In the simpler days BC (Before-Covid), Shake Shack was an American success story - a publicly traded burger joint serving quality food and enjoying tremendous brand loyalty.
If you’ve been following the news this week, you’ve seen how the reality of Shake Shack during COVID-19 has run headlong into the economic catastrophe hammering America and the world.
One of the reasons Shake Shack's influence has been bigger than their footprint is that they are the anti-fast food brand, owned not by a big faceless corporation, but by a guy who loved great restaurants. Good quality product, well-treated employees, charismatic leader. (True confession – I have been a Danny Meyer and Shake Shack fan for years) But then word got out that Shake Shack took money ear-marked for ‘the little guys’ as part of the first big Federal Government bailout program and cue the brand crisis. Why? I'm sure Shake Shack is wondering the same thing...
The hard reality is that people support others getting help, right up until it becomes clear that there’s not enough help to go around. And when that happens, which it did here, it can get ugly quickly.
Shake Shack suddenly found itself, not as the David of the story challenging the big burger empires, but as the Goliath stealing from the little guy.
So why Shake Shack? Surely their business is being decimated just as badly as everyone else’s. And while the fact that they’re publicly traded should put them in a better position to weather this than others, no business plan envisioned anything like this. Not to mention, there are no shortage of companies of all sizes asking for and/or grabbing at the bailout money. Which brings me back to the question, why them and what can brand strategists and marketers learn from this?
While there are surely countless lessons I considered writing about, these are the two that feel particularly relevant in this moment:
- People hate (the appearance) of hypocrisy. Remember, Shake Shack represented innovation, yes, and quality. But, I think they also represented something bigger - the underdog standing up to the big guys. That translated, for a lot of people, into them becoming a de-facto champion of the little guys. They may not have intentionally taken on that additional burden of having to carry the hopes and dreams of others, but it happened. The result? When they took money ear-marked for small(er) businesses, they weren’t doing right by those who they were ostensibly the champion of which opens the door for...
- People hate (the appearance) of ingratitude. It all comes down to our love-hate relationship with success and power. Danny Meyer was respected for being an innovator/rebel, even as he got wealthy. In fact, his being wealthy and successful was fine precisely because it was proof that being a rebel (which innovators are) paid dividends. But then, when things got brutal, his efforts to do what was best for his company ran headlong into his aura of putting community first.
So, what’s the point of all of this? The point is that you must always be mindful of the promises your brand has made to its customers, and the expectations that have resulted. As Shake Shack learned the hard way, while those expectations may serve you quite well when things are going well, they can backfire spectacularly during a crisis. Which I think is what’s happened here.
To do what was best for their bottom-line today, Shake Shack chose to sacrifice some of yesterday’s brand equity as a steward of the community and champion of the little guy to get the bailout money they needed. They didn't do anything illegal, and it is IMO debatable whether they did anything worse than others are and have done. But that, of course, is the point. They weren't like the other guys and they failed to account for the fact that their fans loved them for precisely that reason. Which entirely makes sense when you consider their brand promises and how their behavior was viewed as a failure to live up to the expectations that resulted. Which, it seems, is what’s just happened to Shake Shack.
Agree? Disagree? Hey, that’s what the comments are for!