Marketing disasters 4: When CEO’s go rogue

Today many marketing professionals have accepted the concept of an integrated marketing communications strategy.  This approach abandons the linear, step-by-step approach traditionally taken for marketing communications as expressed by the mnemonic AIDA (Awareness, Interest, Desire, Action) and replaces it with an ongoing relational dialogue.

Integrated marketing communication campaigns seek to rationalise communications by creating a coordinated strategy which delivers a consistent, credible and competitive message relating to an organisation.

Such a strategy takes marketing communications beyond the traditional elements of the marketing mix; such as advertising, public relations and direct marketing; and includes elements normally associated with other aspects of the marketing mix such as brand logos and customer relationship management.

The aim is to reduce costs, create synergies and to reinforce competitive advantages.

However, to make the most of an integrated marketing communications strategy the following is required:

  • Strong commitment from senior management
  • Closer integration and increased involvement with promotional agencies
  • A uniform approach by all actors in the process.

In some businesses, senior managers and owners may act as figureheads for the brand e.g. Richard Branson at Virgin group, Michael O’Leary at Ryanair or even Donald Trump.  These individuals are placed at the forefront of the organisations marketing activity.  What such individuals say and do is critical to the success of their organisation’s communications strategy and if the move away from the message at the centre of their integrated marketing plan, significant damage to their brand can occur.

There have been several prominent examples of where loose talk by a senior executive has caused reputation and financial damage to a corporation.  Here are a few examples:

  • Most people in the UK are aware of Gerald Ratner, the former CEO of Ratner’s Jewellers.  Ratner made an infamous after-dinner speech at a business conference. Unbeknown to Ratner, his ‘humorous’ speech was recorded on video and distributed to the media.  In it he said that, “We sell earrings which are cheaper than an M & S prawn sandwich but probably won’t last as long”.  He also referred to a decanter and glasses set as “absolute crap”.  The effect of his speech being publicised was £500 million being wiped off Ratner’s share value.  The jewellery firm he had spent 20 years building nearly collapsed overnight.
  • Then there was David Shepherd, the brand manager for Top Man, who described his target customer base as “hooligans or whatever” and said that they were only likely to wear a suit for their first job interview or for a court appearance.
  • Matt Barrett of Barclay’s told a committee of MPs that consumers should avoid Barclaycard as it was so expensive.  He also told the MPs that he’d advised his children not to borrow on credit cards.
  • Keith Cochrane of the transport company Stagecoach was reported in the press as describing bus passengers as “riff raff”.
  • Allen Ross, at the time the CEO of Glaxo Smith Cline was quoted as saying that 90% of drugs only worked on between 30% and 50% of the consumers taking them.
  • Ivan Seidenberg, the boss of Verizon, the US cell phone supplier once said, “consumers have unrealistic expectations about a wireless service working everywhere.  Why in the world would you expect your (cell) phone to work inside your house?”.

In each of these examples, misplaced comments, unguarded remarks or attempts at humour have mis-fired, causing significant damage to the corporations these men led.  It is crucially important that if you intend to follow an integrated approach to marketing communications or to place a senior manager in the role of a commercial figurehead that they are never off their guard and that their statements are in accordance with the agreed strategy.