Marketing Mojo With Stephanie Fierman

            

I love McDonald’s.  I do.  Or to be more specific, I love the fries… and the Extra Value Meal #2.Now I know what you’re thinking.  You’re thinking “Eegads!  A woman of your refined upbringing and delicate palate, how could you?”  Yeah, well, back off haters.  I also ate at Jean Georges in NYC this past Monday (egg caviar and the lobster) and believe that a renaissance person such as myself can burn the fat candle at both ends.

And now I have a business-related reason to love them, as well.

This month’s Fortune is the Fortune 500 issue, and it rocks - especially the article about how McDonald’s has transformed itself from an arrogant ”ugly American” company into a true corporate citizen of the world.  It’s exciting to read.Complete with photos, the lengthy article details McDonald’s “glocal” strategy.  We all remember “think global, act local.”  Now, complete with its new-agey description, the company is doing precisely that.   How’d they do it?  They changed the culture from one that considered Oak Brook, Illinois to be ground zero, to one that is entirely focused on innovation, on the new idea:  wherever that idea may come from.  And cultural change is great, blah, blah, but talk is cheap.  The distinction here is that McDonald’s rebuilt its operations in order to follow through and to ensure future progress.While McDonald’s has never been a completely hierarchical organization, the company started with the US at the top of the food chain (pardon the pun).  But as the global economy became real, the company discovered that the old ways of doing things simply weren’t working.  Not atypically (think Coke and Pepsi in India), the wake-up call came in the form of a repeated public relations gaffes in European companies where US-style menu choices were not only failing, but reinforcing McDonald’s reputation among activists as the very symbol of American imperialism.  The fact that it changed is a credit to the company.McD’s changed its operating policies and adopted a business plan based on ”freedom within a framework.”  This approach gives regional and national managers considerable leeway to make their own decisions in their own markets.  And it was non-egotistical in another way:  it took a hard look at the brand and decided what was truly holy and what was not.  This is tough stuff for a company with such a rich history (I can hear CMOs everywhere throwing their bodies over their marks right now…).  The corporate logo cannot be changed, but local markets run their own advertising campaigns.  Furnishings are also customized by market.  The company fosters constant communications not only between the US and global markets, but between the non-US markets themselves.  America is not the center of  the McDonald’s universe.  The concept of delivering good food fast is:  and “good” is something that differs greatly from one place to another.

It’s tempting to wonder how is it that we thought it could be any other way, when over one billion people in the world’s second most populated country (India) doesn’t eat beef??  You adapt or you die.  Is beef what makes McDonald’s McDonald’s?  No.  But as a long-time corporate executive, I can say with 100% certainty that, at some point, smart people in that company thought that the Big Mac was McDonald’s.

Today, Europe is McDonald’s largest money maker, producing $8.9 billion in revenue, or 39% of the company’s total top line.  The US produced 36%.  And while the US produced a 2007 increase in operating income of 7%, Europe grew by 32% and Asia-Pacific shot up by 69%. 

Things have not always been so great.  Mad cow, activist demonstrations, protests in France.  But the company is now on track, and has opened communications, innovation and product pipelines that travel around the world - and frequently start far outside Illinois.  Here are a few lessons I draw from McDonald’s experience:

* Create the formal and informal pathways by which far-flung operations can communicate what their markets need and want, without fear or hesitation. 

* Tie performance appraisals and compensation to the behavior you seek.  Calculate bonuses, in part, based on the identification and adaptation of good ideas from other markets.  A Board could formally make this a factor in the CEO’s compensation, as well.

* Become a citizen of your community.  This is not unlike the advice I give when speaking on the topic of online reputation management: become a respectful member of the marketplace you care about.  After a French militant group become disgusted at the prospect of American mystery meat and ransacked a new store in 1999, the company’s European president opened the entire operation for inspection.  Staff now shows the public around kitchens, fields all questions (not just the one’s the company likes) and freely discussed the food and its ingredients.

And, as a citizen of your community, be certain that those marketplaces are run by locals.  For many years, senior managers outside the US were American expats. No more.  Delegate authority to people in and of the market you want to grow.

* Be open with your detractors.  When Greenpeace targeted McDonald’s for its use of soybeans from illegally deforested areas of the Amazon rainforest, McDonald’s agreed and asked for the organization’s help in solving the problem.  That kind of behavior wins respect - even friends - fast.

I’d like to mention that the Wall Street Journal recently ran a story about Kraft that reflects many of the same lessons McDonald’s has learned and acted upon.  You can read that article here.  In the meantime, I’m going to surf the web to see if I can buy a box of Chinese Oreos: four wafer sticks filled with vanilla and chocolate cream, coated in chocolate.

When in Rome (or France or Spain or China)…
McDonald’sKraftoreosoreo

Friends:  have you seen my new daily blog yet?  Subscribers include all the living Presidents.  Not really - but they could use some advice. 

I can’t believe I haven’t written about Mona Shaw before, because she’s become a hero to frustrated consumers everywhere who must cope with companies that have a virtual monopoly on some corner of our lives, such as the providers of trash pick-up, energy, phone and cable service – companies that hold you practically hostage, because you have nowhere else to go.

I had my own experience with one of these companies in the past week – Time Warner Cable – and once again I was reminded that all the marketing in the universe cannot make up for one poorly-trained customer service representative who treats me like I just fell off the turnip truck.

The short version is that, for over a week, I had intermittent high-speed cable service. Do you understand? No Internet connection. I mean, didn’t I come out of the womb with an Internet connection? No? Inconceivable!

I spoke to many representatives. Those that treated me like an idiot made me mad – not at them, necessarily, but at Time Warner Cable. Then the second representative who had to come out in person restored my belief in humanity by fixing the problem, cleaning up after himself, validating my feelings of frustration and wishing me a good day.

Why do consumers have wild “mood swings” like this? How can one person in a call center destroy years of corporate spending and goodwill?
 
                         
It’s because it’s not about the product. It’s about a much deeper human need for respect, understanding and honesty.

So back to Mona “The Hammer” Shaw of Bristow, VA. Certainly Mona was reacting to lousy service from Comcast when she entered a local office and began bashing phones, keyboards and monitors with a hammer, but her words indicate that what really made her angry was how she and her husband were treated: “[Comcast] thought [that] just because we’re old enough to get Social Security that we lack both brains and backbone.” In other words, a little respect goes a long way. Tara Hunt writes a great post on this very topic, triggered by a recent experience she had with a rental car company.

What’s most interesting to me is that the traits Tara assigns to companies that make customers happy vs. those that make them crazy once again have nothing to do with product quality. In old direct marketing-speak, decent product execution is almost “hygiene,” and consumers do understand that a product or service may not work sometimes. No one takes a hammer to your phone because your product failed: they do so because (a) you put them in a corner with no choice, (b) you duped them (Mona and her husband waited two hours in Comcast’s local office only to be told that the person for whom they were waiting had left) and (c) you treated them poorly.

Companies in these one-choice industries are exactly the ones who have the opportunity to delight customers right into buying additional services. So why is the reality too often the opposite? And being treated poorly in the past will overwhelm a new-and-improved widget every time.

If CMOs and CEOs don’t include customer service metrics when they calculate marketing ROI, they’re missing a vital part of the success equation.

Please check out my new daily blog at http://www.stephaniefiermanmarketingdaily.blogspot.com, and consider subscribing for quick takes on news and trends of the day.

The Short Life of the Chief Marketing Officer
This blog would be remiss if it did not provide a link to the most recently quoted article focused on the plight of the CMO.  This piece does not cover a lot of new ground, but I do give it credit for circling around what I’ve always said is the heart of the matter:  that is, fuzzy, mismatched expectations between the CEO, the organization, its stakeholders and the CMO him/herself.

 If I had to explain what I mean in one (two?) sentences, I would say that some equate marketing and, by extension, the role of the CMO, to “branding” and advertising.  On the opposite end of the spectrum, many understand the CMO to be a senior business person first, with a core expertise in the entire marketing mix:  one that should be at the CEO’s senior management table when matters concerning the customer are discussed.

If I sound like I have a bias, I do:  I am in the latter camp, not the former.  I do not mean to say, however, that either one is “right.”  Any point along this spectrum can be perfectly fine if it is mutually-agreed and adhered to by the CEO, the board, the organization and the CMO in question.  In good times, and bad.  And there lies the rub.


The New Corporate Intranet, Web 2.0 Style
Serena Software, a vendor of enterprise change management software, is replacing its existing intranet with Facebook on the front-end, attached to a CMS on the back-end.  The implications of this are pretty interesting.  I just hope that Serena eliminates Facebook’s “Change status” function, lest the company get a lot of “In meeting”  “On phone” “In meeting” “On phone” “On phone in bathroom…”


Tiffany Goes Into Business With Swatch
Swatch is setting up a company that will use Tiffany branding and designs to sell watches that will be made and distributed through its global distribution network.  Hopefully, this is a genius move that reflects the melding of mass affluent and luxury purchasing trends around the world.


Newspapers Still Wield Some Influencing Power – Online
Newspapers are still powerful, or are at least still read by those who are:  Mediamark Research reports that readers of newspaper sites are 52% more likely to be categorized as “influencers” than non-newspaper Web site readers.  Good info, for those planning media budgets for ’08 who may think that newspapers are on their way out.


Nielsen Releases 10 Most Popular Lists of 2007
GoViral Ranks Top 5 Viral Advertisements of 2007
I guess I’d vote for the RayBan spot (3.2M YouTube views since May) but ONLY because the Blendtec ad (2.7M views since July) to me is, well, royalty and should be on a list all its own…


I Really Hope My Brain Does NOT Always Work Like Google
As has been previously reported in this blog, Google tends to report popularity.  NB: If what’s popular is also truthful, I’m all for it.

Companies Should Keep and Forward Old Phone Numbers
This is a great tip that seems so simple, but we all know that companies do not always follow this advice.  If a customer pulls out a dusty old catalog and is ready to order a Christmas gift, be sure she can find you.

OK, I don’t actually know anyone who loves their phone service… but I figured this headline wouldn’t draw Verizon’s ire and, well, I’m afraid of Verizon.

I recently found a blog called eyelesswriter.com, where the writer describes the experiment he did as a follow up to VerizonMath.com. VerizonMath.com is where you can find the story of George Vacarro, guy who called Verizon and recorded 6 different managers quoting different and wrong rates for the same plan – sometimes 100 times less than Verizon actually charged – and then not being able to understand the mistake when it was explained to them.

But this Eyelesswriter is a fellow after my own heart: only 6 calls? Puh-leeze. Eyelesswriter called Verizon 56 TIMES over two days with two questions:

(1) What is the data overage rate for the basic 10MB data package for $29.99?
(2) If you get the Core Choice 450 minutes package with unlimited data, what is the data roaming rate in Canada?

As the blog explains, the first question was intended to be relevant to a general audience, given that nearly every phone can now receive data – plus the question referred to the most basic plan available. The second question was similar to the one described by VerizonMath.

Of the 56 reps to whom Eyelesswriter spoke, only 1 answered both questions correctly. 52% (29) did not answer either question correctly and 7.5% of the incorrect responses under-quoted Verizon’s actual rate by 100 times or more. (There appears to be a bit of confusion between cents per kilobyte and dollars per kilobyte…).

The recording made me wince.

In the last couple days, as it happens, a couple of my blog/newsletter friends have also posted significant rants about terrible customer service experiences. What’s interesting and most important to me as a marketer is that the prevailing emotion usually projected by write-ups like these is not anger or hatred, but… disappointment.

It’s disappointment, because consumers want to have a good experience and they want to believe us marketers when we advertise, skywrite, promote, print, stunt, twitter, blog, facebook (as a verb), etc. and promise on-time arrivals and correct billing. That our XYZ is better. That we are the brand to trust. Consumers want this to be true!

And then, too often, it’s not. Marketers are imperfect animals, to be sure, but my circle of colleagues frequently discuss how much marketing can actually impact performance in some companies – and whether all the new Web 2.0 tools make folks believe that a little social media and behavioral targeting will make everything ok. I firmly represent the point of view that an entire value chain in a company has got to be ready to deliver or David Ogilvy himself couldn’t make a new marketing initiative work. At my last job at JPMorgan Chase, I sat on the same floor as the Client Relationship Managers and, among other things, was responsible for both marketing and training. So my team could launch the newest whiz-bang product, and that’s great, but we were also able to and fully accountable for ensuring that “the line” was well equipped to help sell and service the product for clients.

If marketing is all about creating valuable relationships with customers, we’ve got to continue to work across our companies to ensure that the rest of the enterprise is executing well. We’re the ones that need to keep articulating the brand promise for the entire company, ensuring that everyone embraces their part in it and working with every division to make sure that delivery expectations are understood, met and exceeded.

This is, actually, the joint mission of every CMO, COO, CFO, CTO, CIO and CEO team.

Verizon spent $1.9B in advertising last year. How much of that is undone by a rep who cannot distinguish between cents and dollars per kilobyte? customer servicebad customer servicetara huntverizon