The 3 Biggest Marketing Mistakes Of All Time And What You Can Learn From Them
I think the biggest marketing mistake I have to have ever made was about 4 years ago when I agreed to do a small amount of work for free for a prospect. I decided to do this as part of a marketing strategy to attempt to get this particular prospect to turn into a customer. I poured in hours of time meeting with the prospect, getting things set up and working on their marketing plan. By taking this approach it diminished the value of the service I was going to be providing. As a result of this approach I not get any focus from the prospect, I did not get the information I needed to do a good job, I was unable to demonstrate value and I did not end up getting the customer. One good thing that did come from that experience was that through the process I determined that the prospect was not a good fit for us and also would have been a customer of not much value if we obtained them as a customer. I think probably the most important thing I learned though from this experience was that providing something for free is not effective if you offer your entire service for free. Free is one of the most effective marketing methods there is. There are numerous free marketing campaigns that are effective (a great example is the free coffee marketing campaign McDonalds has on). Since then we have executed successful ones as well. To make them effective we have found you need to ensure it is either on a very short period trail basis, if you offer your full product for free, or it needs to be a very small partial portion of your service only that is given away for free for a longer time period. Although we failed we were able to learn something from it which is always good. I love learning from both the best and the worst. In this article I decided I wanted to look at the worst marketing mistakes ever made so that I could make sure I never make the same mistakes. Hopefully you will find it helpful as well or if not at least interesting.
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Executive Summary
- understand what your brand stands for and don't do things that are contradictory to it
- you will never be able to get people to pay a premium for a brand with a low cost image
- you can't always trust consumer testing
- don't alienate your existing loyal customer base when trying to attract new customers
- act fast and admit your marketing mistakes when you do make them
- take advantage of marketing mistakes by turning them into marketing opportunities
- don't underestimate the value of a well placed product placement
- scoop top marketing opportunities so that competitors can't take them & establish a presence in your market
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1. Mercedes Benz Trys To Change The Chrysler Brand
ROI = -54%
Purchase Price (Investment) = $37 Billion
Sale Price = $7 Billion
Net Loss From Project = $20 Billion
2. The Ford Edsel
ROI = -87%
Sales = $212 Million (estimated average car sale price of $1,800 to the dealerships and 118,000 cars sold)
Contribution Generated From Sales = $85 Million (estimated at 40% contribution margin)
Other Costs = $35 Million (Marketing costs, Inventory clear our costs etc)
Initial Investment = $400 Million in development and launch costs (at today`s value would equate to $ given was spent in 1956)
Net Loss From Project = -$350 Million
3. New Coke
ROI = -3700%
Sales Increase = -$350 Million (Estimate sales at $3.5 Billion and sales decrease of 10%)
Contribution Increase per year = -$210 Million (Estimated at 60%)
Initial Investment = $6 Million ($4 Million in testing/development and an estimated $2 Million in advertising)
Net Loss From Project = -$216 Million
Honorable Mention: M&M's Pass On Placement In The Movie ET, Then Taken By Hersey`s Reese`s Pieces
ROI = 4,600% (for Hersey`s, missed out on by M&Ms)
3 Year ROI = 14,800%
Sales Increase per year = $14 Million (Estimate)
Contribution Increase per year = $5.6 Million (Estimated at 40%)
Initial Investment = $1 Million advertising commitment to promote the ET movie
Net Loss From Project = $5.6 Million (Loss for Effem, gain for Hersey's)
Sources
http://www.answers.com/topic/the-coca-cola-company
http://adage.com/article/adages/coke-marketing-s-biggest-blunders-turns-25/143470/
http://content.time.com/time/magazine/article/0,9171,922960,00.html
http://www.snopes.com/business/market/mandms.asp
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My name is Chris R. Keller. I work at Profitworks Small Business Services helping various B2B small businesses in Waterloo and Kitchener Ontario generate new customers. Feel free to connect with me on Google+ or if you are just interested in getting new customers for your B2B small businesses enter your email in the box provided below and click the "Send Me Free Sales Insights" button.
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