As if being a successful CEO wasn’t tough enough, now you may have to learn a new skill–the art of apologizing. The number of public C-level apologies is growing daily as Mattel’s Robert Eckert, Ameritrade’s Joe Moglia, Apple’s Steve Jobs, and JetBlue’s David Neeleman join a very long list.
What’s happening? Have business leaders suddenly abdicated control? Are meeting financial expectations overtaking common sense and good business judgment? Or, have corporations lost touch with their customers?
One answer could be “all of the above.” However, a more accurate explanation is that our world of instantaneous and ubiquitous communication has given customers more power to hold CEOs and companies accountable than ever before.
Branding 101 taught us all that a brand is more than a product name or a company logo and loyalty can’t be bought with an ad. Brand loyalty is a gift from a customer to a company that consistently earns their trust and demonstrates credibility over time. It can also be taken away at any time.
Brands and trust
When a company or brand delivers what is expected time after time, customers begin to trust the brand. When a company acts in accordance with the image it projects then credibility develops. But as credibility and trust grow, brand failures become more costly.
Dell lost customers’ trust when service slipped. Mattel lost both trust and credibility over lead-tainted toys. Ok, so much for product related problems, what about the corporate brand image? Herbal tea-maker Celestial Seasonings incurred customers’ wrath by ignoring its advertised corporate image of environmental stewardship when it poisoned prairie dogs on its property. Who would have guessed that prairie dogs were important to tea drinkers? And that question is the point of this discussion.
There is an unwritten contract today between customers and the brands they buy. First, they expect you to consistently deliver what you advertise. Second, they expect the companies they do business with to treat them with respect and to be honorable and forthright. (Editor’s note: For a definition of the terms “respect,” “honorable,” and “forthright” ask your customers because only they can define the terms.)
Corporate behavior impacts brand image
Unfortunately brand research all too often stops with product or service quality. What is not well understood is that everything a company does affects the brand in the eyes of the customer. Google’s decision to use solar energy for its server farms reinforces what Google stands for and strengthens the Google brand. A company’s decision to outsource manufacturing or their help desk isn’t just a financial decision; it impacts employees, the community, political leaders, and, most of all, customers.
In the “everything is brand world,” each person in the company, from contract employees to managers, to executives, to the Board of Directors must be responsible for maintaining and increasing brand value. Key brand decisions are not just product or marketing related, they can be decisions on: outsourcing; environmental policies; corporate contribution recipients; high-profile law suits; layoffs; plant or office closings; treatment of employees; animal testing; low cost suppliers; product quality control; service response times; controlling information leaks, and even how to control pests on corporate land.
How can you possibly know which issues will touch a customer nerve and negatively affect brand loyalty? It’s simple–ask them!
Finding out what customers really want
Companies need to spend time to understand what makes customers so loyal. They need to go beyond research on products and services and understand what the customer believes are:
- The best and worst experiences they have had with your company
- The values of the company?
- The social and ethical responsibilities the company has?
- The major differences between your company and the competitor.
Once you have the answers work them into your company value statements, CEO messages, employee training etc. After you have communicated internally, broaden the communication to partners, channels, and suppliers. Open customer communication feedback channels on product and non-product issues. Consider a customer advisory council and possible a CEO blog to communicate key decisions customers care about. Make sure every executive, manager and employee in the company understands what is important to customers and that every meeting ends with one question “will this decision help or hurt our brand?” And finally, don’t let anyone forget the prairie dogs!