Unless you follow the spirits industry, and bourbon in particular, you might now have heard about the recent controversy created by Maker’s Mark as they “temporarily” changed the formula of their bourbon. Specifically they announced that in order to meet unprecedented demand for their product they would be lowering the proof (the ABV or alcohol by volume).
They were watering down their booze.
The company assured loyal bourbon fans that in their taste tests, no one could tell the new formula from the old. To them it was a minor change forced upon them by consumer demand. Except somehow in all this they missed that in addition to watering down their whiskey they were watering down their brand, an iconic brand that the company had been investing in for decades.
As a Kentuckian, bourbon fan and regular Maker’s Mark drinker I was pretty appalled by the company’s choice. Not that I need to get “liquor’d up” on a regular basis but it seemed like a radical choice to make for a company whose brand was built on quality, nostalgia, and taste. In discussions with friends many compared it to the old Coke/new Coke debacle. While there are similarities in my mind it was very different since Coke, while an old, iconic and nostalgic brand itself, is a commodity not a premium product. Maker’s Mark “handmade” appeal, as signified by their red wax hand dipped bottle tops, was thrown out the window so that the company could meet their sales quota.
A company that had wrapped itself in a brand of never changing history overnight demonstrated that it would change it’s product to make a buck.
Now what does that have to do with startups beyond helping decide what cocktails to serve at a launch party? A lot.
Technology startups don’t have a brand promise based on history or nostalgia. They are too new for that. They also don’t promise to never change. In fact they promise the opposite, to innovate and change continually towards some other brand goal. For most startups the brand promise they make is about speed, reliability, trust or security. Yet if a startup, or any company, violates their brand promises to meet some other business goals they can lose customers faster than you can say “last call!” Grow too fast without maintaining product quality and you’ll lose your brand investment. Focus on features that open new markets while cutting back on supporting your current customer base and the brand will evaporate like alcohol from a barrel.
The most fragile and often the most valuable thing in any company is the brand. Technology can be rebuilt. Internal processes can be improved. Personnel can be upgraded or replaced (harsh but true, no one is irreplaceable). But the brand, the idea of what a company is and what it stands for is the unique idea carried in the mind of every customer. It’s a delicate balance between what they have been told about the product (marketing), what they have heard about it (word of mouth and social media) and their own first hand knowledge (user experience). Overreach in any one of those areas and you risk destroying the brand your company has invested in building.
Today Maker’s Mark announced they were reversing their decision and returning to the original ABV formula. Whether or not customers will forgive them trying to cut corners to make volumes remains to be seen. I know I won’t be going back.
Well said, Steve. I’d love to understand the dynamics at Makers Mark that generated such a flawed decision. At least they had the sense to reverse course before they completely sunk their premium brand.
Terrible idea to eat your own brand for more money.
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