Tropicana Redux: 20% Sales Drop Gives New Meaning to Negative ROI

Well, it’s one thing to go out in the blogosphere and sound off on my personal opinion, even if it’s shared by so many. It’s quite another to see the actual impact on sales that Tropicana experienced after Arnell redesigned the pack. According to Ad Age, Tropicana’s sales dropped 20% in a 7 week period, when the category was essentially flat.

Anyone who questions the agony involved in tweaking a package design should take note.

A lot of people are comparing this to New Coke and I think that’s rubbish. New Coke was a new product introduction, not a package redesign. It involved a new formulation, a new name and a new package. Tropicana was ostensibly doing what CPG marketers do every day, namely, updating the pack.

I have also read comments that question whether market research was done at all or if it was badly flawed. My sources tell me that the research was done, it was done thoroughly, the design tested dismally, and the recommendation was not to adopt the new design. Whose ego overpowered the voice of the customer? Or were the research results “reinterpreted” in a different way prior to being presented to the client?

Some graphic designers consider package design to be a lesser art form. It may not be as glamorous as corporate identity, but it’s far more complex, much less theoretical and, in terms of generating true consumer response, it is where the rubber meets the road.

Tropicana will recover from this. It will be interesting to see if there are any consequences for those who recommended the wrong path.

The CMO and The Curse of Sibling Rivalry

Information is power. Turf is even more powerful. I worked long enough in corporate America to know that to be absolutely true.

I recently read about a CMO Council study that found that marketers “don’t know how to use customer input to improve operations, products and processes.” Not all that surprising. My inside experience–and outside observations as a consultant–suggests that most CMOs are pretty far removed from grass-roots customer data. And, as the study suggests, customer data gathering is an increasingly fragmented process. This situation is exacerbated by the fact that even if a CMO has excellent input about customer perceptions, s/he is blocked from acting on it by the other sibling in the corporate family.

Examples? I have seen:

• A customer service unit that was “owned” by Operations, with the same call metrics for consumers and for businesses. By the way, business customers have much more complex issues, but the call center was operating under a re-engineered approach that rewarded call brevity, not understanding of the business. 
• A Human Resources department reject an employee recognition program that rewards on-brand customer service because it “owned” recognition awards, and had no desire to change what was already in place
• Valid, insightful customer research fielded within a line of business that was dismissed by Corporate Marketing because it wasn’t a part of the Voice of the Customer program

In short, many corporations have have a perfect storm of information hoarding PLUS turf protection that can result in a pretty poor outcome for the customer.

What’s a CMO to do? Perhaps not to claim the title of “Chief Customer Officer”, which is what the CMO Council suggests. Any company with a strong brand should understand that every single employee has the potential of being a chief customer officer. Centralizing the responsibility just gives other departments an excuse not to feel responsible.

In this difficult competitive environment, Benjamin Franklin’s statement is truer than ever: “We must indeed all hang together, or most assuredly, we will hang separately”.

Instead of bemoaning the lack of budget to go out and advertise, promote, and conduct new research, now may be the perfect opportunity to team up with your brethren and share and/or collect customer data together. Then, create ways to act on the information!