Gorillas and gazelles: GNC lacks muscle behind segmentation strategy

By Kevin Byrne

I’m not a bodybuilder. At 6’3” and 175 pounds, I’m more gazelle than gorilla. My workouts involve runs along Lake Michigan more often than bench presses at the gym. However, while in the midst of marathon training, I do rely on protein shakes and amino acid powders to help with endurance and recovery.

The trouble is that GNC (General Nutrition Centers) doesn’t seem to understand the difference between the muscle heads and me. They know I’m a customer but they don’t try to determine why. They don’t seem to know what to do with me.

The online experience with the brand is the worst. I receive daily emails touting the latest and greatest in the world of vitamins and supplements designed to inflate me to Incredible Hulk proportions. Meanwhile, the Yahoo Mail banner ads, in a feeble attempt to be targeted, show more of the same. Along with the online confusion, the retail stores offer little guidance as to where different types of customers might find their preferred products.

GNC has the information; that’s the frustrating part. They offer a loyalty card and track online and offline purchases. The data is there, they just need to use it. With a little analysis, distinct groups would most likely start to emerge: the organic, yoga-types with their homeopathic remedies, the dieters looking for the newest fads in weight-loss, and maybe even the lean, mean marathoners.

By defining better segments, GNC could target their consumers with more efficiency and grace. They may even choose to use overlay demographics or at least ask a few questions about users’ interests and goals. Current customers would feel more included and be better informed of products designed to help them achieve their objectives. As word of this new approach spreads, GNC’s image may evolve to be more inclusive of individuals who might currently feel out of place at this type of store.

It’s all about segments. You’ve got to separate the gazelles from the gorillas and market accordingly. All customers are not the same, so don’t treat them that way.

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Kevin Byrne is a graduate student in Integrated Marketing Communications at Northwestern University's Medill School. He enjoys his constant carbo-loading while he trains for his fourth marathon. He can reached at KevinByrne2010@u.northwestern.edu.

Dear Netflix: A love story

A humorous take on customer lifetime value from the perspective of an IMC student

Dear Netflix,

You need to move on. Seriously. Don’t you get it? We didn’t end in a bang or a whimper because there was nothing to end. We were never even together! And now you’re sending me letters again. Come on. Pull yourself together.

Our fling in the summer of 2008 was just that: A fling. It didn’t mean anything to me. I don’t want to be callous but you offered me a free trial, my friends said you were great, so I took you up on the offer. No obligations, no strings attached. I threw a few movies in my queue, you sent me the first DVD, and I devoured as many as possible over the course of the next 30 days. I have to admit, it was great. I can see why you’re ranked number one in customer satisfaction. But I wasn’t looking for anything long-term. I got my free trial and, to be honest, that’s all I wanted.

Now, you come groveling back with your “Try Netflix again for FREE today” letters every few months. Do you forget what happened last time? I watched unlimited DVDs for a month, used $16.99 worth of your services, and then I dumped you. Now you’re back for more? Are you hoping that I’m a changed man? Maybe I suddenly have more money that I can spend on a membership? Sorry Netflix, you’re out of luck; I’m even poorer than before. It’s called grad school.

I don’t understand why you want me so bad. Am I really worth the investment? If you got to know me, I don’t think you’d be willing to spend so much. Let’s look at this logically. You mailed the letter to me so you obviously know where I live. Did you take a look at my zip code? Did you even bother to ask PRIZM or Personix about me? I can’t imagine they spoke too highly of Uptown; we’re not exactly big spenders. And what about my queue? I left it empty. I didn’t send any mixed signals; it was a clean break. And did you happen to notice my partner already has a subscription? We’re covered with all the movies we need. But now you’re back after a couple of years apart. Netflix, the odds are stacked against us. The Markov chain is written on the wall. My probability of purchase? Zero. It’s not going to happen.

I know I’ve been harsh, but don’t give up; your loss leader approach is bound to work on someone. Even though you couldn’t retain me, there’s some other guy out there whose present value of future cash flows is worth your initial investment. Sure, I defected, but stick to your retention model, listen to behavioral cues and you’ll be fine.

It hurts me to say it, but my lifetime value is zero. You’ll be better off once you realize that. But, if you don’t mind, I’ll take you up on that second free trial. No hard feelings, right?

A poor investment as always,

Kevin

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Kevin Byrne is a graduate student in Integrated Marketing Communications at Northwestern University's Medill School. He loves free stuff but just can't commit. He can be reached at KevinByrne2010@u.northwestern.edu.