Four Years Late Linkedin Communicates Data Breach Action Plan

Linkedin recently did a nice job handling their data breach.  They sent the e-mail below to users.  The e-mail clearly communicates the most vital information a consumer would want to know and is done in a manner that's easy to digest.  The only problem is the data breach occurred in 2012 and was widely reported on back then.  While Linkedin didn't realize how broad the breach was, they should have taken these steps four years ago.  The situation highlights the need for brands to take extra precautions when a crisis occurs and go the extra mile at moment zero.


----- Forwarded Message -----
From: LinkedIn Legal
Sent: Wednesday, May 25, 2016 3:00 PM
Subject: Important information about your LinkedIn account

J.Crew Admits It Made Two Critical Mistakes

J.Crew sent an e-mail to its customers this week acknowledging and apologizing (well not really apologizing) for the two big mistakes it has made over the past few seasons:

1. Drifting the fashion style too far away from the brand core
2. Raising price above what the brand value proposition can support.

The email was sent as an informal memo from CEO Mickey Drexler and carries a very casual tone.  Take a read...

The refreshingly simple and conversational style of the e-mail definitely caught my attention.  I believe the messaging does the trick in terms of getting lapsed consumers to at least give J.Crew another look and may even help put J.Crew back in their consideration set the next time they are browsing for new clothes.  Based on a quick trip to J.Crew's website, the styles do feel more aligned with the brand equity than the past few seasons.  That said, the ticket price still feels more premium in many categories than I'd expect many customers to pay full price for.  Sure J.Crew may have invested in the quality, but observing that requires consumers to take a trip to the store and feel the product for themselves.  Given how reliant J.Crew has been on promotions over the past few season, one has to also wonder if they have trained their consumers wait for sales and not pay full price.

Coca-Cola "One Brand" Approach Likely To Fail

Facing declining soda category trends in the United States and flat category growth globally, Coca-Cola is launching a new go-to-market strategy aimed at securing its market share and growth prospects.

The heart of this new strategy is unifying Coke, Diet Coke, Coke Zero, and Coca-Cola Life under a "one brand" marketing brand campaign and packaging architecture design. Historically, the company has treated the variants more as individual brands. The new design will be rolled out in Mexico first this May, with other markets adopting the new packaging throughout 2016 and 2017, with the US likely at the tail end of the transformation.

The marketing campaign will be based on the "Taste the Feeling" concept and supported by 10 TV ads, digital, print, out-of-home, and point of sale materials. The objective of this effort is to have all variants of Coca-Cola will be unified under this message and speak together as one voice instead of separate marketing for Coke, Diet Coke, Coke Zero, and Coca-Cola Life.

The packaging design is also aimed at driving a greater sense of brand unity and halo across the business.  All of the Coke variants will now all display the signature Red Disc, although the different variants will still feature a splash of their own unique colors: black for Coke Zero, silver for Coca-Cola Light/Diet Coke and green for Coca-Cola Life.  Marcos de Quinto, Coca-Cola CMO explained this decision by saying "Packaging is our most visible and valuable asset, . . .The Coca-Cola Red Disc has become a signature element of the brand, synonymous with great taste, uplift and refreshment. By applying it to our packaging in such a bold way, we are taking the next step towards full adoption of the 'One Brand' strategy, uniting the Coca-Cola family under one visual identity and making it even easier for consumers to choose their Coca-Cola with or without calories, with or without caffeine."  Although the company admitted it is still working to determine the exact packaging execution of this vision in the US where Diet Coke has a large market share and utilizes "Coke" on its packaging vs. the other variants, which use the more formal "Coca-Cola".

My take on this brand strategy approach is simple - it's a mistake and will likely fail.

The objective of this strategy is to clearly drive greater scale, which from a marketing standpoint traditionally means driving greater efficiency in advertising spending (e.g., getting a bigger bang for your buck because any advertisement should now drive sales across the broader brand portfolio vs. just one Coke variant like the historic marketing was targeted).  Accepting this premise would obviously seem very financially attractive as it would allow Coke to reduce its overall marketing budget because it no longer needs to run four independent advertisements to support the four different variants, it can now look to drive all four behind one advertisement.  However, I would argue that any shorter-term cost savings will be more than offset by longer-term revenue declines because the effectiveness of the 'one brand' advertisement will likely be lower than Coke's historic variant focused approach.  This is the case because to make this strategy work, Coke effectively needs to dilute its messaging to the least common denominator that halos across all four variants.  What made Diet Coke and Coke Zero so powerful is they each spoke to two very different target consumers than original Coke and I worry that one advertising campaign will soften the brand's ability to both target and resonate as deeply with each individual target, instead opting for being a bit of everything for everybody.

From a packaging standpoint, the company is also clearly trying to make a scale play by increasing the visual brand block at shelf with a sea of red.  This in theory should grab more consumer attention in store.  Additionally, for a design purist standpoint, the simplicity of the new brand architecture is far more beautiful than the current disaggregated design.  However, sometimes the uglier solution is the more effective solution from a consumer standpoint.  What consumer has ever complained they cannot find Coke on the shelf?  I have real worries that the new packaging will lead to significant confusion at the shelf and in some cases will lead to the consumer either walking away empty handed or with the wrong item.  Simply put the packaging is just too similar across variants to allow the consumer to quickly find their variant of choice - especially in a category dominated by a grab and go mentality.  Additionally, from an on-pack communication standpoint, the variant name is in the wrong location on the can and bottle.  It should be below the brand name where consumers eyes are trained to expect it, as opposed to up top.  The location on the top of the label is likely to be missed by many consumers based on the fact that the packaging pulls their eye directly to the brand logo and consumers are trained to read down, and not glance back up.  Finally, I'd argue consumers have a strong affinity for the can color of their personal favorite variant.  In many ways, what can color can you prefer has come to express something about your personality to yourself and others in our society - not necessarily good or bad - but something about who you are.  I'm a black can (Coke Zero) guy.  I don't think consumers will ever articulate this, but I expect the black can people and the silver can  (Diet Coke) people to have some hesitations about picking up a new red disc can.  I think they'll miss how their old can helped expression a very small piece of their personality.  In this way, Coke will be a victim of its own historic success.

Canned Beverages Making a Come Back?

One of the trends I'm anticipating over the next few years is the revival of canned beverages.  The twist is that this time we should expect to cans popping up in beverage categories where the packaging form was previously not leveraged on a broad scale. I believe two categories in particular are primed for growth: canned wine and canned water.

The case for canned wine is simple - single serve and convenience.

The case for canned water is also simple - the increasing backlash against plastic bottles.  I'm a big fan of this resealable cap execution that Noah's is currently offering:

Toyota Prius "The Longest Chase" Best Super Bowl Advertisement of 2016

Toyota wins my award for best Super Bowl commercial of 2016 for its Toyota Prius "The Longest Chase" advertisement.

The award is based on the premise that strong advertisements grab your attention, communicate a clear benefit, link to the brand equity, and have strong brand recall.  Many Super Bowl ads are entertaining and grab your attention, but few do all four of these things and hence don't move the needle in terms of driving brand perception and ultimately revenue.  Indeed, many brands fall into the trap of pushing too far on the entertainment aspect and fall short on the benefit, brand equity, or recall aspects.

While the plot of the Toyota Prius advertisement is sure to stir a little controversy (e.g., potential references to OJ Simpson), the commercial was both entertaining and effective.  In short, the ad did exactly what it needed to do for the brand - re-frame it as a car that is anything but boring in a way that was compelling, on equity, and memorable.

Take a look if you missed it:

Chipotle's Store Closure A Marketing Stunt

In the aftermath of Chipotle's E. coli and norovirus outbreaks, Chipotle said sales at stores open at least a year dropped 30% in December.

As a response, Chipotle Mexican Grill recently announced several moves to“to reassure our customers that this can’t happen again”, including:

• DNA-based testing on many ingredients to ensure quality and safety

• Making changes to improve food safely by moving the chopping of tomatoes/lettuce and shredding of cheese to a central location, blanching onion/avocados/limes to remove any potential germs before they're chopped, and updating meat marinating protocols

• New food safety training protocols

• Closing its ~1,900 restaurants for a few hours on February 8 to host an all company meeting via video conference with its ~60,000 employees nationwide to talk about food safety changes, thank its employees for their hard work during the crisis, and restore employee morale. Stores are expected to reopen at 3 p.m. local time that day, meaning the chain will sacrifice sales during lunch. "We're going to let all of our folks know about how this happened, and, in detail, all the steps that we're taking to ensure that it won't happen again . . . It's going to be a great rally" explained Chipotle founder and co-CEO Steve Ells.

• Paid sick leave for employee to help reduce spread of germs

• Launching a multifaceted marketing and PR campaign that includes direct mail and traditional advertising in early February after it expects the CDC to wrap up its multi-state investigation into the food-borne outbreak, with the goal “to tell our story about what happened,” according 
  to Mark Crumpacker, chief creative and development officer 

• Offering a $50 discount and a limited-edition gift from the maker of Tabasco on the first 1,500 catering or "Burritos by the Box" orders for 20 or more people for Feb. 7

• Rolling out a store-by-store grass roots marketing effort that empowers each store manager to create his/her own local reactivation campaign by doubling the amount of free food each store is authorized to give-away

With these moves, the company has finally decided to move from defense to offense in their response. But what took so long? Why hasn't the company moved quicker to own the conversation?

So far, the store closures have made the biggest headlines. But the jury is still out whether this is a smart strategic decision or not.

A restaurant chain temporarily closing its doors is not unprecedented. In 2008, after returning as the CEO, Howard Schulz famously closed all Starbucks to improve the consumer experience at the beginning of his effort to reignite sales growth.

But for Chipotle, this peace offering again seems like its too little, too late. If they were going to do this, shouldn't this have occurred weeks ago?  February 8th is still relatively far away, and several more weeks removed from the actual outbreaks. So in effect, the company is prolonging the news cycle.  

And, besides, is it even the right strategy and message for what the brand needs at this stage? The vast majority of consumers aren't reading the company's press releases or watching the news, so the store closures are likely to lead to some element of confusion and re-raise awareness of the outbreaks.  Was "my" store impacted by the outbreak?  Are they closing the store to clean it?  

From a symbolic standpoint, closing its doors to consumers may alos actually be sending the wrong symbolic message. In fact, the very act of shutting the doors, physically blocks the consumer out and reduces transparency verses inviting consumers back in to give the brand another shot. The notion of transparency in a crisis is critical, even more important when your brand's foundation is built on transparency as is Chipotle's. To this end, the store closures feel like the wrong action for this event and more of a PR stunt to grab headlines.  

I'd argue the brand's response should have been based on four pillars: responsibility, transparency, even higher standards, and community.

1) The brand, as it did, should quickly come out to take responsibility for the outbreak and ensure the risk of future outbreaks will be minimized. The brand needed to quickly present a clear action plan. Part of quickly taking responsibility means transitioning from defense to offense by owning the conversation and minimizing the spreading of any false information. To achieve this, in addition to actively pushing out information, the brand needs to be present in the places consumers are going to find information. To this end, I would have recommended activating a search engine campaign (both SEO and SEM) on a variety of potential terms consumers are likely to search (e.g., Chipotle outbreak, Chipotle food safety, etc.) to learn more to help funnel them to your website vs. third party websites.

2) The brand needs to maintain full transparency with its consumers. The company still has not broadly announced the cause of the outbreak incidents. This feels like a major mistake. Could it be that the either still do not know the cause or it's multiple products lack of transparency flies in the face of the company's stated values. Lack of knowledge escalates the fear. As opposed to consumer just avoiding the salsa or lettuce, they avoid everything. I was disappointed to notice that is was very difficult to find any information of the outbreaks or the action plan on Chipotle's direct website. As best as I could tell you either had to type in specific terms into Chipotle's search tool or run a google search to to find https://www.chipotle.com/update. I'd also argue the company meeting on February 8th should be open to the press and broadcast over the internet for consumers to view as well in an effort to continue promoting transparency.

3) Chipotle's brand is all about holding fast food to a higher standard in terms of food quality, and in many ways their response as outlined above does just this. Most of these measure far exceed industry standards and Chipotle should rally the cry for other restaurants to match them. The action item of offering employees sick leave is enormous and I do not believe the company has done a good enough job of promoting to ensure it receives more media attention. This should resonate very broadly not only as a food safety measure, but also as a workers rights/benefit.  By pivoting the media discussion to groundbreaking steps like these, Chipotle has the opportunity to regain its pedestal as a champion for fair and humane business practices. 

4) Finally, and most importantly, the brand needs to get people eating their food again, even if its free food. The best way to do this is through community engagement. This means not just open the doors to its community, but also actively going out and engaging in new ways with them. It's easy for consumers to distrust a national brand, but much harder a restaurant that's ingrained into their community. So investing in supporting local schools, holding community gatherings, offering free giveaways, or bring a friend in campaigns. The $50 off catering orders for the Superbowl is a good start, but why limit it to 1,500 customers? Eating the food at group gatherings reduces the stigma and judgement of coming back to the brand.

Is Audi Naughty or Nice?

In only a matter of few months, Audi appears to have done a reverse shifts on its brand positioning, or at least the articulation of its brand character - leaving consumers to wonder if its naughty or nice.

Audi launched a new advertisement last summer entitled "nice performance" that aims to position the brand as the performance vehicle for considerate people, while BMW as the car for self-entitled jerks.

"The Audi A4. Engineered with a spirit of excellence, thoughtfulness and respect - traits also shared by those that drive one. Sure, it's a German luxury performance sedan, but it's these special qualities that put it in a class of its own," Audi says.

 

However, in January, in an abrupt change, Audi started running a commercial entitled "swim" that features a school-aged boy breaking the town pool rules, only to be commended by his approving mother.  Sure his main crime is doing a cannon ball into the community pool.  But, nevertheless, the brand communication is clear - society's rules are meant to be broken. That with Audi, its okay to be a little naughty in order to express yourself.

"When a young rebel considers taking a plunge, he envisions the consequences of challenging everything he’s been told. For over 100 years, Audi has embraced that same challenger spirit. You’ll see it in our cars, our company, and in everything that we do," Audi says

I find the ad funny, but pushing the brand too far from its non-conformist messaging.  There is a difference between expressing your individuality and encouraging kids to break society's rules.  And more importantly, a far cry from the position as the "nice" guy.

Interestingly, Audi recently started re-running it's 'nice performance' ad.

So is Audi naughty or nice?  Either can potentially work, just not both.

Apple Pay Gets Rolling Via Bank Partners

I'm a big fan of how Apple has started promoting Apple Pay.

Apple itself has yet to run any televised commercials for the service.  Instead, Apple has been partnering with the largest credit card issuers to promote the product for them.  In fact, Apple recently claiming that Pay is supported by credit cards representing roughly 90% of U.S. purchase volume.

Recently banks such as Wells Fargo, Bank of America, Chase, and Capital One have all aired commercials promoting Apple Pay . . .

Capital One:



Wells Fargo:



Bank of America:



While all of these advertisements are done by different banks, Apple has done a great job to partner with each to make them all feel relatively consistent and delivering on the same message.  Apple's influence is also clear in showcasing the product in use.  Since the launch of the iPhone, Apple has hands down had the best product demos of any TV commercials.

More importantly, the launch strategy of handing over the product promotion to business partners is successful because it accomplishes three key goals:

1. Helps generate a tremendous amount of product awareness
2. Simplifies the notion of mobile payments by making it just an extension of an existing credit or debit card
3. Creates credibility by linking the new technology with the financial institutions that consumers already trust for their banking needs

Now all Apple has to do is continue to enroll more retailers and start pumping out more iPhones.

Yoplait Deals Latest Strike in the Yogurt Wars

As I noted in previous posts, the yogurt wars are on center stage. . .

If the Greek yogurt market was a boxing match, Yoplait would be badly blooding coming out of the first several rounds (with less than a 10% market share). However, now the brand has come out of its corner swinging for Chobani, the Greek yogurt heavy weight champion.

In a good old fashion Coke vs. Pepsi style rumble, Yoplait is challenging Chobani to a taste test to determine who has the best Greek-style yogurt in an effort to win over consumers.

The backbone of their fight is a national TV campaign ads that doesn't pull any punches. . .



Yoplait's is also making the fight personal by opening a pop-up store in New York City very close to where Chobani's SOHO flagship operations are located. In the meantime, Chobani is counterpunching with the recent launch of its 100-calorie line, Chobani Simply 100, to challenge Yoplait Greek 100 ($150 million in sales) as well as running a Super Bowl advertisement to drive national awareness.

At the very least, Yoplait's highly-competitive actions will force Chobani to decide if it should switch from offense (in support its own new product innovation) to defense (by double down support of its base business). My viewpoint is Chobani is the category leader and it has to stay the course of dictating the terms of competition in the category. This means fixing its GMO image and celebrating its "nothing but goodness heritage" in the core business and leading the evolution to adult mix-ins behind its newest product launches. Keep Yoplait chasing you.

Are Consumers Souring on Chobani? Is the Brand at a Tipping Point?

In the matter of only a few years Chobani, the leading Greek Yogurt brand in America, has transformed itself from a small challenger brand into a $1 billion power-player that is giving Yoplait and Dannon a run for their money in the dairy aisle. And in full disclosure, I'm a huge fan of how Chobani built its brand (the unique product/packaging, the challenger brand refusing to back down to the traditional yogurt powerhouses, the innovation, the CEO's vision, etc.), not to mention the delicious product. There's no doubt, Chobani's rise has been magical, with it looking like the brand could do no wrong, that is until recently . . .

Chobani has hit a number of stumbling blocks over the last few months that risk alienating core consumers and challenging the long-term health of the brand. During its meteoric rise, Chobani built a tremendous groundswell of passionate, loyal core consumers. This consumer-base allowed the brand to grow organically through strong consumer advocacy, without having to spend large sums of money on traditional marketing to compete with Dannon and Yoplait. However, there are now cracks in that consumer-base. It's astonishing how many passionate negative comments have appeared on Chobani's facebook page over the last few months. Yes, there are a ton of passionate positive ones too to offset the negative advocacy, but still its troubling for the longer-term brand health. Taking a closer look at the different brand stumbles suggests the cumulative effect of all of these stumbles should be alarming for Chobani.

• Chobani issued a recall after finding a portion of its yogurt was tainted by mold, which caused over 100 consumers to become sick with symptoms including nausea and cramps. While the majority of consumers are willing to forgive and forget assuming this was a one time mistake and the company appears to have handled the mini-crisis with sincerity, events like this start chipping away at a brands trust - especially a brand with a slogan of "nothing but good". Take a read of a few of the several hundred facebook posts:

• Consumers became aware that Chobani is not sure if the grain fed to the cows producing the milk contains GMOs (genetically modified organisms). The GMO finding is very interesting because it again directly clashes with Chobani's promise of "nothing but good". As the facebook posts below illustrate, this realization is upsetting and alienating many of its core consumers. That said, the learning would be far more damaging to short-term brand sales if Chobani was still a small brand that relied on distribution from Whole Foods and other natural and premium grocery stores. Given a bulk of brand sales now come from the likes of Walmart and mainstream grocery stores, the more mainstream consumers are unlikely to blink much of an eye, at least in the short-term.    

• Chobani is downsizing its product from 6.0 to 5.3 ounces, while holding price constant equating to effectively a 12% price increase. Let's just say consumers are not going to be happy about this. Look at a few comments of the hundreds from Chobani's facebook page:

• Whole Foods announced it would de-list Chobani by early 2014. Whole Foods decision to de-list Chobani is really not a surprise given both the GMO issue as well as the brand transitioning from a unique, premium product to a mainstream, mass market mainstay. Chobani grew to over $1 billion in large part by expanding distribution from Whole Foods into mainstream grocery stores, Target, Walmart, Costco, Sam's, and many other retailers. Whole Foods' strategy is to charge a premium price on a differentiated product assortment from more mainstream channels, so as Chobani grew it became at odds with this core strategy. Whole Foods actually held distribution on Chobani longer than it typically does with most brands that mainstream - likely in large part because of Chobani's loyal consumer base and the brand's initial reluctance to discount its products in traditional grocery, mass, and club channels. These combination of factors allowed Whole Foods to maintain its margin integrity.  However, as the yogurt wars heated up and Chobani expanded production capacity (believe it or not for many months Chobani was actually selling faster than the company could manufacture it), it appears that Chobani has started playing the promotion game to fend off competition and win back consumers from the product recall. Overall, losing Whole Foods doesn't just mean lost sales, but is also another challenge to the brand image and keeping its original core consumer group.

Net-net, the combination of all of these brand stumbles will have a short-term impact on the business (e.g., the lost volume during the from the product recall, Whole Foods de-listing, downsizing), but more importantly, I believe they represent a longer-term tipping point for the brand where it will start losing an important sub-set of its passionate core consumers. These core consumers were likely some of the original supports of the brand, early advocates that spread word of mouth, and helped fuel the organic brand growth. These consumers shop at Whole Foods, believed "nothing but good" meant safe (no contamination) and pure (no GMOs), and were willing to pay more than traditional yogurt for Chobani because they felt like they were getting more from the brand (both literally an additional 0.7 ounces and figuratively in an emotional connection to the brand). Can Chobani win these consumers back before its too late?  Potentially, but to do so would require a shorter-term financial hit to the brand. I'd anticipate these consumers finding, latching onto, and starting to champion a new premium yogurt brand in Whole Foods' dairy section and helping to start building that brand. In fact, it looks like it's already starting . . .