Walgreens gets it wrong when marketing to me

October 05th, 2007 - 16 Comments

Here’s a quick marketing thought I had just now. I know I usually write about personal finance, but this week I’m stuck on marketing, so I hope this is useful to a few people.

Recently, I used my Snapfish account to order photos and I decided to pick them up at a nearby Walgreen’s. It was awesome — no shipping charges and the photos were ready in about an hour.

About five days later, I got this email:

Digital Photo Printing and Free Online Photo Sharing at Walgreens Photo Center

What’s going on here? Clearly, Walgreens is trying to maintain a relationship with me and upsell me to their own photo service. I understand this, but the method is so clumsy that I can’t resist commenting. (As a marketer, I also know you can’t always get it perfect, so this is just my suggestion, not me blaming Walgreens.)

Here’s what Walgreens knows about me: My name, my email address, the fact that I bought photos, and the Walgreen’s I ordered them from.

  • Their goal: To get money from me.

  • Their message: If you click through, you see a page called “Celebrate sweetness” about using their own proprietary photo service and ordering prints or personalized gifts. I sincerely believe that I have never been described as “sweet” in my whole life.

Teddy Bear Sweetness

Where did Walgreens go wrong?
And assuming they’re getting negative ROI on this campaign (I bet $100 they are), why is that? Let’s take it step by step.

They already know I use Snapfish. How likely is it that I’ll upload my photos to another service? Answer: zero likeliness. They’re taking a limited view of making money by assuming that I “should” spend my money through their service. But what about the other ways they make money? What about building a permission asset and giving people something they really care about?

What I would do
If I were Walgreen’s, I would take the same data they have — my name, my email address, the fact that I bought photos, and the local Walgreen’s location — and make a radically different pitch.

walgreensramit.png

Look what the I get: A personalized letter that gives them a coupon for a service they actually care about (Snapfish). Maybe they could even get Snapfish to foot the bill. And Walgreen’s gets me to come in to the store. Guess what happens then? I’m more likely to buy something, and I also have to talk to the manager, who will be trained to upsell me on a new service Walgreens is offering — perhaps something relating to photos?

The best way to make money isn’t always the quickest.

Thanks to Scott Hurff for the graphic. Scott Hurff (scotthurff.com) is an entrepreneur and founded Fuego (thefuego.com), a chillingly great modern men’s publication served up weekly by email. If you want the best information on wine, lifestyle, food, apparel, fashion and anything else any classy guy should know, sign up for Fuego.

facebooktwittergoogle_plus

Related Articles

How to find love using psychology

If there is one thing I have learned in my decades on this earth, it is this: Beware of a ...

Read More

How to get an amazing job and build your career -- with Ryan Holiday

I believe you can learn from ANYONE -- even if you don’t agree with 100% of their views. Years ...

Read More

16 Comments

 

Comments

  1. Very interesting piece, Ramit. I’ve recently come in to the role of analyzing past marketing ventures at the company I work for to see what gets people motivated and what turns them away.

    We had a huge blunder not long ago by following the letter of the law, as it were, in regards to the difference between spam and bacn. They sent a mass email to every customer who had registered their email address, that chose either opt-in or opt-out to future mailings, of an account summary along with a small advertisement. It was informing them about a program they were automatically signed up without an opt-out choice after making a purchase with the company.

    I really think that they lost many potential sales from people who would come back, if the deals were right on an exact product they want who will now remember the brand in a negative light. This company has excellent branding and has built a huge community without using a social networking.

    Emails were coming in at a rate of about 40 per hour demanding mailing list unsubscribe, sternly informing the company of previous requests to remove, and very few questions about how the program works and why it isn’t working how they intuitively think it should work. It left a small blip in positive sales because of the unprecedented coupon. Though I find it more likely that loyal customers who liked the coupon made special purchases, causing this blip.

    Making a quick buck with an email marketing campaign is not worth alienating a consumer. I think that the Walgreen’s effort will fail not because people will logically look at the effort the way you did, but rather they understand that they do not want the services offered, and see the ad as a negative experience, hurting future brand-customer relations. I think this will still cause a small blip in positive sales for Walgreen’s, probably just enough to justify the marketing campaign as a success. But I think these sales will be from already loyal customers who already use their services, and now buy a little extra in the short term.

  2. I think it was particularly clumsy of them to advertise “Sweetest Day.” It’s not like people actually celebrate the day unless they work for a greeting card company or they’re really in love and looking for any excuse to celebrate it.

    Maybe if they had some Halloween deal with pictures of costumed kids or costumed adults, that would be a start.

    That would be a good way to communicate with customers who don’t use Snapfish–perhaps those who’d brought their prints in, letting them know that they could submit them online. I’d appreciate that kind of service.

    But you’re right, trying to get you from Snapfish probably isn’t going to work. Engaging analysis…I would have responded quite well to such a letter.

  3. Actually, there are so many companies using the “personalized” letter with signature, sending to so many “potential customers” that I don’t buy it anymore. I find it fake – the signature is obviously “signed” from an image attachment and unlike real letters where you sign it one by one, email signatures are just from the (created) template. Furthermore, the tactic is so overused by people who are trying to sell things online.

    But I love your alternate idea on how Walgreens tie up with Snapfish for promotions.

    After I upload photos into Multiply (http://www.multiply.com), the site displays possible products (photos, mugs, etc) that can be printed and sold from the site with photos I have uploaded! That’s cool.. I get a preview and if I like it (and willing to spend), I’d go for it.

  4. Well, my first question woulda been, “WTF is Sweetest Day?”

    I like your approach–shows they actually noticed you use Snapfish, and that they want to give you something useful. Their e-mail just looks like spam to me.

  5. nice upsell of ElFuego at the end there!

  6. very interesting article ramit.
    It got my attention cause I work for the company :O

  7. Very true…I am curious if you have any thoughts regarding Pez dispensers in the Walmart checkout aisles….good marketing or last ditch effort to sell candy that tastes like chalk? Have you written anything on this? THIS IS MY PASSION…no one has been able to unlock it yet….

  8. Hello,

    Walgreens is a low-cost convenience store. They put 2 and 2 together and figured out that if you like to pick up photos at their location you could use their service to order online. Maybe just maybe they are trying to respect your privacy as to whether you use Snapfish or whatever: their job is not to pry into your personal life but to furnish prints, and they thought they would spend near-zero effort to let you know there is another method for you to do that.

    Personally, if I got an impersonal “personalized” form letter e-mail from a Walgreens manager who has been prying into my consumer habits, I am going to feel a wee bit violated and creeped out.

    Walgreens does what it does fairly well without confusing the picture with insincere marketing. I’m also pretty dang confident that if Snapfish want your business they can give you the $5 and then partner with Walgreens to pick up your photos. The Walgreens manager can spend his time making sure the photo printing service and other essential retail operations are working alright.

    -danny

  9. I believe Walgreen doesn’t have a proprietary online photo service. It’s still Snapfish dressed up to look like a Walgreen website. I could be wrong, but my wife works for a competitor of Snapfish’s, so I’ll run it by her and let you know if I find out anything more.

  10. I have to agree with one of the above comments. That manager would definitely not be the one sending out letters and I am SURE that he has much more essential profit driving tasks to complete than to speak to every customer who gets one of those letters. Which would be a lot of people if they actually expect to draw a reasonable number of people into the store. If they were going for a personal direct marketing approach they would send people door to door or have someone greeting customers asking if they are aware of their photo printing service or passing out coupons at the door or photo counter. I think Walgreens may have gotten it wrong with you, but it is offering a direct marketing campaign to the masses and if you look at it on that scale I would be willing to bet that many people who are ordering prints online and picking them up through walgreens might be interested in using walgreens service. Marketing is all about getting a percentage of those who see the medium to act on it. To be more effective with what they DID do they could have attached a first time user coupon which would offer incentive for someone using… say snapfish, to try their services.

  11. Sorry Ramit, you are all wrong on this one. Personalized letter for walgreens is definately not worth their time and effort. The photo business is not a big income earner for them.
    They make more money selling pop and pringles at double the price of walmart.

  12. I actually work for walgreens, in the photo finishing department. In response to the above comment, the photo department is actually our highest gross department in the entire store, including pharmacy. You would fall out of your chair if you knew what kind of profit was behind your memories ;)

  13. You should consider doing some research. I’m a Head photo specialist for a Walgreens photo lab. a. Walgreens photo labs make u a very high % of the front end sales. b. If you would have started using walgreens.com, u would have saved roughly 4 cents a print. c. Sweetest Day was just the luck of the draw on advertisements you got, it will vary from Free Family Value ack, to Halloween to Cutest Baby Seach, the list goes on. and lastly your photo lab sees very little of a store manager. They have Head hoto Lab Specialists who are backed by an Asst. Manager who together are in charge of the lab. Walgreens photo employees are the nicest and most helful hoto labs youll ever come across. So if you have ideas for ways to make there services better stop in and talk to them. They are always lookin for ideas.

    Signed-photoJoe

  14. I agree the Walgreen’s idea wasn’t the best, but your idea does nothing to me. On the contrary, it appears Cheesy.
    Boomeranged, eh?

  15. Wow – some people can whine about anything. Ramit – stick it!

  16. Your story is sad but unrealistic the letter you have is a fake number and you made up the letter. Managers do not have time or even care about seeing you and its against company policy to do that.