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John Tantillo's Brand Winner... And Loser: Bank Stress Tests and KFC
Posted by The Marketing Doctor at 5/10/2009 6:16 PM 
Categories: Marketing
Tags: Oprah new marketing Treasury banks uncertainy coupon John Tantillo market Domino's branding KFC marketing confidence target market optimism FDR economy bank stress test
Categories: Marketing
Tags: Oprah new marketing Treasury banks uncertainy coupon John Tantillo market Domino's branding KFC marketing confidence target market optimism FDR economy bank stress test
Brand Winner… | And Loser |
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John Tantillo’s Winner and Loser of The Week:
Winner: Bank Stress Tests
Loser: KFC
Folks, without further ado:
The Winner
I’m not a finance guy, and I will make no predictions if the Treasury’s “stress tests” (with results out this past week) will have long-term positive effects, but as a real marketing strategy they are this week’s winner.
I’ll keep my case short and to the point.
One of the biggest historical drags on the market —as well as new lending, the psychology of our economy, our optimism, our willingness to take risks and make investments— is uncertainty. When people are uncertain about the future, they become defensive, and this defensive attitude hurts growth.
FDR understood that in addition to market reforms and stimulus, he needed to send a message of hope and confidence. But you can’t just construct this message out of nothing, because people simply won’t buy it. The message needs to be built on substance and followed up with action.
Forget the too subtle work of some advertisers. In real marketing, there is nothing better than a clear presentation.
In this sense, the Treasury Department’s stress tests couldn’t be a clearer “promotion.”
They told you what they were supposed to do and then did it.
The uncertainty was in the health of the banks, and the explicit role of the stress tests —just as with a cardio-vascular test— was to measure the banks’ health. After the stress tests were conducted, the results were clearly laid out and widely released. Again, given that lack of transparency was one of the banks’ problems, this was another excellent move.
Some critics are going after the credibility of the tests. Fair enough. If, in the long-run, these current stress tests are seen as invalid, further government steps to address the confidence problem will be hampered.
By the way, many of these critics are the same technicians that got us into this mess. They simply don’t understand real marketing and the value of making people believe in their institutions again. Take this from a former stats professor and number-cruncher: real marketing is a more powerful tool than most metrics out there.
Regardless, the general approach is a winner. It showed quick announcement, implementation and disclosure by the Treasury Department in a time of real chaos and upheaval. It also gave everyone a platform from which to take the next step: that’s a confidence-builder. Ah, confidence —the elusive variable in the technician’s equation, but a central component of the real marketer’s strategy.
Now, one of the next steps is for banks to listen to what the Marketing Doctor said almost a year ago and get boring again.
The Loser
This week’s KFC coupon debacle has resulted in two losers: Oprah and KFC.
Now, some might argue that the massive turnout for the KFC giveaway that Oprah promoted on her show (with the coupon to be printed out off of her website) was at least a win for KFC, and possibly a win for Oprah as well, since it confirms her enormous influence.
Real marketing says otherwise.
Here’s why. No one doubted Oprah Winfrey’s tremendous brand strength. It is a strength that has been built up over decades, and like the best brands it has been built on consistently delivering on the needs of her Target Market. (I’ve written more about her here.)
The point is that a great brand never needs to confirm its brand strength. This isn’t a popularity contest, and you don’t get points for proving your marketing power. You get points for delivering on that power by meeting the needs of your Target Market. In other words, Oprah needs to make sure that when her Target Market reads her magazine, or watches her show, or goes to one of her hotels, the experience is consistently positive and in-line with what they have come to expect from her personal brand.
In this light, KFC running out of chicken because of an Oprah Winfrey coupon give-away, leading to the threat of riots and hordes of disgruntled customers does no one any favors, least of all Oprah. Note to all potential marketers: riots and protest marches are never good for your brand.
Oprah is now linked to a very negative experience, and so is KFC, despite the seemingly breathless talk of a KFC rep who said it was an unprecedented turnout. This is the kind of “unprecedented” that we should always avoid. In this case, KFC should have made sure that they were prepared for the coupon roll out.
KFC is taking the right steps by sending out rainchecks for those who walked away empty handed, and I think Oprah has to do something similar to assure her followers that the next time they respond to a promotion that she endorses, they will not be disappointed.
That said, there is one winner to emerge from this fiasco: marketing as the new advertising. The combination of old media (i.e., TV talk show) with new media (Internet coupon promotion) has once again shown itself to be incredibly powerful. (We’ll see more evidence of its power, as more and more people become adept at using the Internet in their buying lives —remember the Domino’s giveaway a few weeks ago.)
And remember, it’s always easier when you keep marketing and branding in mind.
TODAY'S TANTILLO TAKEAWAY -
It is never enough to just let a promotion “fly.” Real marketing means following it through to make sure it benefits your Target Market every time.
Always used production of the winner.
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