My Blog is Moving

I am moving my blog from this stie to my website-- www.brandandreputation.com. I hope that you will continue to follow my thoughts and share your comments.

Strategic Planning and Brand Management Must Align

I have always believed that brand management is an outgrowth of strategic planning. Too often, a so-called brand company--usually a firm focused primarily on design, or a PR or advertising agency--comes in to an organization and goes through a brand audit and proposal. Far too often, the recommendations of these firms have no connection with the overall strategy of the company. They do not look at the mission. They do not understand if the company has the internal culture to meet the brand promise. All they seem interested in is a creative solution in terms of design or messages. These activities are doomed to failure and are very costly to the organization in more ways than one.

The costs are not just monetary. Organizations that engage in superficial brand activities actually create a division between their brand promise and its actualization, both internal and external to the organization. Employees look at the brand as being disconnected to the reality they know, and customers learn that the organization makes promises it cannot keep. This creates additional cost in terms of diminished reputation. In one study by Majken Schultz and Mary Jo Hatch (the Expressive Organisation), it was found that some 70% of employees at companies the researchers studied, did not understand and were not committed to the brand strategy of the company. Considering that it is impossible to have a corporate brand if the organization cannot live it, what the authors found is a typical recipe for disaster.

Because of these problems, I developed a process called DIFFERS, which starts with strategy before getting organizations into branding, organizational engagement, and marketing communications activities. It forces companies to think strategically and not jump to the more creative aspects of branding.

Recently, I had the opportunity to work with a strategic planning company, Ambler Growth Strategy Consultants, on a brand process for an organization. While strategy should be done before branding, the organization had actually engaged my firm first. We had developed a great positioning, tagline and new name for the organization. It was based upon the best available information we had. Then, the organization began working on its strategy for the future and we realized that everything we had done had to be changed. We developed a new positioning and tagline for the organization. The strategy consultant expressed happy surprise that we were so willing to change our direction and admit that we needed a new positioning since the target markets had changed. She indicated that many brand and advertising firms she had worked with would have remained committed to their original work. While this was nice praise, it was a poor statement on the brand industry. Most branding firms I have worked with in the past are more committed to the "artistic" aspects of what they do rather than the strategy.

Most organizations are suffering from a "trust deficit". Is it any wonder trust is diminished? Stakeholders have come to expect that companies care more about what they say rather than what they do. This is the fault of bad management, but it also is the fault of a marketing and communications industry that is not doing its job correctly.

Brand and Reputation are Critical for Non-Profits

Brand and reputation management are often focused on corporations, but there is tremendous upside for non-profits to focus on their brand and reputation.

Non-profits exist on the basis of support of their donors. Without public support, the non-profit ceases to exist. In the current economic downturn, non-profits have had particularly trouble in two areas: 1) fewer dollars from donors; and 2) fewer dollars from corporation. The two are interrelated. The latter--support from corporations--is more problematic for many non-profits since the dollars were larger and there was an expectation of continuing support, which has dwindled, if not gone away entirely.

Let's start with the idea that people have less disposable income. That means that there are fewer dollars for them to give to their favorite organizations, including universities, religious institutions, hospitals, etc. The "pie" is shrinking, but the same number of organizations are looking for support. Add to this, the added pressure that has come from disasters, including the Gulf Coast, Haiti, and others that have sought public and corporate donations. So, the market has become more competitive.

Whether or not they like to admit it, non-profits have historically operated on a principle of "noblesse oblige". That is, that those with wealth will feel an obligation to help those less fortunate. That underlying motivation may still be there, but people must choose more carefully than ever where the money should go. And, there have been a lot of abuses by non-profits of the money they have received and a lot of scams. So, trust is eroding as well, leading to some people simply unwilling to give for fear that their money will not reach its intended objective.

When competition heats up, brands predominate. Brands create the attributes and associations that cause people to see differentiation. If the pie is shrinking, non-profits need to get very serious about differentiating from other organizations and having a compelling value proposition for the donor, whether it be a person or a company.

The brand and reputation also are important for companies. Donations are changing from philanthropy to strategic social responsibility programs at many companies. This means that a non-profit needs to be very attuned to the objectives of corporations around them and match themselves to the strategy of the company. Gone are the days when they can simply expect a company to give them money with no expectations. Social responsibility programs should be tied to the company's strategy and toward the interests of the company's stakeholders. Non-profits need to understand the goals of the company and match themselves appropriately.

My last few consulting engagements have been with non-profits. They have been the most successful projects I have done in some time because we have enabled the organization to think more broadly and become more "corporate" in their thinking, which has benefited them in the way they have approached their sources of revenue and made themselves more competitive in the market.

Manage Expectations to Manage Reputation

My colleagues at Drexel, Dan Korschun and Trina Larsent Andras, and I are discovering that expectations are where reputations are built, maintained or destroyed. Stakeholders have expectations of both companies and industries that are shaped by their own experiences or by the experiences of others. We used to believe that expectations were related to brands and experience was related to reputation. However, social media has changed that. We are getting more and more of our perspective of companies and brands through social media (more than 85% according to a Razorfish study). "People like us" are our primary influencers. Their views not only shape expectations but can influence whether or not we allow ourselves to actually experience the company or brand directly.

The Kano Model is a good way of observing the influence of expectations. According to Kano, there are standards that customers expect to receive in order to be satisfied. These standards are constantly changing. Above the "line of expectation" are those products and services and companies that "delight" us. Those are the ones with outstanding reputations. Those falling below the line of expectations fall short of our expectations, as does their reputation.

The key to reputation management is to manage the line of expectations. We know that some company will attempt to differentiate. When it does, it could delight stakeholders. This will then change the line of expectations and shift the reputation standards for the category.

Consider that at one time a radio in a car was not expected. It was a delight factor. Now, all cars are expected to have radios. Think about the expectations we have for cell phones and other items we buy. Many of the things we expect were unusual and delighters in the past.

Reputation management, then, is similar to marketing and communications strategy and brand management in that it is competitive and category based. For example, Apple continues to operate above the line of expectations--it continues to delight. BP has fallen far short of expectations for envrionmental and safety issues, thereby dragging its reputation down. In doing this, it also likely has changed the slope of the line of expectations for the entire industry down. Some player in the industry has the ability to delight us by exceeding expectations. Hopefully, it will not need to be after another environmental disaster.

Still a Disconnect Between Marketing and Social Media Branding and Reputation Management

e-Marketer has published a survey of how marketers are using social media for brand and reputation management. The results show that there still is a majority of marketers who see social media as another medium to sell a product or service. They don't understand or appreciate the relationship building aspects of social media, or they are so focused on transactional monetization that they cannot get beyond that.

More than 52% of those surveyed said that they either try to push the offensive comments appearing in social media down on the Google search pages or try to put out a positive press release or pay someone to say something positive about the product or service.

These actions are troublesome on so many fronts. There are still too many people who believe that social media is just another medium or that they can defy the changing nature of customer relationships--somehow feeling that they do not have to abide by the new rules of engagement. They do not seem to understand that social media is about relationships and community and conversation with the customer, not the company, at the center. It's a tough world for those who demand command and control. Intrusions into the community are not welcome and companies do this will lower their brand equity and reputation rather than raise it.

I am also troubled by the fact that 12% are trying to do a reverse SEO to squash negative information that appears about their companies. While nearly 40% said that they were working on improvements in product and service as a result of negative comments about their brands, there are still those who think that they can bury negative news. First, the importance of SEO has diminished as social media has risen. We used to only being able to determine the value of a brand by whether or not it came up on the first page of a Google or Yahoo search. With social media, there are conversations that are more important.

As I mentioned in a previous blog, I am not sure the analytics will work as intended to push the comments down, since so many people know how to manipulate searches these days. Also, it is a demonstration of the worst sort of management. Why not just hire the local "wise guy" to "wack" the offender? It's the same thing. We live in a transparent world. Embrace it or stay out, but don't think you can get rid of problems the way the Mafia gets rid of its problems.