6 New Realities of Corporate Reputations

Corporate Image Management matters more now than ever.

Corporate reputations impact brand and product sales performance. That’s one of the key findings from a recent global study by Weber Shandwick called The Company Behind the Brand: In Reputation We Trust.

As the survey report states, “As consumers around the world have greater online access to a brand’s lineage, the influence of the brand parent, or company behind the brand, matters even more.”

The study identified Six New Realities of Corporate Reputation, which the PR firm says serves as reminders that business leaders cannot view their company’s reputation and their product brands as separately as they once did. These six “new realities” are:

1.       The corporate brand is as important as the product brand(s).

2.       Corporate reputation provides product quality assurance.

3.       Any disconnect between corporate and product reputation triggers sharp consumer reaction.

4.       Products drive customer discussions, with reputation close behind.

5.       Consumers shape corporate reputations instantly.

6.       Corporate reputation contributes to company market value.

In actuality, none of these are truly “new” realities, other than perhaps the ability of consumers to now shape corporate reputations instantly via social media.

All were highlighted, in one way or another, in my book Corporate Image Management: A Marketing Discipline which was published in 1998.

However, today’s more conversant and knowledgeable consumer is more aware of the companies behind branded products and services. They are also more informed and responsive to the actions of these companies.

The study showed that 67% of consumers report that they increasingly check product labels to see what company is behind the product they are buying, and a full 56% will hesitate to buy a product if they cannot tell who makes it.

Plus, as we highlighted in this week’s Monday Morning Marketing Memo, a walloping  70% of the consumers surveyed in this study reported that they avoid buying a product if they do not like the company behind the product.

This survey confirms that what I wrote 14 years ago in Corporate Image Management still rings true today: the ultimate battleground for winning and maintaining customer relationships takes place in the minds, hearts, emotions, and perceptions of customers.

Which is why corporate reputations matter more than ever.

Steve Jobs: Marketing Genius

Why Apple’s Steve Jobs is a World-Class Marketing Genius

Like many consumers I have long been enamored with the product designs, enhanced functionalities and overall quality of the Apple products brought to us by Steve Jobs.

As a marketing professional, though, I have also been enthralled by the power, story lines and production values of the TV commercials produced by Apple under the eagle eye and branding brain of Jobs. And yet this is only part of the story behind the marketing genius of Jobs.

Apple is often seen as a company built through product design. But it is more, much more.

Led by the instinctive and intuitive insights of Jobs, Apple has had a foundational focus on the customer experience, long before “customer experience marketing” entered our industry jargon.

The customer experience was often the focus of Apple’s advertising campaigns. And it has certainly been the key element in how the Apple retail stores have been designed, from free availability of products test and trial to the clever concept of the Genius Bars. It is little wonder that Apple’s retail stores have a higher sales-per-square-foot level than any other retail chain in the USA, including high-end retailers like Tiffany’s, Gucci and Coach.

How was Apple able to produce a steady flow of brilliant advertising over the years? Two key factors:

a) Jobs was heavily involved in the creative process at all times

b) Jobs used only one agency (Chiat/Day, which eventually merged into TBWA)

Together they produced a litany of powerful, emotive, brand building advertising campaigns, including:

• 1984
• Mac vs. PC
• Meet iPad
• Silhouettes
• Think Different
• Meet Her
• Stacks
• Quotes

Which of these were your favorites? Any to add? I will be adding the ones I like best to my favorites at our Howard Marketing YouTube channel.

Designers call Steve Jobs an inspiration to their craft. Computer geeks claim Jobs as their own guru. And those of us in the marketing profession know that, above everything else, Jobs is a marketing genius.

We can only hope that Jobs will do for marketing in the Boardroom what he has done for marketing as CEO.

Americans less interested in Australia as a holiday destination

Australia drops to third position among favored destinations

A few weeks ago, in Monday Morning Marketing Memo #244 on Sustaining Competitive Advantage, I wrote:

“In almost every case of industry leadership decline, the blame lays clearly at the feet of poor marketing execution and organizational cultures that are not customer centric and therefore not capable of sustaining market leadership.”

We unfortunately have another example of this, as verified by the most recent Harris Poll of American adults. Conducted in July, the survey asked “if you could spend a vacation in any country in the world outside the U.S., and not have to worry about costs, which would you chose?”

Australia, which has always been first or second choice in the eight year history of this survey, has suddenly been bounced to third position behind Italy and Great Britain. (The survey was conducted before the recent UK riots which filled news headlines around the world, but after the latest royal wedding, which may have provided some spark of renewed interest in the UK as a holiday destination.)

For the past several years, Tourism Australia and its global advertising campaigns on behalf of the country’s tourism industry have seemed to lack a coherent strategy.

First there was the dubious “Where the bloody hell are you?” advertising campaign in 2006, which generated plenty of controversial press coverage but did little for the country’s image as a preferred holiday destination. It also did not generate any major increase in visitor numbers despite its A$180 million price tag.

This was followed last year by the “There’s nothing like Australia” spot, which is basically a compilation of actors, pilots, surfers, ferry boat operators, zoo staff and other so-called “average Australians” repeatedly singing the jingle “there’s nothing like Australia.”

Quite frankly, in my opinion, this spot has more emotional appeal to Australians, encouraging greater domestic tourism, than it does for Americans or other nationalities as an enticement for overseas visitors.

No wonder that visitor arrivals in Australia from the USA in the first six months of this year have dropped 3% compared to the first half of last year. In fact, for the full year ending June 2011, visitor arrivals from the USA have dropped nearly 5% over the corresponding period.

Of course, the extraordinarily high Australian Dollar is hitting tourism in this country on two fronts — making it cheaper for Australians to holiday in places like Malaysia, Bali and Fiji, and making it much more expensive for Americans and others to visit Australia.

But remember, the Harris Poll specifically included the criteria “not have to worry about the cost,” when asking Americans to name their most preferred holiday destination. Thus, with costs and exchange rates taken out of the equation, Australia still dropped to its lowest ranking ever. Even worse, Australia is only the fourth most preferred holiday destination for the Generation X (age 34 to 46) respondents to the Harris Poll, as well as for all the female adults surveyed.

Global economic conditions and currency exchange issues aside, the recent advertising and marketing efforts by Tourism Australia and its agencies are, in this writer’s considered opinion, strategically off target and incorrectly executed. As a result, as seen in the results of the latest Harris Poll, Australia has lost its position as the most favored and preferred holiday destination among American adults.

One is tempted to ask Tourism Australia: “where the bloody hell is your strategy?”, while simultaneously pointing out that “there’s nothing like excellent marketing execution.”

Customers First. Shareholders Third.

Creating Customer Centric Cultures

I read recently that, according to Deloitte Consulting, “the rate at which large companies lose industry leadership has doubled in the past four decades.”

As I wrote in this week’s Monday Morning Marketing Memo on Sustaining Competitive Advantage, in almost every case of decline the blame lays clearly at the feet of poor marketing execution and organizational cultures that are not customer centric and therefore not capable of sustaining market leadership.

A customer centric corporate culture is one that focuses on building value for customers at all times and at all points of interaction. This requires the mindset of our own personal marketing philosophy: if it touches the customer, it’s a marketing issue.™

Everything your organization does “touches the customer” or has the potential to. Hence, as Peter Drucker long ago proclaimed, “the purpose of business is to create a customer.” In fact, Drucker also wisely said, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”

Successful marketing — and by that I mean highly effective and efficient marketing practices that produce solid, long-term results — is certainly the result of a proper mind set. To me, this proper mind set focuses on customers first, the organization second, and shareholders third.

What do you think?

Personal Recommendations More Trusted Than Advertising

Personal recommendations and consumer opinions posted online are the most trusted forms of communications, according to the latest Nielsen Global Online Consumer Survey. Over 25,000 respondents from 50 countries participated in the survey.

According to the survey, which is conducted twice yearly, 90% of Internet consumers worldwide trust recommendations from people they know, while 70% trust consumer opinions posted online.

Brand websites, the most trusted form of advertiser-led communications, are also trusted by 70% of the survey respondents. Fortunately for marketers, all forms of advertiser-led advertising, except ads in newspapers, experienced higher levels of trust in this most recent survey.

Brand sponsorship is the marketing category that has seen the most significant increase in trust levels since the Trust in Advertising portion of the survey was initiated in April 2007. Almost two-thirds (64%) of Internet consumers now trust Brand Sponsorships, up from just 49% two years ago.

Significantly, text ads on mobile phones have the lowest trust factor, with less than one-fourth of respondents saying they completely or somewhat trust this form of advertising. This is not going to make the folks at the Mobile Marketing Association happy!

Here’s the ranked order of the results for some degree of trust in the following categories:

1. Recommendations from people known (90%)

2. Consumer opinions posted online (70%)

3. Brand websites (70%)

4. Editorial content {e.g. newspaper articles} (69%)

5. Brand sponsorships (64%)

6. Television (62%)

7. Newspapers (61%)

8. Magazines (59%)

9. Billboards / outdoor advertising (55%)

10. Radio (55%)

11. Emails signed up for (54%)

12. Ads before movies (52%)

13. Search engine results ads (41%)

14. Online video ads (37%)

15. Online banner ads (33%)

16. Text ads on mobile phones (24%)

Marketing Luxury in a Downturn

BNET has an excellent interview with Harvard Business School Professor John Quelch on the topic of How to Market in a Downturn.

Quelch, who was one of 10 marketing experts profiled in the 2007 book Conversations With Marketing Masters, says there are two types of luxury customers — the Must Haves and the Wannabes.

Members of the Must Haves group are ultrarich and have incorporated luxury into their lifestyles. They have been mostly protected from the current economic downturn, remain ultrarich, and seek to retain their luxury lifestyles despite the economic problems facing the world.

Members of the Wannabes group, on the other hand, have aspirational views of luxury and only make occasional purchases of luxury goods rather than immersing themselves in a luxury lifestyle.

In the short interview Quelch gives good advice on how to hang onto both types of luxury customers during an economic downturn, and also discusses price discounting and the need for continued research on your key customers.

I have long been a proponent that luxury and upmarket brands should not be marketed through price discounts or brand-deteriorating promotions during economic declines. Any short-term gains are not worth the risk of long-term brand devaluation. Find new ways to make your brands valuable to your core customers and you will be better positioned for the eventual economic turnaround.

Apple Combines Powerful Brand With Great Marketing to Create iPhone Success

How powerful is the Apple brand?

Damn powerful.

I read last week that the Apple iPhone share of the U.S. smart phone market for the fourth quarter was an amazing 28%. This was up from the 19% level in the third quarter.

This means that Apple sold more iPhones in the fourth quarter than the number of smart phones sold by Palm or Motorola. Even more amazing – Apple outsold all of the various Windows mobile devices combined in the fourth quarter!

Chalk up another victory for Steve Jobs over the boys and girls at Microsoft!

The only mobile phone vendor to outsell Apple in the fourth quarter was RIM makers of the Crackberry…..oops, I mean Blackberry smart phone. They had 41% market share.

Now when is the iPhone being released in Australia???

The iPhone is going to make a great case study in how to launch a new product in what was previously considered a saturation market.

A powerful brand. An innovative product. A great launch strategy. Sort of sounds like Marketing 101 to me.

10 New Rules of Branding

I came across the following list of so-called new rules of branding in a recent issue of Marketing magazine here in Australia. The list was developed by the folks at www.BrandingStrategyInsider.com.

Personally, I’d say the list is more valuable as a set of new considerations to be taken into account for marketing strategy, not just branding. But that’s just my opinion!

Anyway, here’s the list:

1. Brands that influence culture sell more; culture is the new catalyst for growth.

2. A brand with no point of view has no point; full-flavor branding is in, vanilla is out.

3. Today’s consumer is leading from the front; this is the most well-informed generation to have ever walked the planet.

4. Customize wherever and whenever you can.

5. Forget the transaction, just give me an experience.

6. Deliver clarity at point of purchase; be obsessive about presentation.

7. You are only as good as your weakest link; do you know where you’re vulnerable?

8. Social responsibility is no longer an option; what’s your cause, what’s your contribution?

9. Pulse, pace and passion really make a difference; has your heartbeat been checked recently?

10. Innovation is the new boardroom favorite.

Can’t say I agree with all of these….but it’s a good way to start a dialogue. Any comments?

Engaged Staff Create Incredible Customers

“To get incredible customers, you need to try to create it through staff,

Marketing Wisdom 2007

The Marketing Wisdom 2007 report, compiled by Marketing Sherpa, is now available as a free PDF download.

I find this annual compilation of stories and tips to be a valuable read, and I often refer back to the four previous editions when looking for inspiration or a thought starter.

A hefty 60-pages, with 110 tips from marketers and agencies, it is well worth downloading. The tips are divided into sections on Email Marketing, Blogs and Podcasts, General Marketing & Advertising, Search Marketing, Social Networks, Web Sites, and B2B Marketing.

The free download is available at http://wisdom.marketingsherpa.com/wisdom.html. You can also download the 2003-2006 editions as well.

After you’ve read through it, come back here and share your comments and thoughts. We can start a dialogue on which stories and ideas are most applicable in Asia/Pacific.