April 23rd 1985 was a seminal day for CX (before CX was even a phrase!) – find out what we can learn from that time and how in 2021, we could be doing better. Understanding customer satisfaction is a good place to start, but it doesn’t give you the full story, in this session Keith will take you through why this is the case. Furthermore, understanding what your customers want, need, think and feel is data that should be glued to the core of not just your CX strategy but also your business strategy.
- How measuring customer satisfaction evolved
- Importance of customer satisfaction
- Utilising customer feedback effectively
Hello, I’m Keith Povey, Director of Marketing for Feefo. Nice to meet you all. Thank you all for joining us. Today, I am going to be talking to you about April the 23rd 1985. Before I get into why I’m going to talk to you about a random date in the middle of the 80s, I’ll just tell you a little bit about Feefo. At Feefo, we provide CX insights and data to our customers. We grew up as a reviews company. But there’s no doubt whatsoever that, in recent times, the data that we collect has become more and more valuable. So much so that we’re working with some of the biggest and best brands in the world.
Now I’ve got that out of the way. Probably the big question is why am I sat here talking—a guy that does ratings and reviews and data insight talking about 1985? Well, first things first, is getting the load. I promise this is just a little bit of indulgence on board, but I couldn’t help myself. I had to completely rebrand our slide deck. If I wasn’t in charge of our brand, I’d probably get told off by someone. I’m here to talk to you about it because lots of things went wrong in the 80s. Mainly fashion, if we’re all honest. Something went very wrong for one of the biggest brands. I’m here to tell you exactly what went wrong, and why it’s a massive lesson for us in our day and age in 2021 about how we approach our CX strategy.
Here’s a guy named Roberto Goizueta. I have to look that up to make sure that I pronounced it properly. For some of you that have probably heard this story, and I’m talking to a CMO Summit, so I’m pretty sure some of you have covered the Coca Cola fail in the 1980s as a case study. What I’m going to try and do is frame it a bit different than perhaps some of the more negative ways of looking at it. I actually don’t think Coca Cola made quite as many missteps as they might have been accused of doing. But here for those of you that haven’t heard this story, is Roberta to tell you exactly why or how this journey started on April the 23rd 1985.
A confident man stood in front of the world’s press telling the world’s press that there is a brand new taste for Coca Cola 99 years after they first started making it. So I’m going to rattle through this case study, especially considering I recognize that you guys as my peers probably know it. But I want to give some information that sometimes doesn’t get shared, give it a little bit of perspective, so that you can all understand in a better way how I’m going to then apply it to CX, so that isn’t just a magical mystery tour through the 80s just to satisfy me.
As I say, Coca Cola started in 1886. They were huge. So huge, in fact, that they had 60% of all of the soft drinks market. It just postwar Second World War. They were under immense pressure. They were getting a bad rap. Diet sodas were being brought out. They were being pushed to change. Market share was being lost to Pepsi and other soft drinks. In the process of developing Diet Coke, which was released in 1983, they found a formula that beat everything in taste tests. In fact, it was so good that it would beat the original Coke, would beat Diet Coke, would beat Pepsi, would beat Diet Pepsi, and beat everything. So Coca Cola took that, and they ran with it. They spent $4 million in the 80s on taste tests. That’s over 200,000 taste tests. So any kind of sleight of Coca Cola that they didn’t they have thought it or they half baked it is completely and utterly unfounded. They spent the equivalent in these in our money of $10 million just on taste tests. They gave it a secret code name, it was called Project Kansas.
To put it another way, one of the bottling companies threatened to sue Coca Cola if they didn’t release new Coke. So what we had just now was Roberto stood up in front of the world’s press telling them that Coca Cola, as everyone had known it, was about to change, and it was going to be better than they’ve ever done. They were confident. They had all the data that they had available to them, told them that this was going to be an absolute slam dunk. So much so that this was one of the ads.
I don’t know about all of you, but that makes me wistful for the days of sitting around a table getting drunk coming up with jingles because that jingle is top draw. I think I might make it my ringtone, if I’m honest.
So Roberta was confident They’ve released new coke. They’ve told the world that new voke is going on sale. Not only is it going on sale, they’re taking old coke off. There was no kind of hedging of bets in this. They took classic coke as it became known off the shelves and replaced it with new coke overnight. And initially, Pepsi lost market share Coca Cola stock went up. They did such a fantastic PR job. McCann Erickson was the lead ad agency, I believe. 80% of the entire United States were thought to have known about the change within a week. I mean, just to get that kind of coverage today would be hard and that’s with the digital mechanisms. In those days, they had TV, they had press, that was about it, which is just incredible.
However, there was a bit of a storm rumbling, and it was from these guys. So Pepsi came on the scene with the taste test or the Pepsi Challenge in 1974. AThe big thing with the taste challenge was it was irrefutable scientific proof that when you took all the brands off of these brown liquids, people preferred Pepsi. Now, the problem with it is if you just ask a human being to taste something, we are predisposed to liking sweet things. So Pepsi was definitely better tasting, and they were pushing it super hard. There was even an anti Coca Cola [inaudible], which there’ll be an irony and when you see what happens to New Coke. But Pepsi were pushing really hard. It’s fair to say, again, in defense of Coke, they were being put in a position where their market position was threatened and they needed to move. They did, and they move decisively. It’s just fair to say they didn’t quite go to plan. Pepsi definitely smell blood.
This was the guy behind it all. This guy was the CEO of Pepsi. His name is Roger Enrico. He looks like the kind of guy that you wouldn’t want to take home to your parents if you were dating him. He just doesn’t look quite right to me. Thumbs put me right off. He couldn’t wait to stick the boot in. He took out an ad the second that New Coke had been released and announced because, bear in mind the secrecy that had gone into it, no one knew what Coca Cola was going to say at that press conference.
The very next day, in the New York Times, there was an ad and all it said was, the other guy blinked. They genuinely spun the story to show that Pepsi did taste better. It was threatening Coca Cola, and it forced Coca Cola to change because that’s how good Pepsi was. Pepsi wanted so much that they gave everybody in Pepsi the day off the next day—everyone—it was basically Pepsi day. On top of that, the marketing machine got into overdrive. They actually created an ad called, “Can somebody tell me why they did it?” They had a small girl talking to camera about how upset she was about them changing Coke only to taste Pepsi and then say, “Hmm. Now, I understand.” That was a quick one. Within a month though, they produced a gems like this.
The pressure kept coming. The pressure kept coming in the shape of over 400,000 complaints. When you consider that there’s no digital way of complaining—no live chat, no Twitter, no email—all 100,000 complaints to their Coca Cola head office is really indicative of a very, very strong public opinion that new coke was not for people who in America. There were protest groups. SDA was formed or the old Soda Drinkers of America, and they became virtually a political lobbying group. They tried to take Coca Cola to court for taking classic coke off the shelves. There were anti coke press, there was anti coke protests on the top left, there was anti coke ads in the middle. Honestly, all of that confidence that we saw from our friend Roberta at the top of it was gone. new Coke was very quickly becoming a disaster.
So let’s recap. Coke was under pressure, and they listened to the market. People preferred the taste of Pepsi, and they listened. So they developed a new product and discovered the most popular taste that $10 million of 2021 money, $4 million of 80s money on taste test that the results were unequivocal—people preferred the taste of new Coke. They doubled down. They went to market. They planned for four years Project Kansas ran for four years before they released the Coke. They released it with absolute confidence. They were totally ready to take a complete and utter shift in the way they went to market. They got totally destroyed. They got destroyed so much so that later on in my presentation, you’ll see what happened.
Within two months of the release, Pepsi had announced a 14% spike in sales. That doesn’t count the spike in sales from other software income providers. That is why new Coke is considered, although I might argue a little bit unfairly at times, to be a complete disaster. So the ripple show, he’s come back out of my 80s excitement and come back down to earth course dorky. Why does that relate to CX? Why is a Director of Marketing for a customer feedback and insights company talking to you about a 36 year old marketing case study? I’m going to break it down for you. This is why it’s important to us all when we consider our CX approach.
Coke had an opportunity, and they listened. They listened really well. They listened in detail. I don’t think we can criticize him for it. They took that idea, and they tested it, and they researched it. They spent a fortune, and they fully quantified their risk in the market. They launched the product, they went hard, they hired one of the best ad agencies at the time in the entire world. They had a huge team working on it. Absolute secrecy, assets up their sleeves ready for 6, 12 months worth of activity. They had completely done everything that, in the 80s, you would considered to be right. I’m just gonna argue that they were probably missing a futile that we have at our disposal today. Then, in fairness to them, and in a CX reference, they listened to the customer feedback. They listened to the 400,000 complaints. They have to stop and listen again. They saw what the market did. Then, they did what they did 77 days later, and I will show you exactly what that is in a second.
Feedback, understanding action. That’s about as basic as I can break CX down for anybody. You should be listening to your customers. You should be understanding what they say. Then, you should be working out where in your business that should create action for you, whether that’s in a linear fashion in your marketing, or whether it’s a piece of feedback that applies just affects your supply chain, your operations, or your Procurement processes, whatever it might be. Customer feedback is the crown jewels that we should all be basing our strategies on. Once you’ve done it, you loop it back and you start again.
In 1985, Coke did that. They collected, they listened, and they fed it back into the business. Because they listened, they acted, they followed the data, although I’m probably going to argue slightly blindly, because the bit in the middle, they didn’t understand. There’s a bit they didn’t understand. They didn’t understand the emotional connection between taste and the brand. They understood that people preferred the taste, and therefore, they thought that was the only thing that someone was making a purchase on, which just isn’t true. People were buying Coca Cola for everything Coca Cola meant to them, and the taste. So whatever little Jimmy thought when he tasted Coca Cola, if it took him back to a fantastic memory when he was 16 sitting by a lake fishing with his dad, Coca Cola as a brand had literally wiped that out overnight. That emotional connection, that deep rooted sentiment, and intent from consumers was not present for our friends at Coca Cola.
They also didn’t have reach. They didn’t have the ability to canvass people by the housands over the internet. They didn’t have the ability to ask [inaudible] and AOL or both the 90s. I know that but it’s very difficult to find any representation of [unintelligible] web internet from the 80s. That would make any sense in the slide deck. That’s what they were working In terms of computer. When I say that, I mean, the data that they were collecting from the taste tests are being processed on that. They had no way and no weapon to do more with that data that we can do today at the click of a button.
So one more 1985 [unintelligible]. Let’s go back to the future. What would happen if we took Coke’s problem now, and we applied tools that are available to you all now? It would look a little bit more like this—they would still collect, they would still listening, they would still feed it back to the business, but they would be able to understand the data because they can see data at scale. Now, in a feedback and review platform, you collect your customer data. It’s not just about stars, it’s not just about are they good or are they bad, it’s about understanding what people are saying and what people are feeling. That’s what gets you to understanding the sentiment.
That was virtually impossible in 1985 for Coca Cola, not because they didn’t have the money or the resources or the intent, but because the tools and the data and the ability to analyze just wasn’t there for them. They have the ability to upscale, understand what words were being used, what patterns of words were being used, how those words connected to emotion, and whether that emotion was connected to intent to buy. That whole portion in the middle was Coca Cola trying to do something that was so complex and so risky without knowing what they didn’t know.
Now, as we move forward, this is the weapons that they were missing. They were missing ongoing ratings and reviews. I realize that they they didn’t have DTC back in 1985, but understanding what people think about your product at any one time is so vital. Having a critical mass of that data to rely on and call back into is vital where, and I’m guessing in 1985, they had the ability to store that. I can only imagine it was predominantly paper and teams, and not the Microsoft side kind. CX insight and data. Being able to drill down by demographic, see trend lines, see extrapolations, be able to put that into a digital visualization tool to create graphs, to create overlays, to factor in sentiment, which as I’ve said in the previous slide, is so important.
Now, for instance, on Feefo, you’ve got the ability to see what your customers are thinking and feeling, what they want, what they like, and what they don’t like. That goes above whether they’re giving you four stars, three stars, or two stars, is understanding what words are they using in those reviews, so they can give you more insight into what it is you need to do or not do.
So what happened? I’ve teased it a little bit. I suspect, as I say most of you know. Here’s a chap called Don Keogh, who was CEO at the time. He was largely credited with being the driving force behind what you’re going to hear happen now. A very smart guy. I think he later became president and chair, so super smart. But I think Coca Cola should get CX credit here, because what you’re about to see is 10s, if not probably hundreds of millions of dollars, being spent on a sixpence within less than 80 days.
So I’m going to stop down there done that. Let’s have a look at what he said—could not measure the depth and abiding emotional attachment to the original Coca Cola. He’s not wrong. They really didn’t have the tools to do that, but I’m here to tell you that you can. It’s important that you do, because by me telling you this story in this way, I’m explaining to you that that emotional connection that your customers have with whatever it is you’re selling, whether it’s bananas, or biros or balloons or whatever it might be, there’s an emotional connection to your brand. Historically, in the past, we’ve been unable to measure and now it’s something like in our feedback platform. That data is available to you so that you can not only make decisions on what reviews you’re given, but understand what words, what syntaxes, what sentiment, and what natural language those people are using when they’re telling you that they’re happy or unhappy.
The changes we’ve all tackled in the last year has given us more more data than we know what to do with. For me, that equates to more more eyes, more clicks, more insight, or more opportunity. It’s just how you’re capturing it, and how you’re using it. So I’ve got a bit of a call to arms. Are you ready? There’s tons of studies that are telling us at the moment that retention is a prime focus for organizations. Those retention strategies need to be anchored firstly in your customer data, and in what your customers are telling you. That’s the easy bit. What we then need to do is the bit that Coke did, and take that questionnaire, and take the data part in today’s world. Then, people are just stopping at the moment. That doesn’t make sense to me.
Just taking your NPS score to your KPIs meeting isn’t enough because what you’re not seeing is how your customers feel. You need to listen to what your customers are feeling as pain, what they’re feeling as good things, what they’re telling you that they desire, what they’re telling you they desire to to stop, what they want to see more of you. It might be an ESG thing, it might be local sourcing, it might be any of these things. They might be giving you four stars because the thing that you’re doing at the moment is great. But in those reviews, they might be telling you something completely different. If you aren’t ready to listen to that sentiment, then there’s a whole facet of your customer experience that you’re missing outcome.
Ask yourself the question, can you understand customer sentiment at scale? If the answer is no, I know a company that can help. Moreover, it’s not as hard as it sounds. It’s not as impossible as it would have been to Coca Cola in 1985. Find a provider that suits you, and begin understanding the emotional attachment that your customers have got that our friend Donkey and Roberta at the beginning of the deck couldn’t.
Moving away slightly from the Coke analogy just for one slide. One other bit advice is this—collect your customer business intelligence across the customer journey. Feefo realize that we deliver more than just ratings and reviews. We provide customer based BI, and where you capture that, whether that’s before a purchasing decision, during, after and even long time after. All of that browses to buyers, consideration to churn reduction is incredibly important for you to base every comms that you send out social post targeting, PPC strategy. All of it should be based on what your customers are trying to tell you at any given point. We do, that’s what we deliver. We’re very proud of that. That’s really grown for us in the last few years.
So what happened to Coca Cola? Well, we all know that they didn’t go pop. In fact, this disaster cost them virtually nothing. There was a little blip in 1986, where I think Pepsi got close to overtaking them or just about overtook them in terms of share over a month or over a quarter. Generally, Coca Cola has continued to grow. The graph on the right is actually because Coca Cola has diversification strategies, not because they’re necessarily lagging behind anybody. The big thing for me is Coca Cola listens to their customers. Coca Cola did everything they could to give what they thought their customers wanted, and they got it horrifically wrong.
Moving forward, that is six years. We have more tools readily available to us to make sure that even on the smallest basis, we don’t make those mistakes again. Thanks ever so much.
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