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Death by a Thousand Cuts: How Great Brands Die
Pio and I often get the question, why do brands die? What was the one thing the brand did to get themselves killed? But the truth of the matter is it’s usually not one thing, it’s lots of little things over time.
Beyond the things you can’t avoid like inflation and increased competition, there are lots of things that brands do to themselves that kill what they stand for and in the process, drive their own death. Maybe the brand decided to use cheaper ingredients, the brand expanded too fast in areas they have no business being in, or perhaps they changed what they stand for too often.
Three brands come to mind that are at different stages of depletion and are hurting: TGI Fridays, Starbucks, and Marriott Hotel Brands. We’ll give you our thoughts on them plus different common issues facing brands and what we’d recommend doing about it.
But first, a comparison between a lost brand and a lost football team - the NY Giants. A football team has an identity like a product has a brand. In the case of the NY Giants, their identity was a hard-hitting defensive team with a strong running game dating back to their heydays in the 80’s. But over time, they’ve completely lost that identity. Firing their head coach (Tom Coughlin), retiring offensive linemen, letting running backs (Saquon Barkley) walk out the building, etc. It wasn’t one thing that killed the identity of the NY Giants, it was many, many little (and not so little) things that killed the team.
Brands work the same way and we’ll start by looking at three brands at different stages of depletion:
- A dead brand - TGIF Fridays
- A hurt brand (we think will turn things around) - Starbucks
- A brand we predict will hurt - Marriott Hotel Brands
The Dead Brand - TGI Fridays
I grew up in the 80s. My friends and I loved TGI Fridays. We’d meet friends there, had laughs, and lots of good times. So what happened from their heyday?
- Singles bar to family restaurant - What the? In fact, the bar where Tom Cruise became a bartender in the movie, Cocktails, was based on TGI Fridays. I think Friday’s forgot Coughlin's law, “Never show surprise, never lose your cool.” That’s a huge shift. Now the shift was due to a change in consumer preferences, but that’s a 180.
- Lost its flair - TGI Fridays was known for their friendliness and their flair (hello, Office Space). Their striped uniforms, approachable bartenders and yes, a ton of flair gave them a unique identity. When flair lost its cool, TGI Fridays walked away from all of these little things and in the end, lost its identity.
- Copycats - Applebee’s, Ruby Tuesday, etc, etc. So many competitors. Rather than trying to build off their strengths and adding to it, they kept walking away from what made them special in the first place.
- The decline of food quality - You can’t run a restaurant on a microwave. The quality of food continued to decline over time.
And there are a hundred other reasons, but it wasn’t one thing, it was a series of things that happened which over time, made them lose who they were - which today is bankrupt.
The hurt brand we think will turn things around - Starbucks
Starbucks is a brand I worked on in the 00’s and it's a brand that goes up and goes down. When it goes up, it has a strong sense of purpose. When it goes down, it’s lost that sense of purpose. What made Starbucks great:
- The coffee - People loved the coffee and the coffee experience. An obvious sign of when Starbucks loses their focus is by looking inside the store. If you see bags of coffee and coffee accessories in their store, their eyes are on the prize. But if you start to see things that have nothing to do with coffee (in the 00’s it was the Bee Movie DVDs), they have become distracted.
- Why did they do this? - A push to drive sales beyond their core coffee offerings and increase the size of ticket.
- The third place experience - In an effort to churn out coffee quickly, they’ve favored efficiency over environment. But do you remember when we used to work out of a Starbucks (and not just because we were desperate with no place else to go). It was a place you’d meet friends, have meetings, or just relax. I don’t know about you, but it’s not relaxing any more.
- Why did they do this? - To increase the efficiency (and traffic) of getting people in and out of the stores.
- The people - Starbucks was known to be a place people wanted to work. They offered unique benefits like healthcare and education. As a result, their baristas were the best who loved going to work and the environment fed off of that energy. Today, it seems like employees are rushing to unions to be treated fairly. That is a far fall from grace.
- Why did they do this? - To increase margins while reducing or at minimum maintaining employee costs.
- The personalization - “One cafe Americano with three shots of espresso for Jess.” Yes, they knew your name and often knew what you liked. You didn’t even have to order it because the baristas knew what you loved. It was enough to put a smile on your face (each day). Now they plunk down the coffee with a printed label in silence and move on to the next.
- Why did they do this? - Same as #2, to increase efficiency and reduce the time it took to get your coffee.
- The community - Starbucks and their baristas were proud to be part of their community. They gave back in every market they served. Their stores promoted local causes and you were proud to have a Starbucks in your neighborhood. They really felt like they were your neighborhood coffee store instead of another chain taking over my local town.
- Why did they do this? - In a word, scale. 38,000+ stores makes it hard (and expensive) to do this.
Some of the reasons behind why Starbucks made the moves they did are understandable. However, the solutions put in place pushed consumers away from why they went to Starbucks in the first place.
Now, we do think they’ve started to figure out what they’ve done wrong before it was too late. They’ve hired a new CEO Brian Niccol who has immediately taken action. The little things like adding the condiment bar back, stop charging for alternative milks (that one always irritated me), offering ceramic mugs (meaning, please, stay awhile), adding comfortable seating, personalization of baristas using Sharpie’s on cups, etc. As you can see, it wasn’t one thing that hurt the brand, and it’s not one thing that will save it. But it seems Mr. Niccol understands what the brand stood for and is quickly going back to its roots.
A brand we predict will hurt - Marriott Hotel Brands
Picture this. It’s 2001. It took you 6 months to get a reservation at the W on Lex. You’re going to see a killer emerging band, have a great dinner in one of the hottest restaurants in NY, and sleep in a WOW suite. Everyone there was a model, a musician or someone with a lot of cash. This was the W Hotel. But today, in a word, a W hotel is “gross.” At least a lot of their hotels. Instead of feeling like “the-must-be-seen-at-club,” it feels like a hangover at a frat house full of people who last saw a club in 1993.
Unfortunately, for Marriott, The W hotel isn’t the only property that lost its way. Remember when the Westin was a luxurious business hotel - the Heavenly Beds.
Or remember when before the Marriott Bonvoy diluted points program was the Starwood Preferred Guest program where all of your business travel quickly paid off for the trip you really wanted to take.
So what happened.
- Marriott bought Starwood - And immediately forgot why they bought them.
- Barry Sternlicht (former CEO of Starwood) left the building - This guy picked out every last detail of every W hotel. When he left, so did the attention to detail.
- Marriott dilutes their Bonvoy program (every year) - Remember when loyalty programs were built to make you loyal? Now they seem to find ways to irritate you. Like the little things, if you book two rooms - one for you and your wife, the other for the kids, they’ll only now give you points on one of the rooms.
- They’ve gotten too big - Competing priorities, no one fully dedicated to each brand in a way where they live the brand they serve. So over time, they’ve lost what the individual brands stand for. What’s a Delta hotel brand stand for? Anyone? Anyone? This is how Marriott positions Delta “Whether it’s business or leisure, with friends or solo travel, Delta Hotels by Marriott provides a seamless experience so you can focus on what matters most. Simple Made Perfect.” Insert any hotel description here.
For Marriott to turn things around, they need to go back to the roots of what each of their brands stood for. Why did people go there in the first place? Go talk to their customers. Listen to what they have to say. Don’t read the brand tracking study, go to the bar, buy a customer a drink. Find a bartender that’s been working there 20 years and ask them what made it great.
And now let’s look at some common issues brands face and what to do about them.
- Change in consumer preferences - What’s new becomes old. What’s hot becomes cold. TGI Fridays and the W hotel could not have succeeded if they followed business as usual these past decades. However, you don’t walk away from who you are, you evolve with the times. You know what you stand for and you modernize it. Tiffany’s and their Beyonce campaign is a great example.
- Margins - Marketers, understand your business model! Your finance team will always be looking at ways to improve the margins, that’s part of their job. If you understand your business model, you can make suggestions that will satisfy both Wall Street and your brand/customers.
- Over competition - Success loves company, we get it. But whatever makes you successful, don’t stop. Keep innovating on your promise (don’t walk away from it). Keep your competition guessing and your consumer both surprised and delighted. McDonald’s is a great example. How many burger chains have opened since McDonald’s opened? The Travis Scott collab is a great example.
- Incentivize your people - You’re only as good as your people. Whatever makes your brand special, incentivize your people to keep it that way and add to it. And treat your people well. If your employees love your brand, chances are your consumers will too. If your people can’t wait to get out of your company, chances are your consumers feel the same way. Patagonia gets it. Things like flexible work time so if the swell is up, they can hit the waves.
At the end of the day, always know your business model and what your brand promise is – what makes it special. Add to it, don’t subtract. Be very conscious of the forces pushing you away from it. It won’t be one BIG thing, it’s all the small things.
Trust your gut, if it feels wrong, chances are it’s one of the small things that will kill your brand over time.
