Secret to Breaking the 2-Year Curse: It's the Sales, Stupid

Denny's Former Chief Marketer Mark Chmiel on How to Find Longevity in the Role

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A correction has been made in this story. See below for details.

We all know the statistic and scratch our heads: The average tenure of a CMO is around two years or less. Why? Usually it takes that long to fully understand the intricacies and true insights of most industries, companies and brands. Repeating an action over and over again anticipating a different outcome is a humorous definition of insanity. So are CEOs and boards insane?

DID SOMEONE SAY FREE FOOD? Denny's Free Grand Slam Day aimed to cure brand malaise.
DID SOMEONE SAY FREE FOOD? Denny's Free Grand Slam Day aimed to cure brand malaise. Credit: Ben Margot
In the 1992 presidential election, James Carville gave Bill Clinton an astute political insight: "It's the economy, stupid." With a single focus at the absolute core issue, it swept Clinton to victory.

Ask any CEO what keeps him up at night, and I guarantee the answer will not be a new 30-second spot or the social-media connection that his or her brand is making, or even a new product introduction. CEOs worry about something more primal -- sales. Because every quarter, the Wall Street analysts remind them what's most important: It's sales, stupid.

We, as marketers, have to come to the reality that CEOs have a boss: the board and shareholders. They may talk the talk about building the brand, investing in intangible equity and competitively differentiating; however, at the end of the day, they are objectively evaluated by top-line sales, margin and profitability. So they must walk the walk.

Herein is the problem -- or opportunity. CMOs are branders. We realize we must position and differentiate a business, moving it from a commodity to a brand. Further, we inherently know that if we focus on short-term tactics, we will generate only short-term sales.

Seeking longevity, we focus on the brand -- but this creates a disconnect with the CEO, the board and Wall Street. We are building the future while they are evaluating the present.

For example, at Denny's, we had a late-night (10 p.m. to 5 a.m.) business facing significant guest-count erosion and loss of sales. Historically, this day-part segment was made up of third shifters on lunch break or on their way home, and the younger "club" crowd. Extensive research revealed that many third-shifters were now using QSR drive-thru, looking to save time. However, the "club" crowd was actually growing because they were attending events and concerts and wanted to "keep the night going" through camaraderie with their friends.

Using event marketing, PR and social media, we began building a relevant point-of-differentiation through a quite unique music program sponsoring up-and-coming bands, and creating a Rock Star menu. This included items that were created by the bands themselves. For example, the Plain White T's helped with a white-chocolate-cheesecake milk shake that won an industry culinary award.

The two-year repositioning was so well received by consumers that we applied it to our concept-development work and created a separate restaurant brand for new distribution on college campuses. One recently opened in California this past month with preliminary guest count and sales results that are strong.

WHAT TO ASK
1. Are my marketing plans sales-focused?

2. Do they significantly help achieve the corporate financial objectives?

3. Are they aligned with other company disciplines?

4. Do I challenge my department and agencies to be sales-focused?

5. Most importantly, am I seeking the executive committee's, the CEO's and the board's input and agreement on a regular basis?

But -- and here is the "but" -- the late-night base sales remain soft. They are improving, but not as rapidly as impatient expectations require. The marketing significantly improved the brand, but sales are taking longer and the branding program is now in jeopardy.

This brings us to the critical role of CMOs. While building the brand for consumer preference, higher margins and competitive insulation are important, the critical role (for our actual survival) must be to sell the product or service.

We must be on the same page as our CEO and board, but we also must be bigger -- leading the brand-building.

Two recent examples come to mind: Hyundai's Assurance program and Denny's Free Grand Slam Day. Consumers considering a new auto faced the uncertainty of job security, and to make a significant purchase requires a pretty high level of risk-taking. Hyundai not only discovered the insight, they creatively solved it. Oh, and rumor has it, one of their finance people came up with the solution. Important to note, the Assurance Program significantly drove sales, and it also built the brand.

Brand-building and sales are not mutually exclusive.

Denny's Free Grand Slam Day was developed to jump-start the consumer's brand malaise. It is a 56-year-old icon with more than 95% awareness and more than 90% trial, so consumers feel as though "they already know it." With continually declining sales, what could possibly reawaken them? Referring to the Super Bowl, Nelson Marchioli, CEO, recently said, "To be quite candid about it, last year was the best day this brand has ever experienced, both internally and externally." Those are CEO code words for "it jump-started sales." Over 2 million people came to Denny's on the day. Deliver the present, and protect the future.

Both of these initiatives drove significant sales while also enhancing their respective brands. This simply suggests that we CMOs must be caretakers for both sales and the brand -- and that the emphasis in the marketing mix be equally, if not moreso, on sales than brand.

In today's post-Great Recession economy, this could not be truer. Consumers are spending less, market segments are smaller, and the result is huge share wars. A.G. Lafley, former CEO of Procter & Gamble, said that consumers are recalibrating their family budgets, and it's going to be this way for a long time. So the pressure on the CEO and board is magnified.

Back in 1992, there were many issues facing the country, and both Clinton and Bush debated each and every one of them ad nauseam. Carville finally focused the campaign, and the outcome was then inevitable.

Want to break the two-year cycle? It's sales, stupid.

A Grand-Slam strategy

Denny's offer last year of a free Grand Slam breakfast -- which consists of two pancakes, two eggs, two sausage links and two pieces of bacon -- advertised by its first Super Bowl spot, lured more than 2 million people. Each restaurant gave away upward of 1,000 Grand Slams, some surpassing 2,000.

The 55-year-old casual-dining brand, which enjoys about 95% awareness, had slipped from popular consciousness recently.

The company estimated that the Grand Slam giveaway generated $50 million in free publicity.

It drove significantly positive guest count for that day and a period of time thereafter, and actual sales were positive because the guest count was such an abnormally high number. And visitors bought additional items, such as coffee, juice, extra bacon and toast.

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Mark Chmiel is Denny's former chief marketing officer. He is currently advising private equity in the restaurant space. He can be contacted at linkedin.com/in/19markchmiel.



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CORRECTION: An earlier headline identified Mark Chmiel as Denny's current CMO.

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