• Punishing Your Fans: A Lesson From Kraft

    Posted on May 28th, 2009 by and currently 18 commenting.

    I recently received this email from Brandy Amidon, the Princess of Particulars and CPA at Brains on Fire, yesterday:

    I’m a lover of Kraft Foods. I started receiving this FREE magazine years ago (got one at my desk). It contains these awesome recipes, which of course all include Kraft products. I’ve recommended this magazine to everyone I know that loves to cook. We’ve all made recipes out of this magazine. When you see that recipe on the church buffet table, everyone knows it was on the cover of the last Kraft issue. The website is awesome as well! You can even search recipes by items in your pantry.

    Why am I upset? They’ve started charging for their magazine. After all these years, after all the “yes, please keep sending me those awesome magazine” surveys I’ve filled out. They’ve started charging. Yeah, it’s only 12 bucks. But did we care that every ad was for Kraft and every recipe included Kraft products? No. Because if was supposed to be a gift to their customers. And now, they are just like everyone else. And I’m not special anymore…and neither is my mom.

    Wow. Huge, massive FAIL on Kraft’s part. All of a sudden charging for something that a large amount of people – a lot of which were fans of yours – used to get for free. For free. I just don’t understand the (non) thinking that goes into a move like this. Did you read what Brandy said? She’s recommended the magazine to everyone she knows who shares her passion. She doesn’t even mind all the Kraft ads in the pub. She’s an advocate (and a great cook). And Kraft doesn’t care. All they care about is a soft economy and passing the buck to make up for their losses.

    I followed up with Brandy and asked if she’s going to pay the $12 for the subscription. She isn’t.

    I asked her if this would put her off of buying Kraft products. And she answered that it’ll probably be indirectly, but yes, she’ll probably be buying less Kraft brands because all of the recipes in the magazine recommended Kraft products… “and you ALWAYS follow the recipe.”

    What’s the real trade off here? Will Kraft really be saving a lot of money in the long run? Or have they damaged their relationship with one of the most important groups they could ever have – their base?

    For shame, for shame.

  • http://www.effectwebmedia.com Jillian Koeneman

    Wow. That is a major fail on the part of Kraft. What were they thinking? I also loved that magazine and didn’t mind the ads or self-promotion from Kraft. I bought more Kraft products because of it.

  • Meghan E

    I am also a HUGE kraft fan and a receiver of the above mentioned magazine. I loved getting it and always dog-eared the simple recipes in the magazine. I agree with EVERY Brandy had to say about the switch. I was very upset when I found out that they were going to charge for it now. I think its terrible and I will not be paying the $12 for the magazine. I will miss seeing it in my mailbox :(

  • http://jasonkeath.com Jason Keath

    If they saw the long term value in this, which they should definitely see, and it was a pure financial hardship decision, they should have written their customers and told them that. Give them options. Ask them… Should we include other ads? Charge a nominal rate? And at a minimum give people the magazine as an email or online version.

    Lack of a change plan, lack of consideration for the impact on real relationships.

  • http://www.everydaypr.net susan hart

    You NEVER take anything away from consumers or employees – it’s like removing a military rank or taking a child’s toy for no good reason. I agree with Jason – before you completely change your approach, inform your consumers and give them choices.

  • jmb95959

    This is a very old, very successful business model, typified by the phrase … “The first one’s free.”

    Not only should this change have been expected … seems to me it’s a good thing to eliminate another monthly shipment of printed paper and the attendant diesel & vehicle maintenance costs.

  • http://www.getorganizedbaby.com stephanie lasure

    I believe when we come out of this recession/depression, the companies that will be left standing will be the ones who understood their marketplace, their customer relationships and completely re-tooled their marketing and financial models. What KRAFT did, is exactly what the credit card industry is currently doing – punishing the good creditors, the consistent payers – by lowering credit limits, increasing interest rates and and outright closing accounts. No relationship outreach, no choices, no communication.

    We, as consumers have more power than ever (queue cheesy music!). Through our own creative approach we speak out, tweet out, facebook out those ineffectual corporate practices and we are not lazy! We will stop buying, we will close our own credit card accounts and we will put our hard earned money towards those companies/industries that are creative, making a difference, reaching out for customer input into their products and marketing models and are giving us choices by building a relationship.

    Bye, bye Kraft.

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  • http://www.danielisanidiot.com Daniel

    Ouch. Kraft, that hurts.

  • http://www.iangilyeat.com EH

    Wow, I too looked forward to receiving that magazine. I think their original plan was a great marketing tactic because not only could they advertise Kraft products, but because so many of the delectable recipes used their specific products it increased their sales because people wanted to make the recipe. It will be interesting to see if sales decrease because of it.

  • Ken

    Years ago Olive Garden was told by corporate to save some money. One obvious choice was the free chocolates they gave away at the end of each meal. It saved millions. Better yet, they got another company to offer their mints for free in their place. What a huge mistake. As the President of Olive Garden later pointed out once they added them back to the guest experience – I am paraphrasing here – you never know how the individual parts of a guest experience add together to make the whole experience until you take one too many parts away to save some money.

    The poor employees were verbally abused by customers, guest complaints skyrocketed, it was horrible!

  • http://www.presentationsthatstick.com Jim Watson

    Sounds like Kraft violated rule #1 re: cutting costs:

    NEVER CUT COSTS THAT WILL BE FELT BY THE CUSTOMER!

    (or, at least, not until you’ve cut costs in every other possible place… and I suspect Kraft left a few invisible costs un-cut.)

  • http://www.brainsonfire.com Justin

    I don’t agree. Paying $.50 per month (2 years for $12) for awesome recipes and such isnt’ that big a deal. Sure it’s great when it’s free, but haven’t you said in other blog posts that you shouldn’t give away your stuff for free? It devalues you, etc.

    Maybe it’s because i’m not into kraft or its recipes, but it sounds like everyone’s interested only if it’s free. So how great could it be?

    C’mon! It’s 12 stinking dollars for 2 years of magazines. You spend that much eating out once, or stopping by Starbucks a couple times a week.

    Kraft. You did nothing wrong. If you need the money, it’s not bad that you get compensated for your publication.

  • http://www.AskTheWealthSquad.com Scott Lovingood

    It is the difference between functioning on social norms and expectations rather than market expectations. On the social side people felt like they were part of the Kraft family because the magazine was given to them freely. They are invested in it, pass it on to others, advocate and sell the product as free marketers. Once you move into the market norms then it is a price value comparison. $12 isn’t much but it changes the dynamics of the relationship.

    Read Predictably Irrational by Dan Ariely. These ideas are clearly stated in his book and backed up by experimental research.

    Would you charge your family for Thanksgiving dinner? For a cook out you invited them too?

    Changing the relationship shifts it completely.

    Scott

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  • Jan

    Should have told customers times are tough so we are moving this publication online to cut some of our costs. Customers still have access to recipes and Kraft has access to a huge base of people online that loves their products. What a miss.

  • Paige S. Simmons

    I don’t think it’s about the $12.00 dollars, it’s about the principal. Having said that I won’t pay $12.00 for the magazine, but I don’t think I can do without my Kraft Spicy Shake-n-Bake or my Honey Grahams as long as they don’t take that away I’m good.

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  • Gina Frank

    I too was disappointed when I stopped receiving my magazine. It wasn’t so much about the cost as it was that I never received any notice about it. My mother was also receiving the magazine for free and still is which I can’t figure out! How do they decide who has to pay for it and who they give it to for free!