brand management

How to manage the brand perception-gap.

Brands are about perceptions rather than reality, because they are primarily concerned with emotion more than logic.

Perceptions and attributions may be constructed from early experiences of a brand or by received information. Often, that information is also emotionally constructed. It may have been channelled through peer groups, respected friends or colleagues, or sympathetic media.

Large brands may spend a great deal of resource trying to understand perceptions in the hope of being able to correct any gaps between perception and ‘reality’. Modifying such perception gaps may be a near impossible task as attributions people have constructed themselves are often not accessible to logical argument – they may require significant rebuilding of the brand’s emotional capital.

Changing perceptions can be a long and difficult process – often outside the scope of small brands.

All may not be as it seems.

A key word however is ‘understanding’. Perceptions do not always have to be changed, but they must be understood.

One of the most important perception gaps for small and medium enterprises is that between internal and external perceptions.

Smaller businesses tend to be driven by small close-knit teams with a shared vision of what their business is all about. They are very close to their product or service and have a deep understanding of its operation. However, there may be a significant gap between that and the benefits customers perceive in dealing with the organisation.

The company may believe its key strength lies in the range of products and services – customers may put quality of service top of their list.

A business may see its pricing as a vital advantage – for clients it may be same-day delivery.

Customers may relate to the image of a charismatic CEO while the business believes they success depends upon innovative solutions.

It’s easy to see that this perception gap can lead to businesses devoting costly resource on developing and promoting the wrong dimensions of their brand. Conversely, identifying and building on strengths as perceived by clients can be an effective and rewarding action.

Dealing with the gap

So, how do we identify the perception gap? The answer is relatively simple.

First clarify within the organisation what is seen as the major brand strengths and reasons why clients should make their choices.

Next determine what are the strengths as perceived by customers and other stakeholders. How do we do that? Simple – just ask them – surprisingly, people will usually just tell you.

A very simple device is the customer service survey. Ask questions designed to probe people’s views of the company and services. These could include a list of adjectives with the question: ‘Whch of these best describes ABC?’ Similarly, a list of benefits – price, range, customer service, reliability, track record etc. – asking the client to rank them in order of importance.

Ask a range of questions and keep as many as possible quantitative – i.e. score 1 – 10 or rank these qualities. This allows you to measure answers from a number of respondents. Eep the qualitative questions, ‘What do you think…’ To a minimum.

Your last task is to compare the customers’ perception with the company’s. There may be some obvious gaps that need addressing or some small adjustments. Remember, it’s more effective and easier to adjust your brand communications to be in tune with customer perceptions.

Advertisements

Tesco and five kinds of brand damage.

Financial, sales-revenue and profit reversals usually correlate with brand damage, though not necessarily to a serious extent. The public is often sympathetic to market conditions and we have seen many retailers struggling through, without permanent brand damage.

Tesco_signHowever some forms of damage can be more serious and enduring, and recently we have seen poor Tesco stumble from one hole to another. Sales revenue damage was compounded by mishandling possibly questionable management activities.

It’s probably a good time to consider the five major categories of brand damage in the light of the benighted retailer’s problems.

1. Market environment damage

Sometimes no blame can be attached to the organisation for issues beyond its control. Particularly political and legislative changes can impact business and the brand and the company may be trapped in negative activity,

Cultural and technological issues can also have damaging impacts. However, it can be argued that a well-managed brand should be constantly monitoring the market environment to remain in touch and relevant.

2. Accidents, incidents and events

Traffic police often say ‘There are no accidents, only incidents’ – the inference being that all accidents are avoidable. Events can be seriously and often terminally damaging.

We can look at the brand damage following in the wake of BP’s catastrophe in the Gulf of Mexico, or Toyota’s string of recalls. These ‘events’ are rarely blameless and damage is inevitable – the distinguishing feature is how a brand faces up to such a catastrophe. Openness, acceptance and swift responses can do much to restore a brand’s reputation where denial, obfuscation and attempts to cover up will only compound the problem.

3. Neglect, complacency and hubris

This kind of brand damage often follows a period of undoubted success. It is where a brand sits back, assumes that it has arrived at its place in the sun and believes it has a right to its position. This often leads to the previous form of brand damage as complacency dulls the belief that ‘something might go wrong’.

In the Tesco example, for decades the business was hardworking and innovative – a pioneer of online shopping, exploiting multi-channel trading and pushing the boundaries of a food market retailer. Did it grow fat, lazy and complacent? It has been suggested that part of the malaise was not being sufficiently sensitive to economic and market changes, and lack of clarity in its brand positioning – leading to shrinking market share.

In such a case, there is often an emotional disconnection – a complacent brand, like a complacent person, stops reaching out and the important emotional bond with the audience is damaged.

4. Incompetence and mishandling

It goes without saying that incompetence in brand management will be penalised. Well-meaning fumbling may not be taken too seriously if the brand has sound core values, however.

Mishandling is often the product of misunderstanding what is important. We have already looked at damage due to events and incidents. These are typical areas where a strong hand on the tiller is required to handle the aftermath.

We have recently seen the tragic events surrounding the Virgin spacecraft test-flight – we also witnessed the exemplary way Richard Branson responded. A stark comparison with Tesco’s response to falling figures.

5. Malpractice, malfeasance and dishonesty

This type of serious brand damage is the result of the actions of individuals or groups within a business. It may be rogue elements or it may be with the approval and complicity of management. We have seen examples of corrupt individuals in the financial sector – here swift action from the board can go some way to mitigate the potential damage. In other cases is may be institutional malpractice – here brand damage can spread beyond individual organisations to whole sectors.

Sometimes this can strike at the very core values of a brand and the damage may be terminal. The example which springs to mind is that of Anderson Consulting and the Enron scandal. The implied brand value of probity was brought into question and the result was the demise of a brand.

We wait to see if this type of damage was involved in the Tesco episode. If so, we can expect a costly and crippling degree of brand pain. Perhaps for a grocery retailer corporate rectitude is not a core value, but we can be sure other brands will be queueing up to fill the moral void.

Will the co-op’s problems lead to long term brand damage?

Co-op bank sign

Sadly, we have seen it all before, commercial blunders and personal… well, shall we say, misjudgments. Usually brands are stronger than people imagine and can come out of such mire with little more than a few bruises to the ego and a little embarrassment. The public understand that the brand is not embodied in an individual – in most cases.

tripodalcultureSometimes however, the damage can go much deeper. The danger is when the brand’s core values are threatened.

A brand’s culture is very much like any other culture, it is tripodal – at its heart are its core values and beliefs, around that are its actions, how it interacts with the world, and finally its products, the physical manifestations of the brand in terms of tangible artefacts and goods. Any one of these elements may be vulnerable to damage through the actions of individuals or groups. We have seen some spectacular examples over recent years. But usually the brand may survive so long as the core – the beliefs and values are not damaged.

The question for the poor old co-op bank is, are its values at risk?

I think it is a close call. One differentiator that separated the brand from other banks, and helped see it through the stormy waters of the banking crisis, was its ethical dimension. Although it may have been viewed as staid and perhaps parochial, it relied upon the heritage of the co-operative movement, distanced from the pure profit motive. It often took ethical stances in terms of investments structured its accounts and products accordingly. This a distinction which must have appealed to many customers whose values it reflected.

Are business ethics distinct from personal ethics? Does business probity stand separately from moral laxity in the bank’s officers?

I’m sure the brand has not suffered terminal damage, but it has been hit in a very sensitive spot, its valuable point of differentiation will take a good deal of reclamation.

Brand lessons from Starbucks, Amazon, Google et al.

Euro coinLesson #1: The brand is everyone’s responsibility including the CFO.

The recent furore and public backlash at brands which take UK tax avoidance to the extreme was wholly predictable, and avoidable. But how many organisations involve their senior financial people in brand management – how many CFO’s see the brand as part of their responsibility?

I don’t want to get into the rights and wrongs of the tax avoidance activities of these multi-nationals. A CFO had a right and responsibility to maximise post-tax profits for his or her shareholders. They may even be held liable if they do not act to avoid excessive tax burdens.

Boards must share brand values as part of their corporate responsibility. Many of the brands involved in the recent ‘scandals’ take their customer focus very seriously. They have made huge investments in their brands and would probably include such values as fairness, probity, honesty and fiscal responsibility as part of their brand ethos.

Brand leadership v finance.

There seems to be some disconnect here between the brand stewards and the financial stewards.

I’m not suggesting that anybody has acted illegally, but as with all brand issues it is a matter of perception. When the public see successful businesses apparently thriving, they take that as a positive brand virtue. When they hear of shadow companies and ‘management’ and ‘royalty’ fees from overseas that lead to minimal taxes being paid, they smell something bad.

When the tax advisors came up with a great scheme to minimise corporation tax, and when the FCO presented this to the board, did nobody say; “Hey, this does not square with our brand values – it looks bad to our public.”

The problem is one of brand leadership. If the brand is at the centre of corporate decisions it is a great safeguard and reality check for corporate responsibility.

We are already seeing the outcomes: brand aware customers are making their feelings known by using their consumer power. Perhaps the FCO’s will think again. Rather than saying; “I’ve done nothing illegal”, concentrate on explaining falling customer revenues at the next board meeting.

Online brands – opportunity or threat for pack design?

Pack designWith more sales moving online do we have to rethink the role of pack design – will it become a less important part of the marketing mix?

‘Phenomenal’ growth – that’s IGD’s prediction for online grocery shopping (The Grocer). Online sales growth is outstripping growth through stores, according to the Office for National Statistics (ONS)’s Retail Sales figures for July 2012. All exciting stuff, but what does it mean for pack design strategies?

I spent a good deal of my working life involved in retail pack design; everything from biscuits to lawnmowers. Its importance was taken as a given. It was the silent salesman, communicating features benefits and the brand values. Emotionally there is no more powerful moment than at the point of purchase. Trends in online and click-and-collect could potentially change the role of packaging design.

At the moment most products have a dual life; part on the shelf and part online. Our relationship with online brands is based to a large extent upon our in-store experience. But as time progresses products and customers may evolve who have no relationship other than online – in fact it’s easy to think of any number of online-only brands, though perhaps few in the FMCG sector.

A case could be argued for pack design to be being obsolescent. However, it’s interesting to look at how e-books that never have a bookshelf life have adopted virtual covers online: the same goes for some albums – a skeuomorphic comfort factor. So perhaps there is one important semiotic role for the pack as an icon for brand or product.

Many of the other functions of pack design present quandaries – conveying product information, size, contents, applications, instructions etc. These are not necessary for the online ‘pack’ as they can be conveyed in product information and specification details on the web page, separate from the pack. However, these may need to accompany the delivered product.

Other functions of the pack design such as communicating features and benefits, demonstrating the contents or creating emotional appeal will still be required. However, these are not necessarily roles for the pack. Rich online media, video, audio, games, communities etc., may present far more exciting ways communicating this information as part of the whole ‘pack’ experience.

Rather than presenting a threat to pack design it may open the door to a new age of retail/e-tail connection.

Packaging designers need no longer be constrained by the pack dimensions or print limitations. A single compelling icon when clicked can open a door to an almost boundless experience. The necessary data and statutory information can be separated from the emotional appeal of the brand.

The pack for the delivered product will have a different function. The purchase decision has been made. The new pack has to inform and reassure the buyer they have made the right choice and help stimulate repeat purchase.

The future looks exciting for pack design – though maybe not as we know it.

What will do the Google brand most damage – profit slump or communications bungling?

Google logoShare trading in Google was suspended for a while when its third-quarter results were published early by mistake.

The results revealed a 20% profit slump, but what was the biggest potential long-term damage to the brand – the figures or the bungling?

Business results matter, but all companies have ups and downs. Many traditional media companies have suffered reversals in the face of changing markets – areas where Google has benefitted in the past. CEO’s present to the analysts, explain the figures, make their future forecasts, and get on with job.

Share prices suffer for the company (Google was down 9% when shares were suspended) – but that is a business fact. Investors will take a long view of performance and projections and move on. It is a pragmatic decision.

Brand damage is another thing – it is an emotional dimension. We don’t have quantitative measures such as share prices, though all are interlinked. Crucially, the brand is more likely to be damaged by the apparent bumbling and fundamental errors in releasing the results early.

The Google brand has ridden quite high, displaying sound judgement and competence, where other internet brands have skidded from error to error.

The general public is often unconcerned with corporate performance so long as the brand is comfortably between the extremes of insolvency and excess profits.  PR disasters are likely to inflict more lasting dents.

This blip for Google is unlikely to be an enduring or terminal issue. It should be a warning to all of us however not to take eyes off the details of process, especially in corporate communications, however big and successful we grow.

How to learn from what Toyota learned.

Image of Toyota LogoToyota have had another recall issue to come to grips with. This should be no big deal. Most manufacturers have a number of these each year. Toyota’s always seem to come under a rather brighter spotlight which may be a reflection upon their reputation for process, reliability and build-quality. So, when an issue arrises, the media is quick to jump upon it.

You may remember the previous recall of 2009 that received a lot of high-profile press comment. One of the things that characterised that event was the surprisingly bumbling way that the company seemed to react. By comparison, this latest event was an object lesson on sound press relations and crisis management.

What can the rest of us learn from this?

  1. If it can happen, at some point it probably will. Don’t assume it can never happen to you no matter how sound your practices. Be prepared.
  2. Have your ‘spill-drill’ in place – know how you will deal with a media storm in practical terms. Who will handle what and how.
  3. Identify spokespeople in advance. There is nothing worse than journalists calling various different members of staff for comment. Some may have no experience with the media, others may know nothing of the problem. The result  can be conflicting, ill-informed and clumsy stories. Nothing looks worse. Get your spokespeople in place in advance: make sure everyone knows who they are and directs any questions to them.
  4. Don’t hide – nothing makes journalists more curious and antagonistic than, ‘No comment.’
  5. Act fast – in today’s digital world news flies! Deal with one story straightaway and you won’t have to deal with 100 ones in the morning.

Five key characteristics of great brand leaders.

Brand leadershipWhat is the defining characteristic of great brands – large or small? It is brand leadership. They have strong, committed and unwavering direction.

Great brand leaders come in all shapes and sizes from Henry Ford to Richard Branson or Steve Jobs. But they all share some key qualities.

(1) Vision

A clear view ahead and ambition for the brand is vital. Vision is not to be confused with strategic objectives: it is a more amorphous thing and often difficult to articulate, but we all recognise when people have vision.

Vision is not about what a brand will do, but of the brand itself. I’m sure in the early days of Virgin, that Branson had no idea he would be selling financial products or space travel. And Steve Jobs did not see himself in the mobile phone business. Vision is not necessarily about the product or service – these will change over time under market or technology pressures. It is about the brand and its values that should be steady and enduring.

(2) Communication

There is little point having vision if you are unable to share it. Great brand leaders are good at communicating their vision – but not necessarily verbally. Often they communicate by example, by their actions, by the way they go about their business. Branson is not the greatest verbal communicator, but his vision is clear in his operation, manner and approach to business.

(3) Empathy

Great brand leaders have a good deal of empathy for their audience. This is different from understanding – the stuff you get from research. It is an emotional quality. It is relating to the aims and aspirations of your brand stakeholders. It takes exceptional people to still be able to empathise with consumers or junior employees as they themselves climb the greasy pole of success.

(4) Consistency of values

One of the reasons we choose brands is for consistency – when I select brand ‘A’, I know what to expect. So long as my expectations are met, I am happy and loyal. It’s not just about product performance or service, it’s about the way the brand goes about its business.

Consistency is a function of leadership. It is not to say a leader can’t surprise or even shock – but they operate within a clear framework of values.

(5) Brand guardians

Organisations grow. To ensure that the vision is clear, the consistent values are understood and empathy is fostered, the leader needs to recruit brand guardians – trusted lieutenants who will carry his or her values through the organisation.

We see this with great football managers – once the match is in progress, there is little they can do to affect the outcome of the game. But usually they have one or two key players who understand and share their views and wishes. These players ensure things are kept on track and don’t drift.

As brands grow to global stature and complexity, these guardians are vital and should exist at all levels and in all disciplines within the organisation. Once recognised they need to be fostered and nurtured.

Make the most of the five ‘E’s of branding.

The five 'e's of brand experienceBrand experience is all about the interaction between the brand and its public. While we all remember the four ‘P’s of the marketing mix (though I’ve seen up to 11 at the last count!) – the crucial dimensions of brand interaction are the five ‘E’s.

Engagement

– interactions need engagement. The more people engage the greater the opportunity for interaction. Smart brands maximise engagement. Product, literature, advertising, communications, customer service and online connections – all present chances to interact.

Excellence

– the goal of any brand should be excellence in its chosen arena. Excellent product, customer service, processes – each touch-point should be the best we can make it.

Ethics

– we see more brand disasters arise from unethical dealings. This is all about poor brand values and bad leadership. A sound brand should deal openly and honestly with its customers, suppliers, employees and the world in general. People are far more likely to forgive incompetence or poor service than they are unethical business practices.

Emotional attachment

– much of our attachment to brands is emotional (though we try to convince ourselves it is pragmatic). It is intangible, but we should recognise it as a core brand strength, deeply embedded in brand values. Apple, for example, has a loyal following who simply love the brand – it is difficult to analyse, but the company does seem to understand it and builds on the values it embodies.

Experience

– as with ‘engagement’, the points of interaction are points of experience. Whether it is visiting a store or a website, opening a brochure or a package or using a product – there is a user experience. Our entire understanding of the world is based primarily upon our sensory and emotional experience of it. Brands such as Starbucks understand this – it is not just about the product (which lest’s face it is just a cup of coffee), but the whole experience of the store, the environment. It is about all the senses, visual, auditory, olfactory  and tactile.

Branding should not be a verb.

Branding in marketing - never verb a nounBranding, in marketing, is something that ‘is’ not something you do. In short, we are better thinking of it as a noun rather than a verb.

A soon as we start selling a product or service with a name, a brand exists. It emerges from the interaction of the product or service with the world at large. A business can create a new brand simply by bringing something to market.

We can then develop that brand, improve it, promote it and communicate its benefits, protect it, grow and diversify it – but branding itself as an activity, has no meaning, unless you are a cattle farmer.

I spotted an article the other day proposing that branding was an unethical activity. I was about to rush into print to respond, when I realised that I couldn’t because the argument was based upon an incorrect premise – that there was an activity called ‘branding’.

Dangerous shorthands

The unhelpful and uninformed use of the term has grown out of lazy journalism. Just as ‘marketing’ is misused to mean anything from advertising to PR, branding is a shorthand for all forms of brand development, identity creation and brand communication. It is also a handy term when a pejorative inference is needed to criticise those bad, mad men and women.

I work in brand development – but I would never describe myself as a ‘brander’ – because I don’t ‘brand’.

Perhaps it’s time for all of us who work on brands to champion a bit of clarity, and in the words of one of my favourite quotes: ‘Never verb a noun’.