Protecting Your Corporate Brand
Corporate Branding Is More Than Just Logos and PR
Ever since I wrote my first book in 1997, Corporate Image Management: A Marketing Discipline for the 21st Century, I have advocated that “nothing touches the customer more than how he or she perceives your corporate image.”
Corporate image management, or what some writers and researchers refer today as corporate reputation management, remains one of the most important (and yet most overlooked) management and marketing disciples for businesses, organizations, associations, and government entities.
In today’s global market environment, customer trust in organizations, particularly corporations, is at an all-time low as a direct fallout from the never-ending series of widely reported scandals (i.e. WorldCom and CEO Bernie Ebbers, Enron, Martha Stewart, HIH Insurance, OneTel, Tyco, Citicorp’s recent activities in Japan and Europe, Boeing, and Parmalat in Italy).
Corporate image management has always been important, but perhaps never as important as today. As Federal Reserve Chairman Alan Greenspan said in his Commencement Address at Harvard University in 1999, “In today’s world, where ideas are increasingly displacing the physical in the production of economic value, competition for reputation becomes a significant driving force, propelling our economy forward.”
The corporate image is an extremely important corporate asset, one deserving the same attention and commitment by senior management as any other vital issue. The key to managing this asset is to fully understand that your stakeholders’ perceptions embody your corporate image.
Unfortunately for every organization, these stakeholder perceptions are no longer (and I doubt if they truly ever were) formed solely through experiences with your products and services.
For instance, a multiyear study by Cone Inc., a marketing and communications firm based in Boston, reveals that American customers are now increasingly taking into consideration the reputation and track record of social responsibility of the companies they will keep in their spending circle. Eighty percent reportedly said corporate support of a cause is a key factor in whether or not they trust a particular firm, an increase of 21 percent from the previous year.
According to Carol Cone, CEO of Cone, “This study, a series of research spanning over a decade, shows that in today’s climate, more than ever before, companies must get involved with social issues in order to protect and enhance their reputations.“
Supporting a cause can improve a company’s status with customers. Companies that are caught or reported behaving unethically or illegally can also expect to receive some clearly defined customer responses. In such cases, according to the Cone research:
- 90 percent said they would consider switching to another company’s product or service.
- 81 percent said they would speak out against the company to family and friends.
- 80 percent would consider selling any stock holdings in the company.
- 80 percent would refuse to invest in the company.
- 75 percent would refuse to work for that company.
- 73 percent said they would boycott that company’s goods or services.
- 67 percent said they would be less loyal in their job at that company.
On the other hand, positive corporate activity in social and community issues can have an immediate positive impact on corporate brand images. GMIPoll conducted a survey with 20,000 consumers in 20 countries one week after the South Asian Tsunami, measuring their opinions on American multinational brands, corporate tsunami relief efforts, and U.S. foreign policy. A remarkable 59% of these consumers reported that their impressions of corporate brands improved as a result of the tsunami relief efforts from U.S.-based multinational corporations.
For example, Coca-Cola provided bottled drinking water, basic foodstuffs, and medical supplies to tsunami victims; Starbucks made an initial contribution of $100,000 to international relief organizations CARE and Oxfam UK, plus donated $2 per pound of Sumatra coffee sold during January; and the Bill & Melinda Gates Foundation pledged an initial $3 million to nongovernmental organizations to aid tsunami relief efforts.
The GMIPoll results indicated that as a result of Coke’s contributions, 61% of consumers reported an improved image of Coca-Cola. Starbuck’s tsunami relief pledge resulted in 51% of respondents expressing an improved image of Starbucks. The Bill and Melinda Gates donation resulted in 50% of respondents reporting an improved image of Microsoft.
Furthermore, 46% of all consumers indicated that they will purchase more products from the companies that provided tsunami relief. For example, 39% indicated they would consider purchasing more Coca-Cola products in the future; 32% indicated they would buy more at Starbucks; and 37% indicated a greater willingness to buy Microsoft products.
Positive brand sentiment gained from tsunami relief efforts stands in stark contrast to images heavily influenced by U.S. foreign policy. The GMIPoll found that one in five international consumers consciously avoids purchasing American brands as a way of displaying their discontent over recent American foreign policies and military action (the three countries with the highest percentage of consumers who indicate an intention to boycott iconic American brands are South Korea 45%, Greece 40% and France 25%).
Softening the blow however, 56% of those who indicated that they consider boycotting American brands also reported that their judgment of those corporations that had donated to the tsunami relief effort had improved; similarly, 48% stated that they would consider purchasing products in the future from those brands that had provided tsunami aid. Clearly, there are powerful international cross currents influencing global consumers’ views of American iconic brands.
Corporate branding is more than just positive media coverage, good financial results, and increased market share. And it is certainly more than just donating money, products, or services when natural disasters strike.
Properly managed, your corporate brand should discourage unethical behavior throughout the organization, reduce staff turnover, reduce customer churn and attrition, and minimize negative media coverage. This will happen only when management sees the corporate image as a management discipline, and not just a marketing tool, a graphic design project, or a public relations exercise.
The essential role that corporate image now performs is also a result of major shifts in the field of marketing combined with more knowledgeable and interested customers. The corporate brand image is much more than a name or logo. Your corporate brand reflects your way of doing business, a key component of reputation and identity.
The strongest corporate brands tend to be the ones with the most consistent and clearest messages. These brands create expectations and anticipations in the minds of both consumers who buy, use, or recommend the brands and the employees who deliver upon these inherent promises.
Every organization has a corporate image, whether it wants one or not.
When properly designed and managed, the corporate image will accurately reflect the organization’s commitment to quality, excellence, and its relationships with its various constituents: such as current and potential customers, employees and future staff, competitors, partners, governing bodies, and the general public.
Also, when properly managed and communicated, the corporate image will create an internal culture that is more likely to protect the brand and reputation of the organization.
In a sense, this is complete circle of corporate brand protection. A properly managed corporate image creates a culture that protects the brand and reputation, which therefore reinforces and strengthens the management of the corporate image.
This makes the management of your corporate image one of the most potent marketing and management tools available for your senior executives to use in ensuring the viable execution of your corporate vision, as well as ensuring the protection of this most vital corporate asset.
KEY POINT: nothing touches the customer more than how he or she perceives your corporate image.
TAKING ACTION: who is in charge of your corporate image? If the answer is not “everyone in the organization,” then take time to reflect on why not.
When was the last time your senior management team reviewed and discussed your corporate image? How soon can this subject be added to the next senior management meeting agenda?
Survey the top 20% of your customers on their perceptions of your corporate image. Survey 100% of your employees asking the same questions. Compare the results.
This article is excerpted from our book The Best of the Monday Morning Marketing Memo, available in paperback and Kindle formats at Amazon.