Ad Agencies: A Dying Breed?

A week ago, I came across an article published by Ad Age about how some agencies have dropped off a bit and aren’t necessarily performing up to clients’ standards.  In my opinion, if agencies aren’t so vital to clients anymore, it’s their own fault. However, this has a negative effect on all agencies and the industry as a whole. This got me thinking about a list of “commandments” that I have from a great marketer, Martin MacDonald, and how he would correct this debacle. 

As some of you reading this may or may not know, a few weeks ago was Martin MacDonald’s birthday. Unfortunately, he was taken from us too soon and his loved ones weren’t able to celebrate it with him. For those of you who don’t know, and as those who knew him can attest, Martin was a great marketer and an even greater person. I had the pleasure of meeting and spending some time with him when I was a teen living in Dallas, TX. He worked with my father, Mark Miller, at Rapp, a successful marketing/ad agency. While I will unfortunately never have the chance to work with him, the fact that he has had such an influence on my blossoming marketing career demonstrates how truly impactful his personality and creativity was.

If all of us were to take the approach to marketing and the workplace environment that Martin displays below (whether we’re creative or not) and apply those concepts to both life and marketing, I whole-heartedly believe that agencies would become indispensible and flourish.

(Click to expand image)

I’ve had teachers, executives, and HR managers all tell me this semester how great it is that I have all this energy and passion for marketing and its practices; they attribute it to my youth and my readiness to apply what I’ve learned. While those may be true, what I really hope is that I can maintain that energy and passion throughout my career and that the print-out of Martin’s words-of-wisdom taped to my work station will help to keep me on that track.

Web 2.0: Cut the Clutter

It's kind of strange to think that the bulk of the internet has really only been around for just over fifteen years. During that time, the web has developed into something massive, both on a scale of seemingly endless cyber space and with the sheer magnitude of processed executed over it. By 2007, the average consumer was devoting 23% of his/her media consumption to online channels[i]. As one might expect, that number has since increased. While all of this is fantastic for both consumers and marketers, it does create a problem that has plagued marketers for years: clutter (cue ominous music).

Web 2.0, with all of its P2P, blogs, Wiki pages, Twitter, clouds, avatars, widgets, RSS feeds, video channels, MySpace and Facebook capabilities, has changed marketing and its processes drastically. However, all of these platforms have caused Web 2.0 to walk down a similar, cluttered path as its one-dimensional ancestors: print media, radio, and television. Let’s look at it this way, consumers are besieged with over 5000 advertising messages a day[ii]. Consumers either choose to block out these messages or are completely averse to them. Despite what some people may say (cough cough, the know-it-all kid in my International Marketing class in the 3^rd row), the consumer is smart and is constantly looking to avoid these messages. This means that marketers have to find creative and innovative ways to reach them with their messages. Gone are the days when you could expect people to pay attention to billboards, print ads, and TV commercials. Online, it’s becoming the exact same way: “Banner blindness” has caused the number of people who clicked on the ad to fall from its high of .75% in 2006 to below .18%[iii]. Additionally, users are becoming more and more frustrated with mandatory ads, such as pre-roll advertisements on YouTube. It doesn’t matter the size of your budget or the frequency with which you bombard the market with your messages; what matters is engaging the audience. Otherwise, all you’re doing is spending a lot of money to have messages fall on deaf ears and blind eyes.

Furthermore, consumers don’t care about what companies say about their product, they care about what their peers are saying about it. People pay much more attention to “Likes” and Tweets from friends than what’s in a commercial slot. With e-commerce, people look at ratings and recommendations instead taking the manufacturer’s word for it. The best organizations are the ones who have figured out effective ways to hone in on this data and measure it. Those are the companies that understand their consumer and what it takes to reach them. Domino’s (I know, this is like the 3^rd Domino’s reference in the last 4 blogs, sorry) has done a fantastic job of locking on to peer evaluations of their products and taking progressive steps from there. But how does a company or agency ensure that their ads are in the miniscule 1-3% of advertising messages that are actually remembered? [iv] Interaction and engagement. It sounds so simple, but that’s because it is. That’s what makes Web 2.0 so revolutionary, unlike other media, it provides the opportunity for marketers and companies to actually establish direct communication with the market on a mass scale. In order to be successful, companies need to take advantage of it.

 Let’s take a look at Nike and what they did with its soccer division. It created a campaign, known as The Chance, where Nike took submissions from amateur players all over the world and selected the best to receive a chance for trial periods with professional soccer clubs across the world. Nike bludgeoned its website, Facebook, and Twitter mediums, as any company would and should do, but then they went a little off the beaten path by developing a phone app, YouTube series, and got the consumers involved directly. Each of these facets allowed the masses to follow their favorite player and actually interact with them throughout the process. Additionally, Nike did a fantastic job of interacting with followers through social media regarding voting sessions about favorite players, drills the players would participate in, and other interactive applications. This allowed people to feel as if they were part of the process and had an influence on it. On a similar note, why is American Idol so successful? Because the people’s vote counts for something and people believe they have an influence on the outcome. Same principle here with The Chance. Nike was able to effectively break through media clutter and utilize different mediums to interact with the market, generate buzz, and get their message across.

How Nike "Writes the future"...

Media clutter has, and probably always will be a problem for marketers, no matter what format is used. What is important is determining ways to avoid that traffic and to be able to get the message through to consumers without getting lost in the muck. Some of the most effective ways to do that are: using mediums in an innovative fashion, engaging the market, and giving them a chance to participate. Things have been changing since the introduction of Web 2.0, and I couldn’t begin to tell you where we’ll be in the next fifteen years as marketers or consumers. But as Madonna so nearly sang 20+ years ago, “We are living in a digital world, and I am just a digital girl” (Get it? It’s a spin-off of her song “Material Girl”. Get it? Nevermind…)

[v] [vi]

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[i] Steenburgh, Thomas, and Jill Avery. "UnME Jeans: Branding Web 2.0." Harvard Business School 035th ser. 9.509 (2008): 1-13. Print.

[ii] Ingram, ByMathew. "Marketers Losing Amid Social Media Clutter - BusinessWeek." Businessweek - Business News, Stock Market & Financial Advice. Web. 05 Nov. 2011. http://www.businessweek.com/technology/content/oct2010/tc2010105_764897.htm.

[iii] Steenburgh, Thomas, and Jill Avery. "UnME Jeans: Branding Web 2.0." Harvard Business School 035th ser. 9.509 (2008): 1-13. Print.

[iv] Steenburgh, Thomas, and Jill Avery. "UnME Jeans: Branding Web 2.0." Harvard Business School 035th ser. 9.509 (2008): 1-13. Print.

[v] Ingram, ByMathew. "Marketers Losing Amid Social Media Clutter - BusinessWeek." Businessweek - Business News, Stock Market & Financial Advice. Web. 05 Nov. 2011. http://www.businessweek.com/technology/content/oct2010/tc2010105_764897.htm.

[vi] "About The Chance." Nike - Please Choose Your Nike Region. Nike. Web. 05 Nov. 2011. http://www.nike.com/nikefootball/write-the-future/about?locale=en_US.

For the People, By the--Potato Chip?

Usually when one thinks of the negative aspects of junk food, the potato chip is one of the main culprits. However, instead of casting scowls of disappointment and disgust at this innocent little fried spud, we need to take the time to recognize that it has been going through a bit of a progressive makeover during the past decade. The potato chip and other salty snack foods are going through a transformation, thanks to Frito Lay. Yes, that same Frito Lay that was referred to as greasy in those old Pringles commercials (http://www.youtube.com/watch?v=zUEB3dKdBtU).  Frito Lay has been on the front lines of changing the perception and composition of the potato chip and other snacks, by making them healthier and tastier for the consumer.

Frito Lay prides itself on doing right by and for people. Its promise on the Frito Lay website states: “It’s the belief that we can all benefit from doing good. From supporting local farmers, to investing in sustainability efforts, to going the extra mile to use the highest quality ingredients, we think the small steps we take today can make a big difference tomorrow.”[i] Through recent product changes and marketing efforts, Frito Lay’s progressive change has people taking notice of its attitudes and beliefs. Various business-oriented publications and consumers have Pepsi Co, Frito Lay’s corporate parent, rated as one of the most proactive in focusing on products that benefit the consumer, while also aiding the environment.

As you may have read from my previous blog entry about Domino’s Pizza, I truly appreciate major companies that listen to their consumers and do everything in their power to make a better product. Frito Lay is another one of those companies. The potato chip and snack giant has focused on eliminating artificial ingredients, improving taste and reducing fat to create a better tasting, yet healthier product.

Let’s be serious, America is full of overweight people. I’m not proud of it, but it’s a fact; we’re a fat country. According to a Deloitte survey, 31% of respondents said that “over-processed food” was among their top concerns about food[ii]. Frito Lay has input and begun execution on a plan to eliminate artificial ingredients from its products. Currently, over fifty percent of Frito Lay products are all-natural; this meaning they are made from corn or potatoes, healthier natural oils, natural spices and seasonings and nothing artificial. Furthermore, it has even started offering gluten-free options for a variety of their chips. For those of you wondering what “gluten” is, feel free to learn about it and every single ingredient in Frito Lay products on its website (http://www.fritolay.com/your-health/explaining-ingredients.html). Here’s another “fun fact of the day”, compliments of yet another Deloitte survey, 55% of consumers understand less than half of the ingredients in the food they eat[iii]. The fact that Frito Lay not only lists the ingredients in its products, but also explains how they pertain to the food and the consumer, demonstrates that it’s hiding nothing and is proud of its products—Psst, that’s a good sign for us[iv]. Plus, all of this is a win-win for Frito Lay and consumers: by making the snacks healthier, consumers won't feel so guilty for eating them, so they'll eat more. While on the other hand, Frito Lay profits from the increased consumption. I like to call it "Guilt-free snacking".

UPDATE (8/10/2011): Monday, I had the pleasure of speaking with Cheryl Cerminara, VP of Talent for Frito Lay, who is very engaging and informative woman. I learned about some of the processes that Frito Lay uses to ensure healthiness of its products. One in particular focuses on salt/sodium levels and the manipulation of salt crystals so that the salty flavor remains, but that the sodium in a couple slices of bread from a sandwich would be greater than in some of Frito Lay’s chips. Very cool. Thanks Ms. Cerminara.

Next, on to that place that we call home—Earth. Frito Lay is also taking progressive action to preserve this rock for future generations through the utilization of its sustainability program. Frito Lay’s motto regarding the planet and environment is: “In order to make the best snacks on earth, we need to protect the earth. So we’ve committed to making sustainable products…[v]” Whether it’s using solar power to help make Sun Chips, recycling water to grow ingredients, minimizing waste or reducing greenhouse gases and emissions, Frito Lay is dedicated to improving the environment and the processes used to create these delicious snacks.  Sun Chips even switched over to a compostable bag[vi]. For those of you playing at home, it means it’s essentially biodegradable and after a certain period of time, you won’t see it lying by the side of a highway. Pretty cool, huh?

As much as I love Chester the Cheetah, Cheeto’s mascot, Frito Lay should think about changing their mascot to one of my favorite childhood superheroes—one that happens to get overlooked more than he should—Captain Planet*. All kidding aside, it’s fantastic to see an industry leader taking proactive steps that not only benefits the people that consume them but also the environment that produces them.

*Frito Lay, I wasn’t kidding about Captain Planet, seriously consider it…

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[i] "Our Promise : | Frito-Lay." Smart Snacking Products & Healthy Choices by Frito-Lay: Healthy Choices, Fun Snacks, Kids Snacks.. N.p., n.d. Web. 1 Aug. 2011. http://www.fritolay.com/about-us/our-promise.html.

[ii] Warner, Melanie. "Why Frito-Lay’s Move Towards “Clean Labels” Is Smart Marketing." Citzens.org. N.p., 4 June 2010. Web. 1 Aug. 2011. http://www.citizens.org/?p=2238.

[iii] Warner, Melanie. "Why Frito-Lay’s Move Towards “Clean Labels” Is Smart Marketing." Citzens.org. N.p., 4 June 2010. Web. 1 Aug. 2011. http://www.citizens.org/?p=2238.

[iv] "Explaining Ingredients | Frito-Lay." Smart Snacking Products & Healthy Choices by Frito-Lay: Healthy Choices, Fun Snacks, Kids Snacks. N.p., n.d. Web. 1 Aug. 2011. http://www.fritolay.com/your-health/explaining-ingredients.html.

[v] "Sustainability of our Environment through Emissions Reduction, Energy Conservation, Water Conservation & Waste Recycling | Frito-Lay." Smart Snacking Products & Healthy Choices by Frito-Lay: Healthy Choices, Fun Snacks, Kids Snacks. N.p., n.d. Web. 1 Aug. 2011. http://www.fritolay.com/our-planet.html.

[vi] Wills, Amanda. "New Sun Chips Bag is Less Noisy, Still Compostable - Earth911.com." Earth911.com - Find Recycling Centers and Learn How To Recycle. N.p., n.d. Web. 1 Aug. 2011. http://earth911.com/news/2011/02/24/new-sunchips-bag-is-less-noisy-still-compostable/.

Tale of the Tape: Terrapin vs Sweetwater

             We are gathered here as witnesses of a clash between two titans of the small brewery industry, heavyweights of hops, behemoths of barley, mammoths of malt…you get the idea. Finally the debate between which of these two juggernauts has the best brewery and visiting experience will be settled. Separated by 64.9 miles (thanks Google Maps), these rivals are constantly waging war over Georgia and Southern beer drinkers’ delights.

(Insert 50’s era ring announcer voice here) “From the blue corner, with a total medal count of twenty-two, and 15 years in existence, fighting out of Atlanta, Georgia—Sweetwateeeeeer Brewing Company-ny-ny (sorry, I had to for dramatic effect). And its opponent, from the red corner, with a total medal count of twenty-one, and 10 years in existence, fighting out of Athens, Georgia—Teeeeerrrrrapin Beeeeeer Company (it was actually kind of fun that time).”

“Alright breweries, I want a good clean fight; no cheap shots, no hitting below the label, if at any time one of you is knocked down, the other will return to his corner until I give the signal for the fight to restart. At the sound of the bell, come out and clink bottles. Alright? Alright? Good, now let’s get it on!”

 Now before we get this slugfest underway, I feel it’s important to explain the story behind this blog entry:

This past May/June I took a marketing research class, which was phenomenal by the way (BIG ups to Prof. Norvell), and my team’s final project was a presentation of the findings and suggestions based off of our qualitative and quantitative research done during the class. Our topic and company of interest was Terrapin Beer Co. However, since we were trying to disguise bias throughout the survey and in-depth interview process, we sprinkled in other smaller breweries, such as: Sweetwater, New Belgium, Magic Hat, Full Sail, etc. After screening, we interviewed and surveyed around 70 people based primarily in Athens or Atlanta, aged 21-29, fairly balanced distribution by sex (~62% men, ~38% women), and had been to both breweries. In our final survey, we did a comparison between Terrapin and Sweetwater based on the most important components of a brewery and visit (determined from previous consumer surveys that we conducted): Price, facilities, seating/seating area, atmosphere, tour, variety/offerings of beer, and taste. Through the use of Top Box vs. Bottom Two Box scores [for those not familiar w/ this technique, it compares the number of times people chose the highest possible satisfactions (ex. 5 on a scale of 1-5, 5 being the highest) against the number of times people chose the lowest two possible satisfactions (ex. 1 or 2 in this case)], Pearson Correlations, and confidence intervals, we were able to analyze the most important factors and their relation to overall satisfaction. Here is what we found…

(As much as I’d love to literally script and write out a fight between two personified beers, I actually have more important things to do, like school work and work for my internship, so this will be a Reader’s Digest version)

(Ding ding)

“And we’re underway here in tonight’s main event. Terrapin looks loose and energetic, while the more experienced Sweetwater is poised to outsmart this pup.”

(The lads at Terrapin)(Me, Julia, and Sean at Sweetwater)

Round 1: Price/Bang for your buck

Both breweries are pretty cheap, Terrapin is $10 for 8 tickets and Sweetwater is $8 for 6 tickets, and each price of admission is accompanied by a pint glass you get to keep. But where this round differentiates is in the pour; Terrapin will give you around 1/3 of a glass for each ticket, while Sweetwater tends to give you a little more, just shy of 1/2 a pint. EDGE: Sweetwater

Round 2: Facilities

Based on the results, it was a lot closer than expected. I thought Sweetwater would run away with this one, but they only just comfortably nudged out Terrapin. Sweetwater’s facilities are nice: wood bar, wood-floored inside, fully bricked outdoor area and patio, a big flat screen TV indoors, the works. While Terrapin is larger and has more room, it is certainly not as well—decorated; it’s got cement floors inside, a large backyard, a very strong scent of malt, barley, etc. (it is a brewery after all), and its restrooms aren’t as clean or fancy. EDGE: Sweetwater

Round 3: Seating/Seating Area

This one was a complete landslide. Sweetwater has a small, small seating area inside: few seats at the bar and 4-5 tables with two chairs each, and zero seating outside except for one picnic table. Terrapin boasts tables indoors, long and circular tables outdoors, and about one hundred extra seats and chairs to do with as you please. EDGE: Terrapin

Round 4: Atmosphere

Sweetwater has a great outdoor patio/deck area, but what may have hurt them in this category is the lack of size and space available. No one likes the feeling of being all cramped together. On the other hand, Terrapin has tons of space both indoors and out; they provide corn-hole boards for patrons, and have live music playing outdoors on most occasions. Also, you can unleash your dog here to let him/her frolic and play with other canines, unlike Sweetwater. EDGE: Terrapin

Round 5: Tour

For starters, Sweetwater’s tour is separated from its bar area, which helps cut down on the pungent brewery smell, and gives you a pretty good feel for the brewery and most of its aspects. The tour takes you on a walk by the distillers, mashers, etc., to the bottling area, onto the packaging sector, and you finish up in the storage fridge where there are cases of beer all around you (aka. Heaven). The tour guides are also very engaging, funny, and I’ve never had the same one twice, which allows for each guide to put their own spin and style on it. At Terrapin, the tour, if you could call it that, simply walks you to in front of the distillers where you will be spoken to and given a history of the company and then that’s about it. Personally, I have taken the tour four times and had the same woman give me the tour each time. What’s that saying, “Variety is the spice of life?”….EDGE: Sweetwater

Round 6: Variety/Offering of Beers

Fairly close, almost a draw. Both Sweetwater and Terrapin offer a good selection of beers on tap at the breweries. Furthermore, they also do a fine job of cycling the lineup fairly often, with the exceptions of their cornerstone beers. However, Terrapin just pipped Sweetwater at the finish. While not 100% sure of the reasoning behind it, I believe it’s because Terrapin more regularly cycles their beers and also pulls out their infamous “Side Projects” as options on a fairly regular basis. EDGE: Terrapin

Round 7: Taste

All tied up going into what may be or seem like the most important round and category to most beer drinkers. Not a surprise to me though, but maybe that’s because I’ve analyzed the research and knew it already. Both have their signature and cornerstone brews, Terrapin has Rye Pale Ale and Golden Ale and Sweetwater has Sweetwater Blue and Sweetwater 420, along with seasonal and other assortments. All taste great, too. Personally, I don’t have a super refined palate complete with two thousand papillae per square centimeter on my tongue, so I don’t really tell that large of difference when comparing similar brews from each. However, the people have spoken and, by a narrow margin, have selected Sweetwater. EDGE: Sweetwater

“Final seconds of the fight! These two middleweights are slugging it out at the center of the ring! Standing toe-to-toe, trading blow after blow after blow! (Ding, Ding, Ding) The two breweries embrace, each raising their arms as if they’ve believe they’ve won. This one is going to the judges!”

“The judges have scored this fight 3-4, 3-4, 3-4—in a unanimous decision—for the NEW champion of small breweries in Georgia—Teeeeeerrrrapin Beeeeer Companyyyy!”

            Now hold up, before you go getting on me and questioning my math skills or if I know how to count, let me explain the reasoning behind this. Immediately you’re thinking “What the hell?! Sweetwater had 4 pts, Terrapin had 3 pts, it’s plain to see that Sweetwater won.” Ahhh, but there is a little something called weighting and correlation my friends. While Sweetwater did win more rounds/categories, they didn’t win the ones that mattered most. According to our research and analytics, such as Pearson correlation, the categories that most factored in to overall satisfaction were: facilities (won by Sweetwater), atmosphere (won by Terrapin), seating (won by Terrapin), variety (won by Terrapin, narrowly) and price (won by Sweetwater, but was essentially a coin flip, so we’ll call that a wash).

            I know, I was shocked by some of those factors, particularly facilities and seating, but the fancy and expensive analytic software that our professor ran the numbers through and helped us analyze don’t lie. This goes to show how important it is to understand your target market, their opinions and feelings on the various aspects that encompass one’s attitude toward a product and company, and to do complete and thorough research to back it up. In the early stages of our research, my team and I asked what the main purpose of going to the brewery was; the response “to be with friends and/or family” was the overwhelming majority, followed by “to drink beer”, of course. Maybe it all goes back to what I was saying in my previous blog entry, by being able to create an atmosphere and experience that is bonded and linked with a company and its product, you’ve just been able to connect that consumer to you emotionally. Through its atmosphere, enough seating for you and all of your friends/family, and great variety, I hereby proclaim Terrapin the victor and king of Georgia small breweries. At least for now…

Service With a Smile

In today’s market, consumers are looking for more than just a product or a service; they want an experience. While some companies offer a great product or service, they may be lacking in going that extra mile that truly sets them apart from their competitors. For example, while retail and fast-food giants Wal-Mart and McDonalds dominate the market in their respective industries, they could learn a little something from the mom-and-pop stores and restaurants that they occasionally help put out of business—the factors that give people that peak experience.

During this past Spring Break, my buddy, Sean, and I took a road trip to several major cities in the South and visited several successful restaurants, breweries, distilleries, and music venues to determine how and why they had become so lauded. For this entry, we’ll be looking at a couple examples of businesses that provide an unrivaled experience to accompany their product and service. Our first stop takes us to Charleston, SC and Bowen’s Island Restaurant.

 

(Click on the photos to enlarge)

Bowen’s has been a family-owned and operated restaurant since its creation over fifty years ago. It sits on the edge of Folly Creek and offers fantastic seafood, a family atmosphere, and picturesque views. We had a chance to speak with the restaurant’s owner, Robert Barber and his daughter, Hope McIntosh, about what sets Bowen’s apart. After a few hours, a tour, a few drinks, tens of questions asked by us, a cooking demonstration, and a cornucopia of seafood and sides, it was plain to see what set Bowen’s apart—tradition and love. It is so rare in today’s consumer market that one finds a company that genuinely cares for the consumers and their needs; well Bowen’s Island Restaurant does that to the umpteenth power. For example, they harvest their famous oysters from oyster beds in Folly Creek only a few minutes boat ride from the restaurant, as they have been since 1946. Also, they prepare them on a large sheet of steel cooking apparatus (that has been in the family for decades) and cover them with wet burlap sacks to steam the oysters and cook them in their own juices. Furthermore, the entire restaurant, inside and out, is covered with signatures and messages written by patrons from the last several decades (don’t think I passed up the opportunity to sign myself into history).

(Bowen's featured on Travel Channel's Man vs Food: From 6:21 on 1st clip to 0:20 on the 2nd clip)

Bowen’s continues to differentiate themselves and woo customers by providing a warm atmosphere that all feel comfortable in. The service, care, and dedication that is shown by everyone, from the hostess to the owner and his daughter, is incredible. I truly felt like I had come home from school and had my mother waiting on me hand and foot and genuinely cared about my satisfaction. Ask any customer or consumer of any product or service from any company, big or small, if they prefer to be treated like a person or a number. I guarantee that 99.9% of the time people prefer to be treated or known as Sara, Jim, or Miguel instead of a revenue source or Reference #KW4972849. At Bowen’s they’ve got that by the boatload (pun fully intended). It is truly an experience that goes above and beyond. Believe me when I tell you that if you want to see how to build a strong customer base, unwavering loyalty, and success, check out Bowen’s Island Restaurant.

Next, we jump on over to Nashville, TN, affectionately known as the Music City, Nashvegas, or Smashville. There, we were lucky enough to be able to score an interview with Erica Nichols, COO of the Nashville Songwriters Association and President of the critically acclaimed and world famous Bluebird Café. For those of you who don’t know, the Bluebird Café is a listening room and restaurant that hosts shows for songwriters and artists in the country music community. The concept of a listening room is basically exactly what it sounds like, you don’t yell or scream at the band, you are there to listen to the music and lyrics and immerse yourself into them. They are well known for being the discovery point and launching pad of many prominent country music superstars, such as: Taylor Swift, Kenny Chesney, Garth Brooks (he actually signed his record contract in the Bluebird Café kitchen), Dierks Bentley, Keith Urban, and the list goes on and on. It is rich with tradition and is a landmark in Nashville and for country music in general. Despite all of its notoriety and fame for launching country music careers, I believe its success can be attributed to two key components: sense of community and intimacy.

 The way Erica explained what she thought set the Bluebird apart from other places was that it had “a unique feeling of family; that everyone knows everyone and is always happy to welcome in newcomers.” That factor is evident the moment you walk into the door; as we walked in for our interview, we were met by some staff, who were setting up for the show that night, and they asked us how we were doing and how they could be of assistance. We told him the nature of our visit and he led us over to a table and told us he’d let Erica know we were here. Before we could even get situated at the table, a lady brought us each a beer (they knew us too well) and asked us if we’d like any snacks. Beer AND snacks? Heaven to a college student. We never felt out of place, nervous, uneasy, or anything like that; I was as if I was at home. When Sean and I returned to the Bluebird Café that night for the show, we were again greeted and taken to our table. One of the staff who was there during the day recognized us and waved us over to meet some of his friends and the artists who had performed the night before, just like friends or family would. Throughout the night we saw artists who perform at the Bluebird conversing with guests and staff interacting with patrons like friends would. Even before you step foot into the café, you’re already part of the community.

The other aspect that truly sets the Bluebird Café apart from others, and allows its patrons and visitors to have a peak experience, is the intimacy between the artists and customers. The layout of the Bluebird is unlike most other music venues I have been to; while the majority of venues have a stage at one end of the room, the Bluebird places their stage in the middle of the room. According to Erica, they do this so that “patrons can feel and feed off the artists’ energy and make it seem like this show is only for them. That’s why we placed the stage in the middle, so that everyone has a great view and can almost reach out and literally touch the artists.” It’s an experience unlike I had ever had before at a music venue. You actually feel closer to the artists, not just in a geographic sense, but in that cheesy connection way as well. The fact that the Bluebird is a listening room and the unique floor layout both factor into an exclusive experience that differs from all others.

While there are various ways to gain a competitive advantage and differentiate a business from competitors, one of the best ways is to accompany the core product or service with a unique and special experience for the consumer. In this instance, the consumer is receiving more than just a product, more than just a service, they feel as though they are part of a community, an insider, and for that there is no substituion. As illustrated from the two cases above, extraordinary service and staff, special traditions, emotional investment, and an exclusive atmosphere can help to create a unique experience for consumers that result in brand loyalty, word-of-mouth marketing, and overall success. So for those companies out there who are content with their main product or service the way it is, I suggest you reevaluate your offering and see if you can create an experience to pair with it; you might just be surprised at the amount of success that follows.

The REAL Domino Effect

          Think of delivery pizza and you don’t necessarily think of A-plus cuisine. But how about being considered grade-F cuisine only because you traditionally can’t go further down the alphabet on the grade scale? Well, that’s where Domino’s pizza found itself in 2008’s Brand Keys index of consumer taste preferences among national pizza chains, tied for dead last with Chuck E. Cheese’s—ouch[i]. After sales fell 6% in 2009, then CEO, Dave Brandon, and then President, now current CEO, Patrick Doyle, decided it was time to act on their plan for change for the nation’s largest pizza delivery chain. From 2007-2009, Domino’s had been ranked first in convenience and price among most customer satisfaction surveys. However, they had also consistently ranked near the bottom on taste. It was time to go for the “Trifecta” and get all three near the top of the rankings. How did Domino’s go about pursuing it? They listened to their customers (there’s a novel idea).

            Brandon, Doyle, and the Domino’s team decided to do a complete overhaul of its core product. For those of you playing at home, that’s an incredibly risky thing to do. Need I remind you of the time Coca-Cola changed their taste? Drinkers and fans almost unleashed carbonated anarchy. Brandon and team were well aware of the risks and ready to take that chance when he commented, “Once you’ve built a brand, that’s your brand. To change it means that everything you’ve stood for isn’t right…It’s time to make things right”[ii]. Not only did they completely retool the pizza’s crust, sauce, cheese, and other ingredients, they also retooled how they would re-establish their brand.

                                                            (Watch it. It's very insightful)

            Saying “sorry” is one of the hardest things to do. But that’s what Domino’s did; they launched a major ad campaign to apologize for their subpar product that they had been putting out and vowed to make it better. For starters, people love it when others own up to their own mistakes; people love it even more when the people owning up are millionaire executives who work for billion-dollar companies. I, for one, absolutely loved it. It takes some serious…cojones (that’s Spanish for “testicular fortitude”)...to do that. I never saw AIG or banks go around publicly apologizing for having to get mass bailouts from the government, or Toyota create an ad campaign apologizing for the hassle it causes consumers when a part is recalled. So with their apology part complete, they took the next step, commitment to correcting the problem. They did an excellent job of demonstrating to the customer that they were listening and were going make a whole-hearted effort to do their best at fixing what was wrong. They asked customers to send in pictures of their deliveries, cited specific examples of customer complaints in their campaigns, “…the crust tastes like cardboard”, came out with ads showing where the ingredients are grown and harvested, and cited surveys that customers had previously taken[iii]. In continuation with their revamped product, apology, and commitment to correction, Domino’s also decided it was time to repair their image.

            Domino’s brand image had taken a hit, but through research, social media utilization, and continued feedback loops with customers, they gained a new, more respected one. The pizza giant spent two years re-tooling their core product and innovation of their overall menu in order to provide more options to customers; currently, about 80% of Domino’s menu items were introduced in the last year and a half[iv]. Next, they tackled an area that had traditionally been a thorn in their side—social media. For years, blogs had been degrading Domino’s pizza quality. Domino’s instead reached out to these food bloggers who had bashed them in the past and took proactive steps to sway them by providing them with research, new surveys, and in some cases, samples. Furthermore, they began monitoring Twitter for feedback about their new product and ways to correct continuing errors. Finally, Domino’s invested time and effort into communication with customers to re-illustrate that they had been heard and their opinions would be valued. Most recently, Domino’s has run an ad about their new chicken and their “Rate Tate’s Chicken”, Tate being Tate Dillow, the head chicken chef. This involves more customer feedback and opinions about this new product by selecting varying levels of satisfaction about the taste of the chicken. To quote Patrick Doyle from this commercial, “I wanna hear from people. That’s the way we run this company.”

            So what did this entire product and brand image overhaul mean in terms of numbers and success to Domino’s? Was it worth the risk? ABSOLUTELY. After the ad campaign began to air in late 2009, profits more than doubled the very next quarter from $11 million to $23.6 million. Full year profits also surged by 48% to $79.7 million in 2010 from $54 million in 2009[v]. If that isn’t enough, Domino’s vaulted to No. 1 in the 2010 Brand Keys taste index[vi]. Not too shabby if you ask me. So, much like Hardee’s similar apology campaign in 2004, the risk was completely worth it. Not only did profits increase, but customer satisfaction appears to be at an all-time high. Currently, Taco Bell is taking a page from Hardee’s and Domino’s and running a campaign to combat speculation about the quality of their meat recipe by telling consumers it’s “88% premium ground beef and 12% signature recipe.” Now I may not be able to pronounce half of those ingredients in their “signature recipe”, but at least they’re being honest. I respect them for that. Also, word on the street is that they’ve already started seeing an increase in sales.

In conclusion, kudos to you Mr. Brandon and Mr. Doyle for taking a serious risk of reworking your core product, listening to your consumers, providing opportunities for feedback, and for taking responsibility by apologizing for past transgressions, it’s very refreshing. The moral of this story is that apologizing, along with a well thought out marketing plan to back it up, equals success and great returns, or at least in the recent world of the fast food industry. I wonder how many points I could bump up my finance exam if I made an artistic video apologizing to my finance professor for my performance on his last exam and posted it on YouTube. Alas, I feel that may be too great a deficit to overcome…

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[i] Horovitz, Bruce. "Domino's Pizza Delivers Change in Its Core Pizza Recipe - USATODAY.com." News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. 16 Dec. 2009. Web. 04 Mar. 2011. <http://www.usatoday.com/money/industries/food/2009-12-16-dominos16_ST_N.htm>.

[ii] Horovitz, Bruce. "Domino's Pizza Delivers Change in Its Core Pizza Recipe - USATODAY.com." News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. 16 Dec. 2009. Web. 04 Mar. 2011. <http://www.usatoday.com/money/industries/food/2009-12-16-dominos16_ST_N.htm>.

[iii] Farhi, Paul. "Behind Domino's Mea Culpa Ad Campaign - Washingtonpost.com." Washington Post - Politics, National, World & D.C. Area News and Headlines - Washingtonpost.com. 13 Jan. 2010. Web. 04 Mar. 2011. <http://www.washingtonpost.com/wp-dyn/content/article/2010/01/12/AR2010011201696.html>.

[iv] Wiesendanger, Betsy. "Change at Domino’s." Nyse Magazine. Web. 04 Mar. 2011. <http://www.nysemagazine.com/dominos?page=3>.

[v] "Domino's Says New Recipes, Frank Ad Campaign Help Double Profit - USATODAY.com." News, Travel, Weather, Entertainment, Sports, Technology, U.S. & World - USATODAY.com. 2 Mar. 2010. Web. 04 Mar. 2011. <http://www.usatoday.com/money/companies/earnings/2010-03-02-dominos_N.htm>.

[vi] Dentch, Courtney. "Domino’s Changing Recipe to Help Lift U.S. Sales (Update2) - Bloomberg." Bloomberg - Business & Financial News, Breaking News Headlines. 16 Dec. 2009. Web. 04 Mar. 2011. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aapXMS5qu0YU.

Pabst Blue Renaissance

“What did you guys get to drink?”

“Blue Moon.”

“PBR.”

“So you’re a girl, and you’re a hipster?”

That was a small segment of a conversation held between myself, Ben Pratt, and Randall Bourquin after ordering drinks at the AMA Collegiate Mixer in Atlanta. I had the PBR. Little did I know that my PBR would come in a 16oz tallboy can; thus ensuring that my business casual attire, and any chance I had of looking professional, would be cancelled out by the aluminum beacon in my hand screaming out, “White trash! Right here!” I digress. Before I came to UGA, I had always thought of PBR as the average, working man, American choice of beer. Over the last year or so, I had slowly become accustomed to PBR being the retro-chic and trendy choice of the “hipster” crowd. However, though I am far from a hipster, my loyalty to this brand has not wavered, despite months of ridicule. Randall’s comment got me thinking, though, “What happened? When did this all change? When did PBR replace blue collar and become the official beer of flannel, tight jeans, and vintage clothing?” This is what I found…

For starters, let’s get acquainted with this fine brand and its past and present: Pabst Brewing Company was founded in Milwaukee, Wisconsin in 1844. The beer was originally called Best Select and then Pabst select, but was renamed to Pabst Blue Ribbon in 1893 for the blue ribbons tied around the bottlenecks from 1882-1916. Sales of PBR peaked in 1977 with a production of over 18 million barrels a year. It then steadily declined and in 2001, production fell below one million barrels a year.[i] In the early 2000’s, PBR received a boost in sales from an unlikely source—“alternative people”.[ii]

            These “alternative people”, also known affectionately as hipsters, punks, or other non-conforming subcultures, started consuming the product in mass. Wait a second, how did this subculture adopt the brand and product that former Pabst CEO Brian Kovalchuk deemed an “authentic American beer for the average American”?[iii] Pabst was focused on its target market of the 45-60 year old demographic and seemingly would never intentionally target a demographic that appears the exact opposite of their original target. So again, how did this come to fruition? The answer is pretty simple—they didn’t intend for it to happen, it just did. After some thorough research, Pabst determined the revival indeed stemmed from the Northwest, the lovely birth of the Grunge scene (sound and look familiar?). They also determined that the people who like and embraced the brand detested traditional marketing. Kovalchuk worried that the hipsters might “jeopardize the authenticity” of the brand, but its current CEO, Kevin Kotecki, decided to take a proactive approach to the situation.

            After understanding why and how the hipster and other alternative subcultures had developed a loyalty to their brand, Pabst did what every other company would do in its situation—capitalize on it. Through additional research, Pabst made sure it had a solid understanding of the hipster demographic and took proactive steps in their marketing. Ask yourself this, “When was the last time you saw a PBR commercial or big promotional event?” If you're my age, the answer is most likely never. For those who might have a few more wrinkles, your answer would probably be around the late 70's or early 80's. The beer industry in the US spends around $1 billion per year to pitch its products, while Pabst spends a tiny fraction of that. It decided it would be wise to do nothing, or at least appear to do nothing, in order to keep their image for these groups. And it definitely stuck to its guns: Pabst turned down endorsements from Kid Rock and other famous musical artists and passed on the opportunity to be a sponsor of major snowboarding and other action sports events.[iv] Pabst didn’t follow traditional marketing strategies and redesign the package, or create new ads with their target audience featured when a brand picks up steam; it decided to let the consumers lead the brand. It counted on one of the oldest forms of marketing, word of mouth, to sway those beer consumers whose loyalty was up for grabs.

            In 2001, Pabst inked an outsourcing deal with beer industry-titan Miller Brewing Company. One would think this would have spelled the end of PBR’s revival before it even got started. Instead, statistics show that since 2002, sales have increased 9.4%.[v] So the collaboration with a company that would seem to be all that these alternative groups loathe resulted in a positive effect. This probably attributes to the fact that the younger generation, Generation Y, is wise to marketing and business deals and understands that a deal such as the one made with Miller Brewing Co. doesn’t have an effect on how Pabst will be run or how its image will be managed.

            So back to the original question that sent me off on this wondrous journey through marketing strategies, research, and the understanding of Pabst Blue Ribbon, “Why and how did PBR develop this cult-like following from the hipster crowd?” It’s a combination of several factors: Cheap prices having a positive influence during the recession; the constantly cash-strapped college drinkers and those in their 20’s demographic; brand and lack of mainstream image appealing to the hipsters; and loyal consumer endorsements. The main component of PBR’s revival, however, is that Pabst made a conscious effort to understand their drinkers and adapted to them through a consumer-driven marketing campaign. And if more drinkers take the approach of self-proclaimed punk and avid PBR drinker Phil Barnes, who said, “The only thing that’s going to stop me from drinking Pabst is when I die,” PBR may just return back to its former glory. As for me, I will never grow my facial hair into thick sideburn chops or wear jeans that constrict my blood flow, but I will happily continue to take the abuse I receive for drinking PBR. And it’s not because of its marketing strategy, although I do respect Pabst more now that I’ve uncovered the secret to its revival; it’s simply because it’s cheap, not horribly detestable, and I’ve been doing it for a few years now and am too stubborn to change.

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[i] http://en.wikipedia.org/wiki/Pabst_Blue_Ribbon

[ii] Walker, Rob. "The Marketing of No Marketing - New York Times." The New York Times -    Breaking News, World News & Multimedia. 22 June 2003. Web. 12 Feb. 2011. http://www.nytimes.com/2003/06/22/magazine/the-marketing-of-no-marketing.html?src=pm.

[iii] Walker, Rob. "The Marketing of No Marketing - New York Times." The New York Times -    Breaking News, World News & Multimedia. 22 June 2003. Web. 12 Feb. 2011. http://www.nytimes.com/2003/06/22/magazine/the-marketing-of-no-marketing.html?src=pm .

[iv] Walker, Rob. "The Marketing of No Marketing - New York Times." The New York Times -    Breaking News, World News & Multimedia. 22 June 2003. Web. 12 Feb. 2011. http://www.nytimes.com/2003/06/22/magazine/the-marketing-of-no-marketing.html?src=pm.

[v] Baskin, Jonathan S. "Could Pabst Be Too Cool? | Futurelab – We Are Marketing and Customer Strategy Consultants with a Passion for Profit and Innovation." Futurelab | We Are Marketing and Customer Strategy Consultants with a Passion for Profit and Innovation. 1 June 2010. Web. 12 Feb. 2011. http://www.futurelab.net/blogs/marketing-strategy-innovation/2010/06/could_pabst_be_too_cool.html.