Monday, June 25, 2018

Get It Right and Increase Brand Loyalty By 40%

Sometimes a new product introduction can help revive a brand where loyalty’s eroded. In fact, more-targeted, new product launches can increase loyalty upwards of 40%, being particularly effective in the fast and fast-casual food categories.

But you’ve got to get it right.

Chipotle got it right for 22 years, going from burrito stand to billion-dollar brand à la fresh ingredients and customization. Customers were loyal. So loyal, in fact, they were willing to pay more!

But seven outbreaks of E. coli bacterium and salmonella damaged Chipotle’s brand, customer loyalty, same-store sales, and profits.  They went from #1 to #20 on our Customer Loyalty Engagement Index (CLEI)http://brandkeys.com/portfolio/customer-loyalty-engagement-index.

So, beyond not poisoning your customers, new product introductions can be a highly effective way to re-brand a brand. If you get it right.

Which Chipotle didn’t.

Their nationwide, new product rollout of queso not only received a lukewarm reception and reviews, it was so spectacularly ineffective. Shares dipped 14%. ¡Ay Caramba!

OK, so now Chipotle is planning a new, new product introduction: Quesadillas, pretty much just a Mexican version of grilled cheese.

Hard to mess up grilled cheese, right? They already offer a children’s cheese quesadilla, but an adult version will involve meats and salsa and cheese, and toppings. And it requires a different grill.  So a lot they could get wrong.

Chipotle moved up nine spots in our 2018 mid-year CLEI metrics to #11. Shares have moved up, too, loyalty being a leading-indicator of positive consumer behavior and all, although some of the 10% increase was likely due to April price hikes.

Still, new products can help. So the critical question is, will this new quesadilla introduction help heal Chipotle’s battered brand?

If they get it right this time.


Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Monday, June 18, 2018

Amazon’s Waterloo?


Ex-Whole Foods CEO John Mackey, warned Amazon that its expansion into grocery would be “Amazon’s Waterloo.” 

Oops! Not so much.

Not only is this more of a “Wellington Victory” for the brand, but the acquisition has forced grocery retailers in particular, and suppliers, manufacturers, heck, anyone that sells anything, to make fundamental changes to their strategies, supply chains, and customer service.

It’s been reported that Whole Foods’ customer traffic is up 3%, always a pretty good leading indicator of sales and profitability. And while not as “mainstream” as other U.S. grocery chains, brands like Trader Joe’s and Sprouts Farmers Market should be wary of a coming cleanup in Aisle 1.

Back in March 2016 we measured customer loyalty in, what was then, considered to be the roster of Natural Food markets. Trader Joe’s was #2, Sprouts was # 3, and Whole Foods? Well, they were #5. That’s out of 5 brands tracked. As our metrics always correlate with positive consumer behavior, we weren’t surprised to see that Whole Foods store traffic was down at that point by nearly 4%! Yikes!

But that was, of course, before the Amazon acquisition.

Interested in what happened and how? We invite you to listen to “The Marketplace of Everything” in this year’s recording series, “What Happened?”  

"Waterloo,” you said, Mr. Mackey? With store traffic up, sales up, and profits up, that’s the kind of “defeat” any brand would be glad to make part of their history!



Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.




Tuesday, June 12, 2018

Does Celebrity Brew Political Ambitions?

Howard Schultz is leaving Starbucks this month. The company announced he’s “thinking of a wide range of options. . . from philanthropy to public service.” “Public service” has become the code word for “politics.” Will he be missed?

Well, Schultz retired once before to the detriment of the brand – then came back, and the brand has been growing, but not like it has in years gone by.

There have been a number of ill-considered Starbucks social programs. The “Holiday Cup” debacle, the “Race Together” cup debacle, and the arrest-of-two- black-men-waiting-for-a-friend-in-a-Philadelphia-Starbucks debacle. Oh, and they’ve raised prices. Again.

Brand Keys tracks Starbucks in its Customer Loyalty Engagement IndexThere have been brand ups and downs, but current numbers show it to be #2 (in rankings by their own customers), with the out-of-home coffee category looking like this:

1. Dunkin’
2. Starbucks
3. Tim Hortons
4. McDonald’s

As these rankings always correlate (.80+) with consumer behavior, it’s not surprising to us that Starbucks growth has slowed dramatically and investors are underwhelmed by the company outlook.

For more insight in what Mr. Schultz’s departure will mean for the company and the brand, we invite you read Reuters’ story, “Starbucks investors mourn end of an era as Schultz exits.”
  
The company is hoping China will be its salvation. It’s looking to triple revenue there over the next five years.

And maybe that’s why politics are looking like a real opportunity for Mr. Schultz.



Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies. 










Wednesday, June 06, 2018

Emailing Can Be Bad For A Brand’s Health

Email marketers claim that emails are all about building relationships. Well, they would, wouldn't they? It’s what they do for a living after all.

What Brand Keys does for a living, on the other hand, is ensure that brands better engage customers, grow, and profit, whatever platform they use.

But based on a new survey we can safely say too many emails can be bad for a brand’s engagement health.

BTW, we’re not talking about SPAM. Everybody hates SPAM! No, these insights are according to 1,806 consumers who requested they receive emails from the retail brands they cited and evaluated for us. So to be clear, not SPAM.

For more details about emails you’ve invited into your mailbox, we invite you to read Nina Lentini’s Marketing Daily article, “Many Brands’Emails Frequency Sours Customers.”

What we can say unequivocally is while there may not be a perfect formula for planning email marketing for your brand, there is a proven method to measure how emotionally engaging a brand’s email program is going to be.

And, happily, it can also inform your brand planners how often they ought to reach out to consumers, without also disengaging them.




Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.