Way off the (Maker’s) Mark

The concept of this blog has been all over the map this past week, because, every time I seemed close to finishing it, the news kept shifting. And, truth be told, I ended up being completely wrong regarding the outcome and the lessons learned. Well…lesson learned.

The original title of this blog, also a play on words, was: Don’t Water Down the Truth: A Lesson from Maker’s Mark.

Here’s the back story.

Last week, numerous media outlets around the country reported that famed bourbon producer Maker’s Mark announced it would begin watering down its whiskey, taking it from 90 proof to 84 proof, in an effort to meet rising global demand. I read the story first on CNN.com, which reported that Rob Samuels, chief operating officer of Maker’s, said the reduction is the only way to meet higher demand. Essentially, production at the distillery is maxed, demand cannot be met and the solution – to maximize sales and therefore profits – is to add more water to the bourbon in order to make, and sell, more of it. They also claimed that taste tests showed no discernible difference.

My first reaction was: This is one of the dumbest business decisions, PR blunders and example of brand mismanagement I’ve ever heard of. Potentially altering the way a product tastes, even though people buy that product specifically because of the way it tastes, and not to mention, purposefully diminishing a product that carries a vast amount of brand loyalty, all to make more money and then freely admitting it to customers, was a huge mistake.

And many media agreed with this take. The New York Post headline exclaimed “Alcohol Abuse!” A Forbes contributor went so far as to pose the question “Did Maker’s Mark Commit Brand Suicide?

Upon further review, however, I changed my original stance and disagreed with the majority of the media’s read on the situation. I looked at it from a crisis communications standpoint. One of the first rules of crisis communications is to be honest with customers and get all the bad news out at once. Maker’s Mark was completely truthful about the reasons for the change and, apparently, made assurances that the product quality would remain unchanged.

I believed that they were expertly advised to proactively communicate to customers and the media about the planned change. I decided the vast majority of media were blowing the story out of proportion, the damage to the brand would be minimal and the whole thing would go away within a few days at most.

Man, was I wrong.

Not only did the media coverage continue to escalate, but thousands of the brand’s many devotees took to social media and the blogosphere in protest, many vowing to never again buy what has been their favorite bourbon.

Ultimately, as it has now been widely reported, the backlash was intense enough that the company reversed its decision.

In a tweet, the company said to its followers: “You spoke. We listened.”

In his public mea culpa, Samuels said, “We’ve been tremendously humbled over the last week or so.”

So what are takeaways from this debacle?

1) The best laid plans and “cardinal rules” don’t always provide the outcome you hope to achieve, especially if the idea is harebrained on its face – Maker’s Mark thought that by being proactive, forthright and transparent they would incur some backlash but would ultimately weather the storm. They wildly miscalculated. Aside from the decision itself, they did, and said, all the right things. Marketing communications is not an exact science, and sometimes no matter what you say or how you say it, a bad idea just won’t be received as hoped.

2) The customer is always right – This is probably the oldest adage in business, and in this case, spot on. Maker’s Mark can adjust its formulation to meet demand, but what’s the point if the process results in a product no one wants to buy anymore? The customer base spoke, and, in the end, Maker’s Mark was forced to listen.

3) Don’t mess with success – If you produce one of the most popular brands in a product category, don’t change it to make a few more bucks. Maker’s Mark is rushing to build more distillery facilities, so production will eventually increase, as will sales. In the meantime, ironically, the brand could actually be strengthened by the perception of scarcity coupled with high demand.

 

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