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.

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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.

Are companies dealing in intangibles even more susceptible to brand reputation damage than those dealing in tangible products?

We know that stock markets seem to often defy logic. The financial sector which we might expect to be grounded in figures and statistics depends heavily upon reputation, legacy and history.  Yet over recent weeks and months we have seen tremors in world markets make financial companies appear incredibly fragile – brands which were surrounded by reputation and history can crumble on flimsy rumour and Chinese whispers. Perhaps the very fact that their real expertise and stability is so intangible makes them far more vulnerable than a smokestack brand that has tangible assets and visible products.

When the brand breaks its promise

One of the reasons why we choose brands is reliability: the brand makes a promise and our past experience shows that it has consistently kept that promise.  Every time we use the brand we enjoy the same result.  And every brand or product category has its critical promise, something that must be got right.

A brand’s reputation for reliability is built over time – over repeated experiences.  However, imagine that you have had 1000 good experiences of a brand and, for you, its reliability is at 100%. But if you have one bad experiences where the brand did not live up to its promise – what happens to its reputation?  Well, its reputation does not drop just by 0.1%.  A brand is either reliable in your eyes or it is not. It’s like a switch; if a brand breaks that promise of reliability its reputation may drop to virtually zero.