From Trademark to Trustmark
Just two years ago… our great McDonald's ship was listing… heading for the rocky shoals of irrelevance and mistrust.
We had to change course. A new course was chartered under our leadership Jim Cantalupo, our CEO and Charlie Bell, our COO.
In January 2003… we changed our growth strategy from focusing on building new restaurants to focusing on attracting more customer visits to our restaurants. In other words, we changed from being supply-focused to being customer-focused.
And customers responded.
In less than two years… we went from being the basket case of business… to one of the best cases in business.
All this happened as we experienced two cultural shock waves. In April 2003, about 15,000 people attended our worldwide convention. We planned to celebrate our great success. However, on the morning of the opening day, we awoke to the shocking news that Jim Cantalupo, our CEO, died. Sometimes all the words in the world can't express the complexity of our feelings. A crying clown… our clown… expressed those deepest feelings.
Charlie Bell was immediately elected CEO. He was everybody's choice. Then, three weeks later, we learned that Charlie was seriously ill.
Charlie was an inspirational leader… he inspired us all to sail into uncharted waters… As he liked to say, "At our heart is the will to do and the soul to dare."
What an amazing year! Yet… we are still sailing ahead. We are on course. And, we plan to stay the course.
At the end of last year, we were truly honored to have won the Advertising Age award as "Marketer of the year".
The wind is in our sails…
And compared to two years ago… we are now serving almost 2 million MORE customers every single day.
Our worldwide sales have increased by 12 percent.
And, we've earned 22 straight months of global same-store sales increases.
How did this happen? How did we plot our course across the challenging seas of change?
We focused on two fundamentals of quality top-line growth: operational excellence and Leadership Marketing.
Today, I will talk about Leadership Marketing… Remember the three R's of primary school education… reading, 'riting, 'rithmetic? Well, our three R's actually begin with R. Our three R's of Brand Revitalization are… restore, reinvent, rebuild.
First, Restore… we are Restoring Relevance to our Brand
Our customers just grew up and many grew out of our brand. They changed… we remained the same. We lost touch with our customers.
So, we had to restore relevance.
Some people advised us to "Go back to the origins of our brand…" "McDonald's is all about Happy Meals and Playplaces." Go back where we came from. But, hanging on to the past is not the way to create our future. We didn't turn back our brand pages to recreate history, instead as we looked ahead, we are writing our new brand history.
To restore relevance, we had to change. We changed our brand personality from the "child in every one of us" to the "young adult every one of us aspires to be." We changed from "we are all children in our hearts," to "we are all young at heart." We changed our brand image sweet spot from seven years old to twenty-two years old. Why? Those who are younger want to be older… and those who are older don't want to be older.
We defined the essential spirit of our brand as Forever Young. Forever Young is an attitude, it isn't an age. We define Forever Young as a youthful, energetic, casual, positive, hopeful.
And, we are dramatically communicating that we are dramatically changing.
Our advertising style underwent dramatic change.
We re-imaged our restaurants to communicate a more contemporary brand image.
We are changing our menu to include products like salads.
We even announced adult happy meals.
We expanded choices for children, so our Happy Meals are even happier meals… happier for moms and for kids. In various parts of the world, for example, we are providing Happy Meal options such as cheese and tomato sandwiches, fruit slices, veggie burgers, milk, fruit juice.
We reinvented our approach to packaging from merely viewing them as efficient food and beverage containers to viewing packaging as an effective brand medium with the widest reach. Our packaging now has a brand new, brand look.
We expressed our new brand attitude in a few small yet very powerful words… "i'm lovin' it." These three words galvanized our entire organization.
Consider this… the voice of McDonald's: "You deserve a break today." "You, you're the one." "We love to see you smile." "We do it all for you." Today's customers don't believe that big business does it all for them.
Today's customers say "I'll bet you do some of it for your shareholders." "Don't tell me I deserve a break. I know that. But, why should I take that break at McDonald's?"
"We do this." "We do that." is all a bunch of corporate "we-we."
In the old McDonald's voice, up until a few weeks before the June 2003 launch of our new brand theme the leading candidate theme was "McDonald's. We love it when you love it." Just a bunch of we-we. Consumers said, "I'm sure you do." Another candidate was, "McDonald's. You'll love it." Consumers asked a simple question… "But why?"
Instead of "you will love it," we changed it to "i'm lovin' it." What a difference a few words make. Instead of the "voice of McDonald's," we now reflect the "voice of the customer." ili expresses first what the customer loves about life and only second how McDonald's fits into that life. ili is not a new brand slogan. It is our expression of a new brand attitude, both external and internal.
Second, Reinvent … we are Reinventing Marketing at McDonald's
There are no out-of-date brands. There are only out-of-date ideas.
Bringing our brand up-to-date meant we had to abandon marketing practices and principles that are out of date. We had to reinvent how we marketed our brand.
McDonald's marketing was highly decentralized. We reinvented global marketing at McDonald's. One of the principles of our new marketing policy was Freedom Within a Framework. We encourage local creative freedom but within a global brand framework. There is no freedom with the framework.
We define policy as the non-negotiable boundaries that limit behavior. Our brand framework is not a list of guidelines or suggestions. How long do you think the Ten Commandments would have endured had instead they been called the ten suggestions?
Freedom Within a Framework helps us to achieve global focus, global alignment, global coherence.
And, as of September 2003, for the first time in the history of McDonald's, all 119 countries are aimed in the same direction. We shared a common focus. We were aligned behind a common brand direction. We communicate a consistent, coherent brand message.
(Pause)
In addition to reinventing our approach to global marketing, we also had to reinvent how we communicated our messages.
Brand positioning is another old-fashioned, out-of-date marketing lock box. It locks big brands into uni-dimensional, uni-segment, monotone marketing…
We declared an end to the out-of-date, simplistic concept of brand positioning. Simplistic marketing is marketing suicide.
A complex, multi-dimensional, multi-faceted brand like ours cannot be simplified to a single dimension, a single position, a single word.
We adopted a new communications approach. We moved from uni-dimensional brand positioning to multi-dimensional "Brand Journalism." And that's what we call our new approach… Brand Journalism.
Think about it…
With "Brand Journalism," no single communication tells our whole multidimensional, multifaceted brand story. Each individual communication provides a different insight into our brand.
Our brand means different things to different people. And… it means different things to customers at different occasions… breakfast, lunch, dinner, snack, late night, weekday, weekend, with kids, or on a business trip.
So we think of our brand journalism as a McDonald's brand magazine… each article is different… each edition is different: different subjects… interesting different people… with different topics… different messages… yet, they all come together to create a dynamic… interesting… ever-evolving… relevant… story.
As brand managers… we are editors of a very special brand magazine. Imagine that you were evaluating a proposed article. You consider not only the subject matter, but also the style. An article on Bruce Springsteen for the New Yorker will focus on different aspects of his life and will be written in a very different style than if an article on Bruce Springsteen were written for Rolling Stone.
Here is how our brand journalistic story appeared this past year:
videos:
Tony Hawk
Ronald High Dive,
Salads
Ronald Synchronized Swimming,
She's Mine,
Mother's Day
Different market segments. Different messages. Different styles.
You will not find a predictable template in the McDonald's brand journal.
Predictability is the enemy of interest. Instead of replication of a single message, we are after a compilation of varied messages …
But, they all add up to a dynamic McDonald's brand story.
By reinventing our approach to global marketing and by reinventing how we communicate our brand story… McDonald's went from getting the cold shoulder to becoming suddenly cool.
(Pause)
I know that I am old-fashioned. But, I continue to believe that nothing, nothing is as powerful as the power of words.
As the wonderful speech writer Peggy Noonan said… "Words have the power to make dance the dullest beanbag of a heart."
In this world of synthesized music, and special effects, and computer graphics, and artificial everything… we must never underestimate the power of words.
Powerful words are not derived by computer animation… they are not provided by the magic of a mysterious machine.
Powerful words are produced only one way… people expressing feelings. Words are the most portable carriers of ideas. You can take words with you anywhere and you can share them with anyone.
We are told that to this day, the most credible communication is still "word of mouth…" Not "picture of eye."
Some say that a picture is worth a thousand words. I absolutely agree. But, a few powerful words will endure more than a thousand pictures.
Even in this new, multimedia world, the so-called sound bite prevails. Why? Because, words don't require technology to travel. Friends tell friends through words. And the word spreads.
Two years ago, we were risk averse. Instead of taking risks, we were playing to minimize losses. Instead of playing to win, we were playing to not lose.
So, when we created our common, global, brand-business plan, we did not call it our plan to not lose. We called it our Plan to Win. And, suddenly instead of talking about not losing, our people started to talk about winning.
Freedom Within a Framework, Brand Journalism, Plan to Win, Forever Young, "i'm lovin' it" … phrases like these have become powerful, inspirational and relevant internal expressions inspiring our organization to behave in a consistent manner.
Today, we are issuing a new booklet that defines what we truly mean by Forever Young. We want to make sure that around the world, words used in common have common meaning… common words with common meaning help us to focus, align and inspire our huge organization.
(Pause)
In addition to restoring our brand relevance and reinventing our brand marketing,... we are also focusing on…
Rebuilding Trust.
In today's uncertain world… trust is a must.
Customers are not only more knowledgeable, more demanding, more quality conscious, more value conscious… they are more skeptical, more questioning, and less trusting. Brands are experiencing a crisis of credibility. There's a consumer-based, anti-trust movement in the making.
Sophocles said, "When trust dies… mistrust blossoms." Well, we cannot allow the blossoms of mistrust to bloom across our brand landscape.
Our goal must be to be more than a mere trademark; our brand needs to be a trustmark.
Al Golin… continues to be an inspiration to us at McDonald's… And in his book he says: "To build a brand, trust has to be an integral part of any strategy." Trust is "the great intangible at the heart of truly long-term success."
As part of our brand strategy, we are following five trust-building principles… our five tenets of trustmarketing.
First, you are what you do.
To deserve trust, we must be trustworthy.
Just saying, "trust me" doesn't track with today's customers. We need to create a consistent pattern of trustworthy behavior.
So, for example…
Worldwide, we created a whole new day dedicated to the well being of children. It's called World Children's Day, raising millions for children's charities.
The public relations supporting World Children's Day helps us to reinforce our commitment to children and it also creates a halo of hopefulness for our brand. And, I am very proud to say that our PR efforts for World Children's Day are being recognized by awards from the PR profession.
We are contemporizing our menu. We are adding more choices to meet the demands of today's demanding consumers.
We disbanded super sizes.
And, even though our food and toy safety policies are the highest in the world, we raised our specs further.
Second, lead the debate, don't hide from it.
Obesity is a major societal priority. The wedge issue is childhood obesity. And the point of that wedge is aimed at McDonald's.
Legislators are in the process of taking significant actions to regulate food marketing, particularly marketing to children.
When people attack, they attack the leader. When leaders act, the world pays attention. Some call this the penalty of leadership. I call it the prize of leadership. Leaders have an opportunity to lead. Leaders have a responsibility to lead. As leaders, our market impact outweighs our market share.
So if we are to be taken seriously in our efforts, we need to lead in taking positive action that is responsive and responsible.
The imperative is to stand up for what we stand for.
When we introduced Brand Journalism last year… we changed marketing at McDonald's forever.
Well last month, we announced a significant new chapter in our ever-evolving brand journal.
The title of this very important new chapter is called, "It's what I eat and what I do… I'm lovin' it."
According to our Global Advisory Council of physicians and nutritionists, if we are to deal with childhood obesity, energy balance is the number one priority…. One biochemist told me, "If you eat it and don't burn it, you will sit on it."
Well… "It's what I eat and what I do… I'm lovin' it…" These simple, clear, easy to understand words articulate the important message of energy balance.
Let me give you some idea of what the Brand Journalistic approach to WIE/WID entails.
Let's start with "what I eat."
We will be focusing on two major issues here: (1) providing increased choice and (2) educating and encouraging people to make the right choices.
Here are just a few examples.
We will continue to increase choice in our Happy Meals. Like Actimel yogurt in France.
For adults, we are evaluating a wonderful new sandwich in Europe called "Pita Mac" – great tasting pita pockets… including a grilled vegetables choice.
(video: PitaMac – chicken)
We are serving a Grilled Chicken Salad in China; tuna in the Caribbean; Protein Platters in Canada; and, my cross-cultural favorite… a new Japanese vegetarian bagel sandwich; coming soon to the McDonald's near you… a new fruit salad.
(video: Fruit & Walnut Salad)
To help educate and inspire children to eat right and be more active, Ronald will become an awesome ambassador for living a balanced and active life.
Now… as for "what I do"…
We are developing marketing programs all over the world to demonstrate our genuine commitment to energy balance as the driving force behind balanced lifestyles… like Bob Greene's walk across America. He's Oprah Winfrey's trainer.
We are committed to encouraging children to participate in sports programs around the world… for example, Little Athletics in Australia; youth soccer in a wide variety of countries. We have a terrific school program in Canada.
Our association with the Olympics is a terrific asset. And, we are developing a coach the coaches program in cooperation with the IOC.
We are evaluating the idea of converting our PlayPlaces to Ronald's Gym Clubs.
Now let's take a look at four of our new commercials. They represent an important new chapter in the ever-evolving McDonald's brand journal…
(Videos: My Butt, Salad animation, Less TV, Bathroom)
WIE&WID is a great example of how we will convey this important message in a youthful, spirited, contemporary Forever Young manner.
The NYT said this about WIE&WID: "McDonald's says it's time to turn off the TV. Now stand up and touch your toes. Repeat." This is a great example of what happens when marketing and PR get together to communicate a unified brand message.
Alignment means more than marketing together… it means marching together.
For example, we promote our brand better when marketing and PR work hand in hand to get our message across in ways that marketing cannot do alone.
Marketing brings customers to our brand doors. But PR helps build the trust so more customers actually come through our doors more often. PR helps make our brand truths credible.
Third, openness is an opportunity.
Transparency is key to trust.
And, transparency requires truth. But truth and trust are not the same. Truth is a fact. Trust is a feeling.
Our customers must believe that our brand messages are true. But they must also trust our brand… as the messenger.
Being open and transparent is very important if we are to be trustworthy brand messengers. Corporate unwillingness to discuss leads to consumer willingness to distrust.
Our Open Doors program first implemented in France is a great example of transparency… we open our doors to children, to teachers, to parents, to journalists, to anyone… They can visit McDonald's they can visit suppliers for a behind the scenes view. They can ask questions. Learn about our food, how it's delivered, how it's prepared, and how it is served. Open Doors is such a success… We are expanding this trust building program to other countries.
Fourth, trustworthy messages must come from a trustworthy source.
For a message to be trusted, the messenger must be trustworthy.
Trusted third parties are helping us get our messages out to our customers.
When experts speak… people pay attention.
So, experts like pediatricians, nutritionists, athletic champions, fitness experts, the IOC, the BBC and so on are helping us to communicate our truths in a manner that can be trusted.
Third-party messages are most trustworthy when they appear in a third-party context. So delivering these messages through PR contributes more to trust-building than including the same messages in paid advertising.
Fifth, good citizenship pays.
Trust does not come from how big we are. It is a result of how big we act.
Ray Kroc taught us that doing the right thing is the right thing to do. Good citizens give back to the community.
As part of our commitment to being a responsible citizen… we publish a global report on our corporate responsibility initiatives.
For example…
- We and our suppliers partner with Conservation International to help develop guidelines for prioritizing responsibility in agriculture and food systems covering social, environmental and animal welfare issues.
- Through a broad range of programs such as World Children's' Day, our Ronald McDonald Care Mobile program, Ronald McDonald House Charities and our Ronald McDonald House program… we offer a helping hand… replacing helplessness with hopefulness.
In preparation for this meeting, I read about Arthur Page.
His principles sound awfully old-fashioned, don't they? But, a lot of old-fashioned advice seems to be quite appropriate these days. It is time to make old-fashioned the new fashion.
Arthur Page reminded us that "Business in a democratic society begins with public permission and exists by public approval. Lose trust and nothing else matters."
Yet, trust is under attack. From all sides. The trustbusters condemn our credibility.
In this unfortunate era of attacking the messenger rather than attacking the problem, the trustbusters seem to prefer confrontation over collaboration. In the food debate, marketing is the target, when obesity should be the target… The trustbusters are quick to define problems. They are slow to work with us to develop effective solutions.
Your role as the leaders of the public relations industry is to encourage a climate of public trust. Communications is not just about disseminating truthful information.
Public relations must be a brand partner, not a brand adjunct. Public relations must not be a brand after-thought. It is our brand after-burner, adding the extraordinary power of trust to our brand truths.
Today's consumers don't just ask "Is what you are claiming true?" They also wonder, "Do I trust you as the source of that claim?"
As I see it, there is one function in the whole world that is best positioned to provide the essential global leadership on the important issue of brand credibility… it is the public relations profession. Who else has the necessary perspective and passion?
So here is my challenge to you… the leaders of the public relations profession.
That great communicator Edward R. Murrow once said, "To be persuasive, we must be credible." Well… we are experiencing a crisis of credibility. You are the guardians of credibility, the keepers of trust.
With your help, with your leadership, with your passion, help us manage our brands so that they are trustmarks… not mere trademarks.
The mission of this society reads, "To illuminate the path and, to the extent possible, create the necessary momentum to renew and to reestablish some simple, proven principles that will always be a cornerstone of effective reputation management."
Thank you for helping to keep Arthur Page's old-fashioned principles… new fashioned.
