Wal-Mart save your pennies.

Wal-Mart, the world’s largest retailer, started a new ad campaign yesterday designed to defend its reputation and praise its record, as an employer and corporate citizen.

Come on, who are they kidding? Not me, that’s for sure.

After being hammered for decades by bad PR for the low wages and benefits it pays its workers, Wal-Mart thinks a few slick advertisements will repair its brand? Management must be drinking the Kool-Aid served by their ad agencies down in Bentonville.

Advertising messages cannot change the mind of a consumer. And most consumers believe that Wal-Mart is a great place to shop for low prices but not the best place to work.

Wal-Mart management says they want to take their case right to the people. But unfortunately the public is unlikely to believe or listen to their message because advertising delivers a self-serving message which holds no credibility.

Running ads might make board members feel better in the short term, but ads are unlikely to do anything for stockholders in the long term.

If you are faced with bad PR, running ads defending yourself actually sends the wrong message. People think the reverse of what you want them to believe. The more you deny something, the more people tend to believe you are guilty. Remember Bill Clinton saying “I did not have sex with that woman.” The more he denied it, the more we all knew he did it.

Or Taco Bell last month running full page ads with the headline “Taco Bell food is safe.” Why do they need to say that thinks the consumer, maybe there is something wrong with the food.

Wal-Mart should learn from its own mistakes. The company was unable to change any minds when it used advertising to try and move the brand upscale to sell expensive wine, clothing and jewelry. So it is unlikely to be successful using advertising to convince people it is a good place to work. Advertising cannot change a human mind.

So how can Wal-Mart repair its image? First they need to do something. Something big. Then they can use PR. The media gives the message the necessary credibility to get into the mind of the consumer.

Saying to “do something” to get PR sounds easy, but obviously it is hard. Powerful ideas are not always easy to come by. That is why sometimes the best ideas are those you steal. Or shall I say recycle.

Leaders should lead and set the standards for the whole industry. In 1914, Henry Ford shocked the world by paying his workers $5 a day instead of the standard $2.34. By doubling the working wage he made buying his cars affordable for his own workers. While Ford was initially ridiculed by the Wall Street Journal and other business leaders, the move is legendary in terms of building consumer trust, support and loyalty.

Wal-Mart could easily do the same thing. Wal-Mart could introduce a new Wal-Mart minimum wage at twice the federal minimum. Moving the minimum from $5.15 to $10.30. That would be dramatic change. And it would be the start of a program for building back worker support and consumer affection.

Wal-Mart also has some other good initiatives they could use increase support for the company. One is the promotion and use of compact fluorescent light bulbs that use 75 percent less energy and save consumers $30 over the life of each bulb.

Last October, Wal-Mart held a Light Bulb Summit in Las Vegas and invited manufacturers, academics, environmentalists and government officials to figure out how to sell more fluorescent lights. The light bulbs have been available for years, but consumers have been turned off by the idea primarily because the bulbs looked so unusual and cost more.

A recent front-page article in the New York Times brilliantly outlined the idea and gave Wal-Mart a huge PR boost. They should springboard this concept into a major campaign. The opportunity is enormous and something Wal-Mart is set up to do in a way big enough to make a meaningful national impact on our energy use.

Wal-Mart’s recent program to cut the prices of 300 prescription drugs to $4 each for a one month supply was another huge initiative it should continue and expand. Delivering low-cost goods and promoting energy saving ideas are both right in line with the basic Wal-Mart tenet which is to save money.

Wal-Mart loves to save us and itself money. And the one thing Wal-Mart should really save its money on is advertising. Spending ad dollars defending itself is pointless and wasteful. Nobody should understand that better than the bean counters in Bentonville.

I also discussed this issue last night on CNBC. You can see the video online. I don't know where they got the guy to debate me, he made no sense at all except to say that he loves Wal-Mart and they can do no wrong.

Comments

[Joe]

I'm inclined to agree with the idea that advertising is not going to convince people that the opposite of what they believe is true. Human psychology rebels against the thought that we're wrong. Wal-Mart has consistently acted in ways which have convinced people that it's heartless. However, people also believe that it's the cheapest place to shop. Both beliefs are not quite true- it's not always the cheapest, and I'm sure it's not always heartless either. It's seems to me Wal-Mart should emphasize and expand on the positive, 'cheapest' idea. Show us the benefits - single-handedly make energy efficient lights mainstream by driving the costs down and promoting the benefits. It could probably best fight the 'heartless' idea by stopping the actions which feed it. They'll never convince us they're not heartless by telling us so, but they could probably change our minds over time by changing their behavior and letting us figure things out for ourselves. But that seems unlikely since they seem pretty tone deaf in Bentonville.

[Bruce Boyes]

Interesting post. In it you said "Advertising cannot change a human mind". So I wondered, what is the purpose of advertising? And if it can't change the mind, how is it possible to still sell so many fast food cholesterol bombs, cigarettes, and other things we know are bad for us?

So, I googled and found a lot of articles, the best of which (in the 30 seconds allocated to the task) is this one, and I quote:

>>>
The authors said industry "is doing everything it can to encourage smoking." This is not surprising: every manufacturer of a legal product will do everything within the law to encourage use. As for the industry not acknowledging health consequences of smoking, is this necessary? Is there any teenager (the most vulnerable age for taking up smoking) in the United Kingdom who genuinely believes that smoking is good for health? Of course not.

What about mobile phones and health hazards? The public (mature adults, not teenagers this time) is puzzled about this issue, but would mobile phone companies advertise the health consequences of their product? No, of course not. Will mobile phone companies do everything to encourage use? Yes, of course.

There is probably no need to do research on the subject. Everyone knows that the purpose of advertising and marketing (regardless of the product) is to promote and sell a product. Is there any manufacturer in the world who spends money on advertising to encourage consumers to stop using its product? None, of course. So what is the point of any research? Simply ban advertising of any product that is detrimental to health.
<<<

http://www.bmj.com/cgi/content/full/322/7277/52

So I guess your point is that Wal-Mart's 'advertising' can only be successful if it promotes use of a product. 'Advertising' which attempts to alter a corporate image can only fail.

[DevonTT]

Years ago when I was getting my master's in advertising, my class was tasked with developing a strategy to sell prunes. So we repackaged them. We cut them into shapes. We targeted them toward kids. We covered them with tasty coatings. We touted the potassium. We focused on the fiber. We camouflaged them in elaborate recipes.

We did everything short of pan-frying the suckers (in our strategies, anyway), not grasping the key learning of the entire exercise.

And that was... You can't change perception unless you change the product. Prunes are prunes, and no amount of focusing elsewhere is going to make a bowl of prune's laxative effect go away.

Wal-Mart can't change its image until it changes itself. The only way to make its underpaid, overworked employee problem go away is to pay them better and treat them fairly.

[vlad macsuta]

very good post. Now I am reading your father book about positioning. What are the next books that you recomend?

[Mark True]

Advertising is one of the last strategies we recommend to our clients in the busines-to-business marke because there are so many other ways to spend your money BEING your brand. The same is true for business-to-consumer marketing. Advertising is good at getting out news about sales or grand openings or product features, but that's about all.

The sad thing is that Wal-mart has the money to get some of the best minds in the business to help them discover a right path to a better brand...starting with the employee audience.

[rogers]

Nice pages here. Great information. Will visit again and recommend.

[Charles]

Walmart should concentrate on improving the culture for its employees. I get the feeling that the employees aren't very happy and it's more than low wages and non-existant benefits. If they focused on improving the culture, the word would spread. No one will ever take their claims of good will seriously, but they would definitely believe someone they know who works at Walmart. Although healthcare would be nice, there are many creative and inexpensive ways to boost the morale of its employees.

["Johnny"]

I totally agree Wal-mart should save the advertising money. Ikea has always been very good at using PR. They did have the same problems as Wal-mart nobody wanted to work in check-out since the wages are so low. What did ikea do they added around 900 dollars (DKK 5000) each month to their normal wage. What happened? Ikea got tons good PR. Worth much more than any ad would have generated. Now everyone what's to work in the check-out at ikea. Best of all even since it's a few years ago people are still talking positive about the initiative.

[Mario Vellandi]

Wal-Mart should raise some of its prices so it can have the extra cash for employees. There's no where else to get the money....their supply chain is one of the world's tightest and best. Their corporate culture is so cheap, vendors sit in plastic garden chairs while waiting to be seen in Bentonville.

Raising the price by even a meager 2 cents to match the lowest Target price, can make a difference

[Neil Bull]

Want a guaranteed way to lose faith in your brand? Be inauthentic.

NB

[David Carlson]

Laura, thanks for an interesting post. There are so many (in other cases) excellent business executives and marketers that have such a trust in advertising. It seems like a lot of them still think that another ad will solve all kind of problems. But I wonder if they never talk to people? Will they find anyone that still will say that advertising is a credible way to deliver a message. I doubt...