Acquisition Cost

by Pete Abilla on June 27, 2006

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During dinner last night, our phone rang and on the other line was a cigarette-smoking man. He wanted a few minutes of my time to explain that he works for Arbitron, a marketing research firm. He pitched his story that all I’d have to do is carry a diary with me and write down which radio stations I listen to, the duration, for one week. In exchange I’d get paid. The rest of our conversation went like this:

shmula:
So, how much will I get paid for doing this?
cigarette-smoking man:
The price of a cup of coffee at McDonald’s, not Starbucks.
shmula:
Okay, how much is that?
cigarette-smoking man:
That’s about $0.79 plus tax.
shmula:
Oh, so you’ll give me a buck for my troubles.
cigarette-smoking man:
Yes, sir. What was your address again?
shmula:
CLICK

I understand the need to manage acquisition costs, but $1.00 for my time to provide great ethnographic data? This was a bad customer experience.

What could Arbitron have done differently?

For one, instead of offering a cash gift, they could’ve offered something else with a higher perceived value, but with actual low actual value. An example of this is airline mileage — to the airline these rewards have very little actual value, but to the customer they have a higher perceived value.

For another, they also could even offer nothing as a reward. I probably would’ve even considered that more than the measly $1.00 they offered. The $1.00 was almost insulting. At least doing it for free would’ve felt altruistic, but doing the study for $1.00 just felt greasy.

Lesson learned: companies can be more creative in their quest for data and in their quest to acquire customers. The perceived value approach is a good one as is the altruistic approach (for data). But, if a company is seeking to offer a cash reward for insightful ethnographic or marketing research data, please at least offer something that’s not insulting or greasy-feeling. Otherwise, just ask for the data and offer nothing at all or offer some gift that has a perceived value but low or no actual value.

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{ 1 comment… read it below or add one }

atypical1 June 27, 2006 at 11:37 am

I’ll give you $1.50 to provide me with that data.

I actually cannot even believe that they would do that. Phone calls never work anyway. Cold-calling is such a poor way of generating business or interest. They would have had better luck if they hung out in a mall and asked folks that same question. They could have done it for free or even provided a $5 gift certificate to Starbucks.

Funny because on their website it shows that they have a “portable people meter” that they use. Obviously they still rely on a clipboard. I just can’t beleive they are that cheap.

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