Marketing Mojo With Stephanie Fierman

Wow, Chuck E. Cheese has a problem.

The Wall Street Journal ran a half-page story in Section A yesterday that would cause any parent to run for the hills.  While CEC describes itself as a place “where a kid can be a kid,” and the cover of its 2007 Annual Report boasts “The Evolution of Fun,” it appears that the actual stores have become a nexus of bad behavior and danger.  Police all over the U.S. have been dealing with fights, guests carrying weapons and boozed-up brawls.

When a public official describes his local Chuck E. Cheese as “something out of a Quentin Tarantino film,” you have a serious problem.  The picture at right shows the CEC in said politician’s Milwaukee neighborhood - with an armed guard out front.

A simple glance at Google tells the Web 2.0 tale.  Of 9 front-page search results for “Chuck E. Cheese,” 5 are negative.  Of 10 front-page results for “McDonalds,” 0 are negative.

So where is the crisis management and what is the company doing about this problem?  While the company’s head of marketing describes the fights and problems as “atypical,” the risk to a corporation is not always volume-based.  Only one child or parent needs to die in one of these melees for CEC to get sued into the ether. 

Not only is (a) taking aggressive action and then (b) broadly communicating your plan the “right thing to do,” it ultimately protects the bottom line and shareholder value.  Take the saddest, most base scenario: if the company gets sued over a child’s death, it will be in far better stead with the court if it can show an active, consistent and good-faith effort to address this problem.  Such a good-faith effort could very well include suffering a short-term revenue hit by closing the most troubled locations in the near 500-location chain.  And continuing to serve alcohol in most stores is a recipe for disaster.  What percentage of revenue coming from alcohol sales - at children’s birthday parties - is worth a legal disaster that effectively cripples the company?

I frequently refer to the Tylenol poisonings in 1982 and J&J’s decision to pull all U.S. product off the shelves even after the company had been determined to have no involvement in the tragedy.  This may well be the best example of a company taking the long view in memory.

There is a range of choices CEC can take.  At the lower end of the range, management needs to take action in its own backyard to resolve these issues.  At the higher end, welcome Alderman Zielinski in as a valued advisor.  Hold a press conference with him in Milwaukee where he ceremoniously padlocks his neighborhood location while you rightfully announce that no amount of money is worth putting people’s lives in danger.  Ask Zielinski to help you create a national “Having Fun Can Be Safe” campaign nationwide. 

Wherever CEC lands on this spectrum, it had better land quickly.  Or ol’ Chuck may be toast.

Chuck E. Cheese    

More than 25 years ago, Tylenol changed the “crisis management” business forever by taking decisive action to compromise profitability based on something that was not its fault.

In the fall of 1982, seven people in Chicago died after taking Extra Strength Tylenol capsules laced with potassium cyanide.  A 12-year old girl was reportedly the first to die.  Panic ensued.  Police cars roved the streets in and around the Chicago area blasting warnings from PA systems.  When it was determined that the poisoned bottles had come from different factories, the possibility that Johnson & Johnson (Tylenol’s ultimate parent) was somehow to blame was decisively ruled out.  Officials came to believe that one or multiple criminals had instead removed bottles from stores, tampered with the contents and then surreptitiously returned the bottles to store shelves.

And yet, responsibility never entered into the decision-making process underway at J&J:  only public safety did.  The company stopped all Tylenol production and promotion.  It issued a national recall not after the episode was over, but while it was still very much underway.  The bottles returned to J&J as a result of the recall had a retail value of more than $100 million.  I shouldn’t say that J&J stopped all Tylenol promotion:  it paid for and issued new national advertising instructing individuals to avoid taking any products that contained Tylenol, and offering to reimburse anyone who sent in an existing bottle of Tylenol capsules.

Once both the crisis and J&J’s action plan were in full force, Tylenol’s market share dropped like a rock from 35% to 8%.  To be expected.  What was not expected was that share rebounded in less than one year:  a return widely credited to J&J’s immediate and decisive action to sacrifice its own well being for the health of - really - the entire country.   Since then, J&J’s response is widely considered to be the gold standard in crisis management.  Act now.  Ask later.

I cannot overemphasize how I feel today about J&J’s behavior that long-ago autumn when I was still a kid.  It made an impression that has lasted my entire career:  one that influences how I measure companies and my own conduct as a business executive to this very day. 

So when I see a company disregard such a lesson for no other reason than financial gain, I am not just nonplussed - I’m disgusted.

SFCA Inc. purchased the assets of Simplicity Inc., a baby bassinet manufacturer, earlier this year after Simplicity went out of business.  SFCA is an affiliate of the private equity firm, Blackstreet Capital.  Two weeks ago, fifteen retailers - including Target, Wal-Mart, Toys R Us, Amazon and Kmart - halted the sale of certain Simplicity bassinets that the U.S. Consumer Product Safety Commission said could be hazardous to babies after two baby girls died (from strangulation in their bassinets).  The Wall Street Journal reported that Toys R Us were selling eight of the 66 models affected by the warning; the chain pulled the products anyway.  And all the retailers affected agreed to permit consumers to return the bassinets for a refund or store credit, regardless of how long ago the product had been purchased.  These retailers heeded the lessons learned from the shining example set by Johnson & Johnson.  Act now. 

SFCA, on the other hand, is doing nothing, holding fast to its claim that it bears no legal responsibility for the hazardous bassinets.  The USCPC couldn’t even issue a product recall, because SFCA would not cooperate.  Rick Locker, a lawyer representing SFCA has declared the company unwilling to recall  ”a product that it did not make and sell.”  The blog Daddy Types reports that - while SFCA may have hired Locker to assist with this matter - Locker is also paid as counsel for the Juvenile Product Manufacturers Association:  the lobbying organization that helps protect the makers of children’s products.  

Ironically, the JPMA’s website is currently heralding September as “Baby Safety Month.” In July, the association tooted its own horn for “reaffirm[ing] its commitment of safety.”  The communications contact on the July press release isn’t someone at a real PR or crisis management firm:  it’s a woman at Association Headquarters, Inc., an organization whose lone means of support is selling services to organizations such as… JPMA.  You can’t make this stuff up.

Henceforth, SFCA has taken a “Who, me?” approach to its products killing children.  The company claims that it might go out of business if it took all the offending bassinets back.  I find this particularly ironic and outdated in our Web 2.o world.  If SFCA came out on the Web and announced a recall (even though they were not legally responsible), the company’s future would be far more secure.  The company would be a hero.  Parents would rave and remember the company when they went shopping the next time.  They would tell one another, at a time in history when spreading the word is easier than ever.  Their marketing folks would get college and business school cases written. 

Isn’t this exactly what Tylenol did and exactly what happened as a result (in a decidedly Web 0.0 world)?  But then again, it’s not hard to imagine those meetings in 1982 where well-meaning lawyers warned that a recall could take down the company and J&J’s top management said, So be it.  We’re not going to stand by and let people die.  Short-sighted greed and bad lawyering are in full control at SFCA.  The drawbridge is up.  SFCA is not legally required to take back the affected bassinets, there are no mandatory standards for safety in the category and the USCPSC cannot bring legal charges against SFCA.

No matter.  There is a higher standard for working and living on this planet that J&J set and by which all corporations should live.  As an aside, I’ll say once again that it’s just good business: (a) the positive halo effect for J&J post-crisis was and still is phenomenal, and (b) not doing the right thing will get you in the end.  You can expect boycotts and bad press at minimum: perhaps a crazed parent manufacturing a terrible happening to take you down if you’re really unlucky.  Permanently disastrous online search results.  But aside from it being good business, it’s about acting human, like someone whose own child or grandchild was killed by your product.

There is no exception - and if there is, I haven’t heard about it and SFCA most definitely does not qualify.  This is capitalism run right into the ground, taking humanity and business ethics down with it.

SFCA  Simplicity bassinets   Blackstreet Capital  JPMA 
Johnson & Johnson 1982 Tylenol   Rick Locker  

“A growing cultural vulnerability to rumor.”

That’s how The New York Times describes a phenomenon that appears to be engulfing the U.S. The impetus for the article, Rumor’s Reasons, is the ceaseless momentum surrounding the claim that Barack Obama is a Muslim.

The rumor was ignited in 2004 by a vituperative web columnist. While mainstream news sources ignored him, the story took root in blogs, email, message boards and the like. Even after Snopes de-bunked the claim, it rolled on.

There are several plausible conclusions to be drawn from both this situation as well as the Times article – some of which have been discussed previously (Parts 1, 2 and 3) on this blog, as well as www.stephaniefiermanmarketingdaily.com :

* The Web lets rumors travel around the world and hang there forever.

* Repeating a claim, even if to refute it, increases its apparent acceptance. It’s the no-win situation of “Where there’s smoke, there’s fire.” The problem is that sometimes smoke is just smoke.

* A point related to “Where there’s smoke”: when an individual attempts to determine whether or not a statement is true, she will often look to society for signals. Do others believe it’s true? This takes on new import when one realizes that the mechanics of the Web reward volume, not truth. So in the upside-down world of the Internet, more does not mean better/more true. In fact – if the subject strenuously objects – the result may be the opposite. Obama denies being a Muslim: websites write about the denial itself and the story duplicates exponentially. Personally, I think the fact that a story is read on the Web only adds to its petri-dish-like effect. Didn’t our parents always teach us to “get it in writing?” If it’s in writing it must be true…

* Rumors mutate. Remember the game of telephone when you were a kid? A recent version of the Obama-is-a-Muslim story includes the line “I checked this out on Snopes, and it’s true.” This line will satisfy many listeners.

Here are some fresh take-aways on the topics of online rumors and reputation management:

1. Actively manage your online reputation. Consider shortcutting the process by hiring an SEO specialist – some work by the hour and will give you invaluable tips.

2. On the whole, spend your time building positive, truthful content. Work with your SEO specialist to build a plan for improving your search results. Tenure, volume and linkability are what count.

3. I do not discourage people from asking publishers to remove untruthful, damaging content, but keep this effort in perspective – and bear in mind the interests of the opposing party. Consider the possibility that a site passing an online rumor may be pleased to fan the flame by broadcasting your objection. And not to go all new-agey on you, but you’re talking about seriously bad karma. Toxicity. No one needs that.

4. I’ve spent nearly all of my time on this blog counseling you, the reader, on how to build your own/your company’s reputation. And maybe this goes without saying, but – when you are judging others – apply the Golden Rule. A graduate school would do well to put JuicyCampus posts into perspective when considering an applicant. Better still, everyone should ignore them entirely.

Many of us are most likely to study an individual’s online “persona” when we are considering the person for a job. There’s no question that it’s tempting to move on if you see unfavorable (albeit unsubstantiated) online content about a candidate, especially when there are many others from which to choose.

Don’t do it. If the Golden Rule isn’t enough of a deterrent, ask yourself whether it’s worth getting sued. While it’s not illegal to look someone up on the Web, there may be legal liability if you (a) do not give the candidate an opportunity to address the offending content, and subsequently (b) decide not to hire the individual. If you haven’t documented a work-related reason for rejecting the candidate, you may be liable. Read this thought-provoking FinancialWeek article, and note that both the legal and background check communities are beginning to counsel employers to eschew the Web (social networks, in particular) when gathering information on candidates.

Farhad Manjoo, a staff writer at Salon.com who penned Rumor’s Reasons for the New York Times, concludes by saying “There’s an arms race between truth and fiction, and at the moment, the truth doesn’t appear to be winning.”

Let’s decide that this is unacceptable.

And, friends: Check out my new daily blog at www.stephaniefiermanmarketingdaily.com, offering shorter takes on news and trends of the day.

I would like to wish all of my readers and their families a very happy, healthy and prosperous 2008.  And a forgiving one, too, since too many candy canes pulled me off track from posting my weekly Favorites. Yes, that’s right, I blame the candy. I’ll get back on track next week. 

In the meantime, here are some pieces that ran from mid December ‘07 to early January ‘08.  Enjoy.


Steve and Barry’s Uses Celebs to Drive In-Store Traffic
The 265-store retail chain rarely advertises, but gets plenty of fresh exposure from partnering with celebrities who get their own exclusive line of clothing.


Study:  Googling Oneself is More Popular
While self-Googling is becoming increasingly popular, about 60% of Internet surfers say they aren’t worried about the quantity or quality of information available about themselves online.  Readers of this blog know otherwise.


How Silicon Valley and Washington Say “I’m Sorry”
Do we have a leadership vacuum?  I say we do.  And how many times can we buy into “I’d rather apologize later than ask permission first” before we start asking questions?  How much of this is marketing spin and how much is real?


Bhutto News Draws YouTube Crowds To TV Coverage
Not everything is a “tipping point,” but there is something real happening across demographic segments when one clip (on YouTube!) draws 185,000 views within 24 hours of the assassination.  Many clips drew between 40,000 and 80,000 views.


Walk 100 Yards North, Turn Right, Enter Store
ShopLocal is just one company pioneering product locating and comparison via mobile devices. Shoppers get search results that provide product, pricing, retailer information and GPS-driven directions to the store of their choice.


Marketer Discontent Set Records In 2007
This is a tough one.  There’s so much change in the marketplace that marketers are more prone than ever to shop their accounts from agency to agency.  Aside from the obvious pain on all sides, there’s no way to interpret this phenomenon broadly.  Bad creative, weak client direction, pressured CEOs, lack of reporting and measurement skills… there are a lot of reasons for this wrenching trend.


Big Fish, Little Fish—Choose Your Pond
Here is an interesting piece of research on executive pay.  It looks at a number of elements including the ratio of average employee to executive pay and how the size and structure of an organization impacts compensation.

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.