More Advertisers Try Wooing Business Clients With Personal Freebies
Most of us are suckers for free stuff. We’ll fly more costly flights just to earn frequent-flyer miles on our favorite airlines. We’ll stay at certain hotel chains that lure us with the prospect of earning free lodging. We’ll even rent one brand of car over another just because one rental agency doles out free tote bags.
What happens, however, when some clever marketer waves 20 free Corvettes in the public’s face? And suppose the only way to win one of the flashy yellow sports cars was by renting a certain brand of truck--not for your personal use, but for your company’s? And further suppose that each time you rented a truck for your company, you were automatically entered. Would that be incentive enough to choose one truck rental company over another? Even if, perhaps, it wasn’t necessarily the best bargain?
You bet your Vette it would.
Just ask the folks at Ryder Truck Rental, who are seeing a sudden spurt in truck rentals since their Corvette sweepstakes began earlier this summer. “To say we have a successful program on our hands is an understatement,” said Jon Larrick, group director of marketing services at the Miami-based firm that will give away 20 of the $40,000 sports cars in October. “Business is up--and not just 2% or 3%,” said Larrick, who, for competitive reasons, declined to reveal just how much business has improved.
Meanwhile, Mead Data Central, the Dayton, Ohio, company that supplies on-line information to many of the Fortune 500 companies, is giving away a vacation valued at $10,000 and an Infiniti automobile in a sweepstakes for people who use its special computer services, including Nexis and Lexis. To make its point, Mead recently mailed thousands of picture postcards of Moscow’s Red Square to key decision makers at companies that subscribe to its service. Each employee who received a postcard was asked to use the service more often in order to increase his or her chances of winning either the trip or the car. Bear in mind, Mead’s service fees are based primarily on usage.
Behind these sweepstakes--and others like them--is a somewhat murky ethical issue that a growing number of companies and their employees must deal with these days. Are shrewd marketing practices playing too big a role in the purchasing decisions each of us make at work?
“The word for this is bribery,” said Jay Levinson, a San Rafael, Calif., marketing consultant and author of the best-selling book, “Guerrilla Marketing.” “You’re bribing someone any time you offer them something beyond what you’re selling. But it’s amazingly effective. It almost always works.”
What is the real appeal here? “Greed,” said Gerard J. Tellis, an associate professor of marketing at USC. “It’s a shrewd attempt to appeal to the selfish motives many people have.”
Some marketing executives trace the roots of all this back to 1981, when American Airlines was the first to offer free trips to its frequent flyers. It wasn’t long before others got into the act: The big hotel chains doled out free rooms and the car rental companies gave away free rentals. Today, the stakes have been raised to expensive sports cars.
“This all raises a ticklish question,” Levinson points out. Who keeps the loot? Employee or company?
Each contest sponsor has a different theory on how to award the prizes. Ryder awards the prize to the company that rents the truck--and lets the company decide who keeps it. On the other hand, Mead tries to make everyone happy. It awards separate prizes to the individuals who enter the sweepstakes and to the companies they work for.
Are companies across America going to have to hire corporate vice presidents of prizes? Not likely. The only perk that seems to concern most companies is frequent-flyer mileage. Even then, fewer than 20% of U.S. companies require that employees turn in their mileage, said Jack Witherspoon, chairman of the National Business Travel Assn. But it isn’t the fear of angering employees that keeps most companies from taking away these miles. Rather, Witherspoon said, it’s the high administrative cost of tracking mileage from large numbers of employees.
Still, Chrysler has kept its employees’ frequent-flyer mileage since 1985. “We realized some employees were booking more expensive flights just to accumulate mileage,” said James Kenyon, news media relations manager at Chrysler Corp. “At first, the program was not viewed very kindly, but now it’s accepted as a way of doing business here.”
These days, however, lots more than free mileage is up for grabs. But the executives whose companies are sponsoring sweepstakes insist that they are good-natured promotions.
“If the service isn’t there, even the prospect of winning a Corvette will not motivate a customer to rent a truck,” said Ryder’s Larrick. Added Jim Joseph, manager of public communications for Mead Data Central: “We haven’t received any complaints from companies that said, ‘Since you sponsored this contest, our bill has shot up sky-high.’ ”
Westin Century Plaza Checks In New Agency
One of the largest hotels in Los Angeles has handed its advertising business to one of the area’s smallest agencies.
The Westin Century Plaza Hotel & Tower last week assigned its estimated $1-million advertising budget to Stein Robaire Helm, a 2-year-old agency with annual billings of about $20 million. The account was formerly handled by HDM, the Los Angeles agency that continues to handle corporate advertising for Westin Hotels & Resorts as well as a handful of individual Westin hotels.
With its business off, the Century Plaza has decided to “rethink” its advertising strategy, said Greg J. Helm, president of the hotel’s new agency. In future campaigns, the hotel will attempt to differentiate its more upscale Tower suites from those in the main hotel, said Helm. Generally, rooms in the Tower section are about 25% more expensive.
They Hope Appetizers Lead to Main Course
Advertising agencies often take small pieces of business from large advertisers with high hopes of eventually winning even bigger slices of the pie.
Last week, the local office of Bozell Inc. walked off with its first piece of Kodak, and Saatchi & Saatchi DFS/Pacific earned another chunk of Yamaha-related business.
Saatchi won Yamaha Corp.’s Riva scooter account, which posts annual billings of less than $1 million. Meanwhile, a tiny division of Kodak, Santa Monica-based Interactive Systems Inc., handed its estimated $2-million account to the Los Angeles office of Bozell Inc. Interactive Systems makes devices that help make software more “friendly” to users. “The Kodak connection is the icing on the cake,” said Renee White Fraser, vice president and general manager at Bozell.
Saatchi already creates ads for Yamaha snowmobiles, motorcycles, all-terrain vehicles, lawn tractors, generators and snow blowers. There is still plenty of Yamaha business that the agency doesn’t handle--including its golf clubs, golf carts and marine products. Does the agency want it all? Said Joseph Cronin, agency president, “Why not?”
Green Image Could Yield Greenbacks
The marketing environment certainly is right for companies to be environmentally sensitive. But few consumers can name even one company that fills the environmental bill.
In a recent nationwide survey, 410 people were asked if the environment played an important role in their purchase decisions. About 96% of those interviewed said it did. But not a single company or brand was mentioned by more than 5% of the consumers as being environmentally friendly.
“No one company has yet established itself as being environmentally aware in the minds of consumers,” said Susan Small-Weil, executive vice president of the New York ad agency Warwick Baker & Fiore, which co-sponsored the survey with Adweek’s Marketing Week. “A large opportunity exists for a company to be the first to establish itself in this arena.”
Hakuhodo Hires L.A. Ad Executive
After his Los Angeles agency went belly up, Tom Burr sat around for about a month and waited for the phone to ring. It didn’t.
But Burr, 59, who co-founded the now defunct Abert, Newhoff & Burr, started spreading the word that he was looking for work. Last week--nearly five months after his agency disbanded--Burr was named senior vice president at Hakuhodo Advertising’s Los Angeles office. He becomes the top-ranking American in the office.
Several months ago, Hakuhodo was sued by a disgruntled former executive who claimed that the agency discriminated against Americans. “I’ve seen nothing that would suggest there’s any merit to that,” said Burr. Besides, he pointed out, “they hired me, and I’m an American.”
