It was recently reported in the trade press that Pepsi had slipped to the #3 soft drink in sales, behind Coke and new #2 Diet Coke. But most interesting was the speculation behind the drop. In an Ad Age article titled “How Pepsi Blinked, Fell Behind Diet Coke”, it was hinted that Pepsi had put too many of its marketing eggs in the social media basket.

Some background: In 2010, the company launched the Pepsi Refresh Project. As I reported in a previous Loyalty Truth post: This Web-based initiative asks customers to submit ideas that they think will have a positive impact on the world, including everything from building community playgrounds to caring for wild cats. Consumers vote on ideas they think should be funded, and to date Pepsi has committed over $15 million to nearly 400 winning ideas.

The Refresh Project was backed by a big social media presence and its launch coincided with Pepsi’s move away from traditional advertising channels, including an ad boycott of the Super Bowl and other major marketing events. (By comparison, Coke is ubiquitous, sponsoring everything from the NCAA tourney to NASCAR to the hit TV show American Idol.)

In the Ad Age article, John Sicher, editor and publisher of Beverage Digest, expressed his concern about Pepsi’s marketing efforts saying, “In the cola wars, the Refresh Project by itself isn’t enough to market Pepsi’s cola brands.” Sicher believes that in addition to Refresh, the company needs “more product-oriented advertising and marketing. I think that the 2010 results are probably a wake-up call for Pepsi.”

In an Ad Age editorial, Rance Crain chimed in “there’s also the danger that consumers could conceivably tire of causes or decide that Pepsi, a marketer long known for its ability to amuse and entertain, is taking itself too seriously. After all, we’re talking about fizzy soda water here.”

Julie Rohem, the ex-marketing chief of Wal-Mart, also expressed her doubts about Refresh in a recent blog post:“the message had nearly nothing to do with the product or the sale of that product. It was altruistic and admirable but it did not engage people with the drink itself—only the endeavors that the campaign supported. Pepsi at the end of the day is a mass brand and that means appealing to the masses on the product first.”

So was the Pepsi Refresh Project a mistake? A qualified yes—if the company really thought it could abandon its more traditional advertising efforts for one that pitched good vibes instead of good taste. A message of corporate benevolence is all well and good, but it feels like the company forgot the primary goal of any marketing department: move the product.

That said, Pepsi should also be commended for doing something a lot of bottom line-focused companies have ignored in recent years—giving back to the community. Handing cash to initiatives like “supporting the rescue and care of injured and orphaned wildlife ” and “getting the lowest income students in our community into college” is truly a noble endeavor.

It’s enough to make this bleeding-heart chug a cold bottle of Pepsi or two. If only I drank cola.

Tom Rapsas is a regular contributor to Loyalty Truth. You can follow him on Twitter @tomrapsas

I’ve gotten into a bad habit with my children. Whenever they ask me about overzealous promises from a product advertisement, I just tell them “It’s probably not true, it’s just marketing stuff“.

The bad part is that I am instilling a degree of cynicism in the little ones, but then again “buyer beware” has served us well for decades. To get their money’s worth, consumers need to be cautious, if not skeptical, of claims made and should complement personal research with word of mouth recommendations where possible.

My broad-brush description of marketers can be justified simply by witnessing the lack of loyalty transparency in favored market practices today. I really don’t want to read an email telling me that I can earn a 10% rebate on “all purchases made” only to click through and see that there is a monthly dollar cap on my savings. I also don’t enjoy seeing items priced “less mail-in rebate” while I end up paying a higher price at the register and later struggle with paperwork to realize the savings.

To its credit, Best Buy has partially broken from the mail-in rebate habit as it offered 5 Android smartphones at an introductory price with no strings attached.

In the B2B world, the use of whitepapers as the bait in email solicitation is becoming highly annoying and merits a huge Loyalty Asterisk™.  Just this week, I filled out a form to receive a “Whitepaper” from Socialtext covering critical requirements of enterprise social software. Thinking I was going to learn something, I realized as I was reading the document that it was not much more than a capabilities document for their own product reformatted as a whitepaper.

It is a simple and often used formula – take the key features and benefits of the product you are selling and create an outline that proclaims the same key points as “best practices”. The Loyalty Asterisk™ remains prevalent in advertising and promotional circles today and marketers need to accept that building campaigns with roots in gently misleading the public does not breed long term customer or brand loyalty.

In the words of Generation Y (Millennials) it’s “annoying”! Translated, it means “I’m not buying your stuff!”

If marketers are selling quality, performance, and reliability as part of their product or brand promise, then they need to deliver the message with a higher degree of transparency than is seen today. I consistently advise my clients to deliver offers with accurate pricing and all conditions proclaimed up front rather than play the bait and switch game.

The beauty of Web 2.0 and social media in particular is that consumers have the tools and communications channels available to be able to research products, compare opinions, and provide feedback to friends in an almost instantaneous manner. Brands that market with a heavy dose of the Loyalty Asterisk™ will be skewered on Twitter, Facebook, and in the blogosphere.

Rather than play the game and suffer the penalty, marketers would be wise to play it straight, exercise some Loyalty Transparency, and enjoy the complements and adulation of consumers as they award the brand for delivering just as promised. If you are running your business without social media tools to monitor brand mentions and conversations, you need to step up your game.

Adopting the right tools and building a commitment to marketing transparency will yield improved results. I am here to help you with both endeavors.

The end, when it came, was sudden. Just when it looked like the Saturn car company had been rescued by the Penske Group, the deal fell through and now, despite a loyal customer following, Saturn is no more.

As faithful Loyalty Truth readers know, I have blogged about Saturn in the past, noting its social media miscues and also about the course correction the brand took to try and make things right. No matter what your take on the company is, for many the loss of Saturn is the loss of a beloved brand.

As David Aaker, author of Building Stronger Brands, put it “it was the only organization in the US that really had a quality culture to it…the loss of Saturn is a blow to a loyalty group attracted to the company’s no pressure sales approach and solid customer service.”

Some put the blame squarely on parent company GM. Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, MI, (angrily) said: “It’s criminal negligence. They got attacked internally, constantly, until today they were finally destroyed. How do you take something that was such a good idea and wreck it deliberately?”

As I write this, the Saturn Web site hums along, oblivious to the brand’s demise. It’s animated home page still buzzing with moving cars and people. I can still go thought the motions of ordering a new Saturn Aura that, alas, will never come.

The brand loyalist site Saturn Fans continues to provide news updates from around the Web, all related to the brand’s final days. They read like obituaries really, with headlines such as and “The Ride’s Over for Saturn Lovers” and “Farewell to Saturn’s Utopian Dream”.

Over at the company’s ImSaturn social network site the news was broken via a posted press release on the brand’s pink slip day, September 30. About 50 people have written in to what may be the site’s final post, with many customers either “heartbroken” over the “sad news” or bitter at GM vowing they “will NEVER get my business again.”

One more passionate fan wrote: “I hope someone can come along and bring the brand back as a proud American automobile company but that’s a dream and the way things have gone, in so many ways lately, dreams don’t stand much of a chance. Good luck to us, the true American dreamers…and believers.”

RIP Saturn, you have left a void in the hearts of a lot of American car buyers, another good idea put on the junk heap due to a lack of funding and foresight and commitment. For many, there appears to be no car company out there who can take your place.

Tom Rapsas is an independent Creative Director/Writer/Strategist. He can be reached at tomrapsas@gmail.com and via Twitter @tomrapsas.

Of the many investments that a business can make, one of the most precarious is its corporate brand. Investment in brands run into the millions of dollars and, on the heels of the Ad-Fest known as the “undercard” of Super Bowl Sunday, the extent to which companies will spend to have their message heard is abundantly clear.

Millennials (Generation Y) are the most technology enabled generation yet. They take advantage of the tools available, staying immersed in their devices and social networks, always connected.

The investment of millions by Super Bowl advertising brands (US 3 Million per 30 second spot) creates an unspoken promise that must be kept on Monday morning. Millennials constantly reevaluate their favorite brands consciously or not. Over time, brand equity is established through a series of positive impressions. Human nature being what it is, this intangible equity can be wiped out through one disastrous service experience.

Competition is just that fierce these days, and the velocity of information collected by this increasingly powerful group of consumers enables a “react, reevaluate, and decide” cycle that can have multiple revolutions even before your Monday afternoon Marketing meeting can address a single issue. How many in the Millennial Generation do you think will pick up the phone and call to complain? How many less will take time to write a letter? If they have a negative customer experience, they just simply move on down the road to the competitor.

Here are two examples of companies whose flourishing brands suffered irreparable harm based on poor customer experience. I know, the sample of this study is small. It is nonetheless poignant and meaningful. As they say, “out of the mouth of babes…comes truth”. In this case, Loyalty Truth!

Not too long ago, Dell had a cache to its brand and their sales showed it. In our house, we made several purchases of desktops and peripherals only to grind teeth as a series of hardware failures ensued, subjecting us to time consuming calls to customer support. No call to the Help Desk is fun, but speaking with offshore support desks that grudgingly escalate the request up the chain of command can be infuriating.

The culmination of several of these negative experiences caused the Millennials in my house to swear never to buy Dell. I have attempted to convince them to reevaluate as the company has largely rectified service shortcoming through Gold Service packages that offer US based support, short hold times, and rapid problem resolution.

Just before the 2004 Olympic games, DHL lost a racing bike that I shipped to a race site. How ironic that DHL was the official shipping partner of the games and continually aired a commercial showing professional cyclists warming up on the ramps behind a DHL truck. Each time the commercial aired, a chorus of “Daddy, there’s your bike!” came from the couch, chiding me for my perceived poor choice of shipper. Now that DHL has announced it’s exit from the US market, maybe the issue is moot. Nonetheless I have a legion of young ones that wouldn’t trust DHL with a fruit cake.

On the positive side, JetBlue’s introduction of personal videos and a selection of interesting in-flight snacks served to delight my gang of Millennials. In all, JetBlue has consistently executed well and has created brand loyalty without my Millennials ever noticing their advertisement efforts.

Apple is a slam dunk example of product quality and retail execution cementing the brand message. Yes, their early ads featuring dancing silhouettes were cool, but the Millennials I know first identified with the brand via their innovative music playing device, the iPod. No wonder that iTunes accounted for about 80% of all digital music sales in the US during 2008. The excellent service provided by Apple retail stores and well-executed promise to migrate PC user data to an Apple PC have attracted legions of new customers.

There are two points of learning from these tales:

Groundbreaking marketing strategy and million dollar investments in brand campaigns are all easily trumped by poor execution. More time and investment should be allocated to employee training and incentives to realize flawless business operations.

Brand is important, but the super-glue known as a loyalty program needs to be in place to overcome service problems. Conceived correctly, a loyalty or customer strategy can cause customers to think twice before bolting for the competition.

How secure is your brand investment?

Consumer brands are not only tough to establish, but expensive in the process. The investment and impact both have long term implications, so most companies exercise extreme care in crafting their intended message.

Brands within categories tend to share turf. Soft drinks are young and fun, while banks tend to convey safety and confidence. Contrasting messages have emerged in some verticals as newer competitors attempt to shake up the space. For example, discount brokerages tend to emphasize personal service and low fees, while the big boys (who’s left?) issue a more traditional sentiment.

The airlines have generally held pattern, painting aspirational pictures of all the places they can take you and the comfort in which they will do so. This was the case when the US had 5 or 6 trunk carriers, but not anymore. Whiz kids Jet Blue and Southwest have broken the operating mold and leverage their business model in their brand communications.

Marketer, Mechanic or Pilot?

Almost apart from the pack is Spirit Airlines, who would receive the award for edgiest airline, if there was an award to give. Spirit has spooled up its promotional engines to blast out a seemingly endless string of wacky messages that paint the sky like a summer contrail.

The spirit messages that I am thinking of are presented via the company’s favorite media channel – email. The 2-3 times per week emails feature price, price, and more price that look like a multiplication table:

• $12 off for 12 hours
• $24 off for 24 hours
• $35 off for 35 hours
• $48 off for 48 hours

Others punctuate seasonal change, ranging from an Autumnal “Jack O Low Fares”, an Election Day “Ochobama” fare special to Thanksgiving’s “Tan your Turkey” event.

But the self proclaimed “Kings of Shock Marketing” has outdone themselves with a series of promos that would thrill Dr. Ruth to the bone: “Red Light Specials” are just the start with “Don’t Go South Without Protection” and “We’re proud of our DD’s (Deep Discounts)” joining up with “MILF”, “WTF”, and “We’re having a threesome (Three sales in one)” capping off a list that might create misgivings about exactly what services are being offered.

Spirit evidences a high level of self-awareness when it writes in an email that “These promotions are designed to be entertaining, humorous, and of course, impactful”, and to their credit, they don’t miss a trick. Even the current economic cycle gets the spotlight with “The High Fare Bailout Sale” run last fall.

The question is not so much “what are they selling” as “is it compatible with air travel”? I’m all for differentiating from the competition, but has Spirit gone “hors categorie” in their attempt to gain consumer attention? Will this branding create the competitive edge needed for future survival, or will Spirit simply become known as the Ashley Madison of the skies?