Great marketers are rare. And even great marketers can only do so much...

You’ve been handed a placement: Marketing Director.

If you’re like most recruiters, you will look for something like these qualifications:

You’ll insist on a Marketing MBA.  Big mistake (mostly). Most marketing MBA’s aren’t worth a fraction of what they cost. (How much? The 2012 Wharton Executive MBA is $179,000.)

But let’s be honest, Mr. or Ms. Recruiter: you are not getting University of Pennsylvania/Wharton grads anyway. You are getting University of Phoenix/Online grads.

And here’s what is taught in B level B-school: tactics.  Data analysis.  Outdated software.  Tired business models.

Which brings us to Mistake Number Two:

You’ll look for Marketing Directors from other companies.  This is a dilemma.  You want candidates that get hired, because that is how you are paid.  I understand.  Here’s the problem.  Show me 10 classically trained marketers and I’ll show you 10 people who couldn’t sell their way out of a box.

Because most marketers have never sold something, they have little regard for the second half of the transaction, the sales engagement.  The closest they’ll get is ‘lead generation’ on their resume, but that’s an oil filter without a car.

See, marketing is nothing more than selling in print.  Selling.  In.  Print.  (Don’t get all high and mighty on me about the word “print”, unless you go through life never using words.)

As a recruiter placing a Director of Marketing, you must know the following:

Marketing is about saying the right things.  Not clever things (although that helps); the right things.

And how does one figure that out?  Sadly, I’ve met only four marketers in my career of 21 years that knew or know how to do this. (One of them is me.  Two passed away years ago.  The fourth is the ONLY person I would hire besides me.  None of us has an MBA.)

Look for copywriters is my advice.  And look for people who have carried and met a quota.

Forget Director of Marketing.  You need a Captain of Marketing.  Titanic references aside, a Captain of Marketing understands how to lead art directors, graphic artists, copywriters and production companies.  They know how to handle top executives.  They know when to shut up, when to whip, when to get out of the way and let their people surprise themselves.  They can manage (and beat) a budget, a deadline and a creative brief.

Politics and bad management slink off their backs.  Making, MAKING their prospect notice and act is all that matters to true Captain of Marketing.

Nothing else.  That’s who you put in front of your client.

Rob Rutkowski's office is famous: The Scream Team plans the move to Local.com. That's me in the black, pointing at things in an important fashion. Benson Kane, VP of Sales and Marketing, looks on.

It’s official. Our company, Screamin Daily Deals, has been acquired by Local.com in Irvine.

Here’s a quick pic of some of the Scream Team huddling over my desk in Marketing (that’s me in the black, center of huddle).  My department gets the biggest white boards!

You can read a much more serious reporting of this story here on TechCrunch and also  here.

-Rob

What $4,000 of failed Honda transmission looks like.

As an owner of two high mileage Hondas, I’ve unfortunately learned a lot about their transmissions. I am currently replacing both transmissions (again!) as I write this.  It’s number three for both of them.  ARG.

I’m determined to avoid this in the future, and after talking with some very smart transmission folks, I now recommend the following regimen for your Honda:

1- Have a transmission shop install a heavy duty transmission cooler + an inline filter. Honda transmissions have a filter built in, but you have to remove the entire transmission to replace it.  Which means nobody does.  Even if you change the fluid every 30,000 miles (as Honda recommends and few people do), you’re running clean fluid through a dirty filter.  Duh.  Installing an inline (and thus, external) filter means you can change it easily.

The other issue is heat.  The transmission does have a meager cooler, but if you’re driving in the mountains or hauling anything heavy (like when we go camping in said mountains), the transmission will overheat and cook the pressure plates, causing a ‘slipping’ feeling and executing your transmission.   Adding a big cooler (looks like a mini radiator and works the same way) will manage this.

2- Run synthetic Mobil One motor oil. This isn’t related to your transmission, but it allows you to perform oil changes at 15,000 mile intervals.  That’s important because you will now…

3- Change your transmission fluid AND transmission filter every 15,000 miles, when you change your oil + filter. Now you only need to remember every 15,000 miles, you change both your oil and transmission fluids, and both filters.  (make sure you always use Mobil One, otherwise you will destroy your motor).

The new maintenance costs more (figure $100 each time), but you do it less often and your drive train will last basically forever.

Honestly, I can’t answer if this will avoid another failure, but my bet is it will eliminate the disposable nature of Honda transmissions.

A friend of mine recently asked (hypothetically) if I’d like to be run marketing for the brand Sarah Palin.  It’s an interesting thought experiment.

My answer?  No.  Too easy.

Here’s why.  When she recently rewrote Paul Revere’s history by flat out making up shit, she demonstrated her usual incompetence and whoring political tactics.  (Suffice to say I’m not a fan).

But she also stuck to a marketing plan that has been successful for all evangelical products.

See, evangelical products (religion, ideology) are not constrained by logic, reason or even the burdens of trade and proof. They never have to deliver, they only have to promise. Their markets don’t buy results, because the results are often unverifiable. (In fact, in most cases, the results are 100% false).

Doesn’t stop them one bit. These buyers are purchasing the promise, not the delivery. Hence, Sarah Palin can literally make up the most batshit rant her tiny mind can create, and as long as it uses the right words and evokes the correct emotions, her believers will gobble it up.  I promise you for every eye rolling judgement of Ms. Palin’s silly and inaccurate banter, one more person decides reality is too complicated. To them, Palin’s irony-free stupidity feels safe.

For an interesting read on how spasms like Palin, Beck and Fox News can exist, read Eric Hoffer’s The True Believer. He predicted all this madness in 1951.

That said, nothing cracks me up more than 10 minutes of Glenn Beck.

A number of folks have contacted me directly, seeking customer support with their TownHog purchases.

While I did work for TownHog for a time, I no longer do.  I’m currently the Director of Marketing at Spreebird Deals.

That said, I’m sympathetic to customers who are having trouble reaching TownHog.  To that end, here’s all I know about how to contact them.  This is listed on TownHog.com, and I’m providing this in the hopes it will help.

TownHog – Dotblu, Inc.
343 Sansome Street, Suite 510
San Francisco, CA 94104
Phone: 1-888-673-1321
(Business Hours: Mon-Fri, 9AM-6PM PT)

Questions: info@townhog.com
Support/Help: support@townhog.com
Business questions: info@townhog.com
Media: pr@townhog.com

NOTE: Some people have mentioned they have no luck getting any response going through these channels.  I personally called the customer support line and it went to voicemail during business hours.

If you’re still frustrated, there is another option: post your complaint on the company’s Twitter feed.  TownHog’s is simply @TownHog.

I received an interesting response from my earlier blog post introducing my Daily Deal Triangle.  The Triangle demonstrates the three components to any Daily Deal: The Buyer, The Merchant and The Daily Deal Company.  I argue the triangle must be balanced so each party benefits fairly.

I also argue that a few deal companies (Groupon, LivingSocial) have skewed the triangle in their favor, mostly on the backs of the merchants.

But some deal companies are building balanced triangles that serve all three parties. And that’s why I think merchants are getting the wrong idea about the daily deal opportunity based on the most visible problems of Groupon and LivingSocial.  In other words, they’re missing the point.

Peter Whyte, COO of Screamin Daily Deals in San Juan Capistrano, CA, puts it succinctly:

“So, given the absence of risk on the merchant’s part, and real world discount, the merchant makes out like gang busters, especially if, as you say, the deal of the day company delivers geographically and demographically ‘relevant’ customers who have the highest potential for returning if they are satisfied with the initial experience.”

He nails it.

When a deal company can deliver well qualified, locally relevant new customers and they have loyalty/referral programs in place, the merchant can do very well with a daily deal promotion.   Peter’s company is a great example of a daily deal offering that does a great job driving geographically and demographically relevant new customers into their merchants.

How about you?  Are you a merchant with some feedback on the daily deal market?  Leave me your comment below.

-Rob Rutkowski

(Want me to speak at your upcoming event?  Give me the details and let’s make it happen.)

Related articles

• The Daily Deal Triangle and Why Everybody is Getting This Wrong (fierceselling.com)
• Are TownHog, Groupon and LivingSocial a good deal for merchants? (fierceselling.com)
• My interview with BIA Kelsey Group on Daily Deal companies (fierceselling.com)
• The Future of Daily Deal Sites like Groupon, LivingSocial and TownHog (fierceselling.com)
• All Grouped Out (revenews.com)
• What to expect when taking the group-buying plunge (theglobeandmail.com)
• Rumor Mill Spits Out Possible $25 Billion Valuation for Groupon (marketingpilgrim.com)

I’ve been thinking a lot about the Daily Deal business lately, even getting interviewed by analysts.  And I’ve come to the conclusion that most daily deal companies are getting the business flat wrong.  Why?

It all starts with something I’ll call the Daily Deal Triangle©.

There are three participants in the daily deal: the merchant, the buyer and the deal company that puts them together.  Each participates for different reasons.

(in a few cases, there is a fourth player: a benefactor.  Some companies, most notably Screamin’ Daily Deals in San Juan Capistrano, CA, engages schools and non-profits to receive a portion of voucher revenue.  This is, in my opinion, a novel and terrific adaptation).

Let’s look at the three parts of my Daily Deal Triangle.

The Buyer: those that purchase the voucher.  They’re in it to get a terrific deal.

The Merchant: the business that offers the deal.  They want new customers and they’re sick of assuming all the cost and risk of traditional advertising (or they don’t have any cash).

The Deal Company: They create all the infrastructure between Merchant and Buyer, assume most of the risk and spend all their own money up front to enable the voucher sales,  and charge an enormous commission for the trouble.  They ultimately want to sell a crapload of high priced vouchers to get that sweet, sweet cash flow.

My Daily Deal Triangle states that all three parties must be served.  But they aren’t right now, and the business model won’t sustain it much longer.

When it works right, a deal looks like this.  Here, represented by the angle of each point, each participant gets their fair share of whatever they get from the deal.  It seems balanced and a good bargain for everybody:

 

But what’s really happening, especially at the Groupon or LivingSocial level, is more like this:

Two parties are rockin’ it (the Deal Company and the Buyer), but the Merchant is getting a very thin slice.  The Deal Company is getting fast revenue and they’re getting paid NOW (and they can hold the money for a while, too).  Advantage: Deal Company.

The Buyer can use their voucher immediately, and they benefit from the huge discount.  Advantage: Buyer.

But the Merchant has to service all these customers at the massive discount.  And there is usually no marketing or loyalty program in place to ensure these customers will return.  It’s not unusual for the Buyer to travel across town, have a cheap dinner, and never return, which sours the experience for the Merchant.

Is it accurate to  say Daily Deals are Bad Deals for Merchants?  Nope.  Not even close. Done right, they are a revolutionary advantage for Merchants.  (see my argument for why Merchants would have to be morons not to consider doing Daily Deals).  But mostly, they’re done wrong.

What’s the right way to do Daily Deals?

Start with the Merchant. They are the lifeblood of the process.  Deal companies need to provide more than lip service about what happens AFTER the deal.  I expect you’ll see a lot more loyalty and referral programs evolving from deal companies.  IMO, if Fishbowl isn’t talking to these companies, they’re freaking morons.

Next, these companies need to limit their geography a LOT more. If a voucher Buyer lives or works in the Merchant’s neighborhood, they’re much more likely to become a regular.

And finally, the deal companies need to focus on affinity of the Buyer. They need to start coalescing around communities.  Gilt is doing this.  LivingSocial’s “Escapes” line extension is doing this.  JDeals is doing this.

One particularly effective version is my newest favorite deal company, Screamin Daily Deals.  Aside from a clever name, they are partnering with schools and non-profits to distribute a portion of each deal.  Buyers can choose from a list of their favorite schools or charities, and 10% of their purchase will go there.  Awesome.  The Buyer now has a reason to choose Screamin Daily Deals over the zillion other deals out there.

Got questions about running your Daily Deal business? I’m available for consulting.  Drop me a line.  Happy to join you for interviews, too.   If you’d like to have me speak at your event, email me the particulars.

-Rob Rutkowski, Founder, Fierce Selling Systems

Related articles

• Are TownHog, Groupon and LivingSocial a good deal for merchants? (fierceselling.com)
• My interview with BIA Kelsey Group on Daily Deal companies (fierceselling.com)
• What Will the Economy Do to Daily Deal Sites? (fierceselling.com)
• The Future of Daily Deal Sites like Groupon, LivingSocial and TownHog (fierceselling.com)
• Groupon Envy Clutches SXSW (adage.com)
• Small Business: In Groupon’s $6 Billion Wake, a Fleet of Start-Ups (nytimes.com)
• Facebook Is Not Ready to Take on Groupon (nytimes.com)

I did an interview with BIA/Kelsey Group this morning; they specialize in local media and advertising, and they were curious about how deal companies are shaping up.  Here’s what I told them:

The daily deal concept has three points, like the three points of a triangle.  The merchant, the deal company and the buyer.  The only deals that really work are the ones that balance value to all three parties.

There are many perceived examples of deal companies not honoring that balance, usually at the expense of the merchant.  That is giving the concept a bad name.  Groupon’s examples are legion.  I think this is unfair because these merchants receive revenue checks they could never generate on their own.  But perception is often reality.

Deal companies are hear to stay, and merchants that accept and exploit the concept will be further ahead. It’s very possible as the concept evolves and the economy continues to recover, the discounts will get smaller and the deal will have to sell on the merits of the merchant (hooray!).

The deal concept is revolutionary, as it puts all the risk and cost on the media. Merchants who are good candidates are foolish not to use the deal market early and often, yet 9 of 10 merchants are inaccurately biased against the concept.

Few deal companies are exploiting the partnerships with media companies that are possible (I pointed out TownHog and its partners like CBS).  This will rapidly change as the market matures.

Few deal companies are properly branding themselves well. They are commodities, which means everything defaults to price, a weak and lazy form of marketing.  A few notable exceptions are LivingSocial’s travel and family line extensions, JetSetter and Gilt.  Restaurants.com has the most squandered brand of any.

The future? More geotargeting deals using smart phones.

Biggest failure of deal companies so far? Virtually ignoring the huge buyer data they are accumulating.

What do YOU think?

Related articles

• TownHog featured at the Oscars, mentioned on Huffington Post (fierceselling.com)
• EXCLUSIVE Q&A WITH LIVINGSOCIAL CEO: His Secret Plan For Building The Next Huge eCommerce Company (AMZN) (businessinsider.com)
• New York Times Launching Groupon-Like Daily Deals Service (mashable.com)
• Why Groupon Sucks (zacharyadamcohen.com)
• To Groupon or not to Groupon: Research on group deal profitability (olsonomics.com)

This year, Oscar attendees received outstanding swag bags provided by my friends at Madison & Mulholland.

The Huffington Post picked up the story, pointing out that the vendors included in the bag will also offer their products and services in deals on TownHog and Madison & Mulholland’s sister site, JaneRecommends.com:

"In an unusual twist, certain items from the bag will be featured and offered for sale on TownHog.com - a coupon website - at 50% off. Others will be for sale at JaneRecommends.com."

Congratulations to TownHog and Madison & Mulholland’s for making it to the red carpet on Oscar night!

Here’s a longer quote from Zorianna Kit’s article:

"The Madison & Mulholland Ultimate Nominee gift bag: No suite, this year the company sent bags directly to select Hollywood stars including Mila Kunis, Natalie Portman, Anne Hathaway, Nicole Kidman, Halle Berry, Amy Adams, Michelle Williams, Julianne Moore, Helena Bonham Carter and Annette Bening.

In an unusual twist, certain items from the bag will be featured and offered for sale on TownHog.com - a coupon website - at 50% off. Others will be for sale at JaneRecommends.com. Additionally, one lucky subscriber will have the opportunity to win the entire contents of bag on Town Hog. [Incorrect; this was reported in error -Rob]

Inside the bag were gift certificates for "experiences" including a weekend stay at the Hotel Indigo East End in the Hamptons, a tour of the Eagle Castle Winery in Paso Robles, CA., a photography session with portrait photographer Lucille Khornak, fitness sessions at Revolution-in-Motion in New York City, a pampering spa day a the Royal Sphatika Spa in NYC, a wine and cheese session with The Cheese Impresario and a one year membership to Atrium Concierge Travel Club powered by Thomas Cook.

Products gifted include skincare from Clayton Chagal and Cynthia Rowland, KD Luxe Jewerly and Footgloss, an all natural cream in a stick that helps prevent chaffing on those pretty feet among numerous others."

——–

ADDED April 28th, 2011 by the author:

A number of folks have contacted me directly, seeking customer support with their TownHog purchases.

While I did work for TownHog for a time, I no longer do.  I’m currently the Director of Marketing at Screamin Daily Deals.

That said, I’m sympathetic to customers who are having trouble reaching TownHog.  To that end, here’s all I know about how to contact them.  This is listed on TownHog.com, and I’m providing this in the hopes it will help.

TownHog – Dotblu, Inc.
343 Sansome Street, Suite 510
San Francisco, CA 94104
Phone: 1-888-673-1321
(Business Hours: Mon-Fri, 9AM-6PM PT)

Questions: info@townhog.com
Support/Help: support@townhog.com
Business questions: info@townhog.com
Media: pr@townhog.com

NOTE: Some people have mentioned they have no luck getting any response going through these channels.  I personally called the customer support line and it went to voicemail during business hours.

If you’re still frustrated, there is another option: post your complaint on the company’s Twitter feed.  TownHog’s is simply @TownHog.

Related articles

• Are TownHog, Groupon and LivingSocial a good deal for merchants? (fierceselling.com)
• TownHog.com beats Groupon, LivingSocial (fierceselling.com)
• Bizarre Merchant Behavior in the Face of Daily Deal Sites (fierceselling.com)
• The Future of Daily Deal Sites like Groupon, LivingSocial and TownHog (fierceselling.com)
• What Will the Economy Do to Daily Deal Sites? (fierceselling.com)
• Zorianna Kit: 2011 Academy Awards Gifting suites (huffingtonpost.com)

Deals run on the TownHog Network often include CBS radio advertising at no charge.

Recently, in response to a blog entry about how TownHog stacks up against Groupon and LivingSocial, I received a perceptive comment from Cecile:

"You’re still charging a FEE…call it upfront or via sales, bet you’re charging same fees?

Another thing these businesses are what we in the advertising spectrum call “One Shot” Pony…or One-Shot-Phonies…after all the dust has settled…the store owner made very little commission, stirred up a lot of excitement…and most of those buyers will now seek other One-trick-Deals " -Cecile

First, thanks for the comments. Here are my responses:

1- “You’re still charging a FEE”: While it’s true that deal companies charge a commission on sales of vouchers, I personally think this is very different than traditional fees or advertising costs. That’s because the commission is only collected on actual sales of a voucher. If the voucher doesn’t sell, the merchant owes nothing.

Try this: Go back to your local newspaper and say, “You ran the ad as promised, but we didn’t get any business, so I’m not paying anything.” Or go back to Google and say, “Despite your only charging me for clicks, I still didn’t get any business afterwards, so I’m not paying anything.” See? A merchant still has to pay those fees.

But with deal companies like TownHog, the merchant never really pays FEES, they pay COMMISSIONS only when something actually sells. That is a smoking deal for merchants, and frankly, revolutionary.

2- Daily Deal programs are like a “one shot pony” for the merchant: A very good point, and a lot of merchants are discovering this. Frankly, any business earned on a discount is already starting at a disadvantage for the merchant. But daily deal marketing is here to stay, so merchants that make peace with it will come out ahead.

Furthermore, at least with TownHog, we spend a lot of time designing what happens AFTER our promotions. Our daily deal is one tooth on a cog of marketing, and it can drive a lot of new traffic and revenue, but it doesn’t replace a comprehensive marketing strategy. For example, when a buyer comes in with a TownHog voucher, it’s important the merchant is ready with some loyalty marketing.

Lastly, daily deal marketing isn’t for every business. In fact, I’d argue it isn’t even for most businesses. Personal trainers, for example, don’t do well. Chiropractors either. But premium restaurants, spas and destinations are perfect. And new opened merchants are well suited to run a deal too.

Thanks for your comments. My feedback is relevant to North American markets. Other markets may have localized issues that go beyond these notes.

Also, these are strictly the opinion of myself, and not to be taken as the official stance of any deal company.

—————–

ADDED April 28th, 2011 by the author:

A number of folks have contacted me directly, seeking customer support with their TownHog purchases.

While I did work for TownHog for a time, I no longer do.  I’m currently the Director of Marketing at Screamin Daily Deals.

That said, I’m sympathetic to customers who are having trouble reaching TownHog.  To that end, here’s all I know about how to contact them.  This is listed on TownHog.com, and I’m providing this in the hopes it will help.

TownHog – Dotblu, Inc.
343 Sansome Street, Suite 510
San Francisco, CA 94104
Phone: 1-888-673-1321
(Business Hours: Mon-Fri, 9AM-6PM PT)

Questions: info@townhog.com
Support/Help: support@townhog.com
Business questions: info@townhog.com
Media: pr@townhog.com

NOTE: Some people have mentioned they have no luck getting any response going through these channels.  I personally called the customer support line and it went to voicemail during business hours.

If you’re still frustrated, there is another option: post your complaint on the company’s Twitter feed.  TownHog’s is simply @TownHog.

Related articles

• The Future of Daily Deal Sites like Groupon, LivingSocial and TownHog (fierceselling.com)
• Bizarre Merchant Behavior in the Face of Daily Deal Sites (fierceselling.com)
• TownHog.com beats Groupon, LivingSocial (fierceselling.com)
• What Will the Economy Do to Daily Deal Sites? (fierceselling.com)
• Spawn of Groupon (slate.com)
• Why Groupon Sucks (zacharyadamcohen.com)