Turning Lemons into Marketing Lemonade

“All men make mistakes, but only wise men learn from their mistakes.”    –Winston Churchill

I was reminded of Churchill’s quote when reading a blog from the Council of Public Relations firms, in which Charlene Li, in a posting titled “The Art of Admitting Failure,” is quoted, i.e.:

“When it comes to business, we are incredibly unaccepting and fearful of making mistakes.  And forget about admitting to our mistakes, as that may be a sign of weakness.”  She advises that companies embrace a “culture of sharing failure as well as success.”

The example used to prove her point is Domino’s Pizza, which famously advertised that some people thought its pizza “sucked” and promoted what it had done to improve quality.  The advertising plus customer promotions increased Domino’s sales 14% over the previous year.

That’s turning lemons into lemonade through marketing.

There’s an even more famous example of learning from your mistakes.  In 1985, after much surveying in the face of Pepsi’s competitive growth, Coca-Cola introduced “New” Coke.

Despite New Coke’s acceptance by the majority of Coca-Cola drinkers, a vocal minority damned the change.  Coca-Cola’s Atlanta headquarters began receiving angry calls and letters – some 400,000 of them.  Newspaper columnists and comedians condemned or made light of the switch.  Ads for New Coke were booed when they appeared on the scoreboard at the Houston Astrodome.  Even Cuban dictator Fidel Castro, a longtime Coke drinker, criticized New Coke as a sign of American Capitalist decadence.

Within three months of New Coke’s introduction, Coca-Cola announced a return to the original formula and renamed it “Coca-Cola Classic,” which later again became just “Coke.”

Coca-Cola executives concluded that their mistake had been underestimating the impact on its customer base, part of which had been alienated by the switch.

The whole episode, especially the switch back to the old Coke formula, had a dramatic marketing effect.  It repositioned the brand in such a distinctive way that a Coke renaissance ensued.  What had been perceived as a mistake, ultimately was a boon to sales.

While New Coke is most frequently mentioned as a cautionary tale against tampering with a well-established brand, it also presents some positive marketing lessons.  In his book, The End of Marketing As We Know It, former Coke marketing executive Sergio Zyman says the mistakes made in developing New Coke “turned out to be a roaring success for Coca-Cola, because it rekindled the relationship between the American public and Classic Coke.”

“But,” he adds, “the only reason it wasn’t a disaster is that we were willing to learn from the experience and to change our minds.”

As you can see, even the most successful businesses make mistakes.  The key, as Mr. Churchill said, is to have the wisdom to learn from them.

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