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Branding experts agree that the essence of any brand is trust, and that's especially true of the corporate brand. On the business side, corporate brands are supposed to indicate a safe place to invest money, and a good place to work and build a career. On the consumer side, strong corporate brands guarantee the reliability of products and services.
"While a brand represents strength in its category, it is also vulnerable to unscrupulous behavior," said Rob Gelphman, a public relations executive in San Francisco. "While a brand will help drive sales and help cement market position, it is not a cure-all. It won't save a company from itself. You mess with the brand, and you mess with the entire company."
Marsha Lindsay, president and CEO of Lindsay, Stone and Briggs, said, "A brand is a promise to the customer that goes beyond the product or service. It includes the faith people have in company values and behavior. Corporate malfeasance could potentially erode the trust upon which brands are founded."
Lindsay's branding firm, based in Wisconsin, has gained some consumer insights about the affect of the corporate ethics crisis on brands from a poll it recently sponsored. The survey, conducted by AcuPOLL Precision Research, found that nearly seven in ten consumers are less likely to trust the brand they buy every day when they hear news about misdeeds at Enron, WorldCom and others.
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That's the kind of public opinion that keeps senior executives everywhere up all night worried about their corporate brands.
"They could be next," said Gelphman. "People react to scandal with their pocketbooks. It's going to affect sales. But my worst fear is that everybody will lump these companies into the big mega-brand called Large American Icon Corporation That Restated Its Earnings."
Consumer awareness of the scandals could have an impact on what people buy, agreed Beth Kaufman, director of public relations at The Brownstein Group, a marketing consultancy in Philadelphia. "And they look not just at the product or brand, but the entire company."
As a result, the challenge for legitimate companies is to remain squeaky clean and far from controversy. But what exactly should they be doing to retain consumer confidence so sales won't waver?
"The first thing they need to do is articulate their brand strategies so that people can understand what – and what not – to expect from them," recommends Rob Frankel, author of The Revenge of Brand X. "Branding is so much more than a name and a logo. Now maybe these CEOs can see just how much more. If the CEOs define their brands clearly and compellingly, the public will have a clear expectation of their brands. After that, they merely have to deliver on those expectations, which is easily done."
Branding consultant Kevin O'Donnell wonders about the "guilt by association" that confronts all corporate brands today in the eyes of weary and cynical consumers. He urges companies to take an active role in reshaping public opinion and re-establishing trust.
"Companies that have strong assets to deploy – a rich heritage and history, for example – have a natural advantage," explained O'Donnell, managing partner of the San Francisco office of Prophet, a consulting firm. "This is the perfect time to use those core elements of their brands, and have them be instantly relevant. Coca-Cola did this very successfully, as it was the first corporation to come forward and answer the call to expense stock options on its income statements. This company's brand was built on integrity and high standards, and in making this move, it has given consumers a reason to trust and remain loyal to the Coke brand. At the same time, the silence was deafening when other companies built on the same principles did nothing."
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Andrew Rubin, a marketing and public relations consultant, urges legitimate companies to "brand harder" by communicating a distinct identity loudly and clearly.
"For legitimate businesses, widespread fraud among competitors means customers are ripe for alternatives. Your company may be seen as an isle of honesty in a sea of sewage. Now is the time to let your customers and prospective customers know what you stand for and why you're different and worthy of their support.
"If you don't stand for something fundamentally related to the customer’s needs, or if people don't know what you stand for, your product or service will be regarded as a commodity and the customers will have no qualms about switching to a competitor if you falter. Rigorously cultivating your brand pays off in many ways, not the least of which is giving you a little leeway if you make a misstep," said Rubin, a principal of Winslow-Rubin Communications in Florida.
In much of its reporting of the financial scandals, the media has identified the CEO as the alleged leading villain – just look at Kenneth Lay of Enron, Bernard Ebbers of WorldCom and L. Dennis Kozlowski of Tyco International. Consequently, CEOs everywhere realize they are under close scrutiny nowadays.
This is an opportunity, according to branding experts. Legitimate companies looking to maintain consumer confidence need leadership from a credible CEO, the true steward of the corporate brand. Brownstein's Kaufman recommends proactive communications with shareholders in the form of a press conference or a special report distributed to them. For company employees, she recommends a town hall meeting, an email or voice message from the CEO. Others recommend that CEOs appear in print and television advertising to put a credible face on the "faceless" corporate brand.
T. Scott Gross, author of MicroBranding, lists Bill Gates of Microsoft and Herb Kellegher of Southwest Airlines as outstanding spokespersons. "The CEO is the brand, so all the brand attributes so eloquently listed in the brand statement must fit the boss."
Frankel, the consultant, suggests a more comprehensive approach because integrity is not something that can be sold in a 30-second TV commercial.
"The smarter CEOs will move to control their brands and manage the public's expectations," he said. "They must invest in structured branded programs that focus on real issues, not just press junkets and silly promotions. Like all branding, if they take the lead, others will follow." [14-Oct-2002]
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John Karolefski, formerly the editor-in-chief of Brand Marketing magazine, writes and speaks frequently about marketing issues.
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Aug 26, 2002
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Commodities: Branding the Basics -- Eric Mirabel
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How do we go about turning a commodity product or production capability into a new brand? We look at the Middle East, a transitioning market where manufacturers are branding commodities.
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Aug 19, 2002
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Brands in Toyland -- Ron Irwin
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Is branding in the toy world just child’s play? We look at how traditional brands like LEGO and Brio stand up to the dazzlingly high-tech competition.
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Aug 12, 2002
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Long Live the King -- John Karolefski
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Young and svelte, bloated and strung out, Elvis had universal appeal throughout his short lifespan. The king may be dead but apparently the brand lives on.
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Aug 5, 2002
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IBM Navigates the Biotech Maze -- Edwin Colyer
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IBM Global Services is expanding to a variety of areas like its recent acquisition of PwC Consulting. We look at how a brand like this penetrates the life sciences market.
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Jul 29, 2002
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Do Nonprofits Have Value? -- Robin Rusch
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As we unveil Interbrand's league tables of the world's most valuable brands for for-profit brands in 2002, we ask, Is there value in a nonprofit brand?
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