Not long ago, I saw a long, detailed tweet from a guy named Aakash Gupta that was almost like getting the play-by-play of a fiery, horrifying car wreck of a once-great business empire:
Red Robin restaurants.
And the tweet detailed Red Robin’s fall into irrelevance by succumbing to what I call “psychological marketing” (letting statistics, metrics, and spreadsheets reign supreme) over what I describe as “Sociological marketing” (letting Service, Experience, and genuine love of the customer/fanbase/the game reign supreme).
Here are a few of the gruesome highlights:
* They hit their peak in 2017 doing almost $1.5 billion in sales with nearly 600 locations, by creating a World families loved entering and hated to leave (i.e., they did tremendous World-Building)
* Then the bean counters started seizing power over decisions
* To “save money” due to rising minimum wages they canned all the bussers
* The savings looked great ‘on paper’ and management started doubling down
* BUT… the customer Experience got worse and worse as tables stopped being cleared, wait times got longer, and people stopped coming in as a result
* Including not coming during the peak hours, when they made most of their revenue
* Customers had to wait near an hour between their orders being taken and their food finally showing up on no doubt filthy & “crusty” tables
* In the spirit of even more spreadsheet tyranny… they started raising prices to try to make up for the loss of revenue created by sacrificing Service & Experience on the alter of metrics & numbers
* Now they not only had intolerably long wait times and filthy tables not fit for rats to eat off… but more expensive food
* They went through 5 CEOs in 10 years trying to fix it all, with new menus, loyalty programs, etc… but nothing about fixing the Service & Experience, just more appealing to numbers, metrics, and the idiocy of bean counters
* The stock went from a fat $92 to a straggly $3.61.
Yeesh.
And it’s all just one of many reasons why online marketers will make more of the green stuff by studying the book “The Tyranny of Metrics” than they will doomscrolling social media posts written by broke goo-roo grifters ratchet-jawing about so-called AI and how it will usher in a new age of utopian fantasy like Elon Marx has been stimming about on Twitter recently..
Anyway, hopefully the point is crystal clear:
Sacrificing effectiveness for efficiency is a loser’s game.
And if you look around that’s what you see most online businesses doing.
This is why I write so much about Sociological marketing vs psychological marketing.
The vast majority of direct marketing is psychological marketing.
i.e., an endless series of tips, tricks, A/B split tests, algorithm chasing, goo-roos playing the same tired “scratch my back selling my shyte offer and I’ll scratch yours by selling your shyte offer” – while they see a little success at it teaching it and preaching it as business “gospel”… with nary a mention of customer Service & Experience, or creating a World they want to enter and don’t want to leave.
I’m convinced 99% of direct marketers simply cannot comprehend this way of thinking.
Many of them are great salesman, but utterly suck at the Service side.
So they get people in, only to lose them, and have to constantly replace them.
And as cold advertising gets more and more gate-kept and less and less effective and affordable, they have no clue what to do with themselves except grift over to whatever is trendy like so-called AI, hoping enough newbie are naive enough to believe them, buy from them, not turn on them.
Then there are people who do what I have long called Sociological marketing:
Focusing on and starting with the customer, not the metric.
If all this seems esoteric it’s because it’s not taught.
I had to literally invent these labels “Sociological marketing” vs “psychological marketing” in my elBenbo Press book 6 years ago, to even start teaching it at all, as nobody was thinking that way.
I talk about these concepts sometimes in my free mobile app here:
Ben Settle
