Social License: Coca-Cola’s Secret Recipe for Brand Love
Ms. Sonya Soutus, Senior Vice President, The Coca-Cola Company
Keynote Presentation: Ragan Employee Communications Conference
If there’s such a thing as corporate Camelot, The Coca-Cola Company lived it for much of our first 113 years.
We were the company that made Santa Claus even more popular than he already was. We were the darling of Wall Street. We were the company that taught the world to sing. Along the way, we became the most recognized brand in the world.
Then came Belgium.
On June 8, 1999, the first hint that The Coca-Cola Company had a problem trickled in from the small Belgian town of Bornem.
School children, complaining of nausea, dizziness and headaches, had been hospitalized.
In all, over the course of the next few days, 100 people were hospitalized. All of the cases had one thing in common. Before they felt sick, the kids said they drank Coca-Cola.
It didn’t take long for the worldwide media to pounce.
What was the cause? Where were the quality controls? What were we doing about it?
If Coke wasn’t safe to drink in Belgium, what about Birmingham and Boston?
Belgium marked a seminal moment in what we now refer to as our “short” 125-year history.
We didn’t know it at the time, but Camelot had just gotten its first wake-up call.
Others would follow.
Next came two major legal actions over workplace rights in the U.S. and Columbia.
That was followed by charges that we were depleting groundwater in India.
But the story faded away in Belgium. … We set ourselves back on course following the racial discrimination lawsuit in the U.S. … And we were cleared of any wrongdoing in Columbia and India.
But the damage to Coca-Cola’s reputation was done.
Fast forward a few years and a new wave of challenges began roiling the waters.
This time, it was the medical and scientific communities that made beverage companies public enemy No. 1 in the fight against obesity.
It was a frustrating time at Coke. It reminded some of 1985 and the launch of New Coke.
Some of you are old enough to remember New Coke, which debuted on April 23, 1985. That was the day we took the biggest marketing risk in consumer goods history by changing the formula of our iconic brand.
Quickly – and I do mean quickly – consumers reacted. Seventy-eight days later, we announced the return of the original formula.
It was a dramatic reminder that we don’t own our brands – our consumers do.
For the company that had been viewed as an exemplar of corporate citizenship in communities around the world, all of these events clearly showed we had lost our way.
Some would say humble confidence had turned to corporate arrogance.
Whatever the reason, we’re convinced that the tsunami that started in Belgium and continued for another decade was exactly what our company needed.
That sounds strange, I know. But in hindsight, it’s clear we had lost sight of the important role that image and reputation play in business. In our business and I bet in yours too.
But here’s the thing: Image and reputation are important for a new, more relevant reason today than many once believed. They’re important because they affect business performance in real and profound ways.
Our company’s global vision is to refresh the world, inspire optimism and create value while making a difference.
But I’m convinced we won’t get where we want to go unless we earn an undisputed social license to market and grow our brands.
What do I mean by social license?
Social license is the bridge that connects brands and consumers in the most authentic and honest ways.
It’s the goodwill that surrounds a brand and tilts the playing field in its direction.
It’s the permission consumers give themselves to feel good about handing over their hard-earned dollars to a brand that shares their values.
It’s the political cover that protects a brand when it needs someone standing by its side.
Social license is all those things and it comes only when you have trust and admiration.
At Coke, we believe social license is gained and reinforced by focusing on four things:
- Establishing leadership as a corporate citizen.
- Deepening relationships with communities.
- Demonstrating a commitment to the well-being of consumers.
- And by being responsible stewards of our environment.
Just like you don’t hang out with people you don’t trust and admire, you don’t want to support companies you don’t trust and admire.
I’m not saying a company’s stellar reputation as a steward of the environment or a supporter of high school football is the deciding factor when someone is shopping for financial services, jeans or even beverages.
Products have to work, look good and taste good, after all. I’m just saying it matters.
We also know that trust and admiration are often heavily influenced by opinion shapers. In our case, that’s a diverse group. Employees, consumers, opinion leaders, customers, bottlers, investors, regulators, communities and NGOs.
Individually and collectively, their opinions matter. They also can affect how many bottles of this [Coke Classic contour bottle] we sell.
Ultimately, it is all about selling our product.
Along with the 90 other people on our Public Affairs and Communications team, I’m proud to sell this product. We believe it’s our No. 1 job.
Our business cards may not say sales or marketing, and we may be separated on the org chart from folks who have those words in their titles. But we’re no longer separated philosophically.
The leaders of our North America business don’t talk to associates these days without mentioning the importance of earning and protecting our social license.
We don’t develop a major marketing program in North America that doesn’t include a social license component.
Our customer teams and supply chain colleagues now welcome us into their planning conversations because they’re convinced that we’re a competitive advantage.
Let me tell you, as someone who has struggled in my career to break free from the perception that communications is the corporate equivalent of the jewelry department – fun to try on, but more an accessory than a requirement – this is huge.
Since some of you may be mired in that same struggle, let me tell you how Public Affairs and Communications has helped The Coca-Cola Company get back on track.
Now don’t get me wrong. I believe we’ve always been very good PR practitioners.
The problem was, we looked away and the world changed. Suddenly, no company was immune to scrutiny. Coca-Cola included. Consumers realized they really were in control.
So, a few years ago, we stepped back and honestly asked ourselves if our programs were building the right kinds of equity with the right kinds of opinion shapers.
We decided the way to play a more strategic role – one our business leaders would understand and appreciate – was to reinvent ourselves.
An intensive, weeklong session in Atlanta, with many of our best Public Affairs and Communications people from around the world, led to a new strategy. We called it “changing the game,” and let me tell you, there was never a more accurate or appropriate name.
We decided we no longer would be the sometimes misunderstood guys in the PR and Public Affairs silos who wrote press releases and did government relations.
We would become marketers to opinion shapers.
From that newly minted job description, we defined strategic priorities that explicitly demonstrated our team’s support for our business.
And then we started thinking and acting like business people and marketers.
So let me talk to you about how we’re marketing to opinion shapers to earn the social license to grow our brands.
Like the marketers in our company who launch and nurture brands, we first needed to know more about our consumers.
We had a head start on this one because Coca-Cola has great consumer insights that we’re continually gathering from U.S. markets and markets around the world.
The more we thought about our audiences – the politicians, pundits, media, bloggers, NGO’s, bottlers, investors, regulators, suppliers, civic organizations – the more we realized how multi-faceted and connected our consumer base really is.
For example, today’s stay-at-home parent also may be a professional whose work influences consumers.
He or she may be a neighborhood leader whose ideas are influencing a community.
Maybe they’re a blogger who shares thoughts and opinions on a daily basis.
Without a doubt, they’re voters and part of multiple constituencies.
Of course, they’re also consumers. And when they wheel a grocery cart down a supermarket aisle, they’re bringing their whole self.
The purchasing decisions they make are influenced by what’s in the media, what their neighbors are talking about and by their own beliefs about important issues.
It became obvious to us that to make sure that our messages got through, we needed to communicate to consumers on multiple levels and through multiple channels.
This chart shows how we look at that challenge and how we try to take advantage of every asset and communications channel at our disposal. From paid, earned and social media to employees, bottlers and partnerships.
So that’s the first thing we’re doing to build social license – we’re looking holistically at our target audiences.
The second thing we’re doing is leveraging some amazing assets to encourage brand love and advocacy, community by community.
A great example is the “America Is Your Park” campaign.
Coke has had strong relationships with America’s parks for more than 40 years. But only recently did we really start taking advantage of those partnerships.
Here’s a breakthrough idea for anyone new to this business: In order to get credit for something, you sometimes have to tell people what you’re doing! (Smile)
Two years ago, in collaboration with the National Park Foundation, America’s State Parks and the National Recreation and Park Association, we launched the “America is Your Park” campaign.
The program – which encourages families to get out and enjoy our nation’s parks – also encourages them to go to our LivePositively.com web site and vote for their favorite park.
The three parks with the most votes will receive $100,000, $50,000 and $25,000 grants from
Coca-Cola. Seven other parks will receive $10,000 grants.
The voting closed on September 6, but not before a couple of well-known guys joined the campaign.
Our friend, Ryan Seacrest, was nice enough to upload a video while playing in the George C. Page Park in Los Angeles. Take a look.
But the real power of this kind of program is not at the national level as much as the local level.
Take, for example, the case of a small park in Minot, North Dakota, which was devastated by flooding earlier this year.
Actor Josh Duhamel often visited Oak Park while growing up in Minot. When he learned about our program, he mounted Twitter and Facebook campaigns that generated millions of votes.
Oak Park was our big national winner, thanks in part to Josh’s support and a re-tweet from Ellen DeGeneres. By the way, third place went to Cunningham Park, in Joplin, Mo., which was one of the towns so heavily damaged by tornadoes this spring.
In all, more than 13 million votes were cast for parks across the U.S. We got tons of media coverage from traditional media outlets and on social media sites and racked up more than 121 million earned media impressions.
We also made strong connections with local political and civic leaders. One day they may need a partner for an important project. One day we may need a friend in the right position. We’ll both know who to call.
These local events are great examples of what we’re now able to do thanks to the integration of our North America business with our bottling partners in the U.S. and Canada.
Before the integration, we had two different PAC teams working alongside each other, but often not taking advantage of each other.
By hardwiring the two sides together, we can now bring a full campaign approach and mentality to every opportunity.
I’ll mention another example before moving on.
In cooperation with NASCAR, we continued our sponsorship of Family Track Walks this year at five race tracks across the country.
This is a grassroots program that gives race fans a chance to walk alongside some of their favorite drivers. If you’re a NASCAR fan, you can imagine the thrill of being on the same track where drivers like Michael Waltrip, Kurt Busch and Jeff Burton race.
Here’s a shot of one of our Family Track Walks at the Charlotte Motor Speedway in May. … Isn’t that great?
The third way we’re marketing to opinion shapers to create social license is by engaging our own people as advocates.
The idea here is pretty simple. Arm the 100,000 Coca-Cola employees in North America with information and tools they need to answer questions about our company and brands.
And then encourage them to share the story of how Coca-Cola brings value to everyone it touches.
The program includes posters, banners and pocket cards. … All sorts of stuff to encourage and empower employees to become enthusiastic ambassadors for Coca-Cola with friends, family members and others.
If we can continue to multiply the program’s benefits through the Coca-Cola system’s 750,000 employees, we’ll influence opinion shapers and consumers worldwide.
Those are a few examples of the three things we’re doing to enhance Coca-Cola’s reputation and image in order to earn a social license.
First, we’re looking holistically at our audiences. … Second, we’re leveraging assets to enhance brand love. … And, third, we’re engaging our own people as ambassadors.
So, how are we doing? Iis it working? I think so.
The most tangible evidence is that marketing and sales have embraced the idea that Public Affairs and Communications can be their first line of defense and their best source of positive energy with customers.
They know that if their marketing and sales messages are going to resonate, consumers first have to allow the message to break through the clutter. And there can’t be any hidden obstacles stopping them. In many instances now, we’re softening the ground to allow that to happen.
Quick story. Not long ago, I accompanied members of our ??? brand team to … [Would be great to have a short personal story here – maybe about making a customer call with a brand team.]
We’re also communicating preemptive counter messages.
We’re acknowledging that certain brands contain sugar. And we’re staunchly defending full-calorie beverage options.
But we’re also countering with information that reminds consumers and opinion shapers that we offer more than 500 beverage options – including diet drinks, waters, juices and teas – in North America alone.
These messages are mitigating some of the vitriol and giving people something else to consider before they form an opinion.
We weren’t doing that – I should say we weren’t doing enough of that – before. As a result, we were allowing other people to shape and control the conversation.
Against the background of a deteriorating economy, lagging consumer confidence and a backlash against corporate America, we were an inviting target.
Finally, we had to admit that we could no longer take unqualified brand love for granted.
I’m happy to say, we’ve inserted ourselves back into the conversation.
We’re communicating in ways that allow our people to call on customers without having to explain our role in the nation’s obesity problem. Or talking about where all of those plastic bottles really go after someone drains the last ounce of refreshing liquid.
We’re marketing our brands by making our mission the message.
Participating in and in some cases, leading these conversations helps us think and act more like marketers and less like traditional Public Affairs and Communications people.
We take great satisfaction in having helped our business leaders see the need – and the value – in the new 7.5-ounce mini cans that are so popular now with consumers concerned about portion control.
We take great satisfaction in having helped influence Coke’s pioneering move to show front-of-pack calorie information on beverage packages.
We also take great satisfaction when our marketing folks want to collaborate with Public Affairs to generate brand awareness. That’s what happened recently when our public relations group took the lead role in promoting SmartWater, one of our active lifestyle beverages.
Instead of using traditional paid media, marketing took our public relations team’s advice and decided to use social media for the launch.
They worked with Jennifer Aniston to produce a video. We were pretty sure the video would go viral and get some attention, especially after they gave it the name … “The Jennifer Aniston Sex Tape.” Here it is.
Now that’s how you make sure a video goes viral!
With just enough advance notice to some key media outlets, the video received a million views the first day on YouTube and seven million in the first week.
It also saved the company some major media dollars when the social media costs were compared to what might have been spent in traditional media.
Now that’s marketing! It’s also communications.
I’ll close by saying simply that we’re not there yet. We will do our best to shine the brand today, and we’ll get back up and do it again tomorrow. As we all know in this business, there really is no finish line in our business, and I think that’s especially true where image and reputation are at stake.
Our goal is for Coca-Cola’s North America business to be recognized in the same way that we think of ourselves.
As solid citizens in communities across the country.
As a company that supports what’s important to our consumers.
As a company that has the support of local and national opinion shapers because of what it does not only to refresh the world, but also to make it a better place.
As a company that has earned the social license to operate.
Thanks. It was great to be with you today. I want to thank Mark Ragan for the invitation.
I’ll be happy to take some questions in the time we have left.
Phone: (912) 602-2529
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