On Wal-Mart, Toxic Cotton & The Green Thing

Blitz Magazine, September 2007

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Sam Hill, CEO of MegaCorp, calls in his PR guy.

Sam: “This environmental thing is really catching on. We need to do something green. Well, green-ish.”

PR Guy: “Actually, you only have to create the appearance of doing something, say, tinged with green.”

Sam Hill: “But look at the nature of our business. How on earth can we do that?”

This is a conversation that many corporate types have been having for a while. Thanks to Al Gore, ‘The Green Issue’ is now top-of-mind for many companies and a lot of big corporations are looking for ways to inject some sense of environmental awareness into their operations. But some of the results are more amusing than anything.

Wal-Mart would, of course, be my favourite example. The world’s Premier Purveyor of Pointless Purchases now says that it will spend money to preserve one acre of wildlife habitat for every acre it develops and that it will keep ‘scorecards’ relating to the sustainability of the electronics it sells. No word about Wal-Mart operating its own electronics-recycling program. No mention of what land the company will preserve. So, maybe it will pave over wildlife habitat or farmland in the US, and ‘spend money’ to save one acre in, say, Outer Mongolia?

On its website, Wal-Mart crows about its ‘experimental store’ in Colorado, where “…more than 500 tons of Denver Stapleton Airport’s runway, crushed up and recycled, have been used in the store’s foundation. And the used vegetable oil from the store’s deli and used motor oil from the store’s Tire and Lube Express will be burned to help heat the store.” Yay.

Last June, Wal-Mart issued ‘A Challenge’ to the packaging community, hosting a Sustainable Packaging Exposition with the theme ‘Cradle to Cradle Life Cycle’ (the lack of hyphenation is theirs). Then there’s the scorecard thing: “Wal-Mart has begun measuring 60,000 worldwide suppliers on their ability to develop packaging and conserve natural resources. Our objective is to reduce packaging across our global supply chain by 5% by 2013.”

walmart1The Wal-Mart Packaging Scorecard is to be used “as a measurement tool to allow suppliers to evaluate themselves…based on specific metrics [that] evolved from a list of favourite attributes…known as the 7 Rs of Packaging.” They are: Remove, Reduce, Re-Use, Renew, Recycle, Revenue (economic benefit) and Read (education).

Well Wal-Mart’s sure not doing much to educate anyone in the Vancouver area—nor is any retailer. We’re now in our third month of a garbage strike. Responsible (and PR-savvy) retailers should be buying airtime to ask consumers to hang onto non-food garbage until the strike is over. They’re not. And all of their well-designed, colourful, paper- and plastic-intensive packaging is now flowing out of bins all over the city. This editorial was inspired when a great chunk of Styrofoam became stuck to my windshield.

Meanwhile, the Forest Stewardship Council is making very little headway with the packaging industry—only the higher-end frozen food manufacturers are starting to incorporate FSC-certified paper. And given the value of packaging as a sales tool, the amount of information required on packaging, and the engineering requirements of packaging design, I’m not optimistic.

walmart2The other day, I bought a bottle of room spray, which promised ‘all-natural ingredients’. I do pay attention to packaging and won’t buy something that’s over-packaged. This product appeared to be in a light box. When I opened that box, there was another box. And a silk ribbon. The ‘all-natural’ thing should have also meant that all members of the company’s delivery change were on the same Eco page. The second box was not required for product safety; the ribbon was just a waste. Its packaging designer, therefore, created unnecessary waste, and expense, for all concerned.

As for Wal-Mart, if it started supporting the economies of the communities in which it operates and selling things manufactured in North America, perhaps it could do away with over-packaged lead-laced toys.

Another one of my favourites is that endlessly-troubled retailer, Cotton Ginny. In a mall last week, I noticed that one of its stores is being re-designed with decidedly earthy colours and an eco-sensitive feel. Which is endlessly amusing, given that cotton growing is one of the most chemically-intensive of all farming operations. According to Earthshine, 10% of agricultural pesticides produced worldwide (including 25% of insecticides) are used in cotton production. The Sustainable Cotton Project says that five ounces of chemicals go into the production of a single t-shirt. These chemicals include neurotoxins, developmental disruptors, carcinogens and reproductive toxins. And cotton accounts for about half of all textiles produced. Drag.

walmart4If you go to cottonginny.ca, you’ll first see its new positioning statement: “Cotton Ginny, Sustainable Style.” Then, on its ‘About Us’ page, you get this (again, the lack of hyphenation is theirs): “Cotton Ginny’s journey plant the seed The earth is not a lifeless planet but a living being Time stands still for no one live together, live slowly respect our planet let your heart lead the way.”

Huh? Who came up with that? And what in Sam Hill is that supposed to mean?

I’m sure that one of the more successful ad campaigns in history was conducted by the International Cotton Association. Remember ‘The Look, the Feel, of Cotton?’ Everyone just felt great about buying cotton. With increased environmental awareness, I wonder if (hope) that will change. Cotton Ginny now has an ‘Organic Program’, and it is, believe it or not, offering a line called Eco-ganic Baby. It’ll probably do well. But maybe it will have to change its name, to something equally-inane, like Hemp Honey.

walmart3Marketers have to get with the eco program—their clients are lagging laughably far behind and it’s time to put an end to this head-in-the-sand situation. Increasing consumer awareness will create drastic changes in buying habits. Everyone’s bottom line depends on making adjustments so that consumers will want to buy their products and services. Production has to change. Packaging has to change. A sense of corporate responsibility has to come out of the closet. Green-ish ain’t good enough.

 

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On Communicators Needing to Think Things Through

Blitz Magazine, November 2007

thinking2I was watching Leno last night. He did his regular Headlines bit. It’s funny because it contains ads which are hilarious by virtue of careless errors, ignorance, laziness, and that old bane of writers: the do-it-yourself mentality of those who refuse to hire people who can actually write.

Lately, it has occurred to me that, when communicating with the public, more and more professionals are just not thinking things through.

Last summer, the White Spot restaurant chain ran a TV spot (ad nauseam) in which the gag was that the chef was left to clean up after a team of chefs worked all day to come up with new menu items. But, in the final shot showing the messy kitchen, every pot, pan and utensil was spotlessly clean. ‘Little problem with the props and art direction budget, I guess.

In October, I was one a judge on the Registered Graphic Designers of Ontario’s Design at Work show. I was judging the publications section and saw some beautiful work. But, being me, I had to read the pieces. And found that there were typos in some and grammatical errors in others. Well, if you’re producing a high-end publication, doesn’t it follow that you should hire a writer who, you know, can actually write? And who might stoop to proof the final before it goes to press?

It broke my heart to have to discard an absolutely stunning catalogue. Well, the first part was stunning. Then I got to the copy, and found that the designer had used silver type on a white background. Well, when you put silver type on a white background, you can’t read the type. And if you can’t read the type in a publication, the publication ceases to be a publication and it becomes a waste of paper.

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‘Same thing with web designers who slap 8-point type against a black background. What’s the point in putting words in view when there’s no hope of those words being read? This is why there’s now an entire mini-industry of Usability Experts—people who spend their lives teaching people to think things through.

A current TV spot for Maltesers shows two lovers cuddling on the couch. The guy is feeding the gal the balls of candy with the help of a straw. Which would be fine (sort of), except that the guy is 17 and the gal looks to be in her mid-40s. It’s actually pretty creepy. It’s as if the creative director wanted to appeal to that massive ‘high-school-kid-sleeping-with-his-teacher’ market.

President’s Choice has a new campaign, in which the tag line is ‘Worth Changing Supermarkets For.’ That’s kinda’ catchy. Or would be, if Canadians used the (American) term ‘supermarket’.

Then there’s the ‘Christmas’ v ‘Holiday’ thing. Here’s a case where communicators are really failing to think things through. ‘Christmas’ is a Christian holiday, celebrating the birth of a man named Jesus Christ. It is a very old holiday containing all kinds of rites that have been practiced for a very long time. And, even in today’s cynical world, a lot of people take it very seriously. To millions, it’s not just a retail bonanza.

But marketers say: “Well, we don’t want to insult Muslims and Jews!” And they point to some survey they did, in the course of which maybe 100 carefully-selected people who happened to answer their phones skewed in a certain direction and that was extrapolated to the population at large. Lame lame lame.

In the first place, I’ve yet to hear a Jew or a Muslim complain about feeling excluded from Christmas festivities. And I’ve yet to hear a Christian complain about feeling excluded from Hanukkah or Ramadan celebrations. Every religion has its own stuff; how hypocritical to praise multi-culturalism and diversity and pluralism and then lump the observances of three religions into a muddy term called ‘The Holidays’.

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Secondly, if non-Christian religious groups are so important marketers, why aren’t large advertising dollars spent on advertising specifically to them? Crafting advertising that is clearly trying to sell ‘Christmas’, while failing to tip-toe around two other religious holidays is not only nonsensical, but arrogant, disrespectful and insulting. To everyone.

Third, marketers are not getting it right. They use the term ‘For the Holidays’, but their stores are decorated with all of the accoutrements of Christmas. At the moment, in most malls and shops, all you can hear are Christmas carols. Why not play the Dreidel Song? It’s still All Christmas All the Time—it’s just that no one wants to say that word.

This is very weird. It’s taking political correctness to a foolish extreme. Marketers say it’s ‘good business’. It’s not. It’s just silly.

Communication Gone Wrong

Blitz Magazine, July 2002

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Direct marketers always talk about how precise their methods are. About how, when they send out promotional mail, they know exactly who’s getting it. They say they can target by income level, age, children’s ages. That they know that their clients’advertising pieces are being received by potential buyers.

In the mail, I receive an expensive package from a purveyor of yacht accessories. I don’t have a yacht. I receive an elegant package from a private school, asking me to consider sending my child there. I have a poodle. Now that I’ve announced that, I’ll start receiving samples of cat food.

Trade magazines also claim to be precisely targeted. (I’m one of the few publishers who can truthfully say that, as I up-date the Blitz mailing list every day and know exactly who’s getting it.) But my mechanic receives Strategy and Reel West. He doesn’t know why, he just does. I know this because I found them on the floor of his waiting room.

Technology has allowed for marvelous developments in magazine design. With the wrong result, I believe. I glance at Maclean’s and Vancouver. Both are so over-designed as to be unreadable.

Companies that can afford to commission good creative are airing TV commercials that are cloying (Toyota), nonsensical (Suzuki, Microsoft), badly written (Nestle) and annoying (Mott’s, All Bran). Even if people can stand to watch them, or make sense of them, the ads are bad enough to turn people away from the products they’re pitching. (And how about that McDonald’s slogan: ‘There’s a Little McDonald’s In Everyone’. Think about it. Ew.)

The Internet Advertising Bureau claims that an increasing share of marketing dollars is being committed to Internet marketing. Internet marketing firms say that advertisers can be confident about spending thousands of dollars in this fashion because web advertising is now so targeted—so precise.

I am a single, heterosexual female. When I open my email, I’m offered discounts on Viagra, potions to increase the size of my husband’s penis (by 3”!!!), potions to remove the hair on my chest, and something about a virtual experience wherein I can have sex with an Asian girl.

On a per-capita basis, Canada is the world’s most wired nation. Yet 1,000,000 Canadians have closed their Internet access accounts. It was recently reported that the editor of a popular e-zine has disconnected his incoming email address. His receipts were too time-consuming, too stressful.

Broadcasters are making TV unwatchable. We have an endless stream of propaganda pieces for the US military. Laughably bad sci-fi series. Shamefully stupid sit-coms. A special on the most passionate movies in history. Anniversary specials of once-popular TV shows. Weakest Link. Reality shows. Crap.

I now use the Internet only for addresses. If an email message doesn’t immediately appear to be relevant to me, it’s gone. My recycle bin runneth over. Friends report that they own TVs for the sole purpose of watching rented movies—they now refuse to watch television.

So this is The Great Age of Communication. Communication is so easy, so quick, so efficient. Marketers are spending untold sums to communicate, and they think that their messages are reaching the right people. Methinks they’re wrong.

Worse, where the correct people are reached, they’re turned off messages by their quality. Because, more often than not, that quality is so mind-numbingly bad, so insultingly inferior, that people are rejecting both the message, and now, the medium.

Tripping: YVR Rides High as #1

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You need to fly somewhere. You want to get there quickly, efficiently and in a cost-effective fashion. Upon arrival at your destination, you grab your luggage and get a cab. Do you care which airport you fly into?

And airports are essential. All air passengers have to use them, like it or not. So do airports need to market themselves?

The answer to both questions is yes. It’s not something most of us think about, but airports do need to market themselves—vigorously—and the Vancouver International Airport Authority is particularly good at.

The Vancouver International Airport Authority (VIAA) is a 230-employee, not-for-profit, locally-controlled corporation to which, in 1992, Transport Canada passed the Vancouver airport’s management and operation. While the VIAA has taken flack for being secretive, it has done a tremendous job of managing, and selling, the Vancouver International Airport (YVR).

When it took over, the VIAA’s first order of business was to position YVR as a gateway airport—not necessarily a destination terminal. It doesn’t appear so on a flat map, but Vancouver is the closest North American city to Asia. Travelers can save an hour by flying into Vancouver from, say, Beijing, to which it’s 800 miles closer than is Los Angeles. So YVR positioned itself as offering one-stop access to North America from Asia. It wants Asian travelers flying to the US, the rest of Canada, Latin America and Europe, to fly into, and transfer from, Vancouver.

The other target was, and remains, the cruise industry. One million cruise ship passengers pass through Vancouver every summer. And they have a choice—they can fly into Seattle and drive up.

YVR had to meet the arrival and departure requirements of all these international travelers, in addition to the needs of notoriously picky Canadians. The task was to create a facility that was efficient, comfortable and accommodating to everyone.

In 1996, the International Terminal Building opened as the first terminal of its kind in North America. It was designed especially for international connecting passengers, with state-of-the-art technology for ticketing, baggage handling and customs/immigration inspection.

By 1996, $250 million had been spent on constructing the International Terminal, installing a third runway, renovating the Domestic Terminal, adding a new parkade and creating 109,000 square feet of retail space. Work continues. In 1999, $90 million was invested in infrastructure, renovation and expansion of facilities. Also that year, work began on the $40 million Airport Connector Project, which involves road improvements and a new three-lane bridge. The YVR South Terminal, which services domestic commuter, small regional and charter airline traffic, was also upgraded. (The cost of all of this has been helped along by the much-loathed Airport Improvement Fee: $5, $10 or $15, depending on destination, payable by all departing passengers.)

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YVR’s location is, for an airport, incongruous. It’s only 20 minutes from downtown Vancouver but it’s on Sea Island, which is an environmentally-sensitive area. And it’s beside Richmond, a heavily-populated bedroom community. The VIAA pays rent ($64 m/yr) to the federal government, which owns the land, but it’s the caretaker of Sea Island and has to try to keep both environmentalists and Richmond residents happy.

YVR was one of the first airports to introduce a de-icing system which eliminates the pollutant urea from its ice control program. It maintains water, air quality and noise monitoring systems. It uses electric vehicles. It has a mobile, 20-unit environmental emergency response team. Its waste management program annually handles 470 tons of paper and 127 tons of compostable food waste. Construction projects are monitored for environmental compliance. It uses dogs to prevent bird strikes and negate the need for pyrotechnics—although YVR is located in the avian Pacific Flyway, its bird strike rate is less than half of that at other Canadian airports. From the PR perspective, all of this works—a 1999 survey found that 75% of locals had a favourable impression of this corporate citizen.

Most passengers don’t think about this sort of thing. They’re more likely to notice the airport’s amenities. Such as the 72 shops in the departure lounge. The concierge service, chapel, business centre, family rooms, nursery. The loads of inexpensive long-term parking and constant free connector shuttles. The art collection, natural light and mountain views. The dozens of multi-lingual volunteers. Cruise ship passengers have their own baggage belts and carousels. Fairmont Hotels attached a 392-room inn to the airport, which it bills as the world’s most luxurious airport accommodations. It offers day rooms, gym use, in-room airline check-in and satellite check-in. YVR’s positioning statement ‘Above & Beyond’ is something its management sticks to—and it’s true that a common reaction from arriving passengers is: “Whoa, nice airport.”

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Then there’s cargo. YVR has positioned itself as the global distribution centre for cargo between the world’s major trading blocs, particularly Asia-Pacific and North America. It’s a 30-minute drive from the US border, and from the Port of Vancouver, which is served by most international shipping lines, four railways and 400 motor carriers. The central Cargo Village houses 130 transportation companies, forwarders, brokers and other related businesses. The VIAA’s positive relationship with Canada Customs, and a pre-arrival review system, allow for international shipments to be released within 45 minutes. YVR also offers pre-clearance of US-destined cargo through Free Trade Zones (Export Distribution Centres), a 25% discount on landing fees for international all-cargo flights, a fuel tax exemption on international air cargo and 24-hour operations, all of which makes for a vast reduction in air cargo costs. Obviously, cost reductions make an airport attractive.

The pay-off of this investment and overlook-nothing organization is that, in 1999, 290,000 tons of cargo passed through YVR. That’s a 14% increase over 1998, far in excess of both forecasts and growth at other west coast airports. The International Terminal Building was meant to accommodate 8 million passengers; in 1999, 16 million passengers used YVR, allowing it to surpass San Francisco as the second-largest airport on the North American west coast. In 1994, airport revenue was $128 million, concession revenue $28 million. In 1999, airport revenue was $245 million, concession revenue $61 million. Today, YVR is one of BC’s most important economic engines, generating $4 billion in annual revenues. It supports 400 off-shoot businesses and 26,000 employees—more than the province’s mining and fishing industries combined.

In the International Air Transport Association survey of leading airports, YVR was ranked #1 in North America; #4 internationally (behind Singapore, Copenhagen and Helsinki). Business Traveler Asia-Pacific magazine named YVR its airport of choice, Conde Nast Traveler placed it among the world’s top ten. It has become a management model for airports around the world.

yvr5The VIAA subsidiary, Vancouver Airport Services (VAS), markets its expertise, operating philosophies and leading-edge systems to governments all over the world, which are rapidly dumping airport operation and financing on the private sector. VAS may take over whole airports, or perform specific services. It recently took over management of four airports in the Dominican Republic, as well as airports in Uruguay and Chile. It completed, for example, the business plan at St. Maartens, the reconstruction of the runway and apron at Moncton, the new retail plan at Wellington.

It’s easy to see that an efficient, beautiful, fully-outfitted airport is going to be attractive to those who have to use it. But VIAA has to work as hard to sell YVR to everyone who needs an airport.

Janice Antonson, the VIAA Manager of Aviation Marketing, explains: “A lot of people don’t think of airport management as a competitive business, but it is. Airlines and passengers have a choice of which airports to use. Back when Open Skies lifted restrictions on who could fly into Canada, we had a lot of new carriers flying into Vancouver and we had to compete with other west coast airports—LA, San Francisco and, to some extent, Portland. And we had to fill this new terminal.

“We work with the carriers that fly into Vancouver and are the liaison between the tourism industry and the aviation industry. Once a route is brought into Vancouver, we help market that route. Our job is to ensure that all airlines that fly in, as well as travel agents and tour operators, are aware of the connections available through the airport, and the facilities and services we offer.

“Education is a big part of the job of this marketing department. For example, to help Philippine Airlines establish the Manila-Vancouver route, I would go to the Philippines and meet with their employees, most of whom probably haven’t been here and don’t know the airport. I give a PowerPoint presentation on the airport and its location. I explain about Vancouver’s Transit Without Visa program, which means that most travelers connecting to the US, depending on where they come from, don’t need a Canadian visa. You come in on a flight from Hong Kong, you go immediately to US Customs, so you aren’t technically in Canada at all.

“When you explain this, people realize that they and their customers can save an hour in the air, and another hour by by-passing Canada Customs. When you shave off that two hours, YVR becomes the logical choice. And for business travelers, time is everything. The new airport in Seoul, for example, is over a hour from the city—YVR is 20 minutes from downtown Vancouver. That makes a big difference. And what a great stop-over city. On an overnight stay, you can go skiing, shopping, golfing—whatever, and make a short trip back for your flight out. These things are very important to passengers and airline employees. And once they know all of this, they choose Vancouver.”

Antonson also works closely with the cruise ship companies, through the VIAA membership (along with Tourism Vancouver, Tourism BC and the Port Authority) in the Pacific Rim Cruise Association.

“We have to work with both the cruise ship companies, and with the airlines that feed the cruise business,” she explains. “Despite the cruise passenger traffic we already have, we actually suffer in the summer because we don’t have enough seats coming into Vancouver. Sometimes we lose up to 11 busloads a day to Seattle because all the flights coming into Vancouver are full. So we work very hard to encourage the airlines to put on a bigger aircraft and more flights.

“We have the capacity for the traffic, but the airlines don’t have the aircraft on this route in the summer—their aircraft could be heavily directed at Europe in the summer. And cruising is seasonal. So it’s a big challenge for us to keep the carriers bringing in their service year-round. The airlines have to make sure that the yield from the seat price is right, and that it’s good enough to pull a plane off another route. And they have to know that the plane bringing in those cruise passengers will leave full. It costs a fortune to leave a plane sitting on the tarmac—planes have to keep busy, so we have to present airlines with positive passenger flow numbers.”

Antonson has found that airline economics leaves little room for patience. “Once we get a flight coming into YVR, we need time to market that flight. For example, American Airlines was flying non-stop Vancouver-Miami, which was excellent, but that route was pulled after four months because the flights weren’t full. But four months isn’t enough time to fully market a route and make travel agents aware of it. It takes a lot of time and effort to make a flight successful. But the airlines have to put their aircraft where they’ll make money.”

Antonson, who would not state her marketing budget, makes sales calls to travel professionals and, for travel agents and tour operators, she produces numerous brochures, maps and booklets—everything they need to know about the airport, its facilities, its connections, and what happens to passengers upon their arrival. For others, annual reports, Skytalk Magazine and the annual Airport Business Report, are helpful. Then there’s the hard-core process of convincing the airlines to book their routes into Vancouver. All of that goes on in boardrooms during months of negotiations.

“Our Air Service Development people are in charge of negotiating with the airlines,” continues Antonson. “Some airlines approach us, we approach some. It’s an extremely complicated business and most people have no idea of what goes on behind the scenes. We can’t have carriers landing here unless they can feed into the rest of the network—they have to be able to pick up traffic elsewhere, they have to have the right aircraft and the capacity to service the route. During negotiations, they discuss everything from who the ground handlers will be, to slot times, to catering, to aircraft size, frequency of flights, destinations, where their airport offices will be.

“The airlines have to be sure that the route will be profitable, because anything relating to the operation of the aircraft is their responsibility and cost. They become YVR tenants. They have to pay landing fees, fuel taxes, airport taxes. They have their own employees, including mechanics, on the ground. It’s a significant dollar investment for them, so we show them the traffic numbers; they see how active we are at marketing the routes. It’s not something anyone takes lightly—every landing of an Air Canada 747 from Hong Kong, for example, generates 86% of a person-year of direct employment.”

Most airports don’t even have marketing departments—just communications offices. But as YVR was the first Canadian airport to privatize, the VIAA may have felt pressure to succeed, or saw it as an opportunity to do something very well. Either way, very little has not been done well.

“YVR is not just a pretty building in a pretty city,” says Antonson. “And our mandate is to market YVR as the Pacific Gateway of choice. We’re in a competitive business and have to work to get the airlines to come here and stay here. So we’re aggressive about it—we create and try new programs first, and now we’re the leader in airport marketing. YVR is a great success.”

Blitz Magazine, July 2001

Case Study: 1-800-GOT-JUNK? Becomes a Successfully Crappy Brand

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Blitz Magazine, March 2000

A freak storm hits. As you watch hail bounce off your Jaguar, you wish you had a garage.

Oh, wait. You remember that you do, in fact, have a garage. It’s just full of. Of…you can’t remember what it’s full of.

Determined to reclaim your garage, you call a charity, which says it’ll send a truck Monday, between 8:00 and 5:00. You spend your week-end sorting through mounds of old furniture, sports gear and broken gardening equipment. On Monday morning, you lug it all down to the bottom of your driveway and head to work, thoroughly pleased with yourself.

But when you get home from work, the heap is still there. You leave a message for the charity. No one calls back.

‘Next morning, you look in the phone book under ‘Trash Removal Services’. You call Guy With Truck, who says he’ll be there Saturday at 10:00 a.m. He can’t quote a price until he sees what needs to be removed. Your junk sits and waits; the city garbage men come on Wednesday, but ignore the silent plea for help.

Saturday, 4:00 p.m., Guy With Truck appears. His truck is filthy and so is he. He has one arm and one eye. Your neighbours call their dogs inside and lock their doors.

You have neglected to hide your Jag in your now-empty garage. Guy With Truck sees the Jag, sizes up your house and quotes you $600. You don’t care; you want your junk gone. You write him a cheque and watch him take two hours to load the stuff before chugging off in a cloud of exhaust.

This is not an exaggerated scenario. It happens all the time. But Vancouver entrepreneur Brian Scudamore has taken this unhappy situation and turned it into a multi-million-dollar enterprise.

In 1989, the 18 year-old Scudamore was working toward a commerce degree. At the end of his first year, he needed a summer job but couldn’t find one. Then he spotted Guy With Truck and thought ‘Hey…’.

He paid $700 for an old truck; $100 to have fliers and business cards printed. He didn’t want people to think he was a one-man operation, so he called himself ‘The Rubbish Boys’, and came up with the slogan ‘We’ll Stash Your Trash in a Flash!”. While his little brother stuffed mailboxes with fliers, Scudamore drove the lanes of the city’s west side. When he found an over-flowing garage, he knocked on the door and offered to remove the junk. By the time he returned to school, he’d made a $1700 profit.

Scudamore kept working at the business. By 1993, it was so successful, he decided to make junk removal his life. He incorporated, hired student drivers and invested in more trucks, all bearing the slogan and ‘Rubbish Boys: 738-JUNK.’ Between word of mouth and these mobile billboards, business took off. By 1995, revenues were $100,000.

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This success had much to do with how Scudamore differentiated himself from Guy With Truck. He offered same-day service and promised to remove everything except toxic substances. Rather than charging a rate based on his perception of a client’s income, he provided a printed, pre-set pricing structure (from $35 for a mattress, to $339 for a full truckload).

Not only did the Rubbish Boys not show up late, they called 30 minutes before to confirm the appointment. Their trucks were spotless. They were clean-cut, polite university students wearing snappy blue and green uniforms. They cheerfully removed your junk, and then cleaned up after themselves, sweeping garages and driveways and/or raking the grass. They provided proper receipts and, a few days later, called to make sure you were happy with your service.

junk6By 1997, Rubbish Boys had 16 trucks, 45 high-season employees and revenues of $1 million. Scudamore was nominated Entrepreneur of the Year by Ernst & Young and the Business Development Bank of Canada. He was one of 11 BC firms to make Profit Magazine’s list of 100 Fastest-Growing Companies in Canada—its five-year growth rate of 1,169% put it at #74.

There were contributing factors to this success. In Greater Vancouver, residents are allowed just two bags of garbage per week. And practically every city block hosts renovating yuppies, most of whom don’t know where the nearest dump is, let alone have the requisite vehicle.

Another factor is that charities are increasingly selective about what they take. They get way too much junk and don’t get a break from the dump—some charities spend $20,000 a year on dumping fees. You may think you’re doing someone a favour when you give an old couch to the Salvation Army, but if it’s torn or broken or water-damaged, it’s going to the dump at a pricey $65/ton (the average truckload weighs 1.1 ton).

In addition, Vancouver has many commercials and residential buildings belonging to absentee owners. These buildings are operated by property management firms—professional organizations that don’t want Guy With Truck anywhere near their clients’ properties. Also, while dumpster rental is cheaper than Scudamore’s service, construction companies often find it more efficient to hire him. Now, half of his business is residential, half commercial.

Then there’s the staffing aspect. Junk removal is an April to October business—that’s when everyone cleans up. With commercial contracts, Scudamore still has work in the off-season, but his business is largely seasonal. Seasonal business can’t afford to hire guys who need salaries; they need to be staffed by people who want to work only from June to September.

“For the first three years, Rubbish Boys was a student-run operation—you had to be a student to be hired,” recalls Scudamore. “But by 1998, I realized that, while students were professional, clean-cut and polite, they had no business experience. We were growing and we needed people who knew about building a business.”

junk5Not wanting to abandon his students, Scudamore instituted STEP, the Student Training in Entrepreneurship Program. He recruited students, and then helped them create mini-franchises. They were fronted the requisite cash and provided with a partner, a truck and a route. They received a base wage and a share of the profits; they had to do their own sales and media relations. The most profitable students in each territory received scholarships of $500 to $1000. To date, 180 students have participated.

There was more method to this: Scudamore wanted proof that his operating system could be franchised. Rubbish Boys’ 1998 earnings were $1.3 million; Scudamore saw that there was no barrier to his company’s becoming the Federal Express of junk removal. He had built his brand, it was time to franchise.

The company name became 1-800-Got-Junk? (inspired by the ‘Got Milk?’ campaign). The owner of the 1-800-Got-Junk? telephone number was persuaded to relinquish it. A $30,000, 12-line call centre was installed. Scudamore invested $500,000 in consultants and technology, and perfected a franchise system that easily allowed expansion. Information packages were produced, ads were placed in franchising magazines, the word spread, people started to call. Now there are franchises in Seattle, Portland, Edmonton, Calgary and Toronto. Scudamore’s goal is to have franchises in 30 North American markets by 2003.

junk3The 1-800-Got-Junk? system is simple. Scudamore selects two or three candidates per territory, depending on its size. Successful candidates have to know their markets and have strong sales skills. They must pay $20,000 to the company then invest another $30,000 on leasing, staffing and out-fitting an office; and on acquiring, painting, insuring and staffing trucks. Scudamore does not want franchise owners driving their own trucks.

“We want people working on the business, not in it,” he says. “These franchises are about starting from scratch and using our system to build the business. As people see the trucks and get to know about the brand, they’ll call. In the meantime, we want our franchisees knocking on doors, making presentations to property management companies and staying focused on growth.”

In addition to training, promotional materials and business plans, franchisees receive their phone systems as part of the package.

Regardless of where customers are, when they dial 1-800-Got-Junk?, they get the Vancouver call centre. The centre takes all bookings, organizes drivers’ routes and e-mails the orders to the appropriate franchisee, who re-confirms pick-ups and takes it from there.

junk4Franchise owners also receive the company’s proprietary management system—Junkware, a software package that handles all areas of operations, from scheduling to accounting to marketing.

“All of this is done on our server, but we’re not playing Big Brother,” points out Scudamore. “Junkware is a coaching tool—we want our people to succeed.”

Franchisees pay an 8% royalty, plus another 7% for call centre services. Their gross profit should be 40%, their net 20%. Fixed costs vary by market but, for a $50,000 investment, franchisees enjoy minimal risk in a lucrative, seasonal cash business. And it’s worth it. The Toronto franchisee became the largest junk removal service in that megalopolis after four months of operation. His 1999 sales were $250,000 with two trucks; this year, he has six trucks, 20 employees and sales should exceed $1 million.

 All of this without anything resembling a sophisticated marketing or media program. While Scudamore plans to actively advertise one day, he has always preferred the inexpensive, face-to-face approach.

“Paid advertising has never given us the same return as the face-to-face sales,” he explains. “We’ve tried radio—it wasn’t worth it. We had a little more success with newspaper advertising, but it’s too expensive. We do decals and t-shirts; we’ll take part in home and garden trade shows, construction and renovation trade shows. We just stay out there and keep reaffirming the brand. For us, the most effective way of communicating is via our trucks, our fliers, word-of-mouth and media attention.”

Scudamore has received loads of media attention. He coaches franchisees on how to garner it, and he gets involved in community events. For example, when the community of White Rock was devastated by rain and mud last year, Scudamore’s staff went there to clean up. Scudamore also invented a program called PRIDE: People Removing I-Sores Dumped Everywhere, through which 1-800-Got-Junk? works with community volunteers to clean up littered areas.

Last year, the company posted a website (www.1800gotjunk.com or www.rubbishboys.com). The site gets about 1,000 hits a week, but few people book on-line, preferring to call.

The slogan ‘We’ll Stash Your Trash in a Flash!” slogan is long gone. Now, trucks carry the new phone number and the website address. Liberal distribution of bright, die-cut fliers and $10 or $20 TrashCash coupons remain a mainstay, as does old-fashioned cold-calling.

So Scudamore has taken the most simple of businesses and given it an efficient franchising system and an easily-remembered call-to-action phone number. To date, he and his staff have delivered 15 million pounds of junk to dumps and recycling depots. He has 20 full-time employees and 75 seasonal employees. Sales for 2000 should hit $4 million. And he has no competition. Or….?

“I do have competition,” he says. “The guy with the truck.”

 

On Official Advertising Complaints

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Blitz Magazine, May 1998

I just received my copy of Advertising Standards Canada’s Ad Complaints Report. Previously, the ASC provided only statistical information on complaints. Now, for the first time, it publishes details about complaints lodged by consumers and sustained by the ASC’s National and Regional Consumer Response Councils.

Last year, 598 complaints were received, 296 were pursued, 132 were sustained. Most complaints were about misleading pricing or product claims. The automotive industry accounted for most, there was a sharp rise in reverse sexism complaints and, for the first time, complaints about the negative portrayal of men were sustained. The most notable feature of the report was the increase in the number of advertisers revising or withdrawing ads before they were evaluated.

A few complaints caught my eye. An Alberta show retailer ran a newspaper ad featuring a woman posing behind a large cowboy hat, wearing only cowboy boots. Two people complained that it was offensive to feature the sexualized image of a woman in order to sell footwear. The panel concluded that it was indeed sexually exploitative to show a woman wearing nothing but cowboy boots in order to sell a product that was unrelated to sexuality. (Footwear has been a form of sexual communication for centuries, and Gucci can barely supply the demand for its bum-boosting, 6” spikes, but never mind…)

The panel upheld a complaint about a newspaper ad run by an Ontario automotive repair shop. The ad showed a man, from the back, wearing swimming trunks, under the headline ‘We Specialize in Rear Ends’. One Sensitive Man found that his inner child was offended and that was it for the ad.

The most amusing instance involved a national television campaign run by a food manufacturer. In the spot, a virile delivery man provokes sexual fantasies in a group of women. One complaint was received, claiming that the commercial degrades women by depicting them as slaves to their sexual desires. But the panel found that the commercial exploited men’s sexuality by objectifying the male in a purely sexual role.

This is funny, but it’s also annoying. Ads are pieces of communication, created to catch attention and sell something. Period. No one wants ads that make false claims or encourage dangerous activity but, in these ultra-competitive times, the last thing any business needs, after spending thousands on creative and production, is to have negative action taken to placate one or two people. I like the fact that Canadians are known to be clever and polite—I’d prefer that the term ‘anal-retentive’ remain out of any description of our national identity.

 


Case Study: Subway Wraps Up Its Region

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A lot of British Columbians think that Subway is a BC company. They see Subway outlets while vacationing in other countries and just assume that Subway is another BC firm that has done well.

But Subway is not a BC company. It was founded in Connecticut, in 1962. Today, there are 13,000 Subway restaurants in 68 countries—1,300 in Canada. It is the second-largest franchise in the world, next to McDonald’s, in front of 7-11 and Century 21; and it is the largest franchise in BC.

In 1987, Gerry Lev, then a Calgary franchise consultant, discovered the Subway concept at a trade show. There were 1,000 Subways worldwide, none in Western Canada. In 1988, Lev founded Subway Developments of BC, and the division celebrates its 10th anniversary with 218 stores. And, out of all Subway divisions, and in terms of sales, the BC division is at the top, leading by up to 25%. If that lead is narrowing, it’s because BC has become the model for divisions which are following its lead and catching up.

How can this be? There are only 3.9 million British Columbians. But they eat a lot of Subway sandwiches—400,000 a week, putting annual sales at $90 million.

The answer lies in a potent combination of organizational ease, corporate savvy and media communications, all boosted by the intrinsic qualities of the BC lifestyle.

In the first place, as Lev explains, Subway restaurants are easy to own. “When you buy a franchise, you buy an operating system which has been perfected over time. One of the hallmarks of our system, and our success, is KISS—Keep it Simple, Stupid. The recipes are simple, procedures and operations are simple. There’s no cooking involved, so we don’t need thousands of dollars worth of equipment. The cost to open a Subway franchise is $140,000—a McDonald’s franchise can run from $700,000 to $1 million.

Secondly, Subway has benefited from a lack of competition. “In 1988, there were no sandwich chains in BC,” continues Lev. “There were sandwich stores, in office buildings, closed in the evenings and on week-ends. There was no alternative to burgers, and Subway sandwiches quickly became the perfect alternative, but with the convenience and economy offered by fast food.”

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The price of a Subway sandwich begins at around a dollar and, although the corporation’s research shows that portability is not a major factor overall, it’s probably a bigger factor with BC consumers, who appreciate the fact that they can buy their lunch on their way to work or school, or stow one in a knapsack to eat at the beach or on the mountain.

 “Freshness is our biggest selling point, value is number two,” continues Lev. “But what brought Subway to the forefront is the fact that our sandwiches are not pre-made. People watch their meal being made—precisely to their instructions. The Subway bread is baked in front of customers, which is another selling point; and there’s our traditional ‘U-Gouge’, which is a way of cutting the bread so the contents of the sandwich won’t fall out.

“Variety is another selling point. We have something for everyone—meat, vegetarian, low-fat—and one of the best breakfast sandwiches in the industry. But, getting back to the KISS formula, we’re in the business of appealing to the masses. Some Subway stores offer soup and salads, and we have items like potato chips. But our business is selling sandwiches.”

The Subway benefits are not difficult to communicate to a receptive public—everybody loves a sandwich. The big challenge has always been budget. Subway collects advertising funds from franchisers, and that money is spent on ‘national’ (North American) advertising, care of Chicago agency Hal Riney & Partners. That agency works with a corporate board, and a franchise board, while keeping everyone moving in the same direction—no mean feat, considering the company’s growth: from 10 restaurants to 1,000 in the first 20 years, to 11,000 a decade later, to 13,000 six years after that.

In addition, each division has its own advertising agency. The marketing plan comes from head office in Connecticut, Riney develops is nationally, and the local agencies worth with their own franchisee boards to develop the plan locally. In BC, the agency that is i2i Advertising & Marketing, and its annual budget is $4.5 million. That’s not much for the ultra-aggressive fast food industry, but it’s way more than the franchise had in 1991, when i2i partners Stuart Ince and Cam Iverson began with Subway.

“Back then, Subway BC was 14 stores and the franchisees had just pooled enough money to hire professional help,” recalls Iverson. “That amount was below $100,000, so the account didn’t interest many agencies. But we knew the chain would take off here. It fit the west coast lifestyle, and it fit well in terms of competing against other fast food chains.”

The BC division took off in 1993, when the franchisees decided to go beyond the 2.5% of sales which they were contracted to put into advertising and begin an Additional Funds Program, becoming the first Subway division to do so.

The extra budget immediately shot up our presence—and sales,” says Iverson. “The sub sandwich is part of the eastern deli mentality. With the extra money, we were able to make the Subway sandwich a BC thing.”

Therein lies the key to Subway BC’s success. “We made ourselves a BC company, and part of the BC community,” Iverson continues. “This wasn’t strategy—our franchisees are BC people and they want to be part of their communities and do things they can be proud of. So, aside from spending advertising dollars wisely, we get involved in events and promotions at a very local level—and it’s that community involvement which explains why so many people think that Subway’s head office is here.”

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Subway BC is big on philanthropy. It raised $35,000 for Canuck Place (at the beginning, before the band-wagon effect kicked in). Ditto with AIDS Vancouver. Its Heroes for Hunger program gave a free sandwich to anyone who delivered a Food Bank donation. Every day, Subway feeds supporters of something: the Terry Fox Run, the Children’s Festival, the March of Dimes, Boy Scouts, the BC Boys Choir, Minor League hockey and Little League baseball. It supports scholarships, and it bought the ‘Shout No!” program, working with police and schools on child safety.

 subway6

These are, of course, promotions. But community involvement is Subway BC policy, and philanthropic promotions stretch advertising budgets. “We don’t do many things in a huge way, and we never pick causes for profile,” says Lev. “Most international companies don’t get involved with local figure skating clubs, and we don’t get the publicity that others get, but we reach thousands of people by doing a lot of little things.”

Subway has also been smart about advertising. This has not always been easy, considering the fact that half of its radio spots and all of its television ads are created in Chicago. It took a while for US creative teams to realize that Canadian and American sensibilities aren’t the same.

“It used to be a horrendous problem,” recalls Lev. “I spent a lot of time saying ‘No, not in Canada.’ I don’t have to do that anymore. Now, they know Canada well and we get Canadian versions of everything.”

Once i2i has the marketing plan, it can do what it likes—another success ingredient.

“The BC franchisees are left alone in terms of advertising and promotions,” says Iverson. “And they’ve been aggressive at putting together deals which build Subway’s presence far beyond the dollars they have to spend. We have to work harder to push media dollars into creating image, so we’ve become involved in loads of cross-promotions and have forged strong relationships with media partners. Those promotions have been a large factor in putting us ahead of other Subway divisions.”

Subway runs ten major promotions a year. Its biggest is the annual ‘Survive in Style Sweepstakes’. The concept was a small part of the national marketing plan, but i2i worked with Global Television to make it fit the BC culture, and it took off.

“The national promotion was about fast food survival tips,” says Iverson. “We made it about what you need to survive in BC. We have a true partnership with Global in that we plan it together and tie it in with Global’s Sports Page. Then we give away vehicles, scooters, mountain bikes, cellular phones, vacations–$100,000 worth of prizes. It’s now bigger than most of Subway’s national promotions.”

Another major promotion is the chance to win a trip to the Stanley Cup Finals—essential, of course, for the all-important 18-34 male demographic. “Sports are very important to us and we don’t have the money to participate in the TSN buy,” continues Iverson. “The Stanley Cup promotion lets us tie ourselves to hockey without becoming involved with a team. We’re perceived as being sports-related, even though, at the professional level, McDonald’s is much more invested. We’ve done a little guerrilla marketing…I guess we’ve stolen some thunder.”

(In that vein, one famous tactic is the use of the Subway plane. If Subway can’t afford to sponsor an event, it rents a plane, attaches a banner and repeated flies over the event. After seven years, this remains one of Subway BC’s most successful marketing tools.)

Another smart move was looking at the competition and going in the opposite direction.

“Corporately, our market is 18-49, and that is what our media buys target, but we stay very aware of the 12-17 customer,” says Iverson. “McDonald’s targets families. Teens don’t want to be where families are. So we’ve presented Subway as the cool place to go. We aligned ourselves with the younger radio stations; the Z95—Subway sticker prize campaign was extremely successful. And we created the Sub Dude and got involved with snowboarding at the beginning of snowboarding—there was a time when no self-respecting snowboarder would be caught without a Subway sticker on his board. Teens love us—not only is a Subway sandwich a cool food to eat, but their parents don’t mind. Now, it’s kind of a cult food.”

As far as Lev is concerned, the Subway market is anyone with teeth. “It’s anyone who can eat a sandwich. BC has the largest senior population in Canada and seniors are concerned about blood sugar, fat and cholesterol. And children are the grown-ups of tomorrow. But we don’t have the funds to go after individual markets.”

So individual markets are targeted quietly. “A child’s choice is the determining factor of where parents go, but kids want toys,” explains Lev. “If Dairy Queen advertises a toy promotion, it’ll get the families. We can’t advertise that way, so we have a Kids Pack program—a school lunch with a sandwich, drink, cookie and toy. As a result, we feed more BC elementary students than anyone else.”

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In BC, more than any another Subway region, women are a larger market: 50%. “Between 7:00 p.m. and 11:00 p.m., we get men; that’s when we sell the foot-longs with double meat and cheese,” says Iverson. “But at lunch, 60% of sales are to women. At the beginning, we had to focus on the 18-34s, then we built in the 12-17s, then we spread out to the 12-49s. Now, half of our customers are women. So we’ve broadened the net further. We run ads on female stations like KISS and QMFM, focusing on four-inch sandwiches, the lighter lunch, the sandwiches with six grams of fat or less.”

Subway heavily promotes the latter, but the low-fat aspect adds irony to any discussion involving the fast-food industry. “North Americans are fatter than ever, fries and chocolate are the top-selling foods, steakhouses are North America’s fastest-growing restaurant category and Wendy’s salads are gone,” says Lev. “So while it’s great that people see Subway sandwiches as an alternative to foods that they deem to be fattening, I’m not sure that they care about fat. People may think more about nutrition, but whether they act on it is a different matter. It’s just that the sandwich connotation is more positive.”

Connotation is another important point. “We’re careful to position ourselves in the sandwich category because of the submarine connotation,” says Iverson. “The submarine is rooted in the Northeastern US Italian-American community, where it’s a mainstay. In BC, before Subway came here, submarines were seen as something that fat men ate while they watched TV. Nobody had heard of a meatball sandwich. Or a foot-long steak-and-cheese with Marinara sauce. We communicated a different connotation for BC. Now, we sell a lot of those sandwiches.”

“Kentucky Fried Chicken is now KFC and McDonald’s calls its burgers ‘sandwiches’,” adds Lev. “Subway has never used the word ‘submarine’. As we’ve built our brand in BC, the focus has been on sandwiches, and the fast, inexpensive made-to-order meal. We’ve always promoted our 6” sandwiches—never our foot-longs. The 6” sandwiches fit with BC eating habits, and we won and R&D award when we devised 4” deli rounds, because we created a food that was appropriate for our market.”

All Subway restaurants sell 16 sandwiches—12 corporate, four local. The latter are created by franchisees, and this allowance is yet another reason for Subway’s success.

“The franchisees can choose what they sell, as long as it’s on Subway bread,” explains Lev. “And there’s no test kitchen, anywhere. We try things. If they work, great. If sandwiches don’t move, they come off the menu.”

i2i has used this flexibility for the highly-successful Sub of the Month promotion. “The freedom to create menu deviations has been a real bonus—and franchisees’ input is listened to,” says Iverson. “If head office were to introduce a sandwich which the franchisees knew no one in BC would eat, they could opt out. And we can push sandwiches which fit the BC culture. For example, we knew that chicken would work here, and that a Caesar salad would work here, so we helped develop the Kickin’ Chicken Savoury Caesar. It took off and became a national campaign. And the Sub of the Month program allows us to regularly present a different reason to come to Subway. It’s not rocket science, but it gives us product news and drives traffic.”

The two other Subway divisions which are catching up to BC are Alberta and Minnesota. They too have followed the formula of becoming part of their communities’ fabric, while staying with the national plan.

“A lot of other markets ran their own programs and, in the process, created too many Subway faces,” continues Iverson. “National ads would say one thing, local ads would say another, promotions would say something else. We create our own advertising and promotions, but we stay close to the national campaigns. So the advertising is different, but there’s always something that ties it together.”

Iverson says that the real credit goes, of course, to Gerry Lev and the Subway franchisees.

“Gerry’s progressive—he knew he needed to do more than just sell franchises. He’s a great communicator, he keeps everyone informed, brings in educational speakers. His franchisee support system has really helped the growth of this division. And the franchisees put a lot of energy into staying ahead of the pack. They’ve been willing to take risks and increase their spending. So we have BC people who have worked hard to put a BC face on an American corporation. And sales are way higher than in any other division. It’s an impressive accomplishment.”

Blitz Magazine, May 1998