Thursday, February 12, 2015
When the Ship Starts Sinking
President Mikey’s butt’s in trouble… and a bit more than 90 days ago.
Fourth quarter sales dropped 21% at McDonald’s and global sales are down.
Going over to the developing country with the golden arches isn’t too golden any more.
In the weekend edition of the Wall Street Journal, there was an article about McDonald’s Asian sales entering into the “grind down” mode. The article went on to talk about how a release of sales information the first of the week would further turn the spotlight on a corporation that’s facing disturbing performance.
Before I go too much further in this commentary, I want to make sure that readers understand that what McDonald’s is facing is not something that only McDonald’s is encountering.
The WSJ article that ran over the weekend talked about how mature brands are facing edges of cliffs.
On Monday, Radio Shack declared bankruptcy.
Last month, Coke laid off more than 2,000 corporate staff and its sales — and profits — continue to roll down hill.
Target is in the process of closing down Canada. My bet is that we will hear about that brand shortly and its slide down the slopes.
McDonald’s ad agency, Leo Burnett, is just starting to air a new ad campaign. Mikey even made commentary in the WSJ weekend that he’s looking forward to the campaign helping to turn around sales.
The ad agency folks are smiling up there on Michigan Avenue humming along with the song “I’m Lovin’ it” in the new spots as they deposit those production checks in the bank.
As those customers go to McDonald’s and face a menu of more than 100 items, place orders with individuals who cannot figure out just how much change to give back and then wait there as their order is prepared with the “made-ahead” microwaved-to-order ingredients, I’m not too sure that many can related to those new spots.
BUT… what the heck, those agencies are getting their buck and that McDonald’s CEO can always go out and put the account up for grab and the prostitute-agency holding companies will be out there with their fancy clothes and digs before that ink dries on the Facebook post.
In today’s WSJ there’s a guest editorial written by the past McDonald’s CMO, Larry Light.
When I saw the editorial, my first thought was that this was going to be a very defensive article and Larry was going to be all out defending what’s going on with the McDonald’s marketing as it faces the challenge of social media and the Millennials.
BTW… that’s a common line of define that the prostitute-agencies and the “in-the-trenches” CMOs make.
After reading the editorial, I wanted to send Larry a congrats letter on “seeing the light.” What he says in the editorial is smack on track with what brands like McDonald’s, Coke, Target and other mature brands need to embrace.
Here’s in a snapshot what he says in the editorial…
Stop the hemorrhaging — if a brand is losing its core customer base, ask the fundamental question first… is it because they are “dying off” or because the brand experience that they have sought is not being delivered.
Focus on the direct competition — who’s stealing away the share directly… yes, Chipotle is reaping in Millennials, but McDonald’s is not Chipotle. It’s like a 60-something Boomer that thinks those BOTOX injections will make them look like a Millennial FOX News host.
Restore your claim to fame — in this case, restore fast-food to fast. If Target’s claim to fame is “cheap, hip and cool,” I am not so sure how baby clothes and diapers is going to reel back in the folks that used to shop there.
Keep the brand experience defined and focused — if its burgers and fries, stick to burger and fries. Monkey see, monkey do is so true in the CMO rooms of brands today. Last night I saw a new Domino’s Pizza “brand” ad that declares that Domino’s Pizza is no longer the brand. Now its just Domino’s and the spot goes on with pictures of chicken wings, sandwiches, salads and even nachos.
The loons reside in those corporate and prostitute-ad agency headquarters.
Re-energize the plan to win — Larry uses the phrase “laser focus on the customer” and goes on to comment that the customer focus has been lost by large global brands in the last decade. I agree 100%.
What I would add to Larry’s list is simple.
Get your butt out of the office — Go talk with customers and others like your customers that don’t even get near your brand. A colleague of mine just spent 60 days up in Chicago with McDonald’s ad agency working with them on a project for another client in consumer package goods. The creative team, the account planning team, the client management team never once went out into the Chicago ‘burbs and walked into a grocery store. They never once bought the product and cook up a lunch using it.
Realize that the ad agency cares more about their glamour than yours… A fundamental way of understanding this is to challenge them on coming up with something that your customers are emotionally craving and not what you told them or what they dreamed up.
As I wrote in the last blog, I am not in the business to do dumb stuff.
I am the first to admit that every year in February, I get a tad down-in-the dumps. I get tired of the cold nights, the darkness at 7pm and the clients that seem to go back to doing the same dumb-butt things that they did the prior year.
But then I get a chance to go out and take a couple of field trips and talk with real people. I hear more about what’s real rather than imagined or declared. I see people actually engaging with brands.
I experience the brand experiences.
For all the money in the world, if I were locked up in a corporate headquarters or residing with a prostitute-ad agency, I would not last long.
My bet is that those CEOs and CMOs like those cited here in this blog will soon experience not lasting long too.