| Best Testimonials for Doughnuts on Tips of Customers' Tongues |
Reprinted From: the Tucson Citizen December 3, 2002 By Shella Calamba |
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Long before Krispy Kreme opened its first store here, the company could boast of Tucsonans salivating at the prospect of eating its doughnuts. And it built that customer base largely without TV commercials or newspaper ads. Instead, Krispy Kreme relied on what many marketing professionals say is one of the most effective - and cheapest - forms of advertising: word-of-mouth. "A favorable word-of-mouth is really better than a splashy TV commercial," said Michael Bolchalk, president and chief executive officer of local firm Michael Bolchalk Marketing. "If the messenger is a trusted source, what can be better?" The "Hot Doughnuts Now" light was flipped on at 5 a.m. today at the 4,700-square-foot store on North Oracle Road, across from Tucson Mall, and the first customer won a year's supply of doughnuts. Although Krispy Kreme stores dot states across the country, its popularity mirrors that of local bakeries, said Sidney Levy, head of the marketing department at the University of Arizona's Eller College of Business and Public Administration. "Local bakeries don't have to advertise a lot," Levy said. They have "the merit of something you've discovered ... . Nobody told you about it with billboards." And as a brand becomes more widespread and well-known, "you don't need the advertising because it's riding on its own," Levy said. Bolchalk said the word-of-mouth strategy works by exceeding customers' expectations. "Either they have a great experience with the product or you feel like it gives you added value or you get great customer service with it," he said. One recent example of a successful word-of-mouth campaign, Bolchalk said, is "My Big Fat Greek Wedding." The low-budget film smashed revenue expectations because audiences talked it up, he said. But negative word-of-mouth can do "untold damage," Bolchalk cautioned. There's a saying in marketing circles that unhappy customers are eight times more likely to tell someone about their bad experience than a satisfied customer is to spread good news. But as long as Krispy Kreme delivers a pleasing product, potential customers will get caught up in the testimonials from satisfied customers, Levy said. "It takes on definition. They're not just another wad of sugar," he said. "They're Krispy Kreme." Levy also noted that many marketing strategies eventually lose their effectiveness. Krispy Kreme likes to promote its doughnuts as so fresh they're still hot from the fryer. "Dunkin' Donuts was like that to begin with," Levy said, but it is time for the company to create a "fresh version." Bolchalk said word-of-mouth can work for any product, although much depends on a company's timeline for achieving success. Before opening in Tucson, Krispy Kreme had the advantage of having built up considerable equity in its brand name, he said. Dean Leisman, senior vice president of Rigel Corp., the company with franchise rights for Krispy Kreme in Tucson, said the doughnut maker's strategy is to create the kind of atmosphere that "people want to be a part of." In any event, don't expect to see Krispy Kreme commercials on your favorite television show, Leisman said. "It's expensive," Leisman said. "With one store (in the market), it's hard to justify being on TV." |
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