R.E.D. Marketing

The Three Ingredients of Leading Brands

Greg Creed, Ken Muench

• Publisher: HarperCollins Leadership
• Year: 2021
• ISBN:
  9781400223305
• Topic: Business
• Subtopic: Marketing Research
• Index: Business

Create breakthrough marketing campaigns by harnessing the power of R.E.D. Marketing: a transparent and flexible methodology straight from marketing powerhouse Yum! Brands.

Sidestep the marketing books, courses, and even TED talks that offer hypothetical explanations that sound sensible and embrace the proven, systematic approach of R.E.D. Marketing, which the recent CEO and current CMO of Yum! Brands applied to lead Taco Bell and KFC to double digit growth.

This book, filled with simple frameworks and engaging stories, will help everyone in your company understand what really works for driving sustainable brand growth and business success.

In 2011, Greg Creed had just been elevated from President to CEO of Taco Bell, a brand in deep distress at the time. It was on his shoulders to turn things around quickly along with co-author and CMO, Ken Muench. Together, they developed the R.E.D (Relevance, Ease, Distinctiveness) method.

It's simple methodology does not require complicated terms and a PhD to understand, it's actually quite simple—marketing works in three very different ways:

• Relevance—Is it relevant to the marketplace?
• Ease—Is it easy to access and use?
• Distinction—Does it stand out from competition?

By combining actual examples from Yum! and other recognizable brands of every size around the world with the latest findings in marketing, neuroscience, and behavioral economics, and the author's own experience marketing three different brands across 120 countries, your brand can set and achieve a truly breakthrough marketing campaign utilizing R.E.D Marketing.

1

Why We Needed R.E.D.

WE DEVELOPED R.E.D. because we were in trouble, and no one—not the best authors, nor the most prestigious think tanks, nor the most renowned marketing gurus—had a solution that worked. Taco Bell was slipping in sales. Why? A deep dive revealed some bad news. We were still positioning Taco Bell as a value food, beloved by skateboarding teenagers and extreme value seekers. We poured most of our budget into promoting the lowest cost items with humorous but unsophisticated campaigns: for instance, the classic “Yo Quiero Taco Bell” Chihuahua commercials of the late 1990s to early 2000s, and the “Think Outside the Bun” campaign that followed it. Food back then, in general, was basically all about filling up with something fun for cheap. Funyuns, anyone? Or how about those rad hot dogs at 7-Eleven, slowly rolling under a heat lamp for hours a day?

Here’s the problem though: after several years of Chihuahua advertising, transactions declined at Taco Bell. The campaign had helped make the brand ultra-distinctive, but in later years it also made it feel irrelevant to modern food culture. It was a lighthearted, quirky strategy that beseeched young slackers to eat something different today (tacos!). But all people remembered was the dog, who was meant to represent the mentality of the young male of the times: food was about filling up, craveability, and fun. Very little else got in his way on his mission to fill up on some killer grub. That’s why the first ad of the Chihuahua campaign shows the hero dog walking right past the cute female chihuahua and ignoring everything until he gets to a guy eating tacos and says, “Yo Quiero Taco Bell.” It was an absurdly ridiculous home run in culture. We even sold something like fifty million chihuahua toys. The campaign pegged Taco Bell as the “affordable and filling” option. Unfortunately, transactions continued to go down, and the brand realized it needed to pivot.

Taco Bell launched the “Think Outside the Bun” campaign in September 2001, which focused on portability, with products like the Chicken Quesadilla, the Grilled Stuffed Burrito, and the Crunchwrap. (Today, people remember the “Yo Quiero Taco Bell” catchphrase rather than the actual “Think Outside the Bun” tagline.) For five years sales grew, then that growth started to slow, and by 2009 it was clear we needed to tweak the brand again if we wanted to accelerate growth. As culture continued to shift with the exponential growth of social media, our users continued to grow out of Taco Bell—and worse, the next crop of teenagers and value-driven shoppers were unmoved by the straightforward promise of affordable and tasty food.

Something in culture had shifted and changed our fortunes, and we didn’t have the tools to detect the change and adjust the brand. We had done an excellent job of creating a breakthrough, very distinctive Taco Bell, and we were incredibly easy, with several thousand locations and fast drive-thru, but there was something in the brand that just wasn’t clicking. We realized we needed a better measuring stick and a more comprehensive way of managing a brand if we were going to have consistent success. Greg immediately doubled down on a system he had created years ago, called Sales Overnight, Brand Overtime (SOBO), which started to right the ship by balancing out our panicky impulses to slash prices, throw our budget at performance marketing, and focus on LTOs (Limited Time Offers) with a consistent push toward long-term brand building. As revolutionary as SOBO was—especially in its rejection of 1:1 marketing—we needed something more.

We’ll tell the story of how we were able to pull Taco Bell back from the edge of irrelevance more fully in chapter five. For now, it’s enough to know that this was a pivotal moment in our brand’s history, and the birth of R.E.D. Greg Creed, having been president of Taco Bell, had recently been promoted to CEO. Ken Muench was leading the strategy department of Foote, Cone, and Belding, Taco Bell’s ad agency, closely working with Jeff Fox and Greg Dzurik. Whatever happened over the next few months would be on us and our teams. Unsurprisingly, we were all deeply motivated to have a happy end result. To get there, though, one thing was clear: we were going to need a far more effective and comprehensive marketing system, one that we would develop ourselves. So, in 2013, Ken founded his own consultancy—Collider Lab—with Jeff Fox, Greg Dzurik, and a few other talented planners and social scientists and grew it to about twenty strategists before it was acquired by Yum!. The consultancy is now a sort of Center of Excellence for Marketing at Yum!. Ken still leads Collider Lab, and is also CMO of Yum!, working with all four brands around the world and helping train the company’s nearly two thousand marketers.

Collider Lab

We knew that we wanted every aspect of Collider Lab to embody the three elements of R.E.D.: relevance, ease, and distinctiveness. For starters, we sidestepped more obvious—and fashionable—locations for our office and picked somewhere a little more unique. Instead of Century City, or Abbot-Kinney, or some part of the New York metro area so hip we haven’t even heard of it, we opened up shop in Santa Ana. SA was a sleepy town south of Los Angeles, better known for its mix of recent Latinx immigrants, old-school punks, and Orange County Republicans. Santa Ana was a deliberate choice: constantly bump into people who are unlike you and new ideas will flow. (Hence the name, Collider Lab, which reflects how constant collision with different peoples, methodologies, and ideas creates better ideas.) The Surfliner—California’s coastal railway—rattles through the graceful Art Deco–ish train station every few hours or so, giving savvy commuters a chance to avoid yet another soul-crushing drive home on the 405. We’re a short drive from the best surf spot in town, which explains the fine trails of sand that occasionally track over the office floor after an early morning swell. It all adds up to an enviable quality of life that our employees would lose to hours of traffic every day in LA.

Our office, three stories up on the women’s wear floor of the now defunct Rankin’s department store, on the historic downtown Broadway, is sandwiched between a Kundalini yoga studio, a barbershop, and a group that is advocating for the normalization of marijuana (perhaps they haven’t heard it’s been legalized in California?). A recording studio that specializes in late-night hip-hop sessions is wedged in the basement. By late afternoon, the building is alive with muffled beats, burning incense, and tantric chanting adding to the vibe, if not always the productivity.

Our unconventional digs keep us plugged into emerging cultural trends. We may not know who the most relevant Latinx rapper of the hour is, or what the emerging trends in alternative health, like biophotomodulation, are but we’re just feet away from people who do. Our neighborhood lunch spot is a former swap-meet-turned-restaurant-incubator, which gives the most innovative and original local food trucks a brick-and-mortar location to experiment with their menus and build their businesses. We’ve even worked on collaborations with a few of the vendors there. Our walls are covered in yellow stickies—thousands of them—that we use to sort and refine observations and thoughts into coherent strategies and learnings. There are a few downsides to our spot, however. The elevator is perennially out of order, something that is endlessly bewildering to Yum!’s Board of Directors (which includes some very bold-name CEOs) when they visit. The air can get a little “hard to breathe” when the aspiring rappers that record in our basement light up for the night, but it’s been the perfect location for us, and specifically for the army of brilliant young minds who staff the office.

We knew that for the Yum! strategic nerve center, Collider Lab, to succeed, it would take more than an interesting location. We had to create a work culture that exemplified a tenet of Yum! and Collider Lab, “freedom within a framework.” We are blessed to have Greg Creed as our Chairman Emeritus: his brainstorming skills and ongoing work in our company is invaluable. Still, none of us had the time or the inclination to micromanage a team of hardened marketers, set in their ways, and resistant to new ideas. Instead, we sought out newly minted marketers, sociologists, anthropologists, and political scientists. We are huge fans of “PhD dropouts,” and many of our cohort have started post-grad programs but walked away once they realized what else was out there. PhD dropouts are smart enough to get into a PhD program and do the coursework, but astute and ambitious enough to realize that they can start having an impact on the world without spending years on a potentially mind-numbing dissertation. One of our senior strategists, Lila Faz, traded her poli-sci dissertation for a job at Collider Lab. Another, Jessika Gomez-Duarte, took a “break” from academia, and she’s still here nearly a decade later. We find that full PhDs can speak a different language from other folks, and that disconnection can be hard to cross. But PhD dropouts can hang with the ivory tower folks, and bring it down for the rest of us. So, the dropouts are a Collider Lab gold mine! (No offense to those few Collider Labers that did finish. We love you, too!)

The philosophy that went into creating the cultural and physical environment of Collider Lab mirrored the philosophy that went into creating R.E.D. It wasn’t enough for us to do one thing well. We needed the skills and the resources to attack every branding and marketing problem from three different angles. We had to be open to discovering truths about our clients and their brands that didn’t reflect what they—or we—had previously believed. We had to be nimble enough to reconcile ideas that might seem to be in opposition to each other, and we had to have the intellectual rigor to prove it works or dispense with the bullshit. And it was essential that we figure out new ways of investigating and understanding customers’ real impulses and the nuances of their relationships with the products in question.

Between the two of us, we have over sixty years of experience in creating tangible sales results for brands as diverse as KFC, Taco Bell, Pizza Hut, Dove, Nestlé, and on and on. Greg Creed was a CMO at Unilever, and later CMO for KFC in Australia and New Zealand before becoming the CMO of Taco Bell and eventually the CEO of Yum!, globally. Greg is a unique and legendary figure in marketing. Not only is he the kindest and funniest CEO you’ll ever meet, but he’s one of the bravest. After all, he’s the man who okayed billion-dollar ideas like the Crunchwrap and the Doritos Locos Taco on a handshake. He is also the guy who signed off on helicoptering a taco truck to the remote village of Bethel in Alaska, after a couple of teenagers prank-tweeted that Taco Bell was coming to town (a stunt that generated huge amounts of publicity, and a deep and long-lasting connection between Taco Bell employees and the residents of Bethel). Ken has been in marketing for twenty-five years, first as a copywriter and creative director, then as the head of planning of a variety of agencies (where he won a few fancy awards at the—sometimes gratuitous—international ad festivals), and then in 2011 he helped turn Taco Bell around.

Collider Lab’s debut task was to develop the first iteration of R.E.D. as we decoded the problem at Taco Bell in 2011. Once it was fully implemented, success was instantaneous. Sales turned immediately positive and have continued growing for eight solid years and counting, beating the industry average nearly every single quarter. Perhaps even more important, thanks to that crisis, Yum! now had a comprehensive marketing methodology that looked at every aspect of the business and could quickly detect and correct issues with a brand before they got critical. The system has been endlessly refined over the years, and many brilliant Yum! marketers have played a direct part in this refinement. Marketers like Catherine Tan-Gillespie, KFC’s global CMO, and Christophe Poirier, Pizza Hut’s global CMO, have battle-tested the system in 150 countries and made significant improvements to it over the years.

R.E.D. is now the bones of everything we do at Collider Lab and Yum! marketing. If you look at your marketing strategy through the R.E.D. lens and do the work we suggest, you will find a breakthrough strategy that leads to long-term growth and sustained sales. The combination of the R.E.D. system, the team of brilliant marketers across the world, and the intuitive and risk-taking leaders at Yum! (David Novak, Greg Creed, and now David Gibbs) have helped create one of the most exciting marketing environments in the industry. Marketing at Yum! is still thrilling, vital, long term, and brand building, which is why we’re writing this book: marketing is awesome when done right. It’s powerful, intellectually fascinating, creative, and fun. But more and more, we’re seeing the marketing industry at large become short term, small-minded, and full of a mess of technical and jargony tools with no real brand impact. Why? Because marketers get lured by the siren song of whiz-bang digital tools that promise instant success by targeting the right person at the right time with the right message. The mirage of short-term sales is killing what really works: building a powerful brand long term that stands out in consumers’ minds and leads to continual sales. In our experience, R.E.D. helps it all make sense again. It also makes it far more effective.

This book takes a very different approach than others out there though. If previous books and marketing theories were touted as one-size-fits-all silver bullets, R.E.D. is more like a clear and simple map to guide you through a complicated marketing landscape. If you are fearless and focused as you work through R.E.D., you’ll see that many of the most popular theories in marketing over the last decade fall flat in comparison.

We hope you’ll also find—as we do—that it is an intellectually stimulating, creatively rewarding, and deeply fun part of your career and responsibilities.

As we go through the book, we’ll show you how to revamp your marketing strategy using R.E.D. We’ll show you how to make cultural relevance work, get your ease in order, and make your strategy distinctive. We’ll explain how all three elements of R.E.D. are an important part of your success, and why all three have to be fine-tuned at some point.

If you’re running on only one or two, your brand is still going to struggle. You can be culturally relevant, for instance, but if you’re not distinctive then it’s just a nondescript public service announcement.

We’ll also explain, in the final chapter, how to prioritize each element. Please don’t go off running and try to fix all three elements at once. Pick the one that is the most critical, and work your way from there. The final chapter will guide you through a simple process to identify your lead horse.

If you implement R.E.D., you’ve implemented 95 percent of what a marketer needs to do in today’s world. We won’t say 100 percent because we’re sure there’s something we’ve forgotten, but hey, 95 percent is still a solid A. So long as your brand is distinctive, relevant, and easy to notice, you’ll be fine!

All three elements are important to building a powerful brand (see Figure 1.1).

FIGURE 1.1

2

Change Your Thinking, Change Your Results

AS WE WALKED into the Collider Lab office for the first time, we had three ideas in our heads. They were in our heads because they were so unorthodox for our industry that we worried no one would take us seriously (or hire us) if we articulated them out loud. When it came time to write this book, eight years later, we were still hesitant. We do things differently. We’ve had great results. We believe in the more legitimate strains of marketing science, the ones that are based in academically accepted psychology and behavioral economics. And we believe in simplifying these complex dynamics to the most basic, understandable, and actionable elements.

But applying those fundamental understandings is a completely different story. That’s all about creativity, intuition, big brand thinking, and bold moves. Not really endless focus groups and circular conversations on emotional benefits. It’s why Greg Creed; Yum!’s new CEO, David Gibbs; and Collider Lab work so well together. We all believe the exact same thing. Bold and decisive beats intellectually accurate every time. Our hope is that you will be surprised—maybe even shocked—by how we do things at Collider Lab. If our work was simply mildly unusual, well, ...