I was at a meeting in NY today sponsored by Echo Research. Because the meeting was primarily for communicators, it focused on issues related to reputation from the communications perspective. The argument was that communications should "own" reputation management within companies because it is the most suited discipline to do so. The rationale is that given social media, relationship management--a supposed PR expertise--is critical; and that communications looks at more stakeholders than any function other than the CEO.
I agree with the perspective that public relations is better suited to relationship management than is marketing and that it is a function with concern for many constituents. Still, I have problems with the concept of ownership of something as important to an organization as reputation. The equivalent would be to say that the CFO owns finances. He/she is the primary steward, but everyone in the organization owns responsibility for financial management.
Communications should be the catylst for reputation management, if they have the skill set to do so. However, this skill set needs to be more than a constant urging for social responsibility and "doing things right".
The leaders of reputation management will be those who first-and-foremost understand that the primary interest of a CEO is to build value for the organization. Reputation management does that, but I am not at all sure most communicators or most marketers understand what is meant by that. Communications often sees value as "doing good". Somehow these good things are supposed to translate into behavioral intent. Sometimes they do and sometimes they don't. Marketers suffer from wanting everything to have transactional monetary value--relationships take too long.
A blending of the two is what is needed. Reputation management leaders need to help the organization focus on those things that distinguish the organization in the eyes of key stakeholders to build value. When they do that they will be given the "keys to the kingdom" by the CEO.
Often the communications teams are focused on stakeholders other than those who make money for the company. One often hears "that might be good for customers and investors, but what will regulators or NGOs say?" These are good questions, but reputation is most imporatant with stakeholders who matter, not with those who don't.
Every organization has three key stakeholders who contribute to the company's financial success: employees, customers and investors. Other stakeholders can help or impede success and must be managed appropriately. So reputation management is really about making the company distinguised for the key stakeholders and good enough so that the organization is supported or not impeded in its objectives and activities.
It's time that marketing, communications, investor affairs and HR got together and understood that they are in this together and that common goals need to be worked on. Others need to be brought into the mix, but until the organization can work consistently toward common objectives and behaviors with its key stakeholders, reputation management will not work. CEOs shouldn't care who the catylst is for this. It just needs to happen and the leader is the person who "gets it".
Thursday, November 5, 2009
Thursday, October 8, 2009
An On-Line Bonanza for Bad Managers
I had an interview today with a reporter who is covering a story about a company that sells the ability to bury bad on-line comments by pushing them down the Google search. In other words, a reverse search-engine-optimization concept.
It is not surprising that someone came up with the idea to sell companies on the idea to get rid of the bad reviews. It's like the Mafia getting rid of the body.
There are so many problems with this that I am not sure where to start. First, brands and reputation are not being build on Google searches like they were 5-years ago. This has now moved to social media--conversations on the Internet. Blogs and micro-blogs (Twitter) are where the action is. Second, this plays right into bad management. If someone is saying something negative about your company, a smart manager should want to know why, whether it might have some truth, and then take action to correct it. This is the opposite. "I don't like what people are saying and I want you should make them go away"
It is not surprising that someone came up with the idea to sell companies on the idea to get rid of the bad reviews. It's like the Mafia getting rid of the body.
There are so many problems with this that I am not sure where to start. First, brands and reputation are not being build on Google searches like they were 5-years ago. This has now moved to social media--conversations on the Internet. Blogs and micro-blogs (Twitter) are where the action is. Second, this plays right into bad management. If someone is saying something negative about your company, a smart manager should want to know why, whether it might have some truth, and then take action to correct it. This is the opposite. "I don't like what people are saying and I want you should make them go away"
Tuesday, September 29, 2009
Challenges for the Newly Merged Pharma Companies
The consolidation in the pharmaceutical industry continues. It is interesting that last year at this time I was teaching a Pharmaceutical Marketing MBA class and said that consolidation was predictable. Most of the students, all mid-level at pharma companies in various disciplines outside of marketing, pushed back that this would not happen. I think it was more of a wish on their part rather than good market observation.
Anyway, the consolidation has been going on and will continue. We likely are moving to what the Boston Consulting Group called the "Market of Three". That is, as an industry matures, consolidation occurs until there are three major broad players, with a group of niche players.
There are huge opportunities awaiting these newly formed companies to enhanced their perceived value with stakeholders. When a company says they will be the "new ..., they are in fact framing expectations for stakeholders that something will be different. That is, there will be new attributes, associations and experiences that were there previously. From a brand and reputation perspective, this is a double-edged sword. On the one-hand, these companies can get out of the starting gate with new positioning, brand and reputation initiatives designed to prove that they are in-fact new. Or, they can simply hope that new means that they will be accretive at some point in their financial performance, which I would argue is insufficient to prove their newness.
I would hope that these companies are looking at how they created value before, individually, and how they will be creating value going forward; that they reidentify for themselves and for others their strategic group with which they compete; that they engage in organizational change efforts to bring the new cultures into alignment (60-70% of mergers fail due to culture clashes); and that they look for ways to enhance their reputation with there key stakeholders.
It will be interesting to see how many of these companies do anything more than simply try to tell people that they are new.
Anyway, the consolidation has been going on and will continue. We likely are moving to what the Boston Consulting Group called the "Market of Three". That is, as an industry matures, consolidation occurs until there are three major broad players, with a group of niche players.
There are huge opportunities awaiting these newly formed companies to enhanced their perceived value with stakeholders. When a company says they will be the "new ..., they are in fact framing expectations for stakeholders that something will be different. That is, there will be new attributes, associations and experiences that were there previously. From a brand and reputation perspective, this is a double-edged sword. On the one-hand, these companies can get out of the starting gate with new positioning, brand and reputation initiatives designed to prove that they are in-fact new. Or, they can simply hope that new means that they will be accretive at some point in their financial performance, which I would argue is insufficient to prove their newness.
I would hope that these companies are looking at how they created value before, individually, and how they will be creating value going forward; that they reidentify for themselves and for others their strategic group with which they compete; that they engage in organizational change efforts to bring the new cultures into alignment (60-70% of mergers fail due to culture clashes); and that they look for ways to enhance their reputation with there key stakeholders.
It will be interesting to see how many of these companies do anything more than simply try to tell people that they are new.
Thursday, September 3, 2009
Position Your Brand for Where the Puck will Be, Not Where It Is
I am looking forward to a trip in a few weeks to Toronto, one of my favorite (favourite, if you're Canadian or British) cities. I lived in Toronto for about 10 1/2 years. Great city! Vibrant, multi-cultural, young, wealthy, clean.... Somehow, though, this great city north of the border did a lousy job marketing itself.
When the Canadian dollar was cheap compared to the U.S. dollar (as low as $.59 at one time), Toronto had the brilliant idea to market itself as a cheap place for Americans to visit. "Come see us. We're cheap, have great theatre and restaurants, and you can buy all you want at basically half the price". Things worked well. Americans flocked to Toronto and shopped and went to theatre and had a great time.
Then, the Canadian dollar (called the Loonie in Canada) began to strengthen compared to the U.S. dollar. Up it climbed until it was nearly at par. As of today it is about $.93, or about equal to the U.S. dollar. What happened? You guessed it, Americans stopped visiting. Toronto was no longer cheap.
So, here sits a great city--the equal or better than any city we have in the U.S., and Americans don't visit because they do not know about all of the attributes that could have been part of the positioning of the city. So, off they go to Chicago, San Francisco and New York--cities as or more expensive than Toronto, but cities that have billed themselves all along as places you need to see.
Too bad the marketing geniuses in Toronto didn't follow their Canadian son Wayne Gretzky. When the "Great One" was asked what made him so great, he answered: "I skate to where the puck will be, not to where it is".
I use the Gretzky quote with every company I work with. It is a great marketing strategy. The Toronto dilemma is repeated in way too many companies that develop a positioning with brand attributes and associations that are wonderful for a time, only to find themselves in the wrong place when the market forces change.
It is important to think forward and to make market force analysis a part of the brand process. Will the attributes and associations hold up and be differentiating and desirable if things change? Don't just position against the market as it is; position against the market as it might be.
When the Canadian dollar was cheap compared to the U.S. dollar (as low as $.59 at one time), Toronto had the brilliant idea to market itself as a cheap place for Americans to visit. "Come see us. We're cheap, have great theatre and restaurants, and you can buy all you want at basically half the price". Things worked well. Americans flocked to Toronto and shopped and went to theatre and had a great time.
Then, the Canadian dollar (called the Loonie in Canada) began to strengthen compared to the U.S. dollar. Up it climbed until it was nearly at par. As of today it is about $.93, or about equal to the U.S. dollar. What happened? You guessed it, Americans stopped visiting. Toronto was no longer cheap.
So, here sits a great city--the equal or better than any city we have in the U.S., and Americans don't visit because they do not know about all of the attributes that could have been part of the positioning of the city. So, off they go to Chicago, San Francisco and New York--cities as or more expensive than Toronto, but cities that have billed themselves all along as places you need to see.
Too bad the marketing geniuses in Toronto didn't follow their Canadian son Wayne Gretzky. When the "Great One" was asked what made him so great, he answered: "I skate to where the puck will be, not to where it is".
I use the Gretzky quote with every company I work with. It is a great marketing strategy. The Toronto dilemma is repeated in way too many companies that develop a positioning with brand attributes and associations that are wonderful for a time, only to find themselves in the wrong place when the market forces change.
It is important to think forward and to make market force analysis a part of the brand process. Will the attributes and associations hold up and be differentiating and desirable if things change? Don't just position against the market as it is; position against the market as it might be.
Tuesday, September 1, 2009
Companies Need to Get Customers Involved in Brand Redesign
IKEA recently made changes for the first time to its catalog. It changed the typeface it typically uses. Not a major revolutionary change to be sure. However, the reaction from customers was not what IKEA expected. It was negative and loud.
This comes not that long after Gatorade and Tropicana felt the wrath of its customers over packaging changes designed to update the brands. Gatorade, which I wrote about in a previous blog, redesigned itself and relaunched its brand as "G". Tropicana, which I talked about before, had to back down and reissue its old packaging when customers expressed anger over its new package design.
What is happening? I think what we are seeing is evidence that customers, not the company, own the brand. At one time, companies felt in total control over their brands. They changed things when the wanted and the public was expected to be soooooooo excited about the new brand name, logo and design. The problem was that with few alternative choices and few ways for customers to express themselves publicly, companies were often fooled into thinking that everything was fine. The Internet changed this. It moved power into the hands of the consumer who is free to express their opinions about brands and changes. With more alternatives to every brand on the market, changes that are not liked can easily lead to defections. The switching costs for almost every product--with few exceptions, like banking--are coming down rapidly.
Many companies are embracing this consumer ownership of their brands. Others are reacting with horror. At Hasbro, the company faced off against some of its most devoted customers who created an on-line version of Scrabble called Scrabbulous. Instead of finding a way to work with these brand-lovers, Hasbro sued them, turning many of them into brand-haters who are blasting Hasbro on-line.
Companies need to recognize that the brand is owned by the customer. That's where we always wanted it to reside--in the emotional connection with the individual purchaser. It is time that companies start to treat customers are partners rather than as passive purchasers. If changes to the brand are to be made, companies should get their best customers involved in the redesign. Then, they can use these customers to sell others who are less passionate. Times have changed and companies need to adapt.
This comes not that long after Gatorade and Tropicana felt the wrath of its customers over packaging changes designed to update the brands. Gatorade, which I wrote about in a previous blog, redesigned itself and relaunched its brand as "G". Tropicana, which I talked about before, had to back down and reissue its old packaging when customers expressed anger over its new package design.
What is happening? I think what we are seeing is evidence that customers, not the company, own the brand. At one time, companies felt in total control over their brands. They changed things when the wanted and the public was expected to be soooooooo excited about the new brand name, logo and design. The problem was that with few alternative choices and few ways for customers to express themselves publicly, companies were often fooled into thinking that everything was fine. The Internet changed this. It moved power into the hands of the consumer who is free to express their opinions about brands and changes. With more alternatives to every brand on the market, changes that are not liked can easily lead to defections. The switching costs for almost every product--with few exceptions, like banking--are coming down rapidly.
Many companies are embracing this consumer ownership of their brands. Others are reacting with horror. At Hasbro, the company faced off against some of its most devoted customers who created an on-line version of Scrabble called Scrabbulous. Instead of finding a way to work with these brand-lovers, Hasbro sued them, turning many of them into brand-haters who are blasting Hasbro on-line.
Companies need to recognize that the brand is owned by the customer. That's where we always wanted it to reside--in the emotional connection with the individual purchaser. It is time that companies start to treat customers are partners rather than as passive purchasers. If changes to the brand are to be made, companies should get their best customers involved in the redesign. Then, they can use these customers to sell others who are less passionate. Times have changed and companies need to adapt.
Tuesday, August 25, 2009
Delaware's Proposed Sports Betting Damages the NFL's Reputation?
The State of Delaware got a shock when a court ruled that its proposed sports betting was illegal. Delaware can only off parlay betting (more than one team) and only on pro football. The NFL and other leagues argued that sports betting would damage their reputations? I wish I had been an expert witness for the State on that one!
What exactly is the reputation of the pro leagues that they are trying to protect? Is it Major League Baseball's blind acceptance of steroids? That league even did testing in 2003 but sealed the findings and did nothing about anyone who was found to be using illegal enhancers.
Perhaps it would be the National Hockey League that continues to walk a thin line between wanting a good game and a good fight. When discussions emerged a few years ago about banning fighting, the league found itself having to back down to the players' union.
Or, maybe it would be the good reputation of the National Football League that has had so many legal issues with its players that it is hard to keep track.
So, sports betting in little Delaware would damage the reputation of sports? Are you kidding me? Michael Vick and Ricky Williams can return to the game without damaging the leagues reputation, but betting will ruin it? Hockey players can beat each other up while the crowd goes wild, but betting will make the sport look bad? Manny Ramierez can come back as if nothing has happened, with ESPN cutting into games to show his every at-bat, but betting will taint the MLB?
Why can't the sports leagues simply say that they are afraid that games will be fixed, a la the "Black Sox" scandal in 1919? I can accept that argument. We know that there are many athletes who love to gamble. They're human. Pete Rose, Michael Jordan and Charles Barkley are just a few of those with big gambling habits--the latter two have never been linked to betting on their own sports while active.
It seems that professional sports are very good at turning a blind eye to things they do not want to see or acknowledge. Sports betting occurs all the time with bookies and at office pools. But, in a time when states are trying to find new sources of revenue, the "cause celeb" of the major sports leagues is to stop Delaware from legalizing the back room activities that go on all the time.
The hypocrisy is just too much!
What exactly is the reputation of the pro leagues that they are trying to protect? Is it Major League Baseball's blind acceptance of steroids? That league even did testing in 2003 but sealed the findings and did nothing about anyone who was found to be using illegal enhancers.
Perhaps it would be the National Hockey League that continues to walk a thin line between wanting a good game and a good fight. When discussions emerged a few years ago about banning fighting, the league found itself having to back down to the players' union.
Or, maybe it would be the good reputation of the National Football League that has had so many legal issues with its players that it is hard to keep track.
So, sports betting in little Delaware would damage the reputation of sports? Are you kidding me? Michael Vick and Ricky Williams can return to the game without damaging the leagues reputation, but betting will ruin it? Hockey players can beat each other up while the crowd goes wild, but betting will make the sport look bad? Manny Ramierez can come back as if nothing has happened, with ESPN cutting into games to show his every at-bat, but betting will taint the MLB?
Why can't the sports leagues simply say that they are afraid that games will be fixed, a la the "Black Sox" scandal in 1919? I can accept that argument. We know that there are many athletes who love to gamble. They're human. Pete Rose, Michael Jordan and Charles Barkley are just a few of those with big gambling habits--the latter two have never been linked to betting on their own sports while active.
It seems that professional sports are very good at turning a blind eye to things they do not want to see or acknowledge. Sports betting occurs all the time with bookies and at office pools. But, in a time when states are trying to find new sources of revenue, the "cause celeb" of the major sports leagues is to stop Delaware from legalizing the back room activities that go on all the time.
The hypocrisy is just too much!
Friday, August 21, 2009
Does Signing Michael Vick Hurt the Eagles Brand?
I was asked the other day whether the signing of Michael Vick hurt the Philadelphia Eagles' brand and reputation. The question was put forward with the obvious suggestion that the signing did destroy the brand of the team.
For those who are not familiar with US sports, the Eagles are a professional football (American football, not soccer) team. Michael Vick was a professional player with the Atlanta Falcons who spent two years in prison for running a dog fighting ring and personally being involved in electrocuting, drowning, and otherwise torturing dogs. He did his time; he's out and the Eagles signed him. Many teams refused to sign him. Needless to say, this has created quite a controversy amongst fans. One sporting goods store, Dick's, has said that they will not carry Vick's jersey with the caviat, that they will if customers demand it.
Those familiar with the National Football League know that there have been a large number of players who have had legal problems. At one time, people joked that the NFL stood for National Fellons League.
The Eagles argue that Vick has served his time and that he deserves another chance. Most people know that this is not the real reason he was signed. The Eagles were not trying to make a social statement. He was signed because the team thought he was a good football player and could help the team. Otherwise, he would have been defined as ex-con not worthy of rehabilitation.
Now, what about destroying the brand? We've seen in baseball with Manny Ramierez, Barry Bonds, and others that the home team cheers and the opponents jeer those who have been accused of or admitted taking baned performance enhancing substances. The home fans want a winner. Yes, even the sophisticated city of San Francisco loved Barry Bonds who claimed he never took performance enhancing drugs but could not explain how he gain 3 hat sizes and 2 shoe sizes as an adult. He hit homeruns and won games. He put fans in the stands and built the TV ratings. Major league baseball even ignored the entire steroid scandal, relishing the fan enthusiasm for the homerun derby that broke all historical records.
So, what is the brand of a major league football team? One might want to say a community, family sports franchise, but in reality, the attributes are of a rough, oversized group of athletes expected to win for the city they play in. Owners have long understood that the public wants a winner and that they also love controversy. The Dallas Cowboys became the self-proclaimed "America's Team" with a lot of bravado and controversy surrounding less than savory players. The TV viewing audience for Michael Vick's first game will be huge.
So, for all of those who want the brand to be one thing, the owners and coaches know that what the vast majority of sports fans want is a winner. Cognitive dissonance will play its normal role in helping people to explain away those things that do not fit in their buying rationale. The brand promise of a sports team is to put a winner on the field. If they can do it with a group of "boy scouts", then fine, but the fans have not shown an inclination toward that type of team, despite all of the critics who scream about athletes being role models for young kids. The role models we have in sports are generally bad--get over it. Too many are coddled, spoiled brats who are children in adult bodies. There are many exceptions, but they do not garner the headlines.
Let's all remember that brands are not about making everyone happy or establishing a "higher order". They are only those things if it makes sense from either: 1) the desire of management; 2) differentiation; or 3) customer demand. In the case of football, none of these things is at work. The Eagles are fulfilling their brand promise to the vast majority of their fans. I imagine, though, that more of the downside will stick to the Eagles because it reinforces another brand image of Philadelphia as a city with ruthless fans and a tough, working class underbelly. If this were San Francisco, people would be much more willing to explain it away as a city that recognizes that people can learn from their mistakes.
I despise what Michael Vick did. I wish that all felons were banned from sports so that they were not role models for kids, but my desires are not what make the Eagles brand. I'm not an Eagles fan and wouldn't become one because they signed someone wonderful or didn't. They do not appeal to me as a franchise--as a brand.
While many people wish that the Eagles management would run the team differently and believe that the team turned its back on its brand and brand promise, I would suggest that the team is actually no different signing Vick than it was before. It is the same brand and has the same brand promise. The team may loose some fans, but these will likely be a small group of people who are not devoted fans--those who contribute the most to the profitability of the team.
For those who are not familiar with US sports, the Eagles are a professional football (American football, not soccer) team. Michael Vick was a professional player with the Atlanta Falcons who spent two years in prison for running a dog fighting ring and personally being involved in electrocuting, drowning, and otherwise torturing dogs. He did his time; he's out and the Eagles signed him. Many teams refused to sign him. Needless to say, this has created quite a controversy amongst fans. One sporting goods store, Dick's, has said that they will not carry Vick's jersey with the caviat, that they will if customers demand it.
Those familiar with the National Football League know that there have been a large number of players who have had legal problems. At one time, people joked that the NFL stood for National Fellons League.
The Eagles argue that Vick has served his time and that he deserves another chance. Most people know that this is not the real reason he was signed. The Eagles were not trying to make a social statement. He was signed because the team thought he was a good football player and could help the team. Otherwise, he would have been defined as ex-con not worthy of rehabilitation.
Now, what about destroying the brand? We've seen in baseball with Manny Ramierez, Barry Bonds, and others that the home team cheers and the opponents jeer those who have been accused of or admitted taking baned performance enhancing substances. The home fans want a winner. Yes, even the sophisticated city of San Francisco loved Barry Bonds who claimed he never took performance enhancing drugs but could not explain how he gain 3 hat sizes and 2 shoe sizes as an adult. He hit homeruns and won games. He put fans in the stands and built the TV ratings. Major league baseball even ignored the entire steroid scandal, relishing the fan enthusiasm for the homerun derby that broke all historical records.
So, what is the brand of a major league football team? One might want to say a community, family sports franchise, but in reality, the attributes are of a rough, oversized group of athletes expected to win for the city they play in. Owners have long understood that the public wants a winner and that they also love controversy. The Dallas Cowboys became the self-proclaimed "America's Team" with a lot of bravado and controversy surrounding less than savory players. The TV viewing audience for Michael Vick's first game will be huge.
So, for all of those who want the brand to be one thing, the owners and coaches know that what the vast majority of sports fans want is a winner. Cognitive dissonance will play its normal role in helping people to explain away those things that do not fit in their buying rationale. The brand promise of a sports team is to put a winner on the field. If they can do it with a group of "boy scouts", then fine, but the fans have not shown an inclination toward that type of team, despite all of the critics who scream about athletes being role models for young kids. The role models we have in sports are generally bad--get over it. Too many are coddled, spoiled brats who are children in adult bodies. There are many exceptions, but they do not garner the headlines.
Let's all remember that brands are not about making everyone happy or establishing a "higher order". They are only those things if it makes sense from either: 1) the desire of management; 2) differentiation; or 3) customer demand. In the case of football, none of these things is at work. The Eagles are fulfilling their brand promise to the vast majority of their fans. I imagine, though, that more of the downside will stick to the Eagles because it reinforces another brand image of Philadelphia as a city with ruthless fans and a tough, working class underbelly. If this were San Francisco, people would be much more willing to explain it away as a city that recognizes that people can learn from their mistakes.
I despise what Michael Vick did. I wish that all felons were banned from sports so that they were not role models for kids, but my desires are not what make the Eagles brand. I'm not an Eagles fan and wouldn't become one because they signed someone wonderful or didn't. They do not appeal to me as a franchise--as a brand.
While many people wish that the Eagles management would run the team differently and believe that the team turned its back on its brand and brand promise, I would suggest that the team is actually no different signing Vick than it was before. It is the same brand and has the same brand promise. The team may loose some fans, but these will likely be a small group of people who are not devoted fans--those who contribute the most to the profitability of the team.
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