Tuesday, January 29th, 2019 | 4 min read
As marketers, we all aspire to create campaigns that get attention, which will hopefully lead to more sales. So, how is it that an uber successful marketing campaign resulting in hundreds of thousands of sales comes out as a loss? Well, you’d have to ask Hoover.
When you think of traditional vacuum cleaner brands, Hoover probably comes to mind quickly. Long before Dyson’s simple-yet-effective TV ads began streaming and robotic vacuums worked their way into viral memes, corded vacuums reigned supreme. But in the early 90s, an economic recession swept through the United Kingdom, cutting into the sales of common household appliances, including vacuum cleaners.
Marketers had to come up with unique ways to get people to buy a product that most households already had. There were few differentiators between vacuums of the time – they were all relatively heavy and clunky – so what would spur customers to purchase a new model?
When all else fails, add value. Just think of all the Buy One, Get One offers you’ve probably bought into over the years. Michael Gilbey and Brian Webb, two marketing execs in Hoover’s UK offices, realized that they could harness this universal hunger for a deal in their marketing plan. Their campaign simply required customers to buy a vacuum for at least £100 (about $130 in today’s American dollars) to receive two free plane tickets to either the US or Europe. Pretty enticing, right?
Well, the promotion worked. A bit too well. To satisfy their urge to fly, more than 200,000 people bought vacuums they didn’t necessarily need. Hoover’s factories were all-hands-on-deck, even requiring temporary workers to keep up with the flood of demand.
Unfortunately, the £30 million in appliance sales didn’t make up the £50 million the company spent on airline tickets. And with multiple airlines and travel agencies involved in the promotion, and hundreds of thousands of customers to keep track of, the task of redeeming those free flights proved a ridiculously complex hurdle. This led to bad press, multiple lawsuits, and an overall souring of the Hoover brand’s image.
In this instance, the marketing pros behind Hoover’s free flights campaign started with a good idea. They identified a problem (low demand during a recession), and came up with a solution (adding value to each product).
From a sales standpoint, the plan worked – it drove countless purchases that wouldn’t have happened otherwise. But from a business perspective, there were too many risks that weren’t addressed before launch. Namely, the risk of people buying the cheapest vacuum available in exchange for much more expensive plane tickets.
While the Hoover brand eventually recovered from its very public marketing fail, it had to cut off its European arm and sell it at a loss to recoup some of the damages. Ouch.
There’s a lot to learn from this memorable moment in marketing history. First, do your research! Consider all possible outcomes and potential costs versus rewards. Next, bring in an expert to assess the situation. Evidently, Hoover had asked risk management companies to review the promotion before it launched. Despite the negative feedback and warnings received, the company decided to move forward anyway. Big mistake.
To prevent a campaign from crash landing, brands must put their egos aside and look to industry pros for advice. Even the best pilots require regular feedback from air traffic control to ensure a safe and uneventful flight. In the marketing work, this means hiring an agency with industry experience, and trusting in its judgement.
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