I’ve been to a Cracker Barrel less than five times in my life, probably all but once for breakfast. Call me a snob, but I just don’t think the food is exceptionally good. To me it’s a glorified IHOP. But that doesn’t mean the 660-store restaurant chain doesn’t have its faithful customers. In fact, it is quite popular.
Unless you have no TV or Internet, you are probably already aware of Cracker Barrel’s failed attempt to rebrand itself. First, it attempted a new corporate logo. Then it announced a redesigning of its iconic stores. The heritage-rich brand, beloved for its Southern-style hospitality, unveiled plans to make what some claimed would be reminiscent of the inside of a Holiday Inn Express. The idea, executives said, was to appeal to a broader audience. The uproar that came from its loyal customers was fierce. After losing a reported $400 million, which sent the stock price plummeting, Cracker Barrel backtracked. No new logo; no store refresh.
I thought it was appropriate to talk about this for a few reasons: 1. Flooring manufacturers constantly talk about strategy changes to target Millennials and Gen Y. But the Baby Boomers still control about 70% of disposable income, making them the dominant force in this economy. Second, I often see a lot of companies—retailers and suppliers alike— undertaking some sort of rebranding, whether it be a new logo or something more substantial. My advice: Be careful.
Cracker Barrel has been around since the 1970s. Not all businesses can say they have not only withstood the test of time, but also adhered to the original intent and purpose of when they first started. The differentiator with Cracker Barrel was their unique interiors.
What started as a rebranding effort to update the restaurant chain’s identity quickly went off the rails. It exposed a deep disconnect between corporate leadership and the core brand values embraced by its loyal customer base. The leadership team misread the room when it decided to throw out its down-home appeal in its logo and store environment. The company’s CEO said, “Cracker Barrel needs to feel like the Cracker Barrel for today and for tomorrow,” when in reality the appeal of Cracker Barrel is and always has been its feel of yesteryear.
Here are some takeaways from Cracker Barrel’s failed attempts:
Lesson #1. Do your homework. Cracker Barrel apparently did not take into account how and why the company’s loyal consumer base would react to the new logo. Or perhaps it thought no one would care? If so, they quickly found out how wrong they were. Companies should pay close attention to what Cracker Barrel got wrong and take steps to ensure they do not make mistakes when rolling out initiatives. That includes not conducting research about the impact of the changes on key audiences, not explaining their reasons and justifications for making the changes and not introducing those changes in such a way as to create a public relations firestorm.
Lesson #2: Know your audience. The challenge many legacy brands encounter is how to evolve without alienating the loyal customers who built the business. Cracker Barrel’s challenge was expanding its overall appeal without losing core patrons. Advanced segmentation research could have uncovered high-value emerging segments, like tech-savvy Millennials seeking “authentic experiences,” and guided a strategy to serve that emerging cohort as well as traditionalists.
Lesson #3: A brand should never change for the sake of change. Rather, it should change for the sake of purpose. You take something that’s tried and true, withstands the test of time and holds on to its integrity, and someone comes in and wants to change just for the sake of changing. They think what’s going to happen is that they’re going to appeal to more people, and all those people who don’t want to come to Cracker Barrel will start coming. Here’s the truth: Anyone who never set foot in Cracker Barrel before probably isn’t going to step foot in Cracker Barrel because of the rebranding. It’s not what they want.
Lesson #4: Every great idea looks different in the market than in the C-suite. Pre-launch concept testing could have revealed which brand changes Cracker Barrel’s audience embraced and which they might reject. This feedback loop protects investments and ensures customer alignment. For other companies, think of this as an insurance policy. Whether you’re redesigning your logo, launching a new product or repositioning your brand, test in-market first.
Lesson #5: Be careful about declaring victory. Resist any temptation to make premature claims that a new initiative is successful or well received. Cracker Barrel’s CEO made that mistake when she told ABC’s “Good Morning America” that feedback to the redesigned image had been “overwhelmingly positive.” However, social media was quick to respond to the new logo by criticizing it and asking that the old symbol be restored immediately. Eventually, investors said: “We’re turning this around.”
Remember, a brand is a promise you intend to keep. A reputation is a measure of whether that promise is fulfilled. The poor reaction to the brand’s changes highlights a crucial lesson for other companies: brand transformation requires more than good intentions; it requires precision insights.
