Taco Bell: We haven’t figured out f-commerce, we can’t even give tacos away on Facebook…

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Okay, so here’s a conundrum, if P&G can sell 1000 diapers in under an hour on Facebook, why can’t Taco Bell give tacos away for free on Facebook?

There’s an interesting post over at the Nudge blog reporting that when Taco Bell recently decided to offer its 6 million fans a free taco — no strings attached,  only 3% took them up on the offer.

Chief Public Affairs Officer Jonathan Blum of Taco Bell’s parent company Yum! Brands admitted “We haven’t even been able to give away the food, never mind figure out how to sell it online.” (see (long but interesting) Northwestern lecture featuring Jonathan Blum Yum! Brand, and Terry Davenport, Starbucks). Bottom line for Taco Bell – ‘We haven’t figured out how to make the cash register ring with social media’.

What’s going on? You can sell diapers on Facebook, but you can’t give away tacos to Taco fans…

Of course, the P&G f-commerce offer had the convenience of home delivery – whereas to claim the free  taco Facebook giveaway, you had traipse over to a Taco Bell restaurant.  Rule 1. Make it easy for customers. And you had to kill a tree and print off your free taco voucher. Rule 2.  Make it easy for consumers (and allow them to polish their halos (SMS vouchers?)).

But the key difference between the two – we think – was that P&G was shifting special stock – a fan-first exclusive of a new product line, not available anywhere elsewhere – online or offline.  Taco Bell, on the other hand, was offering regular 99c tacos available everywhere for everyone.

In other words, the P&G offer had ‘scarcity value’, offering ‘social currency’ – bragging rights for a get-it-first exclusive. We think this get-it-first experience is the true home turf for f-commerce – fan-stores that sell fan-first exclusives. We’d recommend thinking twice about f-commere, if you are just going to sell what’s already available elsewhere.

EXCLUSIVITY may be the key to f-commerce success. Thoughts?

 

About the author

Paul Marsden

Chartered psychologist specialising in consumer behaviour and technology. Certified CX professional experienced in Design Thinking. A researcher, writer and speaker, Paul is head of Digital Insight at SYZYGY.

33 comments

  • I think you hit it on the head. Exclusivity is definately a must. I see way too many brands that are on all the channels offering the same thing everywhere. Taco Bell seems to repeat the same offer (free $.99 taco) whether its when someone hits a homerun or if you guess the answer to a question correctly or just because its Tuesday June 21. Now, they are making this attempt on Facebook? Printing the voucher is definately something they should not have done. For me personally I would rather pay the $1 than go through the trouble. What could they do differently for fans? Next time their R&D team comes up with a new idea for a taco, bowl, burrito or whatever, offer it to the fans first and see what happens. And dont make them print something.

  • Given the success of the Chipotle Mexican Grill first quarter Facebook/NBC BOGO, my feeling is that there is a disconnect with perception of value and demographics. Is the Facebook demographic interested in a free $.99/taco or do they see value in paying $6.00 for two burritos built around “food with integrity” values? I choose “food with integrity” as the game changer.

  • Good post. Thanks for covering. I agree with Christina, but will also add that the concept of exclusivity could include a redemption cap, as well as temporal limitations. Enteract Media has a client who gave away free products to a limited number of people for only one weekend. Their Facebook audience response rate was approx. ~20%. Even though they gave away product with no strings attached, the campaign cost less than brand advertising in traditional media and brought more customers through the door. The value went straight to the customer instead of an intermediary. Win-win. Long term loyalty metrics to follow.

  • A few thoughts:

    * Per Christina’s comment, I think it’s pretty simple/obvious. Consumers are unlikely to make a special trip for a single 99-cent item. In fact, that kind of promo is more likely to cannibalize purchases by regular customers.
    * The comparison with a diaper promo is not particularly apt or telling. A better comparison for the Taco Bell FB offer would be Einstein Bagels.
    * I’m pretty sure that diapers are not collector’s items, so I’m not persuaded that scarcity is a factor. Sounds more like the hook for a standard sampling play. You’d need to know whether the “scarcity” FB promo under discussion performed better than other P&G offline/FB new product promos.
    * Parenting is a high-involvement consumer category, and new parents are inundated with coupons, online offers and product samples before they even leave the hospital, so they are conditioned to seek and participate in special offers.

  • If you’re really going after a FB and Tech saavy crowd then why do you force them to print off a voucher? Printers are pretty close to fax machines for most individuals. The 99 cents isn’t worth the trip + paper + ink + time that it takes to redeem. That’s not a value, that’s a waste.

    I was in Qdoba (just like Chipotle) this weekend and they had BOGO for Father’s Day (saturday and Sunday actually). They were packed. Did it cost them? Nope, they made tons on sodas and families feeding their kids at full price. Taco Bell needs to learn how to trade. I’ll trade my dollars most of the time vs. getting something of very little value for “free”.

  • This is a great article, but I think there are some other points to take into consideration. I feel that diapers vs. tacos is not a fair comparison, especially since diapers are more expensive than Taco Bell in the first place (let’s be honest–if you’re spending more than $2, you’re probably buying too much food), and diapers are a dry good while tacos are foodstuffs. I would also point out that diapers are a (sometimes desperate) need, while tacos are not necessarily so–it’s fast food, not something that you _need_ for daily life. I wonder if there is another fast food company that has offered free food via Facebook with the same great response as P&G or the lack of response experienced by Taco Bell? I do agree that printing out a coupon adds the extra hassle to the customer–but the fact that they don’t deliver the food as a customer hassle issue? Not so much. But overall, great points in this article.

  • @Bill Stewart

    I think it can be said even more simply: quality wins. Every time, even if it is an illusion. Why? Because it isn’t about exclusivity, although that does help and I wouldn’t bet against it. But consumers love value, they love to feel as if they are getting great value. A 99c taco does not fill this need. As Bill pointed out, the 2/$6.00 offers a great motto, which gives rise to the perception that it is of greater value. Greater value leads to greater success for a company.

    Taco Bell won’t “win” in social media unless they learn to offer great value or to create the perception that they are. It really is that simple.

  • Maybe, just maybe, it’s that Facebook isn’t the best marketing platform, especially for a $0.99 taco. Yeah Facebook seems to be a great place to sell “How To…” programs featuring Facebook. But is it a great place to sell other stuff or do Facebook users come to the platform to chat and trade pictures with people they barely knew in high school?

    Do businesses need Facebook Pages? Yep. For SEO if for no other reason. But in the end it makes more sense to use Facebook to drive visitors to other websites where people expect to get a sales pitch. I put my local business clients on Facebook for the reasons I stated but I tell them not to expect a lot of business form the site.

  • Never offer anything free … you devalue your brand and product. People do not appreciate something for nothing …. some psychologically think anything “free” is a link to a scam … especially over the Internet …

    Free is a four letter word that starts with “F” … has always been my saying.

    The only entity that made mom ney on this was Facebook from Taco Bell and any crossover clicks on Ads, offers or apps that Taco Bell brought to their site via promotions paid by Taco Bell.

    A 3% take rate (or higher) could have been accomplished by direct mail to anonymous people based upon geodemographic data within X miles of a Taco Bell … this is clled database marketing … no Taco Bell, I am not for hire …

  • I think the success of P&G’s efforts does, indeed, center on “scarcity” or “exclusivity.” Which is one of the six weapons of influence as outlined by Robert Cialdini in his best seller, “Influence – The Psychology of Persuasion.”

    The six are…

    1. Reciprocity – returning a “favor”
    2. Commitment and Consistency – honoring a previous agreement or statement
    3. Social Proof – do what other people are doing
    4. Authority – do what the person with the highest title/rank, the fanciest car, or the nicest clothes says
    5. Liking – follow the advice/instructions of people you like or are attracted to
    6. Scarcity – perceived scarcity generates demand

    Taco Bell would do well to draw on this insight and present a 99¢ taco in light of one of the remaining 5. A buy one get one offer may have performed better because the concept taps in to liking and/or commitment to consistency. Two tacos for the price of one still gives a free one away, but requires customers who already come in regularly to do as they’ve done before. Which may keep them from going somewhere else next time they want a taco.

  • Freebies go quickly on Facebook if the taco’s didn’t there is something wrong. And every freebie is mailed to you or you have to print the coupon.
    Most are gone within 5 to 15 minutes even for a sample.
    The problem was a .99 freebie + printing doesn’t make sense.
    Make the freebie valuable to your customer so they will all flood the page quickly.
    Had they offered say a Free Value Meal they would have been slammed.
    A coupon for a BOGO Value Meal…slammed.
    They threw a penny at the masses and the masses snubbed their noses. But I’m also guessing a few of the Freebie groups didn’t get the alert or they may have been gone?

  • Very interesting but misleading. Taco Bell actually gave away about 180,000 tacos, while P&G gave away 1,000 diapers. The difference is only in how they framed it.

  • There is no value to the free taco. How many people will print out the coupon, get in their car (or walk or tax the bus, etc.) to go to taco bell and just redeem the one coupon and that’s all? It’s not worth the time and effort for the end result. Had they offered a coupon for a discount on an entire meal they probably would have had better results.

  • If they want to be successful, they should give away something with more value than $0.99. How about a 6-pack of tacos for fans only? It costs me more than $0.99 to drive to Taco Bell.

  • I agree with Robyn & some others. Exclusivity is a marketer’s excuse – sorry I don’t think that’s the driving force of this failure. It’s the fact that this coupon/offer was HARD to redeem by the target audience, and not of enough value. I bet most of Taco Bell’s consumer base doesn’t plan out their trip to TB. They stop on an impluse, perhaps late at night. Now who’s got a printer to print out the Free coupon at 12 midnight? And what do I care about saving $0.99 at midnight anyway? Offer was irrelevant & not convenient enough for the low value it was offering.

  • I think Nate brings up an interesting point on framing the issue. Proctor and Gamble sells 1,000 diapers and it’s considered a success. Taco Bell gave away 180,000 tacos … not exactly a small number … but their effort is viewed as a failure. Seems like it’s primarily a difference in managing expectations and forecasting.

  • Panda Express has done free entree giveaways with what was considered huge success at least three times. Perhaps it’s the value of the item that makes it worthwhile. Or, as William points out, the managing of expectations and forecasting. I would also say the build up and excitement around any giveaway is a key to success.

  • If you consider actual coupon redemption rates (anywhere from 3 to 10%), this number is not surprising. Did the author really expect more?

  • The article is comparing apples to oranges. Moms with kids in diapers are a coupon clipping militia who leverage the Internet and social media like deal seeking ninja missiles. Taco Bell customers are people who make random, impulse bad food decisions. They do not organize around, or share taco deals, or even plan their next taco purchase more than 4 minutes in advance. I think the lesson is… social media marketing has a much better chance of success if your target customers are already socially networked. Exactly how many “I love cheap tacos” fan pages are there versus deal/coupon/discount pages? Facebook is not the market. The market is the market.

  • Great points among the commentors! I think it is time that Taco Bell addresses and makes changes in the quality of their meat. My kids have never been to TB because of the quality of their food and I personally have not eaten there in more than 10 years. The could make me eat a taco if they were giving it away for free everyday.

  • e-commerce, f-commerce, shmcommerce… The same rules apply to any media. I don’t know why people think social media is some kind of holy oracle that only gifted gurus understand.
    Rule #1 Use common sense.
    Rule #2 See rule #1. Rinse and repeat.

    Would YOU go into FB to print out a coupon worth 99¢ for an impulse purchase that you don’t know when you’ll make? Well… neither will your consumer. Really… do you need a social media guru to tell you this? The funny thing is that this was probably backed up by all kinds of “research”, which for some reason makes people throw common sense and intuition completely out the window because they think that they are going for predictable results with measurable ROI. Keep counting your beans while your house burns down… See how that works for you.

  • A big part of social media is community bragging rights. No one wants to brag about eating a free taco in their social feed. I think that’s a huge difference. People love to talk about their babies-even their poop.

  • All the price and market considerations aside, perhaps f-commerce is more appropriate for replenishment. The sale of diapers would suggest this. Disposable diapers are always needed and can be hoarded. Thus, the customer who redeems the P&G offer is also taking care of a known future need — replenishing diapers. Tacos are fun, but apart from a few hardened souls, stocks don’t need to be replenished in the same way.

  • I found it interesting that only one comment (prior to the one I’m about to make) referenced the quality of what Taco Bell was offering. True, diapers versus tacos is not really a fair comparison. True, people place less value on totally FREE. True, this is to totally different markets. And true, as “cheap” as I am and always looking for a great deal, I would not bother to print this coupon out to go redeem it.

    But, more true than anything: I’ve always said I wouldn’t eat Taco Bell if they were giving it away – and I didn’t when they issued this Freebie. The sickness that follows from their low quality meat is not worth the FREE taco. I wouldn’t even redeem a free meal – until they are actually serving something of quality.

    There are so many other really good choices for Mexican food that cheap doesn’t appeal for low quality. Sorry Taco Bell…this is a marketing fail all the way around.

  • I am fully on the side of the printer-people. Different tactics will reach different demographics, and the demographic that gets 99c tacos from Taco Bell is not sitting around printing the coupon at midnight when they are out with their friends. A check-in option, like the BOGO Chipotle had, seems more practical for a generation that is leaving the printer behind. In this case, I think being able to get something for free in the immediate moment is more appealing than exclusivity. Whether it would be a good marketing tactic is open for debate.

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Paul Marsden

Chartered psychologist specialising in consumer behaviour and technology. Certified CX professional experienced in Design Thinking. A researcher, writer and speaker, Paul is head of Digital Insight at SYZYGY.