Plano Profile August 2010 : Page 8
as i see it Stop the car! ‘‘S top! stop the car!” screamed our friend Mary during our driving tour of Nashville. I slammed on the brakes, narrowly avoiding being rear-ended by the car behind. i assumed Mary had spotted someone entering the crosswalk or perhaps another vehicle was about to pull out in front of it. “The red light’s on.” she exclaimed. “They’re making doughnuts,” she said as she gestured toward a small green-and-white building behind a sign reading krispy kreme doughnuts. This was my first exposure to the hot, sugary, melt-in-your-mouth fried dough that later became a phenomenon across the United States. Though i consider myself a healthy eater, i have to admit that from that point forward, almost any time i would stumble across a Krispy Kreme Doughnut store, i would stop in—red light or not. But then the stores were few and far between and consuming one of the delightful confections was a special event. So what happened to Krispy Kreme? The company began in 1937 and was popular in the South, but unknown to most of the country until a store opened in Manhattan in 1996. Then in 2000, the company went public. The compa-ny’s stock hit a high of $49 before it began a long decline, losing 90 percent of its value. in her october 13, 2009 article in Yahoo! Finance, Carol Kopp said, “[Krispy Kreme] over-expanded and took on crushing debt. There were allegations of management misconduct. Some franchises went bankrupt. Competition was fierce in the cheap-eats category. More people started consuming healthy foods.” i would contend that the answer to Krispy Kreme’s fall from stardom is even simpler than that. The company lost its way. in talking about what makes a brand work, i like to refer to the brand Dna. in the case of Krispy Kreme, it’s 8 Plano Profile August 2010 not too hard to figure out what that was. They offered a unique, craveable product. Yes, the doughnut recipe was good, but even more important was that they were fresh. additionally, they were hard to get. During their rapid expansion, the company lost sight of these two critical aspects of their brand Dna. Suddenly there were Krispy Kreme stores just about everywhere, so the “hard to get” mystique was gone. even worse, Krispy Kreme doughnuts appeared in grocery stores, convenience stores, and gas stations, so they were no longer always fresh. it seemed that at Krispy Kreme no one was protecting the brand Dna. on the other hand, consider Southwest airlines. Headed by Herb Kelleher (still serving as chairman since relinquishing his Ceo role in 2001) since its 1971 incep-tion, Southwest provides an excellent example of how to stay on course with a winning formula. They unfailingly protect their brand Dna. Travelers know Southwest as the airline that doesn’t serve meals (they serve peanuts), doesn’t assign seats, doesn’t have first class, does (typi-cally) have low prices, doesn’t charge to check bags, does arrive on time, and has employees who have fun—so that customers will, too. in Creating Customer Evangelists, by Ben McConnell and Jackie Huba, the authors describe Southwest in this way: “in an industry that’s roundly reviled by customers, Southwest airlines largely stands alone. Thanks to the extremely effective, maverick-cum-evan-gelistic leadership of Kelleher, Southwest has outlasted competitors big and small to become bigger than all of them combined.” according to McConnell and Huba, the secrets to Kelleher’s success boil down to four points. 1. Constantly talk to customers. 2. Make your company extremely open. 3. Make it easy for people to like you. 4. Create a cause. U nder the leadership of Kelleher and his team, Southwest has stayed on course, creating some-thing of a religion rather than a company. as i see it, had the leaders at Krispy Kreme screamed “stop the car” as they began to veer off course and protected their brand Dna like Southwest has, the downfall of this great brand could have been prevented. ■ john longstreet
As I See It
John Longstreet
‘‘Stop! Stop the car!” screamed our friend Mary during our driving tour of Nashville. I slammed on the brakes, narrowly avoiding being rear-ended by the car behind. I assumed Mary had spotted someone entering the crosswalk or perhaps another vehicle was about to pull out in front of it. “The red light’s on.” she exclaimed. “They’re making doughnuts,” she said as she gestured toward a small greenand- white building behind a sign reading krispy kreme doughnuts.
This was my first exposure to the hot, sugary, melt-inyour- mouth fried dough that later became a phenomenon across the United States. Though i consider myself a healthy eater, i have to admit that from that point forward, almost any time i would stumble across a Krispy Kreme Doughnut store, i would stop in—red light or not. But then the stores were few and far between and consuming one of the delightful confections was a special event.
So what happened to Krispy Kreme? The company began in 1937 and was popular in the South, but unknown to most of the country until a store opened in Manhattan in
1996. Then in 2000, the company went public. The company’s stock hit a high of $49 before it began a long decline, losing 90 percent of its value. In her october 13, 2009 article in Yahoo! Finance, Carol Kopp said, “[Krispy Kreme] over-expanded and took on crushing debt. There were allegations of management misconduct. Some franchises went bankrupt. Competition was fierce in the cheap-eats category. More people started consuming healthy foods.” i would contend that the answer to Krispy Kreme’s fall from stardom is even simpler than that. The company lost its way. In talking about what makes a brand work, i like to refer to the brand Dna. In the case of Krispy Kreme, it’s not too hard to figure out what that was. They offered a unique, craveable product. Yes, the doughnut recipe was good, but even more important was that they were fresh.
Additionally, they were hard to get. During their rapid expansion, the company lost sight of these two critical aspects of their brand Dna. Suddenly there were Krispy Kreme stores just about everywhere, so the “hard to get” mystique was gone. Even worse, Krispy Kreme doughnuts appeared in grocery stores, convenience stores, and gas stations, so they were no longer always fresh. It seemed that at Krispy Kreme no one was protecting the brand Dna.
On the other hand, consider Southwest airlines.
Headed by Herb Kelleher (still serving as chairman since relinquishing his Ceo role in 2001) since its 1971 inception, Southwest provides an excellent example of how to stay on course with a winning formula. They unfailingly protect their brand Dna. Travelers know Southwest as the airline that doesn’t serve meals (they serve peanuts), doesn’t assign seats, doesn’t have first class, does (typically) have low prices, doesn’t charge to check bags, does arrive on time, and has employees who have fun—so that customers will, too. In Creating Customer Evangelists, by Ben McConnell and Jackie Huba, the authors describe Southwest in this way: “in an industry that’s roundly reviled by customers, Southwest airlines largely stands alone.
Thanks to the extremely effective, maverick-cum-evangelistic leadership of Kelleher, Southwest has outlasted competitors big and small to become bigger than all of them combined.” according to McConnell and Huba, the secrets to Kelleher’s success boil down to four points.
1. Constantly talk to customers.
2. Make your company extremely open.
3. Make it easy for people to like you.
4. Create a cause.
Under the leadership of Kelleher and his team, Southwest has stayed on course, creating something of a religion rather than a company. As i see it, had the leaders at Krispy Kreme screamed “stop the car” as they began to veer off course and protected their brand Dna like Southwest has, the downfall of this great brand could have been prevented.
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