brand values

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.

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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.

Volkswagen embedded brand values

Volkswagen and brand contagion

A brand is a social construct and as such it does not exist in a vacuum.  It is socially and historically contextual. A brand narrative draws upon these contexts and informs our understanding and our emotional relationships that they engender.

The recent issues facing Volkswagen bring these connections into sharp focus. When we consider the brand values of VW, we see them as shared and deeply embedded in those of the German auto industry in general. They include technical and engineering expertise, quality of manufacture and attention to detail. These qualities we see shared and associated with other individual brands such as Mercedes and BMW.

If many VW values are shared and embedded in our perceptions of German car manufacture, they also draw upon what the world may see as German national values. These may include probity, rule-following, bureaucratic fussiness and openness.

It’s easy to see how VW has enjoyed and built its brand persona upon the wider perceptions of both the industry and national values.

However, just as the brand may suffer from any failure in the encompassing brand values – the converse is also true. VW’s apparent lapse in standards, running contrary to our perception of their values, also has repercussions for the German auto industry as a whole. We may question the brand values of the whole cohort.

As the ripples spread out, long-held impressions of German national principles and brand dimensions cannot avoid damage. This in turn may affect and cause us to questions those values as attributed to other businesses and brands closely identified with national characteristics.

It is a salutary reminder that no brand is an island and value it may acquire or inherit from a sector, industry or a nation is synergic. All may prosper or suffer damage from the actions of others.

Three great brand tools come together.

3 great ideasImportant disciplines combine in a powerful branding approach.  Sometimes it’s just a matter of timing that familiar techniques and technologies can be sparked by a catalyst arriving at the right moment. Not only does the time have to be technically right, but the intellectual and cultural environment needs to be open to the opportunities.

The three branding disciplines I’m thinking about are semiotics, grounded theory and big data.

Semiotics

Semiotics provides us with an approach based upon cultural and societal meanings and the signs and signifiers that point to them. Currently there is a movement to understand emotional significance rather than declarative knowledge about brands and how deeper meanings are embedded in the brand narrative.

A semiotic approach to branding and brand development needs an analytic understanding of the cultural environment that a brand and its consumers inhabit. We need to discern the history, myths, metaphors and symbols that shape the consumers’ world and behaviour.

The major challenge has been the difficulty in finding our way into the data. As much of the meaning is unconscious, traditional research using primary survey techniques is not effective. Asking for views and opinions is of little value as people won’t or can’t answer truthfully – this is not because they want to mislead, but they honestly can’t access those deeper meaning.

Grounded Theory

This is where grounded theory comes in. Grounded theory is a very different qualitative approach. Rather than beginning with a series of questions we are looking for answers to, we approach the data without a theory. It is an ethnographic approach collating all the data we can from the environment. This may include published information, commentary from the media surrounding the subject, observation of the environment and practices, visual images, perhaps video, film and advertising, historical data, songs – in fact the whole cultural tapestry.

What the practitioner is looking for are patterns – recurrences of structures across a wide range of data. There is no pre-conceived theory but we are looking for codes and meanings that are emergent from the data.

As you can imagine, sourcing and amassing the masses of data necessary and then applying meaningful analysis can be a daunting and very labour-intensive task. This was the case in the past, but now we have the final piece in the jigsaw – big data.

Big Data

It is now possible to access amazing volumes of data from a mass of sources – textual, visual and auditory. Equally importantly there are now the analytical tools to process and understand the data – to look for those illusive and emergent codes and recurrences. One of the significant advantages of ‘big-data’ is its cultural richness.

Bringing together these three threads provides us with an approach to branding which allows us access to deep emotional understanding. We can get to grips with the deep meanings that drive the human essence of markets.

What’s the value of a brand? Not a lot say Amazon.

Amazon-logo-700x433I’ve written a lot about brand valuation and how many businesses under-value their brands. Now one of the most powerful brands, Amazon, claim their brand isn’t worth that much.

One issue with brand value is its contentious status so far as balance sheets are concerned. Although a good deal of work has been done to standardise brand valuation in accounting practices, it usually only becomes manifest on sale, acquisition or transfer. This is just where Amazon came unstuck and found itself in the US Tax Court.

There has been a good deal of discussion concerning international corporate giants using subsidiaries overseas to make the most effective use of favourable tax environments. Like Starbucks and Google, Amazon followed a well-worn path to Europe – Luxembourg to be precise. So far so good.

Obviously the Amazon brand was important as the parent company transferred some of the associated intellectual property to the subsidiary for a fee.  However, in the view of the IRS, the fee was not enough. Amazon undervalued their own brand!

Why would they do this? Simply to reduce their tax bill in the US choosing a move favourable regime in Europe.

The details are now the meat of argument for the tax lawyers. For brand specialists and marketers it presents some important issues. The trial should aid the clarification and status of brand valuation. Moreover, it should help identify the position of a brand and its associated intellectual properties as corporate assets.

If Amazon succeeds in defending its own low valuation, it would be interesting to see how it would argue reversing that position should it wish to sell.

This case will be watched with interest, not by just accountants and tax lawyers but also by brand owners and marketers.

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.

Why colour is so important for brand and corporate identities.

Of all the elements of an identity, logo, symbols, typography, colour etc., it is colour which has perhaps the most fundamental impact.

One of the principle functions of an identity is to unite people of a common purpose. It creates a coherent banner for people within an organisation to gather. It identifies the entity to others and distinguishes it. It may separate or recruit.

The reason colour performs such a powerful role is that it is so deeply, culturally embedded in human society.

In a primitive society, our basic unit was the family – this perhaps extended to the clan or tribe.  When meeting a strange individual it was vital to know if they were a member of your tribe – it could be a matter of life or death.

As groups became bigger – from coalitions of tribes up to the first stirrings of nations – recognition of identity became increasingly vital.

The first manifestations involved security, combat and military recognition. You wanted your comrades to know who they were fighting, to express to your enemies and friends who you were before decisions on conflict were made.

Changing_of_the_Guard,_Buckingham_PalaceLong before literacy had spread, colour was a simple indicator – warpaint, bands of coloured material, even coloured plants or flowers, all became group symbols.  As societies became more complex it was till colour that was a primary differentiator. Coloured flags and primitive uniforms were adopted and developed throughout military organisations as demonstrations of national and group identity.

We had ‘redcoats’, the ‘blue and grey’; these terms still pervade our language to identify organisations, the ‘boys in blue’, ‘red devils’, the ‘red army’, ‘green party’, etc.

Sports teams were quick to adopt ‘team colours’ as were street gangs.

Colour is so engrained in our cultural narrative that it’s hardly surprising that it’s so powerful a component of commercial, organisational and brand identities. If I mention a major brand, it is fairly certain that you will be able to visualise its corporate colours even if you may have to think hard about its logo or symbol – Coca Cola, Virgin, Caterpillar, McDonalds, Pepsi, Starbucks, Facebook etc.

Once we understand the vital role colour plays, that is almost hard-wired into our societies, then we can appreciate the importance of brand and corporate colours, and why we change and tamper with that element at our peril.

Do I know you? How brands use your expectations to open you up.

The Rolls RazorWhenever you encounter a familiar brand your expectations are triggered, based upon your past experience. Your subsequent encounter is not fresh and objective but is directed by your previous understanding. Two levels of processing are involved here – ‘bottom up’ processing, the product of this individual episode and the information the brand is communicating, and ‘top-down’ processing based upon your expectations and prior experience. This latter processing operates at an emotional level and is all the more powerful for that.

This top-down processing need  not be based upon direct experience – it can be hi-jacked by similar, if inaccurate memories.  Unscrupulous brand owners use such tactics as using similar sounding names, colour schemes or logos to those of famous brands – those this is merely passing off and rarely lasts beyond the first purchase. Then it is replaced by disappointment and anger.

However, a legitimate and useful tactics for new brands is often to adopt a brand name that ‘sounds right’ – something that triggers expectations at a deeper level and predisposes the acceptance of the ‘bottom-up’ experience.

National characteristics are quite often a start for this. Lagers may choose a Scandinavian sounding name for example. It is a short cut to priming our presumptions. Many mens’ toiletries brands string together a pair of upper-class English sounding names – ‘Mountjoy and French’ or ‘Fairfax and Jarvis’. Fashion brands take a quick shortcut by selecting an Italian, French or British name, depending upon their selected brand positioning.

The name sounds like something we know – something we can understand and our memory brings a whole host of assumptions. A teacher friend of mine had great problems choosing names for her children, because so many names brought a lot of emotional baggage from experiences with children she had taught at some time.

This is fairly basic stuff, and not particularly sophisticated, the important point is to understand what is happening in the mind of the customer. In whatever experiential situation we find ourselves the mind tries to make sense of it. We never truly come with a blank slate. Cognitive processing is powerfully directed by what we expect to experience as much as inputs from the situation.

Brand communication must understand and utilise these fast first impressions and emotions incorporated in them. By the time the declarative knowledge has been imparted, processed and absorbed, the internal emotional expectations are deeply impressed.

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.

Will Dr Martens sale unleash a brand giant?

Dr Martens LogoIt looks as though the Dr Martens brand is set for sale to Permira, the organisation behind the Hugo Boss brand amongst others. I’m sure this can only be good news.

Compared to other fashion brands Dr Martens has always seemed to lag behind in its ability to extend and exploit the brand capital. Yet I’ve always felt there was enormous potential for a brand that has much more emotional legacy than simply that of a fashion label. Though it has immediate linkage to the skinhead era for those who lived through it, it went far beyond and had the power to re-engage with decades of subsequent cultures – both youth and older buyers who had the brand deeply embedded.

In terms of footwear styling, the owners managed to cleverly maintain the fundamental styles while responding to changing fashion cycles.

Perhaps the rather tentative forays into brand extension may lie the historic strength in footwear. The brand owners, the Griggs family, have footwear in their DNA. Boot and shoemakers based in the ‘shoe-capital’ of Northampton, they followed the line of playing to their core competences – the cobblers stuck to their lasts.

Now with new owners without such a strong but narrow legacy, the potential of this sleeping brand-giant may be released.