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Marketing Dos & Don’ts: The Rise and Fall of Blockbuster

David Cook opened the first Blockbuster store opened in 1985 and immediately found marketing success. This isn’t a fairytale, however, as the company plummeted between 2013 and 2014. Many blame the plummet on the online movie and television services, such as Netflix or Hulu, but the reasons fall more upon a poor marketing strategy. Cook made some marketing and financial mistakes that easily could have been avoided. In the end, these mistakes ruined Blockbuster’s chances of finding success. The demise of Blockbuster is an important lesson for retailers, as they could easily make the same mistakes. 

What Blockbuster Did Right 

When speaking about Blockbuster, many want to focus on what the business did wrong. As understandable as that is (learning from mistakes is always a great idea), Blockbuster actually did some things right. In the beginning, Blockbuster took the right approach towards beating its competitors. Blockbuster stores were three times larger than competitors and held 8,000 VHS tapes. Other chain stores kept their movies behind the counter, but Blockbuster chose to display their VHS tapes on shelves. Blockbuster remained open far longer than its competitors and was one of the first to incorporate computer systems and scanners for check-outs. One of the biggest moves owner David Cook made was refusing to stock adult films, which gained the favor of many. 

Essentially, the best marketing strategy that Blockbuster followed was staying ahead of its competitors. By being bigger and up-to-date with technology, Blockbuster gained far more traction than its competitors. Staying a few steps ahead of your competition is never a bad thing, but it is important to focus on other things as well, such as customers and debt. 

What Blockbuster Did Wrong With Marketing

In comparison to what Blockbuster did right, the list of wrongs is far lengthier. For one, Blockbuster entered bankruptcy after struggling to refinance $1 billion dollars of debt. With such a little amount of money to invest in, Blockbuster had very little options when the time came to repay its debt. Not only that, but with such little money to spend, Blockbuster was unable to put money into its stores, prices, and technology. The lesson to learn here? Don’t let debt creep up on your business. Budget accordingly and ensure that you repay your business’s debts as soon as possible. 

Blockbuster had a plethora of valuable information on its customers but did next to nothing with it. With each rental, consumers gave their address, date of birth, and details about their taste in films. They could have used this information to mail out fliers and eventually, send out emails. Following this marketing strategy would have created a stronger relationship with the client and draw them back to continue renting from Blockbuster. That’s the thing, though. Blockbuster did not have a good understanding of their customers. Jim Porterfield, who ran one of the biggest franchises in Blockbuster, believed that the information Blockbuster had should have been used to put out movies that the consumers wanted. Instead, Blockbuster put out movies with little preference for the customers. 

Avoiding the Mistakes of Blockbuster

The scary truth of this story is that anyone could make the mistakes that Blockbuster made. The thing is, you could easily avoid them with the right help. Web Content Development offers a variety of tactical services, such as brand management, crisis management, marketing strategy, and more. If your company is stuck in a rut, we can help. Contact us today to learn more.

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About the Author

Erica D’Arcangelo – De Silva

Erica D’Arcangelo – De Silva has worked in the Internet marketing industry for the last 20-years. Erica is the top-secret SEO weapon to marketing and advertising agencies in the world. She has generated over 300+ million in revenue for high-value brands such as Walmart, Pottery Barn, iRobot, Cutting Edge Firewood, Kelley Blue Book, and many more. Erica has custom-created more than 1,000 content, SEO, and marketing strategies which held the key to doubling and tripling online traffic, and marketing ROI. She has also authored a series of online publications including The Digital Branding Survival Guide, Million Dollar Marketing, 5 Steps to Increase Web Traffic by Blogging, and Repairing Your Online Reputation.