Years ago if the topic of Krispy Kreme came up in a group discussion, the Krispy Kreme fanatics would immediately begin describing what sounded like a religious experience. They'd describe the experience so vividly, that I often found myself sharing the same enthusiasm and I never had a Krispy Kreme. Then a few years ago, one opened up near my home in New York.
I remember driving past the grand opening and there were never ending lines of people winding around the parking lot waiting for their turn. This went on for a few days when I just couldn't take it any longer. I had to see for myself what the big deal was. Why would someone wait in line for nearly an hour or more for a donut? How could the near mention of a Krispy Kreme bring on emotions of ecstasy?
So I waited patiently in line for my first dozen of Krispy Kreme donuts. When I reached the cashier, I couldn't tell if I was more excited to try the donuts or finally be free from the line. As I opened the box, I expected to see a ray of light and the sound of angels singing. Okay maybe that's a little melodramatic, but my expectations were high.
The verdict - the donut was good, but it wasn't 60 minutes in line good. Then I began to wonder, how many other people were waiting in line just to see what the big deal was? How many of them were waiting for a religious experience, that never came?
Business began to decline, the lines disappeared and the shop eventually closed. An article in todays Wall Street Journal briefly discusses Krispy Kreme's financial troubles and how they plan to turn the tides. Part of their turnaround strategy includes running television commercials, selling ice cream and reducing the size of their stores.
Their strategy to fix everything by throwing more money into advertising won't work. My DVR's fast forward button will breeze right past their commercials. Maybe they'll spend millions in hopes that I lose my remote. Hey it happens. Also, I'm not sure I see the wisdom in the ice cream strategy and smaller stores will certainly cut costs, but it won't add customers.
I believe the cult only worked because years ago, the stores were limited to certain geographic areas. In other words, if you happened to be traveling and stumbled across a Krispy Kreme, it was new and different and you would take that experience back to your hometown. Your experience was so different that you would share it with your friends. It was exciting because you didn't have a Krispy Kreme nearby to saturate your experience.
When the chain sets up shop down the road, things change. After your second or third visit you realize it's just a greasy donut after all. More importantly, it isn't good for your health. The product couldn't sustain your enthusiasm or your willingness to maintain the cult.
This is a good example of viral marketing; however you need to have a great product or service to sustain the virus. Why? Because as soon as your fans figure out what your offering isn't all that great, they stop talking about you.
It's been years, but here's the secret to the Krispy Kreme.
1) Buy the KK travel mug (discounts on coffee refills).
2) Get a seat at the bar. Bring a newspaper.
3) Wait for the next batch of donuts. Don't order anything but coffee until the "Hot Donuts Now" sign is lit.
4) Get hot glazed donut, right out of the fryer. This is the prize. The other donuts are just donuts.
5) Repeat.
Your comments on what happened to Krispy Kreme are dead on -- and apply well to associations.
Posted by: Mike Mason | June 06, 2007 at 05:15 PM
Great comment Mike! I love your systematic approach :-)
There's definately a lesson here for associations!
Posted by: Joe Grant | June 06, 2007 at 05:38 PM