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Brand Bankruptcy.

When you’re a hammer most things look like a nail. I am brand strategy hammer. Today’s nail is Brand Bankruptcy.

I worked for 7 months at a company that went bankrupt. The lawyers made money, vendors got cents on the dollar, employees were sent home and the manufacturing plant shut down. Thirty years ago, my father’s secretary claimed personal bankruptcy. Her credit card bills were astronomical.  She continued working, I’m assumed with less new clothes.

Bankruptcy is a common state-supported financial practice. Ask General Motors.

Brand bankruptcy happens when there are not enough assets in the brand bank to cover a massive value hit. This is when poorly prepared brands go bye-bye. Tylenol had enough value to recover from the tampering scandal. Chipotle survived its food poisoning debacle. It may even have come out stronger. Coke’s formula change made a run on the brand bank, but it definitely emerged healthier, with more committed customers. 

Every brand, every company, is going to have a natural or unnatural disaster. Building brand value and banking it, is what smart companies do. It’s prepper stuff.

Good brand strategy maximizes bank assets. It organizes them. Organize and calculate the assets you put in the brand bank and they grow and grow.



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The company Reputation Management has asked me to comment on how a brand can bounce back from poor online reviews.

I believe it’s best to leave them up. As hard and painful as it is, it’s “real world” online commerce. Not everyone is a super model. Not everyone bats .400. To err is human.  How you overcome quality or service problems dictates how you improve. If a product has flaws, fix them. Or acknowledge why they happen. When Chipotle made people sick, it acknowledged “farm to table” is not easy. Healthier is not easy. And they changed.

When Marmot, known for quality in winter gear, gets a bad review, it isn’t defensive, it works even harder to make better product.

Today, if an e-commerce site doesn’t have poor reviews people know it’s been cleaned.

Also, a strong brand strategy (one claim, three proof planks) is also a good way to maintain reputation.  Using an organizing principle for product, experience and messaging feeds the market the information it needs to understand your product. When care-about and good-ats align, brands are hard to tear down. When you simplify and strengthen your value, a few disorganized comments won’t hurt. They just make you real.



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Chipotle is spending a shit ton of money on a short film produced by Creative Artists Agency Marketing with Brittany Howard lead singer of the Alabama Shakes and other bells and whistles in the hope that it can correct is loss of sales (said to be 1/3) due to its tainted food problems of last year.

The New York Times reported the story to day and brand expert William G. Daddi was quoted as saying “Chipotle is trying to reassure its connection to wholesomeness and quality, but it does not address the fundamental issue here, which is a breakthrough of trust between the brand and the target audience, it risks leaving issues unresolved.” He goes on to say the company needs to share what it has done to resolve the problem – and there he is absolutely correct.  But it’s the first part of his quote I take issue with.  That’s the stuff that gives brand people a bad name. A breakthrough of trust?  Chipotle is a fast food restaurant, not a politician. Trust is not a core value of Chipotle. It’s a company that feeds millions of people a day. When it comes to really fresh food – food untainted by preservatives – stuff happens. It’s awful and must be root-caused and fixed, but this is life. Plants die, bacteria lives. Get over it.

What Chipotle needs to be focusing on is what it always has: A mission to deliver fresh, humanely-sourced organic food.  And it needs to demonstrate what it is doing to understand and mitigate problems tied to the contamination. Proof, not a sign-songy story top engender trust.

No one goes to Chipotle for a big honkin’ buritto with red beans, corn salsa and trust.  Fix the problem, share the proof and let’s move on.




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Chipotle is on the verge of turning its PR fiasco around. I’ve written before how Chipotle mishandled things related to food poisoning at its restaurant, but now they seem to be on the right track. They’re explaining and turning a negative outcome into a learning moment. For themselves and the public. Farm-to-table is not as easy to monitor as is the use of pasteurized products from huge mega-providers. Food prepared in stores is not as easily monitored as is food send forth pre-prepped and pre-cooked at regional hubs.

Educating the populace about this business model – and its challenges – is good business. A CEO letter to the public filled with platitudes about “never more vigilant” and the like is Business 101…and very un-Chipotle-like.  But learning and teaching moments are how smart companies do PR.

Stop the spin. Learn and teach. That’s easier. Bravo Chipotle.




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Chipotle raised prices last year on its beef burrito 4-6% and consumers didn’t blink. They happily paid. Why is that? The Bain and Boston Consulting nerds might say Chipotle has great price elasticity. I say Chipotle offers great ROS, return on strategy. One of the best ways to measure return on strategy is to poll current customers about price. “Would you continue to buy Hoegaarden if the price were raised 5%?” a market question might read. If the answer is yes, one might follow up with “Why” or “What is it about Hoegaarden that makes you such a fan?” The answers to the questions are influenced by marketing. And brand strategy – defined as an organizing principle for product, experience and messaging.

When a brand has a codified organizing principle, marrying what the product does well with what consumers want most, it has a strategy. Only then can return on that strategy be measured. In market share. In dollars. And in sense (sic).

As you market your products and services, please don’t forget to measure return on your strategy — not just the return on your tactical investments. Peace!

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It sounds as if Twitter’s new advertising program has been well thought out.  Sponsored 140 character Tweets, called Promoted Posts, will appear atop the results of key word searches.  If you search for Tacos, you might see a Chipotle tweet above all others.  Small type will let you know it’s a sponsored ad. And should you cursor over it the ad turns yellow. Twitter is stealing a page from Google by keeping only ads deemed relevant, i.e., that are clicked on, retweeted or direct messaged in reasonable numbers.  

Twitter will charge advertisers on a CPM (cost per thousand basis), the way TV and print media are priced. (Read more about social media monetization here.) I suspect that in a while CPMs will be one price and clicks another, but we’ll see.  

 Next Phase of Twitter Ad Plan.

Down the road ads are expected to appear in the midst of tweet streams surrounding conversations. The ads won’t result from searches but from the content within posts.  So if there are discussions about tacos Chipotle might buy its way into the conversation.  Whether these purchased posts appear in the stream or along side a la Google is still to be determined.

This is just the tip of the iceberg.  There are so many other ways to monetize Twitter which we’ll all be reading about in the coming months and years.  I’m happy with the current approach – it is America after all – and I am happy that Twitter has tabled the in-stream advertising effort for a while. One bite at the apple at a time.  Peace!   

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