The Rise and Fall of the Brand Ambassador
A lineup of Diageo's "Special Release" Whisky at Tales of the Cocktail 2016, photo by Amanda Schuster
There has been an enormous amount of consternation in the spirit world in recent days after Diageo announced suddenly that it would end its Brand Ambassador program, known as Masters of Whisky, which was co-managed by its agency partner MKTG. Before I jump into this, it’s important to note a few things: I know many of the former and current MOWs that were dropped and consider a few of them as friends; I’m never happy to hear of someone losing their job; and I was also once a Brand Ambassador for a Scotch whisky. In spite of the perks of the job, I personally know the hours away from family, the rigors of travel and the barrage of slights that one weighs through in pursuit of a brand’s position in the market. But my main premise is this: I saw over 5 years ago that programs such as the Masters of Whisky would drop over of its own weight and it should serve as a wake-up call for the entire spirits industry going forward.
The only reason I am in this industry is that I was recruited out of technology sales by a very smart man whose name and family are synonymous with wine and spirits in America (I will not reveal who he is in public because he is an old friend and avoids publicity). He knew of my decades-long love of Scotch whisky, my early blogging about it and early travels to Scotland to investigate it, and one evening at a party made a pitch to me: He began by saying that the brand ambassador, in its current form, was the most unrealized position in the industry and went on to explain the history of spirits brand ambassadors as one of the key drivers in the old account formulations, when there was less of a difference between sales and marketing (think Mad Men) from an organizational standpoint. The brand ambassador drove account adoption, loyalty, and excitement through what we now know as “brand identity”. The brand ambassador was invested in the same goal as everyone else on the team: the sale and re-sale of the product. But at the point of our conversation 8 years ago, the Brand Ambassador existed primarily as a promotional vehicle, the culmination of brand affinities in human form, created by a marketing department to educate and spread the word, create excitement and advocate usage. It had sharply veered away from its intended goal: to drive sales. My friend said that if a salesman was behind the education and presentations it could change things tremendously. That’s why I was intrigued by the idea: I am a salesman and I’m proud of it. As a former actor, I had the presentational skills down; I had a fairly high understanding and knowledge of the entire category of spirits and whiskies, slowly collected over a few decades. My passion for the spirit was obvious, testified by anyone trapped with me at a party as I droned on about single malts, etc, etc. But I realized there and then that the real worth of this position was in its ability to gather those talents to bring one concept into fruition: make money by selling product, over and over.
Todd Richman, one of the ambassadors now affected by the changes at Diageo, serves up drinks with a smile at Tales of the Cocktail in July, photo by Amanda Schuster
My understanding of corporate structure filled in the rest, so a small diversion into history. During the '70s and '80s, what was once a business degree in college morphed in the university into an MBA in Marketing, a specialization spurred by changing priorities in the marketplace (increased overseas competition, etc), but especially given shape by the rise in computer driven statistics. As the underlying methodologies of TQM morphed into “lean” then into Six Sigma, business eventually gave birth to the “marketing guru”, a statistically driven entity that saw the “larger picture”, worked “outside the box” and formulated abstract selling models based on demographics, affinities, SWOT/Gant/Venn diagrams and dozens of other business concepts that were unknown just a few years prior. Most importantly, the guru, and all of marketing, now regarded sales in a different light: instead of a mutual partner with a similarly vested interest, sales was now its executing arm, mere “feet on the street” charged with carrying out the marketing department’s plan, driven by advertising, publicity, incentives, focus groups and a myriad of theories that were formulated in large fishbowl conference rooms by people with expensive degrees who’d never once been in the street or met a customer. And during those decades, a power struggle happened between sales and marketing departments, each one accusing the other of incompetence and worse when sales revenues dipped.
Into this bifurcated system, the modern form of the Brand Ambassador in the spirits industry can probably be traced to one time period and ironically, to perhaps one individual. In the early to mid-1990s, the old United Distillers (which eventually became Diageo), along with their US Importer Shieffelin/Somerset, seeing a rise in consumption of Scottish single malts and riding on the success of Johnnie Walker Black Label, recruited distillery men to serve as brand ambassadors in America to promote the idea, understanding, knowledge and love of all things Scottish. They came over in kilts and heavy brogues, promoting the 5 distilling regions (an early marketing concept) and regaled crowds of mostly men with tradition, language, stories and intimate knowledge about how to make, drink and enjoy Scotch whisky. I was one of those early people affected by them.
Chief among them was Evan Cattanach, one of the dearest men you’ll ever come across, who sadly, and ironically, passed away a mere one week prior to Diageo’s announcement. Evan was a life-long distillery worker and former distillery manager at Cardhu and began to train the first generation of American born “Masters of Whisky” – Spike McClure, Marty Duffy, Steve Beal, Simon Brooking and many more. Their primary purpose was to be the “face of the brand”, focused on education and culture and take part and organize drinking events, pairing dinners, seminars and other Scotch whisky related events. They would take trips back to the motherland for brand nourishment and propaganda adjustment and return back to the US to hit the field running, covering many states at a time. Not too long afterwards, as we saw the popularity of Scotch whiskey take off in the 2000s, other brands followed suit: Balvenie, Glenfiddich, Macallan and Glenmorangie, etc. And along with them, American whiskies, vodkas, gins and just about every spirit product on the market. Soon, getting a “brand ambassador” became the default way of thinking in how to bring a brand to market. Large advertising and staffing agencies outsourced these new roles under their care and over the last 10 years we’ve seen the role “brand ambassador” describing anyone from these “Masters of Whisky” to anyone holding a bottle rattling off marketing bullet points and pouring free shots. To my knowledge, and I’ve talked to many of my fellow brand ambassadors over the years regarding this subject, none of them have ever been trained to sell, or in many cases, trained to understand how sales works. And therein lay the fault in the structure of the role. Mind you, I don’t have an issue with the idea or in many ways the execution of the role in the field. But “brand ambassadors”, “Masters” or not, were doomed to die of institutional irrelevance.
From a business perspective, you break down a balance sheet to 2 lines: “top line”, which is revenues coming in; and “bottom line” which is the end result of revenues minus expenses. In the reality of a product, the only organizational entity that produces revenue is sales. Sales goes out with a product or a service in its hand and comes back with money for it. Marketing, defined as anything that that helps a sale take place, does not do that. Marketing doesn’t directly sell anything, so it is an expense. (I jokingly believe that the main course of study in any marketing MBA program is how to justify your expenses to sales). Marketing does not sell; sales sells. Marketing lives for the ROI (Return on Investment), which is a target as movable as gossamer sheets blowing in the wind. Marketing engages in surveys, focus groups, educational activities, branding activities and breaks down the market into definable segments. It can point to where the sale is, can set the conditions for the sale and analyze the sale after its made. But it does not make the sale. It does not address the top line, but it can be efficient in how its budgets are spent.
Organizational pressure is constantly put on organizations to justify expenses, and in a publicly traded company such as Diageo, they have a fiduciary responsibility to keep the bottom line tight for their investors. So the idea of KPIs (Key Performance Indicators) were put in place for brand ambassadors in order to justify the expense of them. But the problem of KPIs is that they only rationalize expense spending, they do not touch the top line. An informal survey of KPIs across the spectrum turned up a wide range of targets, even down to getting one’s expenses in on time and posting on social media. Really? When there’s a blip in the overall revenues of a company, the executives get nervous and if it trends, they immediately go after the bottom line. Departments are ordered to tighten up, cut expenses, lay off people if you have to until things get rosy again. When one Instagram entry can reach 1000x of what one seminar can do, it doesn’t take long for upper management to start seeing each person in the field differently. You can criticize this approach all you like, but especially in publicly traded companies, it’s the rule of law and it trickles down to privately owned ones as well. Every person in every company has a number on their head, the price and value of their worth to the overall organization. And worth, being an intangible, is only as good as the person controlling that budget. If you’ve been watching Diageo’s trending over the last 2 years, you can see where the thinking started.
(L-R) Masters of Whisky Dr. Nick Morgan, Dave Broom and Ewan Morgan present a seminar on whisky maturation at Tales of the Cocktail 2015, photo by Amanda Schuster
Whisky has changed the world in the last half-decade with a marketplace that is the most dynamic and competitive in history. The lesson for every other company that either has or is thinking of having brand ambassadors: teach them the mechanics of sales. Put them in a position to actively assist each sale being made. Instead of KPIs, tie their compensation to something that can be measured, so that their worth is tied in some way to the top line. The time of “education as an end result” is over: the internet does it almost as well. Education without a tangible result is just self-pleasuring, practiced by those folks I call “fact-urbators”. Teach them sales skills instead. To the brand ambassadors out there, make sure you’re always working on your “B” plan: learn business skills along with distillery notes. If you come from behind the bar, make it a point to understand retail. If from retail or other walk of life, learn the accounting of bar management. Ask distributors how they work, pay attention to their perspective. Stay ahead of the news not only for your brand, but your category and the spirits world in general.
How you manage bad news is another thing, and Diageo, unfortunately, doesn't exactly have the best track record when it comes to handling these situations. Its announcement of the layoffs (not to mention the way in which the affected parties were informed of the decision via conference call and not given the opportunity to adjust their presentations) was accompanied publicly by some marketing speak about their focus on their “Reserve” business that didn't underline the worth, dedication and hard work of those being summarily dismissed.
My best goes to all the currently out-of-work members of the MOW program: if you have contacts and value, you’ll find work again in the industry. If not, it’s a big wonderful world out there waiting for you to try something different. But one proviso: don’t get burned a second time. This was your and everyone else’s wakeup call and it is one that I believe will continue to ring well into the new year.