A lot has been written about the downfall of John Schnatter, Papa John’s disgraced founder. To recap, there were two events that essentially spiraled out of control:
The first event was November 2017. On an investor call Schnatter linked the poor performance of Papa John’s sponsorship of the NFL with black players dropping to one knee during the national anthem. In making this connection Schnatter inadvertently positioned the hugely significant Black Lives Matter movement as an unfortunate obstacle standing in the path of marketing return on investment.
That said he was briefing an audience of investment analysts, whose sole focus is analyzing investor returns.
The second event was in June 2018 on another investor call. Schnatter used the “N” word. In his defence, he was describing how the forefathers of rival chicken gang, KFC once referred to people of colour. Nevertheless, the way he expressed himself was considered at best inappropriate, and at worst, deeply offensive. White people should never, ever use the N word.
After losing the support of its publicity agency, investors and various other stakeholders the company is now seeking to entirely distance Papa John’s the brand from its founder, removing all references to John Schnatter in its visual and verbal branding.
In a final twist Schnatter is conducting a one man leadership fight back campaign, communicating directly with franchisees and the public, seeking his reinstatement and the ousting of the incumbent management. All of which is made credible only by the fact that he is the company’s biggest shareholder, owning 30% of the PZZA stock, stock which at the time of writing was down 39% on the year. So everyone’s hurting.
But what did consumers think of all this?
Morar HPI’s BrandVue Eating Out sentiment tracker provides a fascinating alternative view of the unfolding crisis. BrandVue Eating Out tracks 50+ consumer metrics by sampling 5,000 US consumers each month, probing brand awareness, sentiment and usage across 130+ of the US’s top restaurant brands.
One metric, “Negative Buzz” holds the key as to why dramatic action was required, and also that further work is needed to rebuild sales going forward.
What is Negative Buzz?
Negative Buzz measures the % of the market that has heard something negative about the brand in the last 30 days. The data shows how the unfolding situation was picked up by consumers, worsening over time.
What’s the significance of Negative Buzz?
Analysis conducted by Morar HPI on BrandVue data found Negative Buzz and claimed brand usage were statistically tied to actually sales. When Negative Buzz goes up, claimed usage goes down, which actually reflects real world sales declines. We see from BrandVue data that the rate of sales decline mirrors exactly the escalation of the Negative Buzz metric.
BrandVue data predicts real sales data
BrandVue data is based on daily sampling from 60k+ consumer interviews per year. It picks up sentiment and accurately shows how it drives sales. Triangulating this data allows people outside the company to estimate the value impact of the continuing turmoil. The data below shows 12 weeks rolling average of last month usage, which lines up to the company's quarterly sales updates and outlook.
Papa John's sales performance as the crisis unfolds: (From company sources)
What does BrandVue tell us?
This isn’t rocket science, but it does surface some key insights:
Bad press is bad for business
The Papa John’s story reminds us of the truism that bad press is bad for business. The BrandVue data helps us understand more about how news and sentiment affects consumer choices. It helps even the novice user discover how to turn bad news into an opportunity for a positive story.
Learn more about Brand Vue
If you’d like to know more about BrandVue and how it could help you with what you or your organisation is trying to do, please do get in touch below or visit our website for more information