Brand Reputation
Content
Ten Important Questions Brand Owners Need To Ask Overview In our work with clients, we typically find that once we start working with them very few actually proactively manage their reputation and even less understand the implications of not doing so. This paper sets out to challenge the thinking of those responsible for consumer brands and demonstrate successful case studies with a view to increasing the attention given to this important aspect of brand management and how this fits within an overall marketing strategy. What do we mean by reputation? Brand reputation is what consumers and customers say about the brand, rather than what the brand owner says about it. Brand reality is based entirely on how people perceive the brand and can make the difference between brand success and brand failure. Why does brand reputation matter? Reputation management is growing in its importance. The rapid rise in social media has led to substantial increase in consumer generated content. Any consumer is now an opinion former. Unfortunately for brand owners, a large amount of this content contains misleading information which damages the perception of the brand held by others. Worse still, technology enables this misleading information to spread quickly and once in the public domain, it is a considerable challenge for brand owners to change these perceptions or to successfully communicate accurate information to balance the viewpoint. Additionally traditional media frequently now pick up and report these inaccuracies to large audiences. A lot of the work undertaken by Brand Reputation is focused on helping Marketing Directors improve what their consumers and customers say about their brand. We often start by challenging them by asking them to answer the following ten questions: How large is the difference between what you communicate about your brand & what consumers believe about it? We find that few brand owners are able to answer this question. Not that many even know why consumers don’t believe their messaging. For example an electrical retailer that had a reputation for very poor customer service (aggressive sales staff, lots of products out of stock, unreliable own label products). The company did not recognise their poor reputation and that customers were becoming increasingly disappointed with their brand experience. Instead the retailer spent approximately £2million on advertising what a great customer experience they were providing (as an alternative to competing on price).
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
All this advertising did was remind customers that the brand provided poor customer service which drove sales away to their competitors. Once the brand realised the mistake of the campaign message, their market share had fallen by nearly 7%. This cost the company around £4million in lost profit. What efforts has your company made in this area? Do you really know what your customers think and say about you? What percentage of sentiment towards your brand is positive versus negative? Few brand owners measure sentiment. We believe this is mainly because they don’t know what to do to increase the level of positive sentiment or how to easily access this information. We’ve found that not enough Marketing Directors track changes in perception over the long term and map this against the various activities the business undertakes. Brand Reputation worked with a financial services client last year that had experienced a three year decline in positive sentiment regarding value for money amongst private banking customers. The company had increased current account charges by 60% over the same time period. As a result these high value customers expressed an increasingly level of frustration. The company lost sales of much more profitable products to the same customers due to this frustration. We worked with the company to develop and implement a geographically discrete pilot where current account charges were reduced back to 2005 levels. During the pilot, the company saw a 12% gain in positive brand sentiment and increased participation in new investment products, which improved profitability in the pilot area by 8%. The company has now rolled this strategy out to all its private banking customers and tracks sentiment levels on a monthly basis to ensure this highly valuable segment of their customer base remain satisfied. Are you measuring sentiment? If not, why not? Is your brand as transparent, ethical and responsible as it could be? Brand Reputation was approached at the start of 2009 by a luxury food retail chain who were becoming increasingly concerned that the brand was vulnerable to criticism regarding their procurement policies. We undertook an audit of customer attitudes towards the brand and a behavioural study to ascertain what proportion of their customers were influenced by their perception of the ethical stature and conduct of the company. The results were used to develop a corporate responsibility policy and statement of future intent. This policy and statement (together with details of a partnership Brand Reputation established for our client with a trade body) are prominently communicated in-store. The awareness of this initiative amongst loyal customers has increased average visit frequency by more than 4%. Do you consider corporate responsibility as part of your brand plan?
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
Have you calculated the value of sales you have lost due to your reputation? In our work we nearly always see a direct correlation between sales levels and reputation levels, but not all the boards we work with have historically measured this. A hotel group that had seen an 8% decline in sales retained Brand Reputation to develop a new marketing strategy to reverse the decline. At the initial development phase we conducted a reputation audit to ascertain what lapsed and active customers perceived about the brand. We discovered that the brand communication was not the main problem but that the hotels were providing an inconsistent service and that was affecting the reputation and sales through word of mouth. We worked with the board of the business to develop and implement a training programme to drive up service levels and consistency of delivery. This improved the reputation of the brand, which in turn drove sales back up to the previous level. Have you calculated the opportunity cost of not optimising your reputation? How do you plan to change or improve consumer perception of your brand? If few Marketing Directors fully understand the perception of their brand, then even fewer actively work at strengthening perception as most are focused on delivering their annual plan, managing their team and their budget and delivering their sales week by week. The Marketing Director of a confectionary brand that Brand Reputation worked with did recognise that the company needed to expand their product range to grow their long term sales as short term sales. The company wanted to introduce a sub-brand aimed at a more premium sector of their market. To be able to do this they needed to adjust the positioning of the master brand so that a premium sub-brand was appealing to a more upmarket consumer. We worked with the business to re-develop the packaging of the existing product to make the brand appear more aspirational. Subsequent sentiment analysis showed that perception of the master brand had improved to a level whereby the company could roll out a premium sub-brand without fear of failure. Do you know how to measure which aspects of your marketing activity are wasted & how this damages your brand? A surprisingly low number of brand owners ever invest in econometric analysis of their advertising and media spend. The typical cost of such a study is less than 1% of the annual media spend. However, brands fail to invest this to ascertain which layers of the remaining 99% of the media spend is being spend effectively or is being wasted.
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
A European telecommunications brand retained Brand Reputation to conduct an econometric study. Whilst the brand had a good reputation the cost to acquire a new customer was increasing compared to their competition. Our analysis showed that one particular media channel (which accounted for 20% of their total media spend) was not delivering new customers. The company has now restructured their media plan and brand image scores have improved as the correct investment in being channelled in to the most impactful media. When did you last review your media effectiveness? Do consumers believe what you say about your brand? The greater the gap between what the brand says and what consumers say about it, the greater the commercial problem. Last year we were invited in by a packaged goods company who had a problem. Consumers simply didn’t believe in the quality of the product. Sales were relatively constant however margin was being eroded as consumers primarily purchased based on price. To maintain sales the company had held their price whilst they experienced rises in raw ingredient costs. When we worked with the company we saw that the quality of the product was much better than the consumer perception of the brand. We worked with the client to develop an educationally led campaign which challenged consumer attitudes regarding quality. After three months of this campaign attitudes towards the brand had changed sufficiently for the business to increase price and recover margin without losing market share. Does your market research really uncover what consumers believe? What do you know about consumer generated media and what are you doing about it? The failure to influence the online community is the biggest error being made by brand owners. Consumers are extremely vocal online. The rise in social networks and the increased use of forums, combined with the establishment of websites such as grumbletext.co.uk and consumerist.com mean that it is vital for any brand to monitor and seek to influence what people are saying about brands. Our recent work with a national retailer identified 82 groups on one social networking site alone. On this site we found that more than 50 of these groups were highly negative about the brand. Of particular concern within this set of negative groups was that there were a large number of previous and current employees who were making extremely inaccurate comments about the company. Whilst it is not possible to completely eradicate negative sentiment about any brand, by developing a plan to address the inaccuracies and directly speaking with those who were negative we were able redress the balance. We have also established an official “fan of the brand” group which has attracted more than 150,000 members. This large group of brand advocates are regularly rewarded by the brand owner for their loyalty and advocacy which has made a substantial contribution to a 12% increase in positive sentiment about the brand online. What is being said about your brand online?
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
What systems & processes would you need to change to improve what consumers say about your brand? Few senior managers take the time to identify which areas of their business is causing customer dissatisfaction. By failing to do this businesses are missing a trick. Not only does work in this area enhance the brand but reviews of systems and processes can also generate substantial cost savings. Our work with a restaurant chain showed that the chain was losing an average of 5000 customers a month due to poor satisfaction levels. We worked with the Marketing and Operations teams to review systems, processes and communication materials to identify where the problems were. We found there was a substantial disconnect between what the marketing communications material was committing to customers and what the operations team were able to deliver in practice. This was leading to “over promise and under delivery” which in turn was leading to the customer dissatisfaction and lost customers. We conducted an operational study to see what improvements could be made at an operational level and then worked with the marketing team and their other agencies to amend how service levels were communicated to customers. Subsequent to this work, the restaurant chain have reduced the number of lapsing customers by 80% and saved over £300,000 from process efficiencies. What could you do to improve brand experience? What benefits do you get from your Stakeholder Engagement strategy? A leading airline was facing increased pressure from various special interest groups to openly discuss their approach to reducing their carbon footprint. Viewed as a polluting brand by many, the airline had actually implemented a large number of projects to improve their efficiencies and environmental credentials, but had not communicated any of these either to their customers or to a wider audience of stakeholders. Brand Reputation built an evaluation model for use by the airline to help them assist not only which of their previous environmental initiatives they should communicate but also to identify which different stakeholder groups they should engage with (including local communities, employees, pressure groups, trade bodies, NGO’s, academia and others). We also provided detailed guidance on the format each piece of dialogue should form. As a result of this project, positive engagement scores for the brand have increased by over 30% and respect levels amongst the wider stakeholder community have substantially gone up. We are now retained by this client to provide ongoing guidance on the best way to engage with various interest groups and work on behalf of the brand with several of these groups. Are you aligned with the right organisations to benefit your brand?
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
In Summary Brand Reputation believes that Marketing Director of every brand, regardless of sector, should be asking themselves these questions. The summary of results that we have delivered for clients that we have shown are demonstrable proof that reputation management should be an integral part of the long term marketing strategy for any consumer brand - the examples outlined in this paper show the opportunity cost of failing to consider this. Whilst Brand Reputation has seen that there is some level of recognition amongst senior marketers to start to consider this as party of their marketing plan, there is a requirement for agencies to educate Marketing Directors and Chief Executives as to the importance of this aspect of marketing and the potential return on investment that it can generate and or the profit that it can protect. In the current economic climate consumers are increasingly aware of the value of their cash and are taking greater care than ever in considering where and how to spend their money. The reputation of the brands they are considering is more of an influencing factor for brand selection than ever before. Brand Reputation strongly believe that brands who fail to manage their reputation are at best competitively disadvantaged and at worst at risk of long term failure. About the Author Graeme Crossley is the founder and Chief Executive of Brand Reputation. Prior to founding the agency in 2008 Graeme spent over fifteen years in senior international brand communication roles for leading companies including The Coca-Cola Company, Amazon.com, Pizza Hut, Sainsbury’s and WH Smith. Graeme was elected as a Business Leader of The Marketing Society in 2003 and his first book will be published in 2010. He is a prominent and frequent media commentator on consumer branding. For media and speaking enquiries please contact Jenna Gould on 07958 263708. For all other enquiries please contact our office on 020 7025 8083 or visit www.brandrep.co.uk About Brand Reputation We are a multi-service brand communications agency for consumer brands based in London. We specialise in fixing brand pain™ and we deliver strategies that change consumer attitudes and behaviour to build sales, profit and market share for some of the world’s leading brands. We increase brand value by using bespoke strategies and techniques to fix problems. We work with brands in multiple sectors including retail, FMCG, automotive, travel, leisure and entertainment and financial services. We positively influence how consumers think and act. What do we mean by brand pain™? Brand pain™ is our term for a brand that’s struggling or failing in certain ways and is this is impacting on the commercial performance of the business.
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
Contact Details Brand Reputation:
0207 025 8083
[email protected]
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
All this advertising did was remind customers that the brand provided poor customer service which drove sales away to their competitors. Once the brand realised the mistake of the campaign message, their market share had fallen by nearly 7%. This cost the company around £4million in lost profit. What efforts has your company made in this area? Do you really know what your customers think and say about you? What percentage of sentiment towards your brand is positive versus negative? Few brand owners measure sentiment. We believe this is mainly because they don’t know what to do to increase the level of positive sentiment or how to easily access this information. We’ve found that not enough Marketing Directors track changes in perception over the long term and map this against the various activities the business undertakes. Brand Reputation worked with a financial services client last year that had experienced a three year decline in positive sentiment regarding value for money amongst private banking customers. The company had increased current account charges by 60% over the same time period. As a result these high value customers expressed an increasingly level of frustration. The company lost sales of much more profitable products to the same customers due to this frustration. We worked with the company to develop and implement a geographically discrete pilot where current account charges were reduced back to 2005 levels. During the pilot, the company saw a 12% gain in positive brand sentiment and increased participation in new investment products, which improved profitability in the pilot area by 8%. The company has now rolled this strategy out to all its private banking customers and tracks sentiment levels on a monthly basis to ensure this highly valuable segment of their customer base remain satisfied. Are you measuring sentiment? If not, why not? Is your brand as transparent, ethical and responsible as it could be? Brand Reputation was approached at the start of 2009 by a luxury food retail chain who were becoming increasingly concerned that the brand was vulnerable to criticism regarding their procurement policies. We undertook an audit of customer attitudes towards the brand and a behavioural study to ascertain what proportion of their customers were influenced by their perception of the ethical stature and conduct of the company. The results were used to develop a corporate responsibility policy and statement of future intent. This policy and statement (together with details of a partnership Brand Reputation established for our client with a trade body) are prominently communicated in-store. The awareness of this initiative amongst loyal customers has increased average visit frequency by more than 4%. Do you consider corporate responsibility as part of your brand plan?
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
Have you calculated the value of sales you have lost due to your reputation? In our work we nearly always see a direct correlation between sales levels and reputation levels, but not all the boards we work with have historically measured this. A hotel group that had seen an 8% decline in sales retained Brand Reputation to develop a new marketing strategy to reverse the decline. At the initial development phase we conducted a reputation audit to ascertain what lapsed and active customers perceived about the brand. We discovered that the brand communication was not the main problem but that the hotels were providing an inconsistent service and that was affecting the reputation and sales through word of mouth. We worked with the board of the business to develop and implement a training programme to drive up service levels and consistency of delivery. This improved the reputation of the brand, which in turn drove sales back up to the previous level. Have you calculated the opportunity cost of not optimising your reputation? How do you plan to change or improve consumer perception of your brand? If few Marketing Directors fully understand the perception of their brand, then even fewer actively work at strengthening perception as most are focused on delivering their annual plan, managing their team and their budget and delivering their sales week by week. The Marketing Director of a confectionary brand that Brand Reputation worked with did recognise that the company needed to expand their product range to grow their long term sales as short term sales. The company wanted to introduce a sub-brand aimed at a more premium sector of their market. To be able to do this they needed to adjust the positioning of the master brand so that a premium sub-brand was appealing to a more upmarket consumer. We worked with the business to re-develop the packaging of the existing product to make the brand appear more aspirational. Subsequent sentiment analysis showed that perception of the master brand had improved to a level whereby the company could roll out a premium sub-brand without fear of failure. Do you know how to measure which aspects of your marketing activity are wasted & how this damages your brand? A surprisingly low number of brand owners ever invest in econometric analysis of their advertising and media spend. The typical cost of such a study is less than 1% of the annual media spend. However, brands fail to invest this to ascertain which layers of the remaining 99% of the media spend is being spend effectively or is being wasted.
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
A European telecommunications brand retained Brand Reputation to conduct an econometric study. Whilst the brand had a good reputation the cost to acquire a new customer was increasing compared to their competition. Our analysis showed that one particular media channel (which accounted for 20% of their total media spend) was not delivering new customers. The company has now restructured their media plan and brand image scores have improved as the correct investment in being channelled in to the most impactful media. When did you last review your media effectiveness? Do consumers believe what you say about your brand? The greater the gap between what the brand says and what consumers say about it, the greater the commercial problem. Last year we were invited in by a packaged goods company who had a problem. Consumers simply didn’t believe in the quality of the product. Sales were relatively constant however margin was being eroded as consumers primarily purchased based on price. To maintain sales the company had held their price whilst they experienced rises in raw ingredient costs. When we worked with the company we saw that the quality of the product was much better than the consumer perception of the brand. We worked with the client to develop an educationally led campaign which challenged consumer attitudes regarding quality. After three months of this campaign attitudes towards the brand had changed sufficiently for the business to increase price and recover margin without losing market share. Does your market research really uncover what consumers believe? What do you know about consumer generated media and what are you doing about it? The failure to influence the online community is the biggest error being made by brand owners. Consumers are extremely vocal online. The rise in social networks and the increased use of forums, combined with the establishment of websites such as grumbletext.co.uk and consumerist.com mean that it is vital for any brand to monitor and seek to influence what people are saying about brands. Our recent work with a national retailer identified 82 groups on one social networking site alone. On this site we found that more than 50 of these groups were highly negative about the brand. Of particular concern within this set of negative groups was that there were a large number of previous and current employees who were making extremely inaccurate comments about the company. Whilst it is not possible to completely eradicate negative sentiment about any brand, by developing a plan to address the inaccuracies and directly speaking with those who were negative we were able redress the balance. We have also established an official “fan of the brand” group which has attracted more than 150,000 members. This large group of brand advocates are regularly rewarded by the brand owner for their loyalty and advocacy which has made a substantial contribution to a 12% increase in positive sentiment about the brand online. What is being said about your brand online?
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
What systems & processes would you need to change to improve what consumers say about your brand? Few senior managers take the time to identify which areas of their business is causing customer dissatisfaction. By failing to do this businesses are missing a trick. Not only does work in this area enhance the brand but reviews of systems and processes can also generate substantial cost savings. Our work with a restaurant chain showed that the chain was losing an average of 5000 customers a month due to poor satisfaction levels. We worked with the Marketing and Operations teams to review systems, processes and communication materials to identify where the problems were. We found there was a substantial disconnect between what the marketing communications material was committing to customers and what the operations team were able to deliver in practice. This was leading to “over promise and under delivery” which in turn was leading to the customer dissatisfaction and lost customers. We conducted an operational study to see what improvements could be made at an operational level and then worked with the marketing team and their other agencies to amend how service levels were communicated to customers. Subsequent to this work, the restaurant chain have reduced the number of lapsing customers by 80% and saved over £300,000 from process efficiencies. What could you do to improve brand experience? What benefits do you get from your Stakeholder Engagement strategy? A leading airline was facing increased pressure from various special interest groups to openly discuss their approach to reducing their carbon footprint. Viewed as a polluting brand by many, the airline had actually implemented a large number of projects to improve their efficiencies and environmental credentials, but had not communicated any of these either to their customers or to a wider audience of stakeholders. Brand Reputation built an evaluation model for use by the airline to help them assist not only which of their previous environmental initiatives they should communicate but also to identify which different stakeholder groups they should engage with (including local communities, employees, pressure groups, trade bodies, NGO’s, academia and others). We also provided detailed guidance on the format each piece of dialogue should form. As a result of this project, positive engagement scores for the brand have increased by over 30% and respect levels amongst the wider stakeholder community have substantially gone up. We are now retained by this client to provide ongoing guidance on the best way to engage with various interest groups and work on behalf of the brand with several of these groups. Are you aligned with the right organisations to benefit your brand?
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
In Summary Brand Reputation believes that Marketing Director of every brand, regardless of sector, should be asking themselves these questions. The summary of results that we have delivered for clients that we have shown are demonstrable proof that reputation management should be an integral part of the long term marketing strategy for any consumer brand - the examples outlined in this paper show the opportunity cost of failing to consider this. Whilst Brand Reputation has seen that there is some level of recognition amongst senior marketers to start to consider this as party of their marketing plan, there is a requirement for agencies to educate Marketing Directors and Chief Executives as to the importance of this aspect of marketing and the potential return on investment that it can generate and or the profit that it can protect. In the current economic climate consumers are increasingly aware of the value of their cash and are taking greater care than ever in considering where and how to spend their money. The reputation of the brands they are considering is more of an influencing factor for brand selection than ever before. Brand Reputation strongly believe that brands who fail to manage their reputation are at best competitively disadvantaged and at worst at risk of long term failure. About the Author Graeme Crossley is the founder and Chief Executive of Brand Reputation. Prior to founding the agency in 2008 Graeme spent over fifteen years in senior international brand communication roles for leading companies including The Coca-Cola Company, Amazon.com, Pizza Hut, Sainsbury’s and WH Smith. Graeme was elected as a Business Leader of The Marketing Society in 2003 and his first book will be published in 2010. He is a prominent and frequent media commentator on consumer branding. For media and speaking enquiries please contact Jenna Gould on 07958 263708. For all other enquiries please contact our office on 020 7025 8083 or visit www.brandrep.co.uk About Brand Reputation We are a multi-service brand communications agency for consumer brands based in London. We specialise in fixing brand pain™ and we deliver strategies that change consumer attitudes and behaviour to build sales, profit and market share for some of the world’s leading brands. We increase brand value by using bespoke strategies and techniques to fix problems. We work with brands in multiple sectors including retail, FMCG, automotive, travel, leisure and entertainment and financial services. We positively influence how consumers think and act. What do we mean by brand pain™? Brand pain™ is our term for a brand that’s struggling or failing in certain ways and is this is impacting on the commercial performance of the business.
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
Contact Details Brand Reputation:
0207 025 8083
[email protected]
© Brand Reputation Ltd 2009. All rights reserved. The intellectual property of this article is retained by Brand Reputation Ltd and no part of this document may be published or shared without prior permission.
18 Soho Square, London. W1D 3QL
www.brandrep.co.uk
