Category: Corporate Image

Strong Amazon Corporate Image Protects Customer Loyalty Levels

Corporate Brand Helps Maintain Loyalty of Customers

Last week we wrote in The Monday Morning Marketing Memo blog that “nothing touches the customer more than how he or she perceives your corporate image.”

Research released this week concerning the Amazon brand by the YouGov BrandIndex Buzz score confirms this.

The research shows that, despite high levels of awareness of a recent NY Times negative story on the Amazon workplace, “the percentage of consumers who would consider buying from Amazon the next time they want to buy from a retail store dropped a mere two percentage points, from 72% to 70%.”

As these two points are within the study’s margin of error, the drop is not statistically meaningful.

The fundamental perception of the corporate image is a major factor that determines whether a customer will decide to conduct business with you and, more important, enter into a long-term and mutually rewarding relationship with your organization.

As we see in the case of Amazon, the over perception of the Amazon brand is significantly strong that even an exposé in the New York Times is not enough to the change buying habits and loyalty of consumers.

Amazon may have taken a short-term PR hit last month. But unless new revelations are released, it certainly appears that the powerful Amazon corporate image has warded off any hits to the loyalty of its customers.

Customers Keen To Know More About Companies Behind Brands

Consumers want to know the companies behind the brands.

The recently released Weber Shandwick research study, The Company Behind the Brand: In Reputation We Trust, shows conclusively that consumers around the globe are making product and brand purchase decisions based on company reputations.

Additionally, the survey shows that customers use several methods to find out who manufactures and sells the products and brands being considered, including reading labels and conducting their own research.

This study shows that:

·         67% of consumers increasingly check product labels to see what company is behind the product they are buying

·         70% will avoid buying a product if they do not like the company behind the product

·         56% hesitate to buy products if they cannot tell who makes them

·         61% get annoyed when they cannot tell what company is behind a particular product or brand

·         56% conduct their own research to learn more about the companies that make what they intend to buy

Consumers are keen to know what a company is doing to (or for) the environment, where products are being manufactured, and how the employees are being treated. A good example of this last point is the storm that has erupted in the past week about how the employees at a manufacturing facility making Apple products are treated. In just a few short days, over 110,000 people have signed an open petition asking Apple to intervene with their supplier as there are no labor laws in China to protect these staff.

In addition, there are now calls to boycott Apple products and a New York Times article last week was headlined “In China, human costs are built into an iPad.”

Another source of information for consumers is the BrandKarma website, where anyone can rate a brand or company on the quality of their products, how well they treat people, and how well they look after the planet. Apple, which scores high for Product Karma, has a cumulative below average score for both People Karma and Planet Karma.

The Weber Shandwick survey report states, “As consumers around the world have greater online access to a brand’s lineage, the influence of the brand parent, or company behind the brand, matters even more.”

The bottom line, as we wrote in the Monday Morning Marketing Memo this week, is that corporate reputations and corporate image actually matter more than ever and they have a major impact on the sales performance of brands and products. To think (or act) otherwise is simply foolish.

6 New Realities of Corporate Reputations

Corporate Image Management matters more now than ever.

Corporate reputations impact brand and product sales performance. That’s one of the key findings from a recent global study by Weber Shandwick called The Company Behind the Brand: In Reputation We Trust.

As the survey report states, “As consumers around the world have greater online access to a brand’s lineage, the influence of the brand parent, or company behind the brand, matters even more.”

The study identified Six New Realities of Corporate Reputation, which the PR firm says serves as reminders that business leaders cannot view their company’s reputation and their product brands as separately as they once did. These six “new realities” are:

1.       The corporate brand is as important as the product brand(s).

2.       Corporate reputation provides product quality assurance.

3.       Any disconnect between corporate and product reputation triggers sharp consumer reaction.

4.       Products drive customer discussions, with reputation close behind.

5.       Consumers shape corporate reputations instantly.

6.       Corporate reputation contributes to company market value.

In actuality, none of these are truly “new” realities, other than perhaps the ability of consumers to now shape corporate reputations instantly via social media.

All were highlighted, in one way or another, in my book Corporate Image Management: A Marketing Discipline which was published in 1998.

However, today’s more conversant and knowledgeable consumer is more aware of the companies behind branded products and services. They are also more informed and responsive to the actions of these companies.

The study showed that 67% of consumers report that they increasingly check product labels to see what company is behind the product they are buying, and a full 56% will hesitate to buy a product if they cannot tell who makes it.

Plus, as we highlighted in this week’s Monday Morning Marketing Memo, a walloping  70% of the consumers surveyed in this study reported that they avoid buying a product if they do not like the company behind the product.

This survey confirms that what I wrote 14 years ago in Corporate Image Management still rings true today: the ultimate battleground for winning and maintaining customer relationships takes place in the minds, hearts, emotions, and perceptions of customers.

Which is why corporate reputations matter more than ever.

Product Unplacement

Abercrombie & Fitch Wants Clothes Off Jersey Shore

Product placement is an estimated $8-$10 billion industry, with brands often competing with one another to be pictured in movies, TV shows, sporting events and even theatre plays. But this is the first example I know where a company has actually offered to pay for its brand to no longer be displayed in a specific program.

Last week, in an unprecedented move, Abercrombie & Fitch offered to pay the cast members of Jersey Shore to stop wearing its clothes on air.

According to a statement released by the company, “We are deeply concerned that Mr. Sorrentino’s association with our brand could cause significant damage to our image. We understand that the show is for entertainment purposes, but believe this association is contrary to the aspirational nature of our brand, and may be distressing to many of our fans. We have also extended this offer to other members of the cast, and are urgently waiting a response.”

I wonder if A&F gave any thought to trying to legally stop the identification of its branded apparel, perhaps in the name of brand protection?

That would have been an interesting case (something I would have expected to see argued in the brilliant TV show Boston Legal).

Do marketers have legal recourse to protect their brand image and reputation by preventing associations they believe are damaging?

Any legal or trademark experts out there who can share their expertise or viewpoint on this?

6 Key Attributes of Customer Centric Corporate Culture

Building a Customer Centric Corporate Culture

The key theme of last week’s Monday Morning Marketing Memo on Sustaining Competitive Advantage was the importance of a customer centric corporate culture in sustaining competitive advantage.Many readers wrote during the week to ask, “what are the elements of a customer centric corporate culture?” I believe the six key attributes of a customer centric corporate culture are:

1. Actively engaging with customers on an individual basis to understand their individual wants, needs, desires, likes and dislikes.
2. Systematically recording, analyzing and sharing customer feedback throughout the organization.
3. Placing greater emphasis on customer retention than new customer acquisition.
4. A dedication to continuous customer service improvement, including learning from mistakes and sharing such lessons throughout the organization.
5. Empowering employees to make on-the-spot decisions that enable value-added and customized customer experiences to occur.
6. Uses policies as guidelines for customer interactions rather than firm rules.
 

 

When Lew Platt was CEO at Hewlett-Packard he urged his employees to “create customer intensity everywhere.”
Customer intensity should be the core of any customer-focused organization.

Sadly, there are too many senior executives more willing to talk about how they are cutting costs than about the steps their organisations are taking to better understand the changing wants, needs, and desires of customers.

Rare is the executive who claims “we are going to be successful and grow our business because we are listening to our customers and aligning our future products and services with their future needs.”

Fortunately, such executives are only rare, not yet extinct.

 

Losing Industry Leadership

Research from Deloitte Consulting shows that the rate at which large companies lose industry leadership has doubled in the past four decades.

This should make marketing a central concern of company Boards of Directors. As I wrote in this week’s Monday Morning Marketing Memo on Sustaining Competitive Advantage, in almost every case of decline the blame lays clearly at the feet of poor marketing execution and organizational cultures that are not customer centric and therefore not capable of sustaining market leadership.

Here’s what William Parrett, Chief Executive at Deloitte Touche Tohmatsu, wrote in the December 11, 2004 issue of The Economist:

“A recent survey by Deloitte and the Economist Intelligence Unit found that management and boards of directors focus far too much on financial results that represent lagging indicators of past performance. We believe they should pay far more attention to non-financial factors such as customer satisfaction, product and service quality, operational performance, and employee commitment – leading indicators of future performance that firms can use to navigate confidently toward a sustainable future. We also encourage corporate management to communicate with stakeholders about these indicators in quarterly and annual reports.”

The long-term winners in any industry are never the cost cutters and the retrenchers. The winners are always the marketing innovators and the ones who create, protect, and enhance the values customers receive and perceive from transacting business with them and from being associated with them.

The long-term winners are those who understand, if it touches the customer, it’s a marketing issue.™

In short, everything you do should be done to create value for customers. That is, of course, if you wish to stay atop your industry’s leader board.

What do you think?

Trust Declines

Congress Ranked Last in Trust

The decline in trust of both institutions and the media continues unabated, according to the findings of the annual Gallup Confidence in Institutions survey in America.

Not surprisingly, at least to anyone who has watched the deterioration of politics in America for the past three decades, the U.S. Congress was ranked dead last amongst the 16 institutions included in this study conducted two months ago of adults living in the continental United States (I guess residents in Alaska and Hawaii don’t count).

Only 11% of those surveyed expressed “a great deal or quite a lot of confidence” in the U.S. Congress, down significantly from the 17% level a year ago. Health Maintenance Organizations (HMOs) and Big Business, both at 19%, were tied for the second lowest spot.

Accentuating the dismal trust levels in Congress, half of Americans surveyed reported “very little or no” confidence in Congress. [Side note: unfortunately, this probably comprised a large portion of the 50% of American adults who don’t bother to vote at each election.]

The U.S. Military (76%), small business (66%), and the police (59%) were the only institutions trusted by over half of the 1000+ respondents.

Additionally almost every institution scored lower than a year ago.

Here’s the full list:

  1. Military 76% (down from 82%)
  2. Small business 66% (down from 67%)
  3. Police 59% (no change)
  4. Organized religion 48% (down from 52%)
  5. Medical system 40% (up from 36%)
  6. Supreme Court 36% (down from 39%)
  7. The Presidency 36% (down from 51%)
  8. Public schools 34% (down from 38%)
  9. Criminal justice system 27% (down from 28%)
  10. Newspapers 25% (no change)
  11. Banks 23% (up from 22%)
  12. TV news 22% (down from23%)
  13. Organized labor 20% (up from 19%)
  14. Big business 19% (up from16%)
  15. HMOs 19% (up from 18%)
  16. Congress 11% (down from 17%)

The biggest percentage point drops from the previous study a year ago were minus 15 points for the presidency, minus six points each for Congress and the U.S. military, and minus four points for both organized religion and public schools.

Only the medical system (up four percentage points) and big business (up three points) showed any significant gains year on year.

With trust in small businesses remaining stable and in the second highest spot, there is a huge marketing opportunity for small business owners and entrepreneurs to leverage.

BP’s Latest Brand Disaster: Doctored Pictures

News Corporation is reporting what environmentalists and others have long suspected — that BP has been “playing fast and loose with the truth.”

In a story on Friday on their Australian web site, Newscorp reports that BP has been caught doctoring photos of its response to the worst oil spill in U.S. history.

The story actually originated with the publishing of two altered photos taken from the BP web site by tech web site Gizmodo.

For other examples of BP’s PR approach to this disaster, see our previous post BP: Brand Perfidious.

I suspect that the expected resignation this week of BP CEO Tony Hayward is unlikely to halt the current freefall in the BP corporate brand image.

Let me know if you agree or disagree.

BP: Brand Perfidious?

Perfidious — deliberately faithless, treacherous, deceitful. Of, relating to, or marked by perfidy. Synonyms: false, disloyal, unfaithful, traitorous, faithless.

Perfidious is the word that leaped to my mind when I read this opening paragraph in a post on the Fast Company web site:

“There’s no question that BP has lied extensively over the past few months about the growing Gulf oil disaster. The company has bullied journalists, fudged numbers, and even deployed fake journalists to the Gulf to write about how everything is fine. Now BP may be literally trying to cover up oiled beaches by dumping sand on top of them.”

Over the weekend, the Financial Times (FT) and CNN were reporting that BP is bracing for a shake-up at the top, with both the Chairman and the CEO expected to be replaced within weeks.

However, unbelievably, the CNN story reports that the Chairman is being “singled out for criticism by shareholders for his perceived lack of decisive leadership during the crisis and his failure to support Tony Hayward, the embattled chief executive.

I guess these shareholders have their heads stuck in the same sand that BP apparently is using to cover up the oil-stained beaches in Louisiana.

Mr. Hayward’s performance before the U.S. Congress, in which he tried to handball blame for this disaster to BP’s subcontractors, did nothing to enhance trust in the BP brand or its leadership. Neither did early reports that soon after this disaster BP was offering US$5000 payments to residents affected by the oil spill if they waived their rights to sue for any damages.

The high-powered institutional investors in the UK that own the majority of the BP shares apparently do not have a clue about Corporate Image Management and the impact of the corporate image on share prices.

Both these investors and the BP Board need to understand this finding from the PriceWaterhouseCoopers report Reputation Assurance: The Value of a Good Name:

A single-minded focus that seeks only to satisfy shareholders may ultimately lead to crises and erosion of shareholder value.

Looks like an updated definition of the word perfidious might need to include “can lead to crises and erosion of shareholder value.”

Is Shell Trying to Fill the “Beyond Petroleum” Void?

Deja Vu?

Into the “Beyond Petroleum” branding void steps Shell Oil.

This multi-national major oil industry player now has an aggressive new ad campaign, in which Shell is claiming to “unlock” a future world powered by new and numerous energy sources and cleaner fossil fuels.

Now where have we heard that one before?

The campaign, which launched just about a month ago, includes television commercials, print ads, online advertising, outdoor executions and two web sites — www.energygalaxy.com and www.shell.us/letsgo.

In the campaign, Shell informs us that the wolrd will soon be on the road to sustainable mobility and that the good guys and gals at Shell are “ready to help tackle the challenges of the new energy future.”

Not one to kick a fellow petroleum dog when it’s down, Shell’s spokesperson told Advertising Age that the campaign had been in the pipeline for almost a year and that the company felt releasing it now was “the right thing to do.”

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