Maker’s Mark was facing a challenge. What do you do when you have limited supply of a product but increasing demand? When your product is aged 6-8 years it creates an even bigger challenge. You can increase supply in the long term, but what do you do in the short term?
Maker’s Mark, a subsidiary of Beam Inc., chose to dilute their product in an effort to increase supply, meet demand and, in the eyes of many consumers, increase profits. The chronology of events runs from February 9 through February 17. What played out was a microcosm of the challenges brands face in the age of pervasive communications. Maker’s Mark made a business decision. However, there is risk in making decisions in a vacuum, and they were clearly not prepared for the impact and consequences.
Today, brands live in a world of unprecedented transparency that cuts both ways. On the one hand, it exposes organizations to levels of disclosure they often don’t know or understand, as British retailer HMV recently discovered. On the other hand, it sets an expectation among consumers that they will be treated as stakeholders in the brand. As stakeholders, they demand to at least be given more access to the inner workings of the brand if not input into major brand decisions.
In the 20th century broadcast model it was fair to expect that, as a brand, you could make unilateral decisions and broadcast them out to your fans and the masses with an expectation that they may grumble, but it would be in private with little amplification or impact. In 2004, less than a decade ago, Jack Daniel’s made a similar decision with much less fanfare and fallout. The online response consisted of a petition with a whopping 700 signatures which ultimately did not lead to a reversal by Jack Daniels.
Maker’s Mark made an internal decision to cut their bourbon from 90 proof to 84 proof. It’s clear they put some thought into it and didn’t take this decision lightly. They did internal taste tests with employee panels of experts and concluded their decision was sound and the product experience would be unaffected.
People Will Talk
Having made their decision, Maker’s Mark then started a decidedly old school campaign to “inform the masses.” The logic seemed sound: Let’s explain why we chose to do what we did. On February 9th, they confirmed the planned reduction in alcohol content in their bourbon, including in an interview where Chief Operating Officer Rob Samuels said:
“We’ve confirmed the taste of the 84 proof Maker’s is exactly the same as what consumers taste in the 90 proof by our tasting panel.”
That same day they sent an email to Maker’s Mark Ambassadors describing what went into the decision to alter their product in an effort to meet growing demand, ostensibly with the expectation that these select fans would understand and help spread the word. The email was signed by Rob Samuels (Ambassador-in-Chief) and Chairman Emeritus and founder Bill Samuels Jr. (Ambassador-at-Large).
The Ambassadors did in fact spread the word. They spread it through emails, blogs, Twitter, and the Maker’s Mark Facebook page. However, the message they spread was not the message Maker’s Mark anticipated. Rather than be appeased by the explanation, it fueled an atmosphere of resentment and betrayal among their fans and consumers. It also spilled out to provoke jest and scorn within the industry as a whole.
By February 11, two days after the initial interview – an eternity in the era of pervasive media – the Twitter mentions alone of Maker’s Mark was nearing a peak of close to 6,000 tweets per day (see great chart here) with a potential reach in the hundreds of thousands. How were they managing the rise in Twitter activity? They weren’t. Their main U.S. Twitter account had only 4 tweets during the entire week.
Finally, Maker’s Mark founder Bill Samuels Jr. issued a statement thanking his customers for their feedback:
“Because there are so many comments, it’s hard for an old guy like me to respond, particularly 140 characters at a time. Now that I’ve had time to compose my thoughts, please allow me to try to answer most of the questions we’re hearing.”
It was an attempt at an explanation which added bourbon…er…fuel to the fire. All he did was acknowledge the feedback, but he didn’t act on it. He candidly admits the magnitude of the consumer response was clearly unexpected, and more importantly, infers they have no structured plan to engage on social platforms, what is now considered table stakes for corporate communications. In the process he fails to acknowledge that the feelings of the consumer – the fan – have been ignored and betrayed. Maker’s Mark had a chance to make things right, to apologize, but instead exposed them as being oblivious to how passionately the consumer felt about their brand.
It’s Not Over Yet
Twitter mentions of Maker’s Mark peaked the following day, February 12, then started to drop off to pre-announcement levels. However, there were unhappy consumers on Facebook, some of whom even complained that their comments were being blocked or deleted.
By now this blunder was spreading, unchecked, through social and traditional media channels, hitting thousands of feeds and streams. It was not until the following Sunday, February 17 – a full week after the initial announcement – that Maker’s Mark issued a statement. It was alarming enough to them to have their venerable Chairman posting a blog on a Sunday to admit their mistake, reverse their decision and apologize. They made an announcement on their website and social channels: “You spoke. We listened.”
Know Your Brand Essence
The expressed sentiment of their fans, bourbon aficionados, industry experts, and the business community in the week after their initial announcement provided insight into the brand perception of Maker’s Mark, the essence of their brand in the eyes of the market. Many expressed their view indicating their appreciation of Maker’s Mark because it’s crafted to have a particular flavor and experience. Maker’s Mark is now telling them what they thought was crafted just happens to be an arbitrary mix. They have also, with their language, diminished the perceived expertise of their senior executives and their consumers.
While opinions as to the level of impact vary, it’s clear that many who enjoy bourbon believe adding water or ice can affect its flavor. So for Maker’s Mark to say diluting their product will not affect flavor is an odd strategy. It not only shows they are out of touch with the market, but it serves to undermine the perceived quality of the brand and the refinement of both their consumers’ palates and those of their in-house experts. This directly calls into question the essence of the brand – what it is that makes Maker’s Mark unique and enjoyable.
Listening Is A Skill
Now, more than ever, brands need to listen to their customers. Maker’s Mark made and implemented a decision without properly gauging the response from their community. They performed internal tests on their product and found no difference. However, they didn’t ask the right question:
“Clearly, if we would have just gotten a bunch of customers together and said, ‘Do you want us messing with your bourbon in any way,’ we would have gotten a resounding ‘no.’ So in a sense, we were asking the wrong question.” – Bill Samuels, Maker’s Mark Learns a Painful Social MediaLlesson, Won’t Dilute Bourbon
To grow and stay relevant, brands are constantly facing important decisions and issues in regard to the future of their products and services. If ever companies have a decision to be made around an issue that can be even remotely related to how their brand is defined, it has been shown that a community architecture for dialog can give them the answers they need, or a commonality of language for communicating their decision at the very least. As Instagram did with proposed changes to their terms of services, or asPepsiCo and Caterpillar did to crowdsource aspects of marketing and product development, its critical to employ strategy to continuously validate fans participation in your brand.
Also critical is understanding there can be significant impact and velocity from the digital and social activism of what can be a relatively small cadre of determined customers. Today, what used to take place over weeks or months is compressed into a very short time frame. People are reaching out directly to the brand through phone calls, email and social media, and indirectly through comments on blogs and articles, openly sharing their feelings. While they may not in and of themselves move public opinion, then can rapidly push a gathering dissatisfaction towards the tipping point of protest and scandal.
The biggest challenge of all is the near real-time pace. Brands used to have weeks or months to decide if their strategy is right. Now they have mere days to ask themselves if this is going to continue to get worse.
Maker’s Mark had some decisions to make. The first decision was tactical but should have been strategic: How do they deal with increasing demand with limited supply? They chose a course of action which angered their customers.
Their second decision was truly tactical but poorly executed. Maker’s Mark attempted to explain their rationale, after the fact. Not only didn’t it mollify their customers, it seemed to make matters worse. As big media started to get wind of the story, did it turn a minor problem into a major one?
Their third decision was emotional. Moved by the overwhelming response from their customers, or perhaps fear (or both), they did a full about-face. Maker’s Mark apologized and reversed their decision to change the formulation of their bourbon. It felt real, and it may go a long way towards mitigating the long term impact on their brand.
For brands, making decisions today is more complex than it’s ever been. Considerations need to go beyond internal decision making to encompass, engage and validate ALL the brand stakeholders. Brands exist within an explosion of conversations and stories of which their own voice – their corporate narrative – is but one of many.
Maker’s Mark has clearly not fully worked out their corporate narrative. Rather than expand it, as their competitor Wild Turkey did last year in introducing a lower proof version of their product, they chose to rewrite their narrative by changing their core product. In some respects, their community’s perception of the Maker’s Mark brand essence was more real and defined to them than it was to Maker’s Mark. A strongly identified and defined corporate narrative yields a brand essence that can be presented and shared with their entire community – customers, fans, Ambassadors, partners and even competitors.
Special thanks to Jeff Gomez <@Jeff_Gomez>, CEO of Starlight Runner Entertainment, for his assistance with this article.