« What's in a name |
Main
| More on GM »
February 22, 2005
Blockbuster Busted
Posted by Jennifer Rice
Blockbuster's getting sued for false advertising claims (from Adrants):
Blockbuster has been caught with its pants down regarding its new "No More Late Fees" ad campaign. Unbeknownst to most, the video rental company's largest campaign to date amounts to a lie... New Jersey Attorney General Peter Harvey filed a lawsuit last Friday claiming Blockbuster did not disclose the reality of its new program.
While it's all in the fine print, Blockbuster's program does not do away with late fees. It simply recategorizes them into a "sale" on the eighth day. If, after 30 days, the video is returned, the charge is credited but then the company imposes the well known, "we'll do anything for a buck" trick and charges a restocking fee.
Ouch. Talk about a great way to destroy brand reputation. One of the tenets of the BrandShift philosophy is authenticity. I think the folks at TrueTalk have done a great job in defining a few key terms related to authentic conversation (go there for more):
- Honesty: We mean what we say.
- Transparency: We don't pretend or hide our true motives.
If this lawsuit has merit, then Blockbuster fails on these two items. I've seen the Blockbuster billboards: "No more late fees." They're trying to compete with NetFlix without changing the way they operate. Somehow they think that changing the label from "late fees" to "sale" changes the meaning of the transaction. Great example of putting lipstick on a pig.
I believe that all companies should start asking themselves the question, "Will this activity build or betray trust with our customers?"
Comments (6)
+ TrackBacks (0) | Category: Authenticity
- RELATED ENTRIES
- › They Say Things...
- › Lafley On Marketing
- › Kryptonite Is Back
- › Participate in the Reputation Marketplace
- › Create More Satisfied Non-Customers
- › Innovation
- › You, Called the Brand
- › Just Words
Jennifer Rice
Andy Lark
Johnnie Moore
John Winsor
1. Steve Portigal on February 22, 2005 01:17 PM writes...
Do you think Blockbuster is acting out of either desperation or arrogance? I definitely had an uncomfortable twinge when the story made the blogosphere a few weeks back, "fine print" revealing something sneaky. Seeing a legal reaction actually validates my feelings; I guess I don't have a lot of loyalty or trust or any positive relationship with Blockbuster (I remember a few years back that their employees would sometimes fail to properly process my returns; I'd get a smug YOU OWE US $3.99 at my next transaction, at which point disputing I did or did not return it was rather futile, and so these undertrained individuals would cop a rather needless attitude and promise me THIS TIME ONLY would they take my word for it; next time I would be charged - I think I stopped renting there because who needs the stress?) so underhanded manipulations like no late fees actually being "we charge you full price" seemed in character.
Permalink to Comment2. Geoff on February 22, 2005 01:32 PM writes...
This case will be dismissed. It's perfectly legit for them to advertise in this manner since they do admit to making consumers pay extra.
And no, I have no connection to Viacom.
Permalink to Comment3. jennifer rice on February 22, 2005 03:56 PM writes...
Geoff, I'm sure you're right... Blockbuster is smart enough to do its due diligence with corporate attorneys and ensure that they wouldn't have legal problems. My bigger concern is that they're relying on an advertising gimmick to promote something that consumers want, and that a competitor offers -- but the company isn't prepared to actually deliver on. As Steve mentioned, it smacks of underhanded manipulation.
Permalink to Comment4. Dustin on February 22, 2005 06:57 PM writes...
It's especially deceptive when you combine their promotion with the knowledge that their online subscription model DOES allow you to keep the videos as long as you want. The only catch is you can only keep three at a time with their $15/month subscription model.
This is not just a black eye for Blockbuster, it is another punch in the gut for all marketers. I just got an email from our purchasing agent. She got a "tip" from a buyer for a gas station chain that their prices were going up 15¢ tonight. The last line of our purchasing agent's email to me was, "We will see tonight if she is a reliable source or a good marketing agent!" Shows you what people think of marketers.
Another element of authenticity: Accountability.
Permalink to Comment5. Bruce DeBoer on February 22, 2005 07:52 PM writes...
You know what? Blockbuster will be the ones that ultimately pay for a poor decision. I was suspect when I first saw the ad for no late fees - "how can they do that?"
After realizing that is was a slight of hand advertising gimick I had that feeling of doom in the pit of my stomack. My "desperate corp. move" radar was up and flashing.
Who is their agency anyway? The best way to lose an account is to let the whole company fail. Right?
-bruce
Permalink to Comment6. Dustin on February 23, 2005 02:37 PM writes...
Yes, Blockbuster will ultimately pay for their decision, but I believe this just feeds that intrinsic distrust most people have of marketers. I write letters to our prospects and customers all the time, but they're approved by and signed by our VP. Why? Because people don't trust a letter from the marketing director.
Permalink to Comment