Marketing Expert's Corner
This article written in 2010
In the tradition of our August amusement edition (e.g., the Wisdom of Crowds, Don't Ask / Don't Tell, Weenies, and of course Idiot Marketing), this month we'll be treating serious marketing topics in a light way.
It's the first annual Idiot Marketing Awards. This is an honor you don't ever want to be nominated for, because it means you've done something really colossal to destroy your market position. Let's start with a simple example...
Stupid Branding Tricks™
This year's SBT inductee is 99¢ Stores, which has staked its identity on the idea that everything in their store is available for -- you guessed it -- under a buck. Recently, management realized that prices for their junk would be going up, thanks to the appreciating Yuan. So they raised their prices, rather than putting a little bit less junk in each package. Hilarity ensued with the Internet firestorm, including law suits for false advertising.
We Don't Give the Idiot Marketing Awards™ Frivolously
A company doesn't earn an Idiot Marketing Award by putting out a sloppy ad or a silly marketing campaign. In fact, it's pretty hard for the marketing department to win an IMA all by themselves. How can this be?
Because a whacked-out promotional idea won't do big damage. Sure, you can get rid of the Taco Bell Chihuahua or waste a lot of money making your logo uglier (think Pepsi). But in the words of Monty Python, that's just a flesh wound. The most profound destruction of brand value is caused by corporate behavior: who you are, what you do, and the disparity between your actions and what people expect of you. You don't live up to your brand promise. You blow trust. Maybe you head off to court. It's rare for a marketing executive to be able to achieve that all on their own. In fact, a stronger sense of marketing priorities would probably avoid these Awards.
The Court Deadline Award goes to...
Mark Hurd of HP, of course. He's been working hard on this one to make my publication deadlines (thanks, Mark!), but he's part of a long tradition of senior execs who have to settle out of court and are sent packing by their board. Watch for HP's market value to sink a few billion this morning.
But I would be derelict in my duties if I didn't also give an IMA to Tiger Woods, who almost certainly destroyed his own brand as well as that of the PGA to the tune of $100 M or more.
The Reverse Mark Twain Award
If it's true that Mark Twain said "it's better to keep silent and be thought a fool than to open your mouth and erase all doubt," then there's nothing lamer than a large company attacking a small competitor via patent lawsuits. If that's the best marketing the big guy can do, how bad must their product be?
Microsoft wins this year because they went the extra mile, holding mock user protests outside of Salesforce.com's user conference. Their flunkies weren't even smart enough to leave when the cameras started snapping. So the Salesforce marketing team did the smart thing: they made the patent lawsuit and the fake protesters a real-time centerpiece of their conference spiel.
Microsoft scores a bunch of free publicity for their competition while making themselves look desperate. Congratulations, team!
The Death Penalty for Shoplifters!
The Recoding Industry Association of America has been on a multi-year campaign to monopolize the IMAs. They've earned their own category, "Win Business by Treating Your Prospects as Shoplifters." Even though they've given up filing new lawsuits against anybody with a PC, they haven't dropped any of their earlier ones. They don't want us to forget the headlines about a 32-year-old single mom who owes them 20 times her annual income, because that makes us all want to buy...right?
This year, a Boston judge threw out one of their $657,000 awards against a college student as being "unconstitutionally excessive." Even after cutting the award by 90%, the judge wrote, "there's no question that the reduced award is severe, even harsh." The RIAA won their IMA by immediately appealing, saying "this court has substituted its judgment for that of the Congress." Unfortunately, they omitted the clarifying words "...that we bought and paid for."
How to Destroy $50 B of Equity in Three Easy Lessons
The poster child for brand value destruction is the company that was trying to sell us on the idea that BP doesn't stand for British Petroleum anymore. They did convince us that it certainly doesn't stand for Blowout Preventer.
Lesson One: Be involved in one of the world's most dangerous businesses, and skimp on safety. Then, run lots of ad campaigns about how eco-friendly a company you are. When something big goes wrong, act fast and use lots of unproven methods that make you look incompetent.
Lesson Two: Once things get hairy in the Gulf, issue absurd low-ball estimates for the leak ("less than 1000 bbl a day"), then do the CEO-as-know-nothing act before Congress and TV cameras. Add the extra flourish of a British accent and a stressed-out executive to make for dozens of perfect-storm moments.
Lesson Three: When you finally get into corporate-contrition mode, get your English-as-a-Second-Language Chairman to speak with folksy candidness that gets you on the evening news for all the wrong reasons.
The Sweet Irony of This Year's Winners
What do all these winners all have in common? Every one of them did this damage as a result of deliberate decisions made by a range of VPs. The executive teams thought they were solving a problem, limiting risk, and following best practices... right into the dog house. Totally self-inflicted, magnified by hubris or just blindness:
The CEO is Completely Unprepared for Public Derision and Corrosive Publicity. This is a tough one, but in the BP situation the entire marketing, PR, and investor relations team (including their outside firms) should have threatened a very public mass resignation if the boss didn't undergo days -- days -- of indoctrination and practice. In an emergency, the CEO's only duty is to inspire calm and confidence so that the rest of the company can get their jobs done. Achieving this isn't just a matter of CEO message control: avoiding these disasters requires acting skills, vocal control, body training, and maybe even hypnosis. Of course, it's really the Board who should be insisting on this...but that's probably expecting too much.
Your Speeches are Written by Lawyers. Of course you must carefully avoid making implicit statements of guilt or liability, but in this situation lawyers are totally in defensive mode: they will not be persuasive writers for the court of public opinion. Don't make the mistake of thinking the general public is like you, or likes you. Every one of your gambits must be war-gamed, every phrase tested with your audience. Every word that comes out of anyone's mouth must be scripted by a master of optics, not a bureaucrat trying to keep you out of court with weasel-words.
You don't Bother with a Disaster Plan. It doesn't matter who's fault it really is, or how good your intentions are, or what Wall Street is badgering you over. In today's snap-judgment, internet-firestorm world, it's only a matter of time before the unexpected overwhelms your company. So you aren't doing your fiduciary duty if you don't go through at least an annual exercise of handling a disaster somewhere in your business. Would you rip out your fire escapes or cancel your earthquake insurance just because you haven't had any problems there for a while? Well then, find a day and a scrap of budget for emergency preparedness, including what to do when viral videos and incriminating emails start to show up on the web.
The Team is most Concerned with This Quarter's Bonus. The biggest marketing problems aren't marketing problems at all. They're strategy issues, things that threaten the company business model, caused by shifts in technology, marketplace, audience preferences, and ecosystem. Think about the repercussions of your actions outside of the quarter. These problems require the attentiveness of a chess player, the intensity of a Patton, and the overwhelming force of a Schwarzkopf. Solving them requires long term attention: a plan with the resources to execute over several quarters.
When your company is on top of the world, you can get away with almost anything. All too often, execs in this situation will press their luck in the hopes of saving a few bucks. And so it was with Apple this year, even though they had measurements showing a defect in the iPhone 4 antenna design long before the product shipped. Did they think that the reality distortion field could bend the laws of physics outside of their offices?
Like a tiny design change amounting to 10¢ of materials couldn't have been done. And they couldn't delay the ship date a week. Nah, they were too busy harassing the press (Gizmodo) over their enterprising use of the finders' keepers rule.
The result: Apple has to give 2 million people $30 gift certificates. Apple doesn't need my prize, but they certainly earned it this year.
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