Listening to customers cannot be overstated. Two recent examples from well-known brands, Wendy’s and Kellogg’s, are stark reminders of what can happen when companies lose sight of this fundamental principle.
Wendy’s Surge Pricing Backlash
The Wendy’s Company, the popular fast-food chain, recently announced a plan to implement surge pricing on its menu items. This meant that a burger during dinner would cost different than at other times of the day, with prices changing in real-time based on demand. The idea was met with immediate backlash from consumers and the market alike. Customers expressed dissatisfaction with paying more for the same product based on the time of day. The adverse reaction was swift and loud, leading Wendy’s to retract its decision.
In a messaging shift, Wendy’s CEO Kirk Tanner announced that the system aims to offer discounts and value offers during slower periods rather than raising prices during peak times. This approach diverges from typical dynamic pricing implementations in other industries and highlights Wendy’s commitment to enhancing the customer experience. In a follow-up statement, the company said, “Any features we may test in the future would be designed to benefit our customers and restaurant crew members. Digital menu boards could allow us to change the menu offerings at different times and offer discounts and value offers to our customers more easily, particularly in the slower times of the day.”
“Wendy’s will not implement surge pricing, raising prices when demand is highest. We didn’t use that phrase, nor do we plan to implement that practice,” Wendy’s spokesperson Heidi Schauer said.
However, the question remains whether Wendy’s researched this messaging and concept with customers before announcing their plans. The change in messaging only came after their strategy didn’t resonate well with their customers. This scenario highlights a crucial lesson: understanding and respecting customer expectations should always come first. If they had listened to their customers during the strategy development process, Wendy’s could have avoided entirely the negative perception of surge pricing in a fast-food context.
Kellogg’s Tone-Deaf Marketing Campaign
Kellogg Company, known for its breakfast cereals, launched a marketing campaign promoting having breakfast for dinner as a cost-saving measure during tough economic times. However, many perceived this message as tone-deaf, as it seemed to trivialize consumers’ financial struggles by suggesting cereal as a dinner option. The backlash was swift, with customers voicing their displeasure at the campaign’s insensitivity.
In an interview, Kellogg’s CEO Gary Pilnick presented cereal as an affordable meal option during financial strain, asserting that the advice was “landing well right now.” However, social media users quickly contested this claim, with some likening it to the infamous “let them eat cake” statement attributed to Marie-Antoinette. This highlighted a perceived disconnect between the wealthy CEO and the realities of the nation’s economic struggles.
Despite a slowdown in food price gains in 2023, cereals and bakery products saw significant price increases, with Kellogg’s among the companies that raised prices to boost margins. The company has been promoting cereal as a low-cost meal option for various occasions, including dinner, through advertising campaigns like “Give chicken the night off.” Senior Director of Brand Marketing Sadie Garcia emphasized the convenience and cost-effectiveness of cereal for dinner, estimating that a single serving with milk and fruit costs less than $1. Pilnick remains confident in Kellogg’s data, noting that over 25% of cereal consumption occurs outside breakfast, with dinner and snacking occasions rising.
Despite the backlash, this ongoing push for cereal as a dinner option underscores the lack of customer empathy in Kellogg’s marketing strategy. Kellogg’s approach to promoting cereal as a dinner option in the face of economic hardship highlights a focus on their bottom line rather than a genuine desire to offer affordable alternatives to their customers. True customer empathy would have involved offering all their cereals at a 50% discount. This move could have served as a powerful marketing campaign while providing natural relief to consumers. Additionally, Kellogg’s could have explored collaborations featuring creative dinner recipes incorporating their cereals, such as cheesy potatoes with Cornflakes. Such initiatives would have demonstrated a commitment to prioritizing customers’ needs over profits, showcasing a deeper understanding of and connection with their consumer base during challenging times.
Lessons Learned
Wendy’s and Kellogg’s faced significant backlash due to decisions perceived as out of touch with their customers’ needs and expectations. Companies must remember that the key to success lies in truly understanding and respecting their customers rather than prioritizing profits at their expense.
Customer-centric strategies are the cornerstone of long-term business success. Companies foster loyalty, enhance satisfaction, and drive repeat business by placing the customer at the heart of every decision. This approach involves actively listening to customer feedback, anticipating their needs, and continuously improving products and services to exceed their expectations. A customer-centric mindset leads to a more substantial brand reputation, higher customer retention rates, and sustained growth and profitability. By prioritizing the customer experience, businesses meet and often surpass their goals, setting a solid foundation for enduring success.
These situations highlight the importance of three critical steps for business leaders to listen to their customers:
- Conduct Regular Market Research: Stay informed about your customers’ changing needs, preferences, and economic conditions. This proactive approach helps anticipate shifts in demand and tailor offerings accordingly.
- Engage with Customers Genuinely: Foster open channels of communication with your customers. Use social media, surveys, and direct interactions to gather feedback and show that you value their opinions.
- Analyze and Act on Feedback: Collect and analyze customer feedback without bias. Use the insights gained to make informed decisions that align with your customers’ desires and enhance their experience.
Today, customer feedback is more accessible than ever; there is no excuse for not listening. Brands must stay attuned to their customers’ voices and be willing to adapt based on their feedback. After all, a happy customer is the cornerstone of a successful business.
Chris Hood is a customer-centric strategist and author of “Customer Transformation,” and has been recognized as one of the top 40 Gurus for Customer Experience. If your organization needs to reset its mindset to be more customer-focused, contact Chris for a workshop to help you listen to your customers better and grow customer loyalty through genuine empathy and action.