On April 23, 1985 – 28 years ago today – Coca-Cola made the now-infamous decision to replace the secret formula of its flagship brand. The New Coke introduction, which critics called the business blunder of the century and cynics declared an unintended stroke of marketing genius, unleashed an avalanche of calls, letters, protests and bad press.
Extensive research leading up to the launch showed that consumers preferred the taste of New Coke. But what the tests didn't reveal was the emotional bond consumers felt with their Coca-Cola. Loyalist clubs and protest groups formed almost overnight, and consumers hoarded and even scalped cases of “old” Coke.
[Note: New Coke was never launched in Australia!]
“The passion for original Coke was something that just flat caught us by surprise,” Don Keough, then President and Chief Operating Officer of The Coca-Cola Company, humbly admitted during a press conference announcing the return of the “classic” formula just 79 days after the New Coke debut.
Sales of the original Coca-Cola surged in the months to follow, restoring the brand as the frontrunner in the ongoing cola wars and affirming a truth countless marketers continue to learn and relearn in the social media era – that consumers, not companies, own the world’s most cherished brands.
In February, Maker’s Mark became the latest brand to reverse course following consumer backlash, backpedaling on a decision to reduce the alcohol content of its bourbon. The news got us thinking: What if New Coke had launched in 2013 instead of 1985? How would consumers’ reaction – and the company’s subsequent response – have manifested in the digital domain?
We pitched these hypothetical questions and more to Michael Bassik, managing director of Burson-Marsteller’s U.S. digital PR and communications practice. Here’s what he had to say:
The New Coke introduction and retraction remains a case study in brand loyalty. Has social media given consumers even more ownership of brands?
The old adage, “the customer is always right,” still rings true. The ability for customers to influence corporate decision making has increased ten-fold over the past decade. Companies now are much more likely to listen and respond to consumer complaints, and consumers are significantly more likely to complain when they’re unhappy. Consumers are more empowered by technology and social media, but also by the companies who realise they are having conversations and expressing their support and discontent online. Social media communities represent the world’s most valuable focus groups. And for the first time in history, companies can engage directly with anyone, anytime and anywhere.
We’ve gradually seen a departure from what we call “high-touch” protests: in-person demonstrations, letter-writing campaigns, phone calls and the like. In their place, we’re seeing an embrace of digital and social media to register support or discontent with a product or service. In the past, the barriers to protest were steep; you had to write, address, stamp and mail a letter, or pick up the phone and call someone. Today these barriers have nearly vanished. You can walk down the street and make a call from your cell phone, or sit at your desk and click the “like” button or send out a tweet. Many define this era of protest as “slactivism” because it requires a lot less effort.
The Coke response in ‘85 was decidedly old-school, yet effective, with top executives holding a high-profile press conference announcing the return of “classic” Coca-Cola. In your opinion, what would the company’s reaction look like today?
We’re now in an era of “and” instead of “or.” Holding a traditional press conference is still an effective method to communicate to the media, but it’s likely that executives would bypass mainstream media initially and talk to consumers and employees directly through digital platforms.
How long do you think it would take Coke to switch back to the classic formula today?
I think it certainly would be faster. The immediacy of social media has cut the protest cycle in half. Companies are now monitoring sentiment online in real time. Just look at how quickly Coca-Cola changed its cans back to red from white (for the December 2011 Arctic Home promotion).
Any fun hashtag predictions?
I suspect the hashtags would predominantly focus on the campaign to bring back the original formula, just as the conversations did in 1985. My bet would be #savecoke.
Could Coke potentially have used social media as a proactive communications tool to support the launch and make it a success?
Social media is an incredibly effective way to launch a new product or service because you can communicate directly with your most ardent fans and engage influencers. But it cannot cover for dissatisfaction with the product. Ultimately, the product has to resonate and be well received, no matter what medium you use to communicate.
Several brands recently have reversed decisions following consumer outcry. When companies or brands pivot or backpedal, what message does that send?
The more brands listen, respond to and engage consumers – and the more they rely on social media to help them do so – the stronger their overall reputation will be. Support for Coca-Cola increased dramatically when the company brought back the original formulation. In essence, Coke said, “We heard you, we listened to you, and we want to thank you for your help. You’ve made us better.” That statement delivered a feeling of empowerment among core fans. Companies only stand to benefit by taking the consumer’s voice into account. Also, it’s important to note that most consumer reactions are born from frustration with their product or service changing. So even if the response comes off as negative, it’s coming from a place of wanting to protect and preserve the brand they know and love.
What do you think these companies learned from New Coke?
A few years ago, Netflix introduced a new pricing model to encourage online streaming. The change was so dramatic that it sparked a tremendous backlash, impacting not only the company’s subscriber revenue, but also its stock price. If Netflix had taken a page from the New Coke experience, it would have been incremental change and new product offerings instead of replacing existing product offerings that are beloved by consumers. They also could have considered turning to communities in social media ahead of time and asking them what they’d like to see. So while history continues to repeat itself with companies not heeding the lessons of New Coke, on the whole, we’re seeing companies rely on social media to gather consumer insights to monitor, question and engage.
Can you cite a few brands whose response to consumer backlash over the last few years has been especially effective?
We’ve seen seismic shifts in two industries notorious for customer service issues and complaints: airlines and cable TV providers. Before social media, complaining about a delayed flight or a problem with your cable service was a rite of passage. It was something everyone could relate to. When platforms like Twitter emerged, you had individuals on an airplane or sitting at home taking to social media to complain about their poor experiences in real time. For a long time, those complaints went unacknowledged and unanswered. Today one can argue that the most effective way to receive support for a problem in either of these industries is to take to social media. Companies like Delta Air Lines and Comcast, in particular, have demonstrated the positive effects of using social media to listen to consumers to solve problems and demonstrate their commitment to customer service. They’ve stepped up and are now leading the way.
Does social media encourage or discourage brands from taking intelligent risks?
Just because consumers are content with a product or service doesn’t mean companies should not continue to focus on R&D. Companies still feel the need to innovate and introduce new products and offerings. The lesson of New Coke is that improvements are best made incrementally. And improvements should not come at the expense of alienating your core fan base. We’re much less likely to see wholesale product shifts in the post-New Coke era, which remains one of the best and most often used case studies on crisis response and consumer engagement.
Brands no longer have a choice on whether to engage in social media; consumers are talking about your brand whether you like it or not. If you were to encounter two people talking about your product or service on the street, you wouldn’t just walk away. You’d listen, engage and respond. Ignoring consumers is not an option.
A lot clearly has changed over the last 28 years. What has remained the same?
Whether writing a letter, staging a protest or tweeting, blogging, liking and commenting, people will always feel a strong desire to express themselves when companies they love make decisions they disagree with. What has changed is that it’s now easier for consumers to express their support. In the past, the best way to do so would have been to continue to patronise a business or buy a product or service. Today social media allows us to express our satisfaction and passion for brands in new, exciting ways. But in the end, human beings are still managing a company’s social profiles and human beings are still responsible for dealing with crisis situations. And that, hopefully, will never change.