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Marketing with no budget

September 1, 2010

In business school I had a few classes on marketing and how best to approach the subject.  Many of the classes were incredibly insightful and I learned all the basics of identifying customer segments, targeting the most profitable customers, positioning, pricing, etc.  It gave me a strong foundation for building the brand at Coup de Taco.  However, here at Coup de Taco we are spend-thrifts and do everything we can to bring great, healthy food to our customers at a low price point.  We also decided not to raise more capital than was absolutely necessary during our start up years.  What this has meant so far is that we don’t have much to spend on traditional marketing.  Our policy to date has been that we spend literally zero on marketing other than in things like price discounts for coupons, revenue sharing for fund raisers, and the occasional discount for a catered charity event.

We have not spent a cent on traditional advertising like print or even digital media.  We know that certain online media would allow us to deliver highly targeted impressions but we’re skeptical that people viewing our ad or even being re-directed to our website or blog will actually become customers.  A few people have suggested that we do a day when we give away free tacos all day.  Chipotle does it at least once a year (clearly I’m a big fan) on the Penn campus and people flock to their restaurant delivering a line around the corner and probably a good number of customer acquisitions.  Certainly a free taco would cost us more than an online ad impression (in fact, more than 1,000 impressions depending on which site they come from) but I still have a feeling that the free taco will be more likely to bring us a new customer than even a highly targeted ad impression.  My partners and I are in a back and forth debate and need some advice…

I’d love to hear from all you back seat marketing experts (or actual marketing experts)!  Hit us up with a response here or on Twitter or Facebook!

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One Comment leave one →
  1. September 1, 2010 10:34 pm

    Jeff H. and Coup de Taco crew –

    Here are my two cents on this: First of all, I agree that online marketing is completely wrong for this… no one is going to look at a website and then go to your truck.

    Outside of that, as is the case with any potential marketing strategy, you have to look at return on investment. I don’t know your cost structure, but lets say a taco costs you $2 in ingredients, and you sell it for $4. Assuming the average customer comes to your truck 2 times total, that’s $2 GP * 2x = $4 maximum acquisition cost you should be willing to pay for a customer. If you run a free taco promotion, lets say you give out 100 tacos (to keep numbers round). That will cost you $200. Will 100 free tacos yield you 25 (100*$2 cost / $4 acq. cost) new customers needed to break even on the giveaway?

    I think that’s the key to your decision. You need to give out tacos in a way that will yield NEW customers. If you put up a sign on your truck, post on FB and blast your mailing list about the promotion, you will get current customers taking your free tacos (not yielding NEW customers). If you can somehow give out tacos to a segment that doesn’t currently know about your truck (free taco with Drexel ID? free taco with 1st year Wharton ID?), it might be worth the money. Just make sure to position it in a way that doesn’t piss off current customers waiting in line and seeing others get free tacos.

    Hope all is well!

    Free taco for marketing advice?

    Max

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