Number 79: December 1, 2004

If you think your friends and colleagues would enjoy this newsletter feel free to forward it to them. If  someone sent this to you,  today. Outlook 2003 and AOL 9 users, please add us to your trusted or buddy lists, so you won't miss an issue.

This week in Katydid:

• A Tale of Two Tubs
• Subscription Information

A Tale of Two Tubs
Sometimes you gotta break the rules. As marketers, we have to have policies in place to protect our organizations against fraud or abuse. However, you have to keep customers happy and you don't want to turn away repeat business.

For example, you might put out some expensive brochures at a trade show. Next to them, you put up a sign that reads: Free. Take One. You might not want to scold a potential customer for taking two, or ten; but you'd be okay to ask them to refrain from taking your entire supply.

The policy of taking one item is there to protect you against the extreme of taking them all. You want to set a reasonable limit and discourage misbehavior. To know when to break the rules, you should be clear about the purpose for the marketing tactic and understand the role of the policy. And since you can't always be there to make the call, you need to make it clear to the rest of the organization.

Sometimes your policy needs to protect your tactic. Pricing a product as buy one, get one free does not allow you to bend the rules. You can't sell one item at half-price because it doesn't achieve what you need: selling two items at a reduced margin.

On the other hand, if you also add the qualification, limit six, if the customer decides they want a dozen, you may be inclined to let them. The point of saying there's a limit is to make the customer buy the limit; it's not to discourage them from buying more. Plus, if the customer is sufficiently motivated, they will find a way around your "narrow-minded policy."

In Phoenix, we have two major chains for movie theatres: Harkins and AMC. They both have similar models for selling popcorn. There's are extra-large, ultra-large, and mega-sized tubs. They try to upsell you to the mega-size tub because it's only a dollar more and you get a free refill. They have a similar policy for drinks.

Now, it is possible to eat that quantity of popcorn if you share it with a large family and the row behind you, but it's not likely you'll be ready for another any time soon. So, many customers keep the tubs and bring them back on another visit. Naturally, the stated policy says, "Same visit only," which means they're not supposed to refill it on another day.

The question is should they enforce the policy? The answer depends on the behavior they want to encourage from their customers. Of course, if there's some health code behind the policy, they have to enforce it; otherwise, it is up to management.

Later-day refills encourage the customer to return to the theatre. Harkins sells refillable drink cups that bring back customers all year long for one-dollar refills. They also sell T-shirts that you can wear to get free small popcorn, which you can upgrade to larger sizes for a couple of dollars. AMC does not have similar offers; rather, they use they have a point card you can use to earn rewards such as free popcorn and movies. Both tactics encourage repeat business.

Enforcing the same-day refill policy encourages customers to purchase again, but if they do not use the refill on that day, it will discourage them from buying that size in the future. Some managers have a policy of we'll do it for you this once. Of course, customers don't like to be scolded, especially in front of a long line of impatient people.

Additionally, same-day refill policies encourage theatre switching, which means giving away product free. Customers watch one film, refill their popcorn and sodas, and then go to another film without buying a new ticket. Customers, who know they can bring their tubs back on another day, are more likely to return knowing that it won't cost them as much for the experience.

Generally, AMC enforces the same-day policy and Harkins does not. As a result, Harkins seems friendlier and customers are more likely to be honest. AMC enforces the policy, which puts them in a role of authority with their customers who are likely to rebel. The last relationship you want with any customers is an adversarial one as it will likely be your last relationship with them.

Harkins is a locally owned chain, so they may have a closer relationship with their management team. AMC is a national chain and may have a more distant relationship, though that means managers should be able to act with more autonomy. In either case, the marketing team should make it clear on what they base their policy, and when it can be broken. I'm sure they'd hate the idea of customers arguing with cashiers over the stupidity of a pricing policy.

Have I had such arguments? Maybe, though I must admit that I've foolishly tried to explain to bleary-eyed teen-agers the value of a flexible pricing policy. After a couple of seconds, I realize I've become that crazy old man I used to stare at blankly.

Instead, I go to the theatre that doesn't scold me and that actually believes me when I say the film is out of focus. And if I they refuse to refill my tub, I don't argue with them. I buy a new tub, pour the contents of the new tub into the old tub, hand them the new tub, and pleasantly say, "Refill, please." Who knows? Maybe I'll share some with the row in front of me.

Top »

Thanks for Reading
This e-mail newsletter spreads mainly by word of mouth. Please send it on to your colleagues. Also, you can read other back issues.

If you have suggestions of web sites to review, writing that buzzes, or a new way of looking at things, let me know. Send your suggestions to .

If you received this newsletter from a friend, please today. Our subscriber lists are confidential; we never sell or rent our lists to third parties. If you want to from this newsletter, please let us know.

Kind regards, 
Kevin Troy Darling

Top »

©2004 KTD Communications | Privacy Information