Who Wants to Buy My Widgets?
We all wish we could sell our ‘widgets’ – whatever it is that we offer – to everyone in our respective markets. For most small and medium-sized companies, this wish is impossible to achieve because going after every potential customer is not feasible due limited resources and the diverse needs of the buyers and potential market at large.
Virtually every company has limited resources. If you were to offer products that would satisfy every need of your market, would you be able to offer all the products they need in all the versions they want? Would you be able to produce and support all of them? Would you have the funds, people, and time to engage and sell wherever the buyers might be? Clearly, offering everything to everyone is not likely to be a practical approach, especially for smaller companies.
A more reasonable approach is to target a certain portion of the market. Furthermore, it is best to identify segments within that target market that we want to focus on. A market segment is a subset of the potential target market relatively to your offering.
To do so, start by defining the “universe” from which you will be targeting specific segments: For example, ’all companies in the US that provide utilities services including power, natural gas, water and sewer, cable, and phone services’. Then, define specific segments within that universe, both in terms of the organizations that make up the segment and the personas of the individuals you are most likely to interact with in each of them, using firmographics, demographics, and other pertinent factors. For example, ’utilities companies who serve rural areas with up to 50,000 customers’.
You want to choose segments that fit your offerings, are attractive enough in terms of sales potential, and where you can excel. Sometimes, as a result of going through the exercise of defining target markets and segments, companies realize that they must tweak their offerings, their internal structure, and their ‘go-to market’ approach, including marketing and sales operations. This might sound like an uncomfortable endeavor, but the outcomes frequently reduce costs and frustration, improve operations, and increase sales and profitability.
At the beginning of every client engagement, we invest considerable time and effort in defining markets, segments, and personas of the Ideal Customer Profile (ICP). We consider this a fundamental step in setting the foundation for all marketing activities that follow.
If you want to grow and improve profitability, but need help defining or refining your target market segments and your Ideal Customer Profile (ICP), contact us and we will be happy to help you (as we have done for dozens of other companies over the years)!
Duke Merhavy, MBA, Ph.D.
President & Chief Marketing Officer
What Is Fractional CMO & Marketing?
Fractional CMO & Marketing is ‘Your Outsourced Marketing Department’ when you need expert marketing leadership and marketing services to accelerate growth and improve profitability, but you’re not quite ready to hire a full-time Chief Marketing Officer or your own marketing department.
Our unique arrangement is the most efficient, innovative, and cost-effective formula for you. Click on the image to the left to watch a short video.
We Help When You Need To:
- Generate more of the right kind of leads
- Close more sales faster
- Get repeat sales
- Formulate a more effective message
- Produce powerful sales tools
- Establish brand awareness, recognition, and preference
- Differentiate your brand from the competition
- Improve customer satisfaction and loyalty
- Develop lasting relationships with customers
- Introduce new products
Marketing Lingo: Primary Versus Secondary Research
Primary research is “pinpointed”, and the methodology is planned and designed to find in-depth answers or solutions to specific questions, issues, or difficulties. Using primary research assures an organization that the information gathered is first-hand, unaltered, authentic, and meaningful. Unfortunately, primary research is often very costly and time-consuming, and there is no guarantee that just one or even the first technique used will be sufficient.
Secondary research requires a smaller budget, takes less time, sources of information are plentiful and accessible, and can even give the interested party an idea of how effective conducting their own primary research may be in the future. It’s important to remember that information found in secondary research was gathered during primary research, and the quality of every aspect of the previous work done may not be known, but will certainly have an effect on the success of any secondary researchers using it. This necessitates making sure the sources are credible, reliable, genuine, and accurate, as well as knowing when the data was collected or last updated.
* ‘Marketing Lingo’ is a regular column in which we define, or otherwise explain, terms often used in marketing but not necessarily correctly or properly by some
6,000 Orders Every Minute?! Thanks, But No Thanks, Grubhub!
A promotion can be a great way to increase awareness of your business and gain new customers… as long as the promotion is well-planned, and your company and staff are well-prepared and well-aware. Recently, Grubhub ran an offer that overwhelmed New York City restaurants and their workers, as well as delivery drivers, and left them all wondering ‘WHAT WERE THEY THINKING?!?!’ Apparently, the kitchens of these eateries were described as ‘a war zone’.
So, what was the problem with the promotion?
Too Ambitious
Grubhub thought it would be a good idea to offer anyone and everyone in the New York City and nearby Tri-State area a free lunch (up to $15) between 11am and 2pm on Tuesday, May 17th, in part, because a survey conducted by the food delivery app revealed that 69% of New Yorkers who were working didn’t break to eat lunch. It sounds like a wonderful offer! One rather large problem with that is out of the 23.6 million people living in the area of the promotion, just 1,793,600 are unemployed, as we calculated from the current 7.6% unemployment rate. According to our math, even if only 5% of the 21,806,400 employed saw the promotion and placed a lunch order, that’s still well over 1 million people. That percentage is incredibly conservative, considering that Statista reported in May 2021 that Grubhub enjoys its highest market share in the NYC metro area – an astounding 37% of all food deliveries in the Big Apple are done by Grubhub – and that would mean 8,068,368 orders. Thankfully, it seems our previous estimate of 5% of the intended market is closer to what actually happened, as calculated from a Grubhub representative’s comment that 6,000 orders came in every minute (so that’s 1,080,000 orders over the 3 hours). The last reported number of food delivery drivers in the New York City area is 80,000, but every single one does not work for Grubhub. Even if they all did, that works out to 13 orders per minute assigned to each driver… and that’s just an impossible workload.
Fortune magazine was told by a Grubhub representative that over 450,000 orders from the promotion were indeed fulfilled, but that doesn’t take into account the total number of orders placed or sent out to drivers that refused them (more on that below) or the multitude of orders that were cancelled. One customer, who was finally able to find a restaurant that was still taking orders during the promotion, had a message for the company, stating, “You could’ve thought about this for any longer than half a second, and you might’ve realized what kind of terrible idea you were doing.”
Surprise!!
Christopher Krautler, a spokesperson for Grubhub, claimed the food delivery app company “…gave advance notice to all restaurants in our network, which included multiple forms of communications across email and in-platform.”
However, Fee Bakhtiar, General Manager of Jajaja West Village, a primarily takeout restaurant, disagrees, and stated, “But it would’ve just been nice if we had a heads up.” She claims that she wasn’t given advanced notice of the promotion from Grubhub – either by email or mobile phone notification – nor were the managers at other New York City and Tri-State area locations of the restaurant.
Numerous other restaurant owners, managers, and workers across the 5 boroughs and Tri-State area have come forward and shared that they didn’t have any idea about the promotion either. While Bakhtiar’s restaurant was able to satisfy all orders it had received through the app, countless others were not. Even though the actual promotion ended in the app at 2pm NYC time that day, delivery time estimates were as late as 8pm for some hungry Grubhubbers who would have to wait until then to eat their lunch order, if it ever even arrived.
We did find an article online from Yahoo! Finance published the day before the promotion – on Monday, May 16th, 2022 at 3:09pm – entitled “Grubhub to provide NYC office workers free lunch on May 17, 2022”. Yahoo in 2022 doesn’t have nearly the traffic it did during its heyday, and we believe the food delivery app still had a clear obligation to give at least a week’s notice of the planned promotion to facilitate wholesale food and restaurant supply requisitions and delivery of those orders, scheduling of staff, onboarding of additional Grubhub delivery personnel, and readying the food delivery app itself.
Not Accurately Anticipating/Estimating Demand
Spokesperson for Grubhub, Christopher Krautler, share that the average number of orders during the promotion was 6,000 per minute, and that it “absolutely blew away all expectations” and “initially caused a temporary delay in our system and some users experienced an error message with their code, but that was quickly rectified”.
Some of the delivery drivers found themselves earning 200-300% more than usual, but others – some thousands of miles from the area of the promotion – were not even able to log onto Grubhub so they could receive orders, which resulted in countless workers losing income during that period (which, at times, overlapped lunchtime in every US time zone). Demand was so shocking that the food delivery app outsourced orders to NYC couriers, who then experienced issues with their platforms and from orders not being on record at the restaurant, or not being ready when promised or even within 30 minutes to an hour after the quoted time.
Couriers play an important role for businesses in the city, and usually, they are able to arrive to a pickup location, the parcel is waiting for them, and they bike it through the city for quick delivery to its recipient. Being tied-up waiting for food orders meant other companies (like law firms and financial institutions) weren’t as efficiently able to move their important documents (many time-sensitive) and other packages.
Even worse, when the Grubhub app repeatedly crashed throughout the promotion, delivery workers were stuck with orders in their possession but no way to see where they were supposed to go or how to get there. This resulted in orders arriving late, and delivery personnel were concerned their rating and reputation with the company would suffer. Also, like with the couriers, orders that came through the app on the ‘get-it-there’ side were either taking a long time to show up or never registered on the ‘make-it’ side, and that resulted in some very delayed deliveries (between 2 and 8 hours after the order was placed). Hopefully, hungry NYC area folks realized and accepted that it wasn’t the fault of the delivery person, and decided not to leave a negative review or low rating.
Leaving Business Partners Holding the Bag And Looking Bad In Their Customers’ Eyes
Relatively speaking, in terms of this promotion’s number of orders, there were very few lunches that arrived before dinnertime, but many Grubhubbers didn’t get their food at all, and were not only left hungry, but also worried about being reimbursed for the money they spent on a midday meal that never came.
Bakhtiar (the Jajaja West Village restaurant’s General Manager) shared that there were 40 orders already when the Mexican food eatery opened at 11:30am. According to her, she wasn’t even aware of the promotion, and even though she couldn’t believe what she saw was actually happening, she and her staff got to work. Eating places that had difficulty with the crush of delivery orders had to remove items from their menu for walk-in customers and the issues (as well as the frenzy to fulfill Grubhub meals) continued into dinner hours.
Megan, a worker at a chicken joint specializing in casual and fast fare described the food prep area as ‘a war zone’, and also stated that the place is usually active every day from the time the doors open and that creates a certain tension, but the promotion was a surprise, and there was just no time to restock anything while trying to meet the crazy lunch orders demand. She went on to explain:
“The restaurant is typically busy from the moment we open the door, and nobody told us about this free lunch thing. The phone wouldn’t stop ringing… people were mad as hell to tell us that they were missing items, or they just never got their food picked up, so the Grubhub delivery guys would have to keep coming back. Eventually my co-workers just got irate with phones constantly being shoved in their faces. Believe me when I say fights almost broke out. It was just too much, and I had to keep reminding myself out loud, ‘I’m just one person’, because I had to take the orders and make the orders while my co-worker did all the overflowing Grubhub orders. There was nowhere to put them either.”
She didn’t get home until 3:30am that night, and hoped for overtime pay, due to the extended hours.
Some customers didn’t fare any better. Chloe Brailsford of Brooklyn was home, quarantining with COVID-19, and thought it would be a good opportunity to use the Grubhub app for the first time after a friend let her know about the free lunch promotion. Unfortunately, nourishment to help her recover wouldn’t arrive via the delivery service – not even several hours later – so she settled for a can of soup from a store that was close by.
The plight of delivery drivers and outsourced couriers – who are essential partners in Grubhub’s survival and success – was discussed above. Walk-in and dine-in customers had to deal with the madness too.
After this poorly executed promotional catastrophe went viral, Grubhub went into full-on damage control mode, and announced that its customers would receive a $15 credit toward future orders on the app and a refund for other lunch plans they paid for after their promotional lunches failed to materialize.
Perhaps even more unfortunate for Grubhub is the fact that Uber Eats jumped on this mess of a ‘free lunch’ situation and used it for its own promotional opportunity, sending an email to users with a $25 coupon and the subject “There’s no such thing as a free lunch”.
Unfortunately, there is such a thing as a bad promotion, and we think with this one, Grubhub nailed how not to devise and plan a promotion. Bad press (and a lot of it) also came about.
Do you have an idea for a promotion but want to make sure you avoid Grubhub’s missteps? Just contact us! We offer a free marketing needs assessment, which means in addition to giving feedback on your proposal for a promotion, we will talk with you and learn other aspects of your business, then provide our insights!
Your Company Needs a Fractional CMO If… (Part 2)
In our March 2022 newsletter, we published our article entitled “Your Company Needs a Fractional CMO If… (Part 1)” and in it, shared the first 4 signs that show your business could benefit from us being part of your team. In this article, we will share 4 more.
A full-time, salaried, marketing executive takes more of that budget than a fractional CMO. If you want to get the most out of the money you spend that goes against your marketing expenses, hire a Fractional CMO.
Are your marketing initiatives not very consistent, or random and disorganized? Or are multiple people, or one person who was thrown into a marketing role, trying to ‘steer the marketing ship’? This is the 6th indication you need a Fractional CMO. Marketing needs high-level management and oversight to be successful. Too many individuals voicing an opinion, or even someone without sufficient experience being tossed into a position of marketing management, is akin to throwing someone into a lion’s den. A discipline like marketing cannot be learned from scratch by reading articles – it is a nuanced specialty that necessitates study, concentration, analysis, effort, attention, and skill. And only after years of working in the field can someone know how to create a plan, budget appropriately, supervise implementation staff, calculate ROI, and analyze efforts to truly know what next steps should be taken.
If you haven’t had an experienced, executive-level CMO to guide your marketing undertakings, then you don’t know what you’re missing… but you should investigate to find out the kind of strategies available and results you could see. By the way, doing so doesn’t detract from any contributions or skills your current marketing staff may have made or has – in fact, bringing on a fractional CMO to oversee and manage efforts shows your entire staff that marketing is vital, and it will prove to enhance your current marketing or promotions workforce’s importance, input, and involvement in your company’s success.
You know you need a seasoned marketing executive, but you also know you need some flexibility financially. This is the 7th indication you need a Fractional CMO. A business of small or medium size needs to be agile, flexible, and able to adapt to changing market conditions, especially when an unexpected opportunity or circumstance presents itself. A costly, year-long promise to a Chief Marketing Officer could certainly be disadvantageous to a smaller company. A fractional CMO is much more flexible than an employee, and is willing and able to be more available when you need them the most. If your business is succeeding and not much marketing oversight is required – you are able to engage for fewer hours; if more guidance, planning, and implementation is needed – you can retain your fractional CMO for more hours. This allows flexibility in the company’s overall budget, but also in the marketing function, depending on needs.
Are your marketing efforts becoming (or may become) stale soon? This is the 8th indication you need a Fractional CMO. Could you continue on the same path? Sure, but a fractional CMO brings fresh eyes and a new perspective, which is often the impetus to growth, modernization, and more success. Maybe you have experienced successful marketing in the past, and you see no reason to update or change your initiatives now – there is no guarantee that what worked before will work now, and unless you have been studying marketing trends and projections, you wouldn’t know what is coming down the pike. It could just be that your business needs a fresh viewpoint and perspective. Marketing Is dynamic, and very often, an outsider’s perspective is insightful – what worked to build your business is not guaranteed to sustain or maintain it. Have you noticed how big brands change their advertising, promotions, and marketing messages every so often? So too, you must update and transform your company’s presentation, as well as its positioning. A fractional CMO is the perfect addition to your team that will give an unbiased, no-nonsense, realistic, company culture-influence-free, internal politics aside, outsider’s opinion. An agenda-free, honest assessment like this is truly priceless because it can expose ideas and issues that haven’t been presented before.
How many of the 8 indications we have presented in the past few months sound familiar? If even one of them resonated with you, please contact us. No matter which indication you could benefit from a fractional CMO rang true for your business, we can help you! And we even offer a free marketing needs assessment, so really… there’s nothing to lose!
Outstanding Marketing Leadership Award Goes to Duke Merhavy, MBA, Ph.D.
We are incredibly proud to announce that our very own President & Chief Marketing Officer, Dr. Duke Merhavy, received the Outstanding Marketing Leadership Award at the Marketing 2.0 Conference held in Las Vegas earlier this month.
This global gathering of brand builders and marketers brought some of the brightest and wisest marketing minds from all around the world together under one roof to deliberate and discuss the future of marketing and advertising.
Dr. Duke Merhavy has been at the forefront of the international Fractional CMO trend, helping to shape this unique role and establish the standards, processes, and best practices for utilizing Fractional CMOs by small- and medium-sized businesses everywhere. In addition to receiving the prestigious Outstanding Marketing Leadership Award, Duke moderated and made significant contributions to a panel discussion named “Customer Retention, Loyalty, and Advocacy” at the conference.
You can read more about Dr. Duke Merhavy here.
“I am so honored to have received the Outstanding Marketing Leadership Award, and I really enjoyed meeting other marketing professionals, chatting about our industry, and listening to the other panelists.
It’s an exciting and dynamic time for the marketing profession! I’m glad to have made the connections I did, and also, that my experience lent some insights to those at the conference.”
– Dr. Duke Merhavy
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