Wal-Mart save your pennies.

January 9, 2007

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.