brand reputation

Oscars, PWC and reputational damage

We have seen a number of brands suffering reputational damage over recent years – BP, VW, Sports Direct, BHS – to name just four that spring readily to mind.

By comparison, the glitch at the Oscars is just an amusing sideshow. However, it brings into sharp focus the importance of attention to detail in everything a brand does. The bigger the brand the more small details matter.

Brands are about people – not only the people in the organisation, but the people with whom they interact. The brand exists at this nexus of interaction. The right brand values are shared throughout the organisation, so every point of interaction should reflect those values. That should include attention to detail in servicing customers and dealing with the world in general.

Mistakes happen, people are human. But often particular brands are chosen because among their perceived values are reliability and being a safe pair of hands. The brand has a reputation which has a tangible value.

For such brands, damage to that reputation can be costly.

Every brand loves to be involved in high profile projects as they have the potential for exposure and building that valuable reputation. However there is the very real danger of those human slips and errors, should they occur, happening in full public glare.

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.

Charities forget brand values in fundraising at their peril.

Charity - Andrew Carnegie.Most decisions we make about brands have deep emotional connections. In many cases they are signifiers for our own sense of identity. Our choices in clothes, food and drink, cars and transport touch us at subconscious levels to accord with our sense of self. They feel right for us as they relate to our personal values and experience.

The more directly emotional the category of the brand, the stronger the connection. There can be few more emotional connections than those we have with charities we choose to support. Our choices are based on direct tugs to our individual heart-strings. We respond to deep beliefs and reflect strongly held values.

In general, the charities’ core activities are strongly in line with their brand values. They are very visible manifestations and probably demonstrate the reasons why we chose to support them in the first place. Where there are concerns lie in their down-stream activities, particularly fundraising. This is where we are most likely to interact directly with the brand and where a mismatch of values can become apparent.

Bob Geldof’s, “Give us your ****** money”, was right on the brand message for Liveaid. It resonated with the values of the supporters. Clearly, there are many charities for which such an approach would be inappropriate.

There has been a good deal of critical press about such activities as ‘chugging’ or ‘charity mugging’ where hit squads target city centres. There are arguments for and against, and for big charities it can be argued that the end justifies the means. However, often aggressive fundraising can seem out of synch withe the values of serious charities. Fundraisers must take a hard look at the characters and values of the loyal supporters and match their efforts to the shared brand values.

Brand values must be consistent above all. Sometimes it seems as though there is a disconnect between a charity’s core brand, its purpose and actions in the field and the activities of the fundraising arm.

Know what you are about – brand lessons from Polaroid

Polaroid_logo_Polaroid – the ‘instant picture’ company, had an amazing USP. They had a patented process that guaranteed them a unique place in the photographic market place. Polaroid Land cameras (named after the inventor and founder, Edwin Land) were the embodiment of an iconic brand from the 1950’s through to 2004.

The unstoppable march of digital photography has proved catastrophic for many of the trusted names brands previously dominant in the sector. Camera brands such as Canon and Nikon easily made the transition. Others, especially those who saw their future in terms of traditional film, such as Kodak, had potentially much more serious problems.

The core differentiator that Polaroid enjoyed was the ‘instant’ picture – digital imagery swept that away at a stroke. However, the Polaroid brand is strong, with a unique legacy and a strong attachment to generations of happy snappers and professionals. There seems to have been a realization that the brand was a much more important asset than a now obsolescent technology. The brand moved ahead.

Polaroid loomed large on my horizon once more when I was reviewing a range of new sports, digital, video cameras under the eponymous brand. It gave me cause to reflect that where Kodak had floundered, Polaroid gained a new lease of life. Kodak seems to have mistakenly thought it was in the film business – where in fact, the brand was all about imagery through whatever means. Polaroid stopped thinking of themselves as an ‘instant image’ brand and developed as a wider imaging brand. All the currency of their legacy continued to support a new offering.

As all photographers know the difference between doing something good and something great, may simply mean changing your viewpoint slightly.

B2B brand benefits are relative.

Brand values and more importantly, brand values, are not always the same throughout the marketing chain.

Some years ago I was pitching for a project for a major retail brand, when I realised how crucial our own brand reputation was. We had clearly demonstrated we could deliver the ideal solution; our product knowledge, understanding and research was spot on; timescales were realistic and prices very competitive. However, we lost the business to a competitor with a stronger brand who we were sure had far less product knowledge, fewer in-house specialists and would certainly be much more expensive.

brandbenefits

What we had failed to grasp was that the brand benefits of a supplier are specific to the customer you are dealing with. We were negotiating with a middle range line manager. Of course he shared the corporate ambitions, but also had a personal agenda that meant he needed to be sure he would look good in front of his boss and not suffer too badly if the supplier did not perform.

He chose a ‘bigger’ brand. There used to be a saying many years ago, that: ‘Nobody got sacked for specifying IBM’. There was a safety factor behind the brand.

The lesson for all businesses is to understand the priorities throughout the marketing chain. What may be key benefits for the end-user may not be top of the list for the distributor or retailer. Of course all the benefits are components of the brand offer. If a brand is to sustain that offer in-depth it must satisfy all stakeholders. However, it is important to understand and communicate the relative benefits to each of the individual parties.

You have a chain of customers each with their own focus, and customers only listen to one radio station – WIIFM – ‘What’s in it for me’.

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.

Do you really own your brand?

When writing or talking about brands, I often find myself using the term ‘brand steward’, which I admit some folks find puzzling. The reason is that I feel uncomfortable with the phrase ‘brand owner’.

When a ‘brand’ is sold, for example, what is actually transferred? It may be the business in terms of premises, or means of production or delivery, but most usually it is the intellectual property – the brand name and all that goes along with it.

There are a lot of intangibles associated with the IPR including reputation, customer expectations and a brand promise. But I suggest these intangible assets are not owned. Nobody created the emotional values and connections – they emerged from the interaction between the public and the brand.

Of course there is a lot that companies can do to help manage, steer and nourish these intangibles, but they certainly don’t ‘own’ them: hence my use of the term ‘brand steward’.

If the company does not own the brand, then who does? Well, if we accept that the brand, the intangible assets emerge from this interaction, then the public has as much claim to ownership of the brand. Without either of these two parties – the public or the company – the brand would not exist.

It’s up to all the brand stewards to ensure the brand flourishes and that is by being sensitive and authentic to your partners in ownership – the public.

Facebook revisited

I recently posted a piece speculating what floatation might mean for Facebook. At that time my view was that the brand’s biggest asset was its followers, many of whom had an irrational, emotional attachment. Many of these fans were likely to want a slice of the business in the same way that football fans buy shares to take a stake in their club. My concern then was that businesses must change their nature once they replace entrepreneurial flair with accountancy expertise, and it is difficult to avoid alienating that big fan base – the vital brand asset.

Though it did not take a financial genius to assess that the valuation was way overstated, I guessed that the fan base would not be too concerned as their emotional attachment would justify the premium.

Unfortunately we did not foresee murky waters through which the IPO would float. When your biggest asset is the unconditional regard of your stakeholders the potential for damage if you are seen to hold them in contempt is huge.

It was always going to be a difficult line to follow, but it was a shock to see such problems so soon.

It remains to be seen what the long-term impact will be for the brand. With the arena becoming increasingly crowded, there are plenty of other harbours for the disaffected to shelter until the storm blows over. I’m sure Facebook is hoping for better weather and very soon.

Will proposed banking changes affect the way banks approach branding?

There has been a great deal of government rhetoric regarding a shake up of the banking system. Both members of the coalition have argued for  break-up, but  Tories want to limit the split to the ‘casino’ activities of proprietary trading while  Lib Dems propose going further and ‘separating low-risk deposit taking banking from high-risk investment banking’.

While the debate rumbles on, the underlying sentiment seems to be ‘retail banking = good; investment banking = bad.’ If legislation is put in place, or in fact if recommendations are implemented, will this affect the way banks handle their branding? There are a number of optional approaches:

  • Banks could install their chinese walls internally, yet keep the same overall brand. This could potentially result in a confused message with the public unsure of how the two sets of values identified by politicians are to be reconciled. If bankers wish to rescue their tarnished brands they may wish to distance the ‘good’ deposit taking ethic from the ‘evil’ investment arm.
  • They could separate the two functions both structurally a physically, while keeping the overall endorsement of the bank’s brand: ‘Blogg’s High Street Bank’, and ‘Blogg’s Investment’. Indeed, some banks are already structured in such a way.
  • Finally, they could build dual brands, culturally and physically separate, reflecting the different values, practices and ethos of the two disparate activities. Their could be a good deal to commend this approach in terms of clarity of offer and protection of the brand image.

Taking such major decisions regarding brands is usually regarded with extreme caution. Organizations carefully consider strengths and virtues, the currency of exiting brands and their investment over time. Paradoxically, the financial sector seems to take a far bolder (or more foolhardy) approach. Brands change, restructure, cast aside establish brand names and launch new ones with far less soul-searching, it seems, than other business sectors.

It appears that structural changes are inevitable throughout the banking world: it remains to be seen how many institutions also see this as an opportunity for brand re-structuring and development.