The Inexplicably Powerful Grasp of Brands

Running my own Pepsi vs. Coke blind test showed me no one is immune

In the late 1990s, Microsoft had a problem.

We were making money — big money — and the stock price was rising several dollars a day. This allowed us, mere employees, to enjoy the finer things in life.

Some of those luxuries were arguably ill-advised. Take the young man who sold his stock and bought a brand new Ferrari, and then wrote it off in his first drive a mere quarter mile from the Microsoft car park in Berkshire, England. It was a crazy time.

The average age of the employees was 26, which at 28, made me an old man by comparison. There was a constant, exciting buzz and the sound of Steve Ballmer’s slightly squeaky, perpetually excited, thick American voice in the background shouting, “Revenue, Revenue, Revenue” at every internal event — usually accompanied by banging a stick on the floor as each word was delivered.

And that was our focus. Every product we released was immediately absorbed by the channel and sales drove sales. We were invincible.

Or so we thought.

Our feedback loops from both the industry and consumers were consistently showing a different story. Sure, everyone bought our products, but they hated doing so. They made it clear that if there was any real alternative, they’d immediately switch out of principle. The press vilified our every move and people actually applauded the U.S. Department of Justice’s decision to take on Microsoft’s position to include Internet Explorer in the Windows platform from the ’98 version and on. There was even talk of trying to break up the company to smash the monopoly Windows enjoyed.

Our focus groups revealed the scale of the problem. When asked to describe Microsoft as a person, the results were surprisingly consistent: Microsoft, in human form, was a white thirty-something male, in good shape, single, successful, incredibly arrogant, shallow, competitive to the extreme, and prone to lying to get his own way. He was the ultra-successful, good looking, “look at how rich I am” guy at the party, who everyone admired to some extent, but hated being around.

Although there was a management level between us, I often reported directly to the board and presented the findings. Sure, it was a problem, but was it a problem in real terms? We were making the targets, so who cares if we’re seen as a bit of an a-hole. After all, where were these people going to go? Switch to Red Hat’s product offering? Oracle’s? IBM’s OS2? No, they weren’t going to like it, but they would continue to buy the products anyway.

What was that about arrogance again?

I admit I’m caricaturing this a bit for effect, but the fact is that in typical Microsoft style, it took a while for the penny to drop, but when it did, enormous resources were immediately allocated to solving the problem.

Nevertheless, changing brand perception on this scale is hard, expensive, and a long term game. It can’t be fixed with quick programs, clever slogans, and training on its own. Employees are rightly skeptical of systems that ask them to change behaviors when they’re measured on results and rarely buy in wholeheartedly, especially where it feels at odds with the culture. How were we even going to begin making a dent in it? How do you get people to like you?

This was the task of both myself and a myriad of other people. We began an inside-out approach and attempted the impossible — change the global behavior of a multi-billion-dollar company at the employee level and drive that change outwards.

New values were installed and formed part of every employee’s six-monthly review. New programs, such as Customer Champions, were designed and introduced to examine every interaction between the company and the channel to make sure the values aligned. New contact points for customers were created and we rolled out a company-wide workshop for every employee to attend and sign off on.

The latter was my area. Working with consultants, agencies, and known gurus of the time, we designed and delivered an hour-long, hard-hitting brand workshop that was compulsory for all employees. It was interactive, even quite fun, and had some key motivational factors involved. It was followed up by actions, more materials, and an ongoing support structure designed to clarify and simplify the core brand message.

Our team spent four weeks delivering the workshop to all locations in the U.K., including Scotland and Ireland. By the time we finished, I had personally run the workshop 84 times to groups of between ten and 20 people. It was exhausting, but it was also exhilarating. Aside from the usual skepticism from employees that it wouldn’t have any impact at all, there was one particular aspect that literally everyone took away from the workshop and probably remains with them to this day. I know it does for me.

It was a simple demonstration of the power of brand at a subconscious level. It showed precisely why so many companies are so protective of it, and why they spend so much money on it.

Not only did this demonstration take just a few minutes to do, but it had already been done many times, both in public and on TV in many countries around the world. It would be instantly recognizable to everyone who attended.

Before each session began, I set up two different color plastic cups at each seat and poured Pepsi into one and Coke into the other. Then, using a flip chart, we went around the room and asked everyone to state their preference.

Coke always won, sometimes by a landslide, sometimes by a margin, but it was always the clear favorite. Occasionally, people would assume it was a trick question and claim the other was their preference, but since the switch in allegiance was fairly consistent between the two, the results were the same.

Then, we’d do the taste test and attendees were asked to pick their favorite of the two, and the results were marked on the board.

Of course, almost all attendees were confident they could tell the difference and would easily guess which was which, and as the exercise unfolded, there was always a clear winner:

Pepsi.

Now, this was interesting for a number of reasons. Pepsi themselves had claimed only a 70% ish rate of success, but somehow we were getting much higher results. In fact, out of the 84 sessions I ran, not once was Coke ever preferred. (Frankly, I was totally unprepared for that eventuality.)

I can’t pretend to know the reasons for this, but a postmortem of the program suggested that an element of groupthink and people trying to beat the system (which would have been very Microsoft) may have enhanced the results. In any event, it helped our case enormously.

After the big reveal and the usual ooohs and aaahhs, there came the inevitable question:

“So given that you prefer Pepsi, would you now switch to it?”

The question was only directed to the Coke drinkers and the answer was always no, although some conceded they might have it from time to time.

Then, perhaps inevitably, came the follow-up question:

“Why?”

Debate ensued. I wrote the key points on the flip chart and they were always similar. For many, they couldn’t quite put their finger on why they preferred the drink they didn’t collectively like as much. They liked the colors better. They liked the packaging better. They felt Coke was more readily available. It was a better name. It felt right to them.

What you’re describing there, ladies and gentlemen, is brand. This indescribable, imprecise association of something that can — and does — affect our purchasing decision. It’s the very reason why big companies spend millions upon millions of dollars sponsoring events, putting logos on things, and showing us impossibly happy people enjoying the product, rather than actually talking about the product itself.

In short, our affinity, belief, and feeling towards an entity (in this case simple producers of brown sugared water) can actually override our personal preference in taste. Pepsi had understood this perfectly and had gone on the attack with their product, which was undeniably superior according to either their own results or ours, rather than fighting the battle on purely brand grounds.

This revelation hammered home the point. If the attendees didn’t care that much before — which was common since they were usually salespeople, admins, or techies rather than marketeers — they were at least partially interested now. This brand thing was real. Peel back the layers and you could actually see it at work.

So, given that undeniable breakthrough, does this story come perfectly packaged with a happy ending about how we managed to succeed in changing the direction of a behemoth like Microsoft?

Not really.

For all our efforts and millions of dollars, we perhaps managed to slow down the rate at which we annoyed our customers. That thirty-something male was seen to be making a bit of an effort in social situations, but he was still a pain in the ass.

In the end, as is the way with all company-wide schemes, resources were reallocated and the project eventually died. I have no doubt others have come and gone in the meantime.

There were some lasting effects on communications and interactions, but, in the end, it was time and a changing market that did most of the work in re-positioning Microsoft. It’s now considered a mature and reliable brand, still a giant in the tech sector, but equally dwarfed by the new boys like Google, Amazon, and Facebook who have their own, arguably bigger and more public problems.

I wonder if those attendees, wherever they are now, ever think about that Coke vs. Pepsi example and the mysterious power that a brand can have over us. If they do, then that can only be a good thing.

But I but they still order Coke.