in theme generated a lot of free press. And in a town full of luxury hotels, the Watergate's scandal-laden history and the hotel's tongue-in-cheek marketing attracts a constant stream of new customers.

Every company is on the hunt for new customers. It is the lifeblood of almost every healthy business. Most marketing campaigns are created to get you to switch brands. You see it reflected in slogans like, Wouldn't you really rather have a Buick? Or Avis's We Try Harder. Or Loblaw's Worth Switching Supermarkets For. Yet attracting new customers requires more than a good slogan. It requires big, surprising ideas.

But you never know what will work. Sometimes an unlikely idea turns into a major success. Other times, what seems like a sure thing falls flat on its face. You're under the influence. The world of business is all about growth. Growth builds companies and growth attracts investors. To stimulate that growth, companies have to win new customers by taking a chance and thinking outside the box.

Or the bucket. Take KFC. Their slogan, It's Finger Lickin' Good, has been around for over 70 years. Not many have that kind of staying power. But as KFC expanded, the slogan wasn't as well established in other countries. In Hong Kong specifically, where KFC has 60 stores, Finger Lickin' Good wasn't instantly recognizable to young fast food buyers, and KFC wanted to attract

a younger demographic. It was a challenge. Ogilvy & Mather, KFC's advertising agency, didn't want to mimic rival McDonald's Happy Meal toys or just give away

free T-shirts. They needed a bigger, attention-getting idea. Recently, the creative director of the ad agency was sitting around the boardroom table with his team brainstorming finger-licking good ideas when he noticed one of them was tapping the table with her beautifully manicured fingernails. He stared at her nails and said, wouldn't it be great if those tasted like KFC? And in that moment, an unlikely marketing idea was born.

It's a unique attempt to stand out in a saturated market. KFC recently launched chicken-flavored edible nail polish to go with the slogan of finger-licking good. Yep, you heard right. Kentucky Fried Chicken flavored nail polish. The polish came in two different flavors, original and hot and spicy. The polish came packaged in KFC's red and white corporate colors

in half-ounce square designer bottles, emblazoned with the slogan, it's finger-licking good. The directions were simple. Just apply and dry like regular nail polish, then lick. The polish was completely edible, created with natural ingredients that make up KFC's secret recipe of 11 different herbs and spices.

For two weeks, KFC teased about the nail polish on social media. Then it held a big launch party in Hong Kong, attended by celebrities, foodies, and fashion bloggers. But the nail polish wasn't made available to the public. It was only sent out to social media influencers and given away at the launch party. The finger-lickin' good edible nail polish became a viral sensation. It was a number one trending Twitter topic, it attracted over 200 million online views, and landed lucrative free coverage from media, including the New York Times and the BBC. It was a finger-lickin' success,

accomplishing its two main goals, to revive the KFC slogan and to get young people talking about the brand. Not long ago, Spotify listeners began hearing an unusual ad. It invited them to explore their musical DNA. The offer was a partnership between Spotify and Ancestry.com. It worked this way. Ancestry would determine your genetic heritage, and Spotify would create a customized playlist

from those regions of the world. So, for example, if your ancestors were from Israel and, say, Quebec, Spotify would assemble a list of 20 songs that might include Israeli rap and Quebecois indie bands. It was an interesting marketing idea. In order to determine your genealogy, you were encouraged to buy a $99 Ancestry.com kit. The swab you sent back would determine your countries of origin. Then you would manually input those country names into the Spotify website. The result was a streaming soundtrack of your heritage. The idea also prompted concerns about privacy.

Ancestry.com maintained Spotify had no direct access to the private data of its customers, as the song lists were not created from your actual material DNA. 10,000 people signed up for the service in the first week. The Jeans for Genres promotion was a win-win for the two companies. Spotify gathered more information to further personalize playlists, and Ancestry.com attracted new customers. NASCAR has an estimated 75 million fans. NASCAR, which stands for the National Association of Stock Car Auto Racing, is one of the biggest sports in the U.S., second only to the NFL for many years.

And 40% of NASCAR fans are women, which translates into 30 million female fans. They spend an estimated $250 million on NASCAR-licensed merchandise annually. To attract more female fans, NASCAR moved into unlikely product areas like fashion and housewares. But maybe the most unusual move was when NASCAR teamed up with Harlequin Romance novels.

Back in 2005, author Pamela Britton, a NASCAR fan who had worked the NASCAR circuit, wrote a romance novel with a racing theme. It was titled Dangerous Curves, and it was published by Harlequin. Britton encouraged Harlequin to approach NASCAR to see if they were interested in licensing a series of NASCAR-branded romantic racing stories. The pitch was intriguing.

Turn romance novel fans into NASCAR fans. The racing company was looking for new ways to grow its fan base, especially female fans. Part of that marketing strategy was to put NASCAR in unusual places in order to expose non-fans to the sport. Harlequin made sense. It's the biggest romance novel publisher, it had a great brand name and extensive distribution. Romance novels account for over 55% of all popular mass-market fiction, and every four seconds, someone in the world buys a Harlequin novel.

So, a deal was struck in 2006, and Britton wrote her first novel in collaboration with NASCAR. It was titled In the Groove, and had an initial printing of 200,000. The cover featured the NASCAR logo and this blurb. The high-speed thrill of NASCAR racing meets the high-stake game of love in this whirlwind romance from the author of Dangerous Curves. Stories that swirled around NASCAR drivers fit well with the Harlequin formula. NASCAR drivers are larger than life, like fighter pilots. In the Groove sold at twice the rate of author Britain's other romance books.

That prompted NASCAR to license two more novels that first year. More success followed. Then a group of authors was brought on board and 16 more books were written the following year. The novels were so popular that Harlequin authors were signing more autographs than the drivers at some NASCAR events. The books also attracted male readers. The reason?

The novels were an accurate portrayal of the sport. All technical racing details were precise and accurate. The NASCAR Harlequin novels are PG-rated to protect NASCAR's image. There is no hot sex, no violent crashes, no alcohol or drugs. Just good heart-pumping, engine-revving romance. A total of 34 NASCAR Harlequin novels were written in the series, with titles like Full Throttle, Overheated, and Speed Dating. Before one Daytona 500 race,

NASCAR and Harlequin staged a speed dating event to promote that title. 50 men and women, split between Harlequin readers and die-hard NASCAR fans, sat around a big U-shaped table and talked to each other for a few minutes until a checkered flag was waved. Then, they moved on to the next person. Sample booklets were prepared,

titled Ladies, Start Your Engines, that featured excerpts from the first three novels. They were made available wherever Harlequin paperbacks were sold, as well as at races and on NASCAR.com. Which proves it pays to make a pit stop for love. And we'll be right back. If you're looking for flexible workouts, Peloton's got you covered. Summer runs or playoff season meditations, whatever your vibe,

Peloton has thousands of classes built to push you. We know how life goes. New father, new routines, new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. If you're enjoying this episode, why not dip into our archives?

Available wherever you download your pods. Go to terryoreilly.ca for a master episode list. 7-Eleven was founded in 1928. The chain was originally called Totem Stores, as in buy your items, then totem away. Then, in 1946, the convenience store changed its name to 7-Eleven to reflect its new hours, open from 7 a.m. to 11 p.m., seven days a week. 7-Eleven is no small company. It owns or franchises close to 70,000 stores around the world.

The product offering is typical convenience store fare. Small, quick-grab items like coffee, sandwiches, and soft drinks like the Slurpee and Big Gulp. But in 2017, 7-Eleven introduced a surprising new line of items. Exclusive cosmetics. called Simply Me Beauty. Aimed at busy millennial women, the marketing strategy was cosmetic convenience. 7-Eleven wanted to offer women who were dropping in for a quick lunch the opportunity to do a quick makeup touch-up and hopefully attract new customers with the word of mouth. According to research, millennials are

budget-conscious and are willing to buy and try, meaning they will sample a new product if it's at an affordable price point. And four out of every 10 millennial women buy value brand or mass market beauty products. 7-Eleven created freestanding gorgeous on-the-go displays that featured over 40 different items for the face, eyes, and lips. From eyeshadow palettes and blushers to foundation creams, eyeliners, and lipsticks. All formulated for different complexions and skin tones. The goal was to keep the quality high and the cost low. Everything was priced from $3 to $5. Beauty Products is a $46 billion industry that has grown by 12% over the last three years.

Drugstores and supermarkets own 30% of that business, and 7-Eleven wanted to volumize its way in. On one hand, you might ask, what does 7-Eleven know about makeup? But much of the time, makeup items like lip and eye colors are spur-of-the-moment buys, and no business understood impulse purchases better than 7-Eleven. The convenience store promoted its cosmetic line extensively on social media, where millennials could see the launch and peruse the reviews. But would shoppers want a pair of false eyelashes with that slurpee? The answer appears to be no.

When I went to 7-Eleven's website and typed in cosmetics and Simply Me Beauty, the search box said, your search did not yield any results. Which may have been the case with the entire cosmetic idea. Gorgeous on the go was gone. On October 17, 2018, Canada became only the second country to legalize recreational marijuana at a federal level. But while recreational marijuana

was legal in Canada, there was still a ban on cannabis edibles. That didn't stop Hershey Canada from dipping its wafer into the cannabis market, so to speak. Hershey rolled out a special edition O'Henry candy bar that was saltier and had more grams of protein than the regular bar. It was called O'Henry 425. As weed enthusiasts know, 420 p.m. is a popular time to light up, and the bar was promoted as a specially formulated treat to satisfy the munchies that happened five minutes later at 425.

A few months ahead of the legalization date, Hershey created a pop-up shop in the Kensington Market area of Toronto. The pop-up popped up on April 20th, naturally, and was designed to look like a marijuana dispensary, with glass jars filled with O. Henry 425 bars and staff wearing white lab coats. Posters on the wall said, It's edible, but it's not an edible. That was an important distinction

because cannabis-free products are not subject to the strict marketing rules governing the cannabis industry. As it stands, cannabis companies are essentially banned from advertising in Canada

and targeting underage people is strictly prohibited. Which meant, ironically, non-pot products have more freedom to reference cannabis culture than licensed weed producers do. The O. Henry 425 bar was made available in stores for a limited time, and the launch was accompanied by a marketing campaign that included Facebook and Instagram posts, videos, in-store materials, as well as sampling opportunities at festivals and summer events across Canada. Paid media went live the morning after Canada's pot law was passed. O'Henry has always been positioned as the bar that can, quote,

satisfy your hunger. But the majority of O'Henry customers are over 45 years old. And younger customers, aged 25 to 35, are still more likely to think of Snickers when they get hungry. Hershey wanted a bigger bite of that demographic. So the 425 Special Edition bar had a number of strategic goals. First, Hershey wanted to defend and strengthen its hunger satisfaction positioning. Second, it wants to be relevant to the millennial market,

and millennials tend to over-index when it comes to cannabis consumption. Third, O'Henry wanted to be the first to own the munchies' hunger moment in the candy bar category. And most importantly, Hershey wanted to gauge the reaction Canadians would have to a brand like O'Henry building an association with cannabis. It was a disaster check of sorts. Hershey wanted to know if it was going out on too much of a limb. It wanted to see if it had social permission to go cannabis. The results suggested yes. Hershey had distributed 1 million 425 bars across Canada, and they sold out long before the promotion ended. O. Henry 425 bars were showing up on eBay for five times their retail price. The campaign generated 69 million media impressions and nearly 16 million video views,

which Hershey says is about seven times above the norm for a typical launch. O. Henry not only strengthened its marketing position as the hunger bar, but the 425 bar also attracted new customers. It stole market share away from arch rivals Snickers and Mars, boosting its sales 8% over the previous year. Not bad for a weed-free weed product. Vancouver's East West Market wanted to persuade customers to stop using single-use plastic bags when they shopped. The independent grocer, specializing in gourmet foods and locally sourced products,

charges a fee for each plastic bag, but it wasn't enough of a deterrent. The independent grocer, specializing in gourmet foods and locally sourced products, charges a fee for each plastic bag, but it wasn't enough of a deterrent. So the store decided to try and shame people into choosing reusable bags instead. Here's what they did. Together with advertising agency Rethink, they redesigned their plastic bags to look like they were from weird, embarrassing stores. One bag had a giant blue logo on it that said, Dr. Toe's Wart Ointment Wholesale. Another plastic bag had a big red logo on it that said it was from the

Into the Weird Adult Video Emporium. Still another proudly sported a Colon Care Co-op logo. The goal was to make people ashamed to walk down the street with a bulging adult video shopping bag or looking like they'd just done a bulk purchase of wart remover. Very discreetly near the bottom of the bags in small type it said, Avoid the shame, bring a reusable bag. Very smart, funny and memorable Then, something unexpected happened.

The embarrassing but amusing plastic bags got so much press, people started coming into the grocery store for the sole purpose of buying the bags. A Phenomenon One advertising expert calls culture eats strategy, meaning the public will have its way with marketing strategies regardless of the company's intention. With that unexpected reaction, EastWest Market is now in the process of creating reusable bags with the embarrassing logos on them.

But in spite of the popularity of the uncomfortable plastic bags, the grocer says the number of customers bringing reusable bags into the store surged to 96%. Even if they were stuffing the collectible plastic bags into their reusable bags. And the embarrassing bags had one other unintended effect. It attracted new customers to the store. The insatiable search for new customers is always tricky. If you've ever seen an ad from your own cell phone provider offering a better rate to new customers than you currently have, you know what I mean. While companies want

to offer reasons to switch, they have to be careful not to alienate existing customers while attracting new ones. So instead of monetary incentives, brands try other strategies. Edible nail polish attracted young customers to KFC and re-established the finger-lickin' good slogan. The unlikely combination of NASCAR and Harlequin attracted women with love and lug nuts. Convenience store cosmetics seemed like a smart impulse purchase but didn't seem to catch on. And a weed-themed candy bar took advantage of the fact Your cosmetics seemed like a smart impulse purchase, but didn't seem to catch on.

And a weed-themed candy bar took advantage of the fact it could waft under the radar of cannabis regulations. Nothing happens in marketing until something gets your attention. And getting your attention in this day and age is no small feat. That means the idea has to be surprising, unexpected, or bold. It can even be embarrassing, warts and all, when you're under the influence. I'm Terry O'Reilly. This episode was recorded in the Tearstream Mobile Recording Studio. Producer, Debbie O'Reilly. Sound Engineer, Keith Ullman. Theme music by Ari Posner and Ian Lefevre.

Research, Jillian Gora. If you liked this episode, you might also enjoy Shame, the Secret Tool of Marketing, Season 2, Episode 1. You'll find it in our archives wherever you download your podcasts. Follow me on Twitter and Instagram at Terry O. Influence. See you next

week. Hello, you've reached the Watergate Hotel. Press 1 for reservations. Press 2 for directions. Press 3 to erase this recording.