Tag Archives: marketing

800-337-9249 spam call from eFolks.com on behalf of CreditReport.com

Nothing irks me like telemarketing spam.

I’ve been on the national do not call registry for years and thankfully rarely get telemarketing calls any more.  But this week CreditReport.com called my cell phone several times, using an outsourced telemarketing spamhouse called efolks.com (located in North Salt Lake City, UT).

Today I took the call (from 800-337-9249) and told them to never call back, that I had never done business with them, and that I was on the do not call registry.

I guess they thought I was playing hard to get, because they called back 15 minutes later with a different agent.  They launched in about helping me ‘find the negative info on my credit report.’ (there is none.)  It wasn’t a pretty conversation.

If you’re on the do not call list and receive a call from these phone spammers, file a complaint with the FTC.

This is just one more example of how the credit agencies are sleazy with their marketing methods.  See a related blog post here.

Side note: a recruiter reached out to me just this week for a SVP Marketing search for Experian Consumer Direct. His email pitch was:

CD is an extremely profitable $700MM division of Experian that is best known as freecreditreport.com; over the past few years the revenues of ECD have grown from $50MM to $700MM+.  This position has around a $200MM budget and is extremely high visibility within Experian.

No doubt it pays well. If you’d like to sell your soul and be a candidate, let me know and I’ll be happy to connect you with the recruiter.

Experian’s latest marketing trick: clever…in a way that makes me want to take a shower

If you’ve had a pulse for the last few years, chances are you’ve seen one of Experian’s ads for FreeCreditReport.com.

I have to admit that most of the spots are generally engaging, funny, and memorable.  The fact that YouTube users have voluntarily viewed them millions of times is saying something.

Still, the method Experian uses to hawk its product is fairly sleazy, and it just got sleazier.

The reason, of course, is that federal law mandates that everyone has a right to receive a free credit report once per year from each of the 3 primary consumer credit reporting agencies in the US.  The site is annualcreditreport.com, and it is administered (by direction of the government) by the 3 credit reporting agencies themselves.

The issue with Experian’s ads is that the free credit report they’re promising is not part of the federally-mandated program, but rather as a teaser deal in conjunction with a subscription to the company’s $14.95/month ‘triple advantage’ credit monitoring service. Whether or not triple advantage is worth its costs is not the point here; the issue is offering a so-called ‘free’ product (which is in fact free from another site, with no strings attached) which actually can end up costing $180/year if the service isn’t canceled within an unreasonably short 7 day window.

Experian would argue that they have disclosed the strings attached to their offer.  “Disclosure” in this case has typically included an announcer’s speed reading “free with enrollment in triple advantage” in the last 1 second of the TV commercial, or a small mention/text link on the freecreditreport.com’s site.

Ok, slightly sleazy, right?  But it gets worse.

For a while now, the FTC has only mandated minimal disclosure for these “free with strings attached” offers.  But a few weeks ago the FTC mandated significantly more prominent disclosures, including large messages on the homepages of sites like freecreditreport.com which direct consumers to the government-mandated site.

Experian dodged the bullet, though. Now, they charge $1 for their ‘free’ credit report (and even that $1 is donated to charity). By charging a nominal amount, they are no longer offering the credit report for free, and thus (so they reason), they can also avoid those pesky consumer-friendly disclosures which would hurt their bottom line.

A message on FreeCreditReport.com implies that the government put a stop to its free reports. It says, “Due to federally imposed restrictions it is no longer feasible for us to provide you with a free Experian Credit Report.”  The company is also beginning to change its advertising to direct consumers to freecreditscore.com.  Unlike credit reports, credit scores have not been federally mandated to be available to consumers for free each year.

I will say this: Experian’s massive advertising for FreeCreditReport.com no doubt raised awareness about credit reports in a way that a government agency could never afford.  And this is the free market in action.  The other observation is that this is a great example of how quickly the free market can skirt the government’s attempts to regulate advertising & marketing practices.

Does anyone in Experian’s marketing department really feel good about what they do?

Small wonder they are fighting and adapting to retain profitable marketing initiatives.  Experian is a UK-based company, but their latest half year results indicate that North America accounts for 54% ($1 billion) of revenues and 64% ($307MM) of EBIT.

Here’s an excellent summary of the issue by the SF Chronicle.

McNeil’s Tylenol recall hurts all branded drug manufacturers

Most branded over-the-counter (OTC) medications offer one primary benefit over their functionally-equivalent generic alternatives: a consumer perception of superiority in quality and safety.  This is why McNeil’s most recent recall of Tylenol and 5 other medications, driven by both quality and safety issues, is a blow for all manufacturers of branded OTC drugs.

McNeil’s current recall is a result of an unusual moldy, musty, or mildew-like odor in the 6 different affected products (plus line extensions).  The smell was also associated in some cases with nausea, stomach pain, vomiting, or diarrhea.  The cause is attributed to a chemical applied to the wooden pallets used to transport packaging material.

This is, of course, not the first recall for Tylenol.  Its most famous recall was in 1982, when 7 people were killed by Tylenol that was deliberately laced with cyanide.  Whoever caused the issue was never caught.  Even before Johnson & Johnson (McNeil’s parent company) knew the cause of the problem at the time, they aggressively pulled all products from retail shelves in a move that was long heralded as a model for crisis management.  A smaller and less serious recall ocurred in 1986.

This time is different.  For one thing, J&J knew about complaints of the funky odor and resulting illnesses it caused as far back as 2008.  Yet they failed to either follow up aggressively or notify the FDA.  And the FDA is none too pleased about that, leading to the recent issuance of a scathing “warning letter” which J&J must address within 15 days.  In addition, unlike the 1982 case of deliberate tampering, this current issue seems to have been caused by sloppy manufacturing and logistics practices, plain and simple.

When you’re dealing with complex, regulated products and complicated distribution systems, occasional safety issues are bound to arise from time to time.  But when quality and safety are the very aspects of differentiation on which your branded product relies, slip-ups like McNeil’s current ones can really create some serious brand vulnerability.

Generic OTC products offer absolutely equivalent efficacy to their branded cousins.  So if the pricier brands aren’t perceived as truly safer than the generics, what’s left?  (devil’s advocate for a moment: the branded products do tend to innovate more often with packaging and delivery system innovations…but even these functional attributes, when successful, are always quickly copied by the generic manufacturers)  So fundamentally, branded OTC medications are primarily relying on their reputation and their perceived safety and quality.

There’s an old rule of thumb in advertising that it takes about 3 ‘impressions’ of a message before it starts to sink in for consumers.  It’s not implausible to apply that same logic to brand crises.  With at least 3 quality & safety-related recalls to date, Tylenol is beginning to send a real message that may start to sink in for consumers: branded OTC medications may be just as prone to safety issues as their generic equivalents.  And if that message sinks in, its good news for OTC generic manufacturers and bad news for the branded pharmaceutical industry in general.

£9.99 for a limited time: Psychological Price Points

A recent trip to London reminded me of something I’ve always found perplexing: the practice of retailers to mark prices at arbitrary “psychological pricing points” (usually ending in 50 or 99).   The fish and chips in London were always £6.99, not £7, and an attraction would likely be priced at £14.99 rather than one pence higher.

This isn’t just my imagination; a 1997 study of pricing in New Zealand concluded that about 60% of retail prices end in the digit 9 and another 30% in the digit 5.  Need more proof?  Look at the circulars in any Sunday paper and count how many electronic items go for $400.  Not many; they’ll all be priced at $399.

It’s a little insulting that retailers think they’re fooling us into believing that $399 is a whopper of a bargain compared to $400.  Do they really?  Are we really?

Pricing studies have indeed concluded that consumers generally respond pretty well to this type of pricing.  Still, I’ll bet many retailers just do it out of habit at this point.

There might have been a time (like when most transactions took place between individuals in street markets) when rounding to even numbers or zeroes truly made things easier: easier to calculate totals, easier to give change, less change to carry.  But most of those arguments have gone away now: cash registers compute most totals, many transactions happen without cash, and round numbers become distorted, anyway, once tax rates are applied on top.   So round numbers don’t even make a whole lot of sense anymore.

While there might have been historical rationale for round number pricing, the practice of pricing in the ‘9s’ is built quite simply on the assumption that consumers are so daft that they can’t meaningfully process much more than the left-most digit in a price.  We’re all busy and don’t have unlimited time to research perfectly efficient prices, but come on now, I mean – really.

Even if there’s a slight increase in retail demand at these strange price points, don’t you find that all those 95s and 99s come with an important quality perception trade-off? It’s like everything has been marked down in some gigantic blue light special extravaganza where the pricing guns have more 9s than any other digit.  It’s something retailers should think about, and some of them have.

High end retailers such as Neiman Marcus and Nordstrom have been pricing their goods in whole numbers for some time now.  Other retailers use a mixed model; Macys and J.C. Penney, for example, tend to price standard goods with 00 and price marked down/sale price goods with 99.  I guess that makes some sense.

Some retailers price standard goods with $x.00 and sale goods with $y.99.

Some retailers price standard goods with $x.00 and sale goods with $y.99.

It’s worth noting that wholesale pricing generally doesn’t follow this same illogical pattern. If you’ve ever seen a wholesale price list, the prices tend to be exact and all over the place. In mature categories, manufacturers will often increase their wholesale prices by an exact 2 to 3% increase each year, so the trend continues. It’s really the retailers who feel compelled to round everything in ways that dull our senses.

A few years ago I started noticing many New York restaurants rounding prices to whole dollars, excluding even the zeroes for cents.  While that’s equally arbitrary to rounding to lots of 9s, at least it doesn’t seem like a veiled attempt to insult our intelligence by assuming we’ll ignore everything after the leading digit.  I actually find whole dollar prices weighty; authoritative.  “Here’s what we’re charging.  Take it or leave it,” the $14 next to the crab salad appetizer suggests.

All this gets even more intriguing when you think about the implications of economic inefficiency driven by this type of arbitrary pricing.  This is particularly enlightening when you take a look at the same good priced in multiple currencies which have a close relative value to one another.  But let’s tackle that in a later blog entry.

I'll take that octopus at $16, but not at $15.99, thanks.

I'll take that octopus at $16, but not at $15.99, thanks.