when crisis equals growth

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A year before Hurricane Katrina devastated the U.S. Gulf Coast last fall, Hurricane Charley took a big swipe at Sanibel Island, the swank and fragile resort area on Florida's southwestern coast. The August 2004 hurricane wiped out much of the island's delicate beauty and left the Sanibel Harbour Resort & Spa flooded. The resort was closed for six months for restoration.

Potentially greater than the physical damage and even the lost hundreds of meetings and millions of dollars in revenue was the blow to the resort's business prospects, as meeting planners nationwide developed major second thoughts about scheduling third-quarter gatherings in what they feared could be a newly volatile hurricane belt.

Dozens of regular and potential new-business customers refrained from scheduling meetings at Sanibel Harbour during last year's hurricane season, Sanibel Harbour marketing head Barry Brown says. And when Katrina wiped out another favorite convention town, New Orleans, last fall, it reinforced travelers' worries about the entire Gulf Coast. Then yet another hurricane, Wilma, brushed the Sanibel Island area last October.

But instead of sulking about the resort's spate of bad luck and wringing his hands about its implications for the future, Mr. Brown began to make lemonade out of the lemons he'd been handed. His most important move was to target the one set of potential customers who would be least likely to get flustered at the idea of planning travel around Florida hurricanes: Floridians themselves.

"They know that vacations can be changed and moved, and they know that the effects of a hurricane-while devastating-aren't always widespread," says Mr. Brown. "People within the state understand that, but you'd have a hard time convincing people in Chicago that's the truth."

Such tactics reflect a different viewpoint by Mr. Brown and his counterpart marketing chiefs in Florida tourism than they might have displayed several years ago: a determination not to flinch in the face of a troublesome issue that could cloud and perhaps even overwhelm his industry. It's a strategy to neutralize such huge negatives, at the least, and to leverage them into positives for the brand, if possible.

Because it can enable marketers to make the best of an often uncontrollable and potentially devastating situation, it's an approach that's catching on. It's also being used, for example, by CMOs of oil companies trying to blunt consumer anger over high gasoline prices, of food and restaurant companies attempting to overcome blame for America's obesity crisis, and by financial-services companies dealing with the plague of identity theft.

"As an aggregate, CMOs are seeing that the reality of being transparent and clear to customers is that they need to deal aggressively with things that are negative," says John Grace, a veteran branding consultant and president of BrandTaxi, in Greenwich, Conn. "They're reacting on a human level, and a level of reality-and if you don't do that today, consumers don't trust you."

More CMOs are reacting this way also in part because "they're getting out of the office more and putting their feet on the street, getting a better feel for the high-profile issues," says Beth Zimmerman, principal of Cerebellas, a Long Beach, N.Y.-based marketing-consulting firm.

Of course, what Brown and other CMOs are demonstrating isn't classic crisis management, which is more immediate and ad hoc. The new approach is something more strategic and long-term, part of a deliberate and prolonged effort not only to blunt the immediate damage created by a surprise occurrence or damaging spike but to turn around a troubling issue.

For that reason, such efforts often are more successful than simply muddling through a crisis because they require the sort of ground-level rethinking that can create new market opportunities, not just neutralize unfavorable developments. "We used to call this `flaw recovery'; now it's called `negative acknowledgment,"' Grace says. In any event, "smart CMOs are figuring out that this approach can create a communications dialogue that they can use to build relationships proactively."


This approach has been used perhaps most successfully by leading financial-services brands that have let American consumers know recently that they've been taking strong steps to thwart identity theft, one of the fastest-growing crimes of the new millennium.

Citigroup answered in late 2003 with Citi Identity Theft Solutions, a package of services to help victims recover their identities even if the crime hadn't involved a Citibank product. When Citibank also aired TV ads from Fallon, Minneapolis, beginning in October 2003, that touted its ability to deal with this problem-and in a gently humorous way, by having victims talk in the mismatching voices of identity thieves-consumer worries began to ease.

"If customers haven't been victims, their response is one of reassurance," says Brad Jakeman, Citigroup's managing director of global advertising. "But the real power is with the customers who have been victims, because once they actually experience what we do for them, they're amazed."

Because of identity theft, "It became very clear in the last two years that you had to attach security and trust to your brand in order to remain a leader in this space," says Susanne Lyons, CMO of Visa USA. "So we had to reassure the public in a way that's interesting and not alarmist with our marketing activities, so that people feel more secure instead of scared."

Thus, Visa recently has promoted what Ms. Lyons refers to as "five layers of security" that protect its customers against identity theft, using cultural icons including New England Patriots quarterback Tom Brady, Donald Trump and the cartoon character Underdog in TV ads from former agency BBDO, New York. Early last year, Visa also supplemented with detailed print advertising "that was almost like a public-service announcement," as Ms. Lyons puts it. "Were we just rubbing salt in the wounds? Research afterward suggested not: that consumers needed to be further reassured." About 82% of consumers felt more confident about Visa's ID theft protection after seeing those ads, she says.

Metropolitan Life Insurance Co., meanwhile, built on the industry's response recently by creating identity-theft insurance as a free rider on its homeowners' and renters' policies. "This is a really strong policy feature, especially with young people getting renters' insurance," says Robert Lundgren, MetLife's VP- corporate marketing. "We wanted to come at it from a solutions standpoint rather than just, `We agree; this problem is really bad."'

Acknowledging a Crisis

It took some time-and the threat of sweeping lawsuits-for food and restaurant companies to agree that the problem of obesity and overall poor nutrition was a really bad one for their American customers. But from a general initial stance of denial and then defiance, CMOs of mainstream American food, beverage and eatery brands largely have switched to a strategy of acknowledging the health crisis and positioning themselves as providers of solutions.

PepsiCo and Coca-Cola are touting their juice drinks and bottled waters. Kraft is bragging about smaller portions of its foods for kids. Blimpie has just introduced a new whole-grain bun with the enthusiasm that it used to reserve for taste-oriented new products. "We don't just want to offer things that are technically healthier but want to offer our customers a choice," says Mark Mears, CMO of the Atlanta-based sandwich chain.

Even McDonald's has made great gains with this approach, reversing the once-laughable notion that it can be a healthful place to eat. Jokes about poor nutrition of Mickey D's fare were banal, but the stakes rose greatly in 2003 when a lawsuit charged McDonald's with complicity in America's childhood-obesity epidemic. After a time of doubt, McDonald's then-CEO, the late Jim Cantalupo-faced with the choice of taking a defensive posture on the issue of healthfulness or going on the offensive-chose the latter.

The company announced in 2003 that it would eliminate artery-clogging trans fats from its fry oil (though formulation problems still have prevented it from doing so). It also has introduced a more robust lineup of salads; promoted milk and fruit in place of soda and fries in its kids' meals; and even, for a time, offered an "adult" Happy Meal that included a bottle of water and a pedometer.

Already, many consumers and even the news media no longer automatically cast the company as a nutritional villain. But can the company retain this new aura over the longer term? "McDonald's taught America and the world to eat breakfast," says Ken Harris, managing director of Cannondale Associates, in Evanston, Ill., a consumer-goods consulting firm that is working with McDonald's. "If they can do that, they can teach America and the rest of the world how to eat healthier."

Some detractors agree that McDonald's could make a difference in America's overall nutritional standards, but not without a much more profound change of heart rather than just some menu additions and a new marketing emphasis. "They're still killing thousands of people a year with what they're selling," says Walter Willett, a renowned nutrition researcher at Harvard University. "Instead of asking every time if you want fries, their people should be asking, `Do you want diabetes?"'

Moreover, some smaller competitors call the big food brands impostors, despite all the new marketing noise to the contrary. PepsiCo's Quaker Oats unit now is rolling out its new fortified Quaker Milk Chillers dairy-based drink across the U.S., for example. But Roy Warren, CEO of Bravo Foods International, says he doesn't "buy the premise" behind Milk Chillers. "It's 50% milk and 50% water-that's why it has fewer calories," says Mr. Warren, head of an Orlando, Fla., company that has formulated nutritionally enhanced milks.

Trumpeting the Positives

Arguments over whether mainstream food and beverage companies really have changed their stripes-or are just marketing as if they have-echo concerns that surround the energy industry as some major oil companies have sought to dampen consumer anger over high gasoline prices.

BP, for example, has been arguing for years through a deliberate, long-view public-relations and advertising campaign that it is the "green" oil company that is more concerned about the planet's sustainable energy future than about short-term profits-that it is "Beyond Petroleum."

"We have not only reduced our greenhouse-gas emissions but have taken an increasing part in the global debate on climate change," John Browne, BP's CEO, explained in the company's 2004 annual report on sustainability. "More recently, we have recognized the contribution we can make toward education, a powerful force for development and awareness."

Yet it's not only environmentalists, but also many American consumers, who can't quite stomach the idea of the world's second-largest oil company acting "green." The advantage that the Florida tourism industry has over BP is that there is complete harmony between what it wants and what its customers want: for the latter to enjoy a leisurely vacation in the sun. But there remain differences among the industry's CMOs over how to treat the consumer perception that Florida has become an increasingly dangerous hurricane belt, even as high gasoline prices also are threatening their vacationers' plans.

Joe Couceiro, for example, is still having none of the "H" word. As VP-marketing for Anheuser-Busch's Florida tourism properties, including Busch Gardens in Tampa and SeaWorld in Orlando, he's well aware of the hurricanes that crisscrossed Orlando in 2004 and of the ever-present threat of landfall during hurricane season in the Tampa-St. Petersburg area. "But we're not going to focus our advertising and marketing strategies on the negative," Mr. Couceiro says. "If anything, we're addressing any negative perceptions caused by the hurricanes by shouting louder about the positives of our destinations."

Sanibel Harbour's Mr. Brown believes more strongly in acknowledging the legacy and the seemingly increased threat of hurricanes. In the aftermath of Hurricane Charley, the resort even helped skittish meeting planners across the U.S. transfer conference bookings to other destinations.

Yet while he's increasingly targeting in-staters who are more nonchalant about hurricanes, Mr. Brown isn't giving up on other crucial markets for Sanibel Island, including foreign tourists. He and his staff now are paying more one-on-one visits to big centers in Europe that book vacations for the continent's travelers who may wrongly believe that Sanibel is permanently devastated.

"We are taking a grassroots approach, overcoming obstacles without a lot of special spin," Mr. Brown says. "They ask us, `I thought you guys were completely underwater-are there any trees left?' And we take our digital photos with us, give them to them and say, `This is how it looked the day I left. What do you think now?"'

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