Archive for the ‘public relations’ Category

Updating a logo is expensive for a retailer, with expenses running into the millions of dollars.

As people who read my recent Forbes column know, I advise against it unless completely necessary to make a break from the past that cannot be achieved through better product/service delivery. Indeed, changing logos too often confuses the marketplace and diminishes impact.

Right on the heels of that column being posted, here comes the news that Wendy’s, the burger chain, has big plans to “rebrand themselves,” including an update to the logo that has served them since 1983.

In this case, I agree with the decision to revise the logo:

A tasteful modernization of Wendy’s venerable logo, which served close to three decades. (AP Photo/Wendy’s)

• It is an acknowledgement that the fast food business has changed greatly since 1983.
• The logo says “old-fashioned hamburgers,” which isn’t exactly what they sell anymore.
• They are making changes in menu and service delivery first, and updating old decor within the restaurants to improve the dining experience.
• The logo is the last, and the least, of the changes.
• They retained strong echoes of the old logo in the new version, maintaining a link to the brand equity encapsulated in the old logo.

This underlines the flexibility with which marketers must approach their function, yet reinforces that change should not be taken lightly: Wendy’s had to admit that “old fashioned” really was old fashioned, and had to catch up to the 21st Century consumer demands, yet strove hard to tie the new back to the best of the old.

What do you think? Did they get it right, go too far, or throw away consumer goodwill with a radical change?

[Note: This column does not pass judgment on whether or not abortion should be legal. It focuses on what Komen did, and whether its actions made sense for that organization.]

I watched the inept public performance of the Susan G. Komen for the Cure organization this week with jaw-dropping amazement. That such a highly respected organization could make such an egregious error in judging the preferences of its constituency is a hard lesson in leadership for all of us.

Komen executives lost focus on their core mission, and damaged their brand.

As a leader, whether you like it or not, you cannot lead an organization solely based on your personal preferences, experiences and beliefs. You must measure all business decisions against the realities (also known as “the pursuit of truth”) of your mission and your marketplace. The leaders of Komen completely misread their “brand position” with their core constituency, and took action that was guaranteed to limit, rather than enhance, their ability to accomplish their core mission.

This poor understanding of (or willful disregard of) an organization’s target market (see Gallup research on how Americans are split in half by the issue of abortion) echoes the introduction of New Coke by Coke decades ago in how disconnected the decision was from what was best for Komen.

To recap: Senior executives at Komen decided to implement a new policy to exclude supporting any organization that was under “prosecution.” Simple enough, and sensible. Except that was not the real context of the new policy. Just as Congress writes laws that seem to encompass a wide audience, yet on close reading are actually targeted to benefit one company in a congressman’s district, so Komen wrote a broad-sounding policy that was actually targeted at one organization: Planned Parenthood.

In truth, Komen was stepping into the deadly whirlpool of abortion politics, and cutting off Planned Parenthood because they promote abortion as an option for pregnant women.

This would not be an issue, if the elimination of abortion in our society was Komen’s goal. That is not Komen’s goal, and Komen’s move actually worked in diametrical opposition to the accomplishment of its core mission, because it alienated half of its audience.

Let’s step through the logic:

• Komen’s mission is to eliminate the chance that any woman dies of breast cancer.
• To accomplish that, Komen invests in breast cancer research, and actively supports the promotion of cancer screenings for women. (Early detection makes many forms of breast cancer curable.)
• To make cancer screenings more widely available, Komen funds screenings through various organizations that advise women on health issues.
  • One of the biggest of those organizations is Planned Parenthood.
• To accomplish its mission, Komen must reach the widest audience of women it can find.
  • Few organizations have a wider female audience than Planned Parenthood.
• Komen decided to cut its ties to Planned Parenthood because senior leaders at Komen fundamentally object to the legal status of abortions, while Planned Parenthood supports keeping abortions legal.

Here’s the problem:

• By disassociating with Planned Parenthood, Komen cut itself off from a huge audience of women for a cause that has nothing to do with their mission of saving women from dying of breast cancer.
• Taking a stand on abortion therefore significantly debilitates its ability to accomplish its core mission.

Regardless of the personal beliefs of the managers who made this decision, for the organization it was both a marketing and financial disaster that was very easy to predict with even a minimum amount of market research. (I found that Gallup report with a two-minute web search.) If the managers in question had put aside their preferences and looked at the situation objectively, they would not have chosen to issue that policy.

Bottom line: Personal beliefs of key executives notwithstanding, a strategic thinker would not allow its organization to be diverted from its core mission for reasons not aligned with that mission. Komen as an organization must never enter the abortion debate. There is no upside, and a huge downside to its ability to reach women of all beliefs with the message that early cancer detection saves lives.

We still have two months to go in this business year, yet we already have two candidates for brand disasters that will be hard to top.

Netflix gets top prize for marketing fiasco in 2011

First up, Netflix and the repricing/rebranding two-step stumble that occurred this Summer and Fall. What a mess! It is understandable that the company needed to rework its pricing to better match its business model, but it hard to believe the company did sufficient homework (customer research, that is) before making a big pricing increase from around $10 for the combo home delivery/streaming film service to $16. I saw poor marketing planning, too, almost as if Marketing had little say in the decision, and was handed a fait accomplis and a tight timetable:

• Where was the looooong telegraphing of the move before it took effect (let’s say at least six months) that would have given customers the chance to adjust to the news? (Full disclosure: My household is a customer.)
• Where was the justification for the shift, fully explained to us, the customers? Not the media, mind you, but directly to the customers? We customers received a letter after the whole thing blew up in Netflix’ face, but not before (at least not my house.)
• How about giving loyal customers an inside benefit by allowing them to keep the old price for a period of time (two months, say, for each year of being a customer.) That would have made the transition less painful. As it is, my family quickly canceled the home delivery and kept only the streaming service. We might have stuck with both for a loyalty discount.

And where Quikster came from is a real mystery. NetFlix is still a very strong brand, yet the old business that built the brand was being dropped down to a secondary brand like last year’s fashion designs. A needless and expensive solution for a customer service and communication problem, that was clearly not thought out. It may even have been the brainchild of one man (the CEO) in a desperate attempt to contain the damage from the pricing fiasco.

This led to a consumer revolt, and the whole mess has led to close to 1 million customers going out the door. Ouch.

And BofA is right on their heels

Close on the heels of Netflix comes Bank of America with their debit card fee, announced at $5 per month for any month their debit card is used at a merchant point-of-sale (not at ATMs).

This was a financial decision, taken in response to the limits placed on debit card transaction fees by the Dodd-Frank financial industry regulation package. BofA stands to lose millions in foregone transaction fees (as will all other debit card issuers.) So, they decided to keep debit cards profitable by imposing a new fee for using them. Their biggest mistakes? Same as Netflix:

• Poor telegraphing of the move. Their competitors announced “tests” of the concept, and quickly drew in their horns when the “tests” produced poor customer reactions (a significant drop in POS debit card usage.) See a good summary here. Unlike airlines in the days of old, an announced round of price rises did not signal to competitors that it was OK to announce their own matching increase.
• Poor choice of price: $5 monthly is a huge fee. Why not $1? That might have been a bearable load for most consumers, and still have made up a bunch of revenue.
• Poor understanding of market sentiment. Consumers are very aware of prices and fees for service today, so this bald announcement generated an entirely predictable marketplace response.

These two companies did not do their homework, did not soften the blow with any nods to customer loyalty or possible competitive responses. They just bulled in the china shop and started knocking stuff over.

Perhaps they didn’t think so, but it sure came across that way to consumers! Whenever you face a need to raise prices (as all businesses should at some point), you need to actively structure it as a chance to reward good customers by “sharing” the needed price increase with them.

The nation’s leading fast-food chicken chain, KFC, is up to their public-relation hi-jinx again, offering to upgrade fire hydrants in a handful of cities in exchange for garbing them in promotional material. This follows up on last year’s manhole cover promotion, another great PR generator that didn’t cost much.

KFC scores again with fire hydrant promo

PR coups aside, though, KFC has been struggling with lost market share for a while as they try to stay relevant in a world that seems to demand healthier food.

The critical word in that sentence is “seems”. Most of us want to eat more healthily, but are not all that thrilled with the quality of the experience:
Fatty, salty foods still taste a lot better than stuff that is good for us.

What is a marketer to do?

Not what KFC has tried. They overhauled their menu to feature grilled chicken, and generated lots of trial, but lost ground to competitors who were saying nothing about healthier foods. And their franchisees are generating lots of bad publicity by fighting the strategy very publicly.

A comparison to Chick-fil-A is instructive. While KFC struggled to define the competition as fried vs. grilled, Chick-fil-A sent its cows out into our world to relentlessly, entertainingly and simply sell us on the idea of switching from beef to chicken. And they ran these simple ads relentlessly on programming (sports events, for instance) where lots of young, male, fast-food burger-chomping prospects were watching.

Chick-fil-A’s market share has leapt 9% this year while KFC’s was plummeting 6%. Looks like the jury is in on which approach makes more sense.

We all want to eat properly. We just don’t get around to doing it.
KFC’s focus on grilled saw the world as we should be, not as we are, a big mistake for marketers.