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Can You Put Your Trust In Brands?

Is brand trust in a crisis? Brand trust is earned through consistently delivering on the brand’s promise. Brand trust is the only way you can build loyal brand advocates. But the global trend is working in the opposite direction. Young & Rubicam BrandAsset Valuator reveals that consumers trust in renowned brands continues to slide. In 1997, consumers indicated that they had a high level of confidence in 52% of brands. By 2008 that percentage dropped to 22%. The Edelman Trust Barometer confirms the same trend with their annual survey. In 2015, for the first time since the end of the Great Recession of 2007-08, their survey signaled a major decline in trust with 16 of 27 countries dropping below their acceptable 50% level into the “distruster” category. For example, Canada went from a 62% trust level in 2014 to 47% in 2015. A drop of 15%! What’s going on?

 

In the climate of austerity are we starting to see brands cutting corners or blatantly deceiving consumers to protect their bottom line. Since 2007-08 the world economy hasn’t been the same and the recent financial instability in China will continue put pressure on brands to perform.

 

 

Profits vs Brand Equity

 

Professor Klaus Schwab, founder and chairman of the World Economic Forum, explains that “There are four prerequisites of the company’s survival; profitability, growth, risk protection and earning public trust.” While we may expect people sometimes to lie, like athletes, actors and most certainly politicians, we don’t expect brands to lie. Why would global companies risk their brand equity by outright lying to their customers?

 

Volkswagen VW, the world’s largest carmaker (past tense) did exactly that when they lied about their emissions tests through cheating software. Why would a mega brand risk its reputation? Profits seems to be the ultimate goal. Jointly Germany car manufactures, actively promoted to Americans that diesel was the future to meet tougher US emission standards. The only way VW was able to compete and live up to the promise was to lie. The arrogance that they thought they wouldn’t get caught is scary, especially since they publicly promised to be the ‘greenest’ car producer in the world by 2018. The lie allowed VW to claim their diesel engine were superior – selling over 12.6 million of them. The fact that buyers used to pay a $2,700 premium over gasoline engines for VW diesels meant an additional $34 billion in VW’s bank account. But the real problem was the fact that their engines emitted nitrogen oxide pollutants up to 40 times above US standards. This environmental damage can’t be fixed.

 

Alan Hilburg and Tracey Linnell say distrust is very expensive. “Low-trust brands pay a ‘trust tax’ in multiple forms, including higher transaction costs and unwanted legislation. The broader and faster the low-trust reality spreads, the deeper the effect of the higher tax.”

 

In a CNN Money report, the financial service holding company Credit Suisse estimated the cost of the VW diesel emissions scandal could exceed $86 billion. About the same GDP value as a country like Ecuador. Volkswagen is facing a very big trust-tax notwithstanding that they are trying to attract customers today through deep discounts.

 

Recently, another scandal was released by CBC Marketplace revealing that Starbucks and Tim Hortons are misleading their customers. They claim the paper cups collected in their in-store recycling bins are being recycled but are actually going into landfills. It seems these paper cups have a plastic lining that requires an additional step in the recycling process, which costs money. So why would two big brands like Starbucks and Tim Hortons mislead their customers to think that they are being environmentally responsible?

 

What’s the impact of a paper cup? CBC estimates that Canadians use over 1.5 billion disposable coffee cups in a year which is equivalent to more than half a million trees. The environmental impact is significant. I don’t know what the cost of recycling a coffee cup is but it is obviously worth more than the truth. But we will have to see if consumers make them pay.

 

Who Makes These Decisions to Lie

 

There is an apparent financial gain that can be significant over time. But who analyzes the brand risk? In an Intangible Asset Market study by Ocean Tomo, they state that in 1975 intangible assets were just 17% of the market value of the S&P 500. Today, intangible assets are 84% of the market value of the S&P 500. What are intangible assets you ask? They are intellectual property (patents, trademarks etc.), goodwill and brand equity. Most of which is built on a foundation of trust.

 

Here are four factors that may be driving some brands to disregard consumer trust as a license to operate:

 

Brand Proliferation

 

Every day we are seeing new brands entering into the marketplace. The explosion of new brands, globalization and intense competition are major problems for brands. According to a Datamonitor report, 58,375 new products were introduced worldwide in 2006, more than double the number from 2002. The reality is consumers have more choices and more choices means more competition for brands, which means more pressure on profits.

 

Moral: Brand equity is important and should be cultivated and protected.

 

Loss of Message Control

 

Brand reputation and image are now firmly in the hands of the consumer, as they control the conversation via digital channels. Nielsen’s Global Trust in Advertising Survey of more than 28,000 Internet respondents in 56 countries said that 92% of consumers around the world trust recommendations from friends and family above all other forms of advertising; an increase of 18% since 2007.

 

Moral: Brands must integrate into digital channels to communicate with customers on their terms.

 

Disconnect with Technology

 

The Edelman Trust Barometer says that the major factor in depressing trust is the rapid implementation of new technology that’s changing everyday life. Of people surveyed 54% were very cynical about new technology, stating “business growth or greed/money are the real impetuses behind innovation.” The problem with most innovations introduced to the market is little work is done to explain to the consumers why this innovation is a good thing in the first place. Genetically Modified Organisms (GMO) are a good example. GM seeds were introduced to farmers to help them increase yields but for the average consumer what did this mean? What was good about inserting a gene from one plant to another and how would consumers benefit from this. Then add, misinformed activists and their scare tactics to label these ‘Frankenfood’ and consumers start getting concerned.

 

Moral: Brands must speak down-to-earth consumer language.

Companies are Greedy

 

There is an inherent belief that faceless corporations are bad and their sole purpose is to make money anyway they can. Greed is what makes the world go round. The famous legal thriller author John Grisham emphasis this belief in all his books which have sold over 275 million copies (2002) world-wide. Every time a bad apple brand gets caught this distrust is reinforced. Janelle Barlow, co-author of Branded Customer Service explains, “Consumers have come to expect advertising and promotions to overstate, to over promise, and to frequently not deliver.”

 

Moral: Take advantage of this belief and build a caring brand (Six reasons why brands should care)

 

The Truth Won’t Get in the Way of a Good Story

 

James Heaton President & Creative Director at Tronvig Group says “It’s just too easy to lie. The attraction is too great, the professional confidence in the gullibility of the consumer is too well-established, the benefits to the company of a ‘visionary and future-oriented’ brand are too immediate and bankable to pass up for the sake of such unsexy things as brand integrity.”

 

The moral of this story is brand’s need a strong governance model to uphold the brand’s core values. This foundation ensure all business decisions are based on those values. Building strong and lasting brands takes time and resources. Lying is one of the quickest ways to ruin a beautiful brand relationship. The real shame in all of this is there are many brands built and operated by honest people that pride themselves on being authentic and truthful.

 

Kees Schilperoort, managing director at Xfacta, a brand consultancy, said it best, “In Brands We Trust, and trust is a must. Because brands that lie, die.”

 

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What does a red cup have to do with branding?

Full Stop – red cups are part of the Starbucks brand experience. As a matter of fact, over 60 million Starbucks cups are served each and every week. From the beginning of November until the end of December, Starbucks will be serving 480 million red holiday cups to help celebrate the festive season.

 

Eighteen years ago Starbucks launched their first holiday red cup – a duration that has created great expectations beyond a simple disposal coffee cup. Has this red cup replaced the advent calendar? With all the controversy so far this season you need to wonder.

 

 

Over the year’s Starbucks red cups has celebrated the holiday season with snowflakes, doves, reindeer, snowman, vintage ornaments, poinsettias, and Christmas trees, but this year they opted for a minimalist design of a two-tone red cup with no images. This brilliant long-term campaign has taken some of Coca-Cola’s best Christmas ideas and put them on a cup. Check out Time’s magazine for the evolution of the Starbucks red cup over the last seven years. This year’s red cup sans holiday icons has become blasphemy for many Christian’s organizations or an opportunity to create a controversy to garner media attention.

 

 

“In the past, we have told stories with our holiday cups designs,” said Jeffrey Fields, Starbucks’ Vice President of Design and Content. “This year we wanted to usher in the holidays with a purity of design that welcomes all of our stories.”

 

Customers See Red

 

Former Arizona Pastor Joshua Feuerstein wrote in a Facebook post “Starbucks REMOVED CHRISTMAS from their cups because they hate Jesus,” that went viral with over 14 million views in the last five days. This extreme view has stirred up the media and the social channels. Even Donald Trump has entered into the picture with the suggestion of boycotting Starbucks. Obviously he doesn’t have any Starbucks shares in his portfolio.

 

Starbucks issued a statement Sunday explaining that they are trying to create an environment that encourages “customers to tell their Christmas stories in their own way” and “to create a culture of belonging, inclusion and diversity.“

 

Jay Parini, a poet and author of Jesus: The Human Face of God said on CNN.com that Starbucks red cup is an attempt to remove even the most secular side of Christmas by “strip[ping] all texture and mythic potential from contemporary life – seems beyond absurd, perhaps even dangerous, as it points in the direction of total blankness, a life lived without depth, without meaning.”

 

Or from Starbucks point of view it’s about creating your own texture and mythic potential without being spoon feed of what you should think or believe.

 

What 480 Million Red Cups Mean

 

There are a couple learning’s we should all take from this event.

 

First, colour does matter, (check out my article on colour), red is a very strong and vibrant colour that can stimulate high emotions – just ask a raging bull. In 2011, Coca-Cola changed their sacred red Coke can to white to celebrate the holiday season and were punished by retailers and customers who became confused by the change.

 

Second, customers own your brand. Before you change any representation of your brand make sure you understand what your customers’ think. Product packaging is sacred ground for loyal customers. If Apple changed their earphones from white to red what do you think would happen? Maybe nothing or maybe all hell might break loose.

 

Third, by providing ambiguity with a blank red cup and letting the customer fill the void leaves too much room for misinterpretation or anti-brand advocated to take advantage of the situation. The brand must own the space (physically & mentally) and direct the conversation.

 

I am happy that I don’t drink coffee and have to endure this tragedy on a daily bases for the next six weeks. However, I did hear that Starbucks has started using cup sleeves with snowflakes on them. Maybe this will appease the detractors.

 

The great thing is brands continue to have the power to inspire, create conversations and be news worthy without changing anything inside their cup. And as we see here, some brand loyalists will always see the cup as half empty and others as half full. Cheers.

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Five Ways to Keep Brands Out of Trouble

Every once in a while a brand will screw-up. If you go online and google “Brand Blunders,” you will find annual lists of the latest and greatest mistakes that brands have made. Social media has given us all the opportunity to see, almost in real-time, the latest and greatest gaffes. An advertising campaign with the goal of reaching a million customers can turn into billions of thrill seekers who will never buy your brand in the first place. The size of the mistake will determine how famous you will become. Famous for all the wrong reasons, I might add. Some brands have gone to the extremes to fake real people product situations with the hopes of becoming a viral sensation, but in most case this too back fire.

Big brand mistakes are self-inflicted wounds based on ignorance, arrogance, tastelessness and just poor judgement. But, sometimes, the reward of free publicity and fame are too hard to give-up.

There is always the temptation of getting your brand noticed – there is good awareness and bad awareness. Generally the bad awareness doesn’t build your brand, but can seriously damage your brand.

Here are some tips on how to keep your brand out of trouble:

Fine Line Between Funny and Offensive

Humour is a great way to communicate your brand. Nothing is better than getting your customer to laugh. In a study conducted by Millward Brown, over half of all ads around the world are considered either ‘funny’ or ‘light-hearted.’ The funnier the ad the more memorable it is likely to be. This is where some brands have gotten themselves into trouble. It is generally when a brand tries too hard and misses the mark or just doesn’t understand their consumers.

Spy Sunglasses tried to be witty and humorous with their outdoor campaign when they plastered the slogan ‘Happy to Sit on Your Face’ on billboards.  Clever, but it didn’t sit well with their customers.  The billboard, slated for a six month stint, was taken down after only one month.

The British grocer Sainsbury’s wanted to promote their ‘low-price guarantee’ and used John Cleese to break down Sainsbury’s aloof image. Lecturing the customers and the staff misfired badly and successfully alienated the target audience.

Skittles is known for their entertaining and fun brand – Touch the Rainbow. The experience of eating Skittles is just as important as the candy itself. In 2008, they crossed the line when they portrayed someone who turned everything to Skittles that he touched. He could no longer hold his baby and he accidentally killed a man on the bus. Depressing rainbow.

Sloppiness

There are countless examples of typos, wrong prices and misinformation. I am sure you have your favorite blooper. Here are a couple examples that will put fear into you to make sure you double and triple check everything you publicly display on your brand.

La Redoute a French fashion chain has had a number of embarrassing moments. On their website, they had a photo of kids promoting their children’s clothing line, but clearly in the background is a naked man. On the same website, they are also selling a t-shirt with a spelling mistake. Instead of having ‘Enjoy Holidays’ written in the garment it read ‘Enjoy Holydays.’

Remember the launch of Apples iOS 6 mobile operating system with the new and amazing Apple Maps? This system would no longer feature Google Maps.  The issues in the Apple Maps were endless to the point that a Tumblr blog was setup to document all the map errors. Every media outlet had a wonderful example in their backyard of wrong bridges, wrong towns and cities, airports turn to parks and parks turn to airports. One reporter stated, “While they are not enough to stop the iPhone 5 love-fest, I sincerely hope that the massive flaws in Apple Maps do not cost anyone their lives.” I am sure there were a lot of Apple employees who didn’t get much sleep until they solved all the problems.

With the desire to offer the widest range of product choices and selection Walmart’sHalloween promotional web pages included a category called “Fat Girl Costumes.” By the time the company understood its error, it was national news and the brand damage was done.

There are many examples of sending the wrong email to the wrong customers or sending out tweets that don’t reflect well on the company like US Airways, who accidentally send a customer a tweet with a pornographic image with a naked woman with a misplace model plane. This tweet was re-tweeted hundreds of times before the company noticed.

Contests and promotions are another area that has high potential of messing up a brand. Getting legal advice is a no brainier, but also making sure the contest fits the brand promise and builds on the brand. Malaysian Airlines still reeling from its misfortune of losing two planes launched a ‘bucket list’ campaign, asking customers to tweet places they’d like to see before they die. I think you know how this ended.

Double and triple check everything before you release it and ask the question does this fit our brand values and promise?

The Shock Value

Fashionista blog says “people are pissed about Harvey Nichol’s new pee-stained ad campaign.” It seems that the British department store Harvey Nichols knows how to get people’s panties in a knot and the Daily Mail said that the campaign has “soiled many customers’ opinion of the store.”

If you ask Tom Ford, he’d say that the shock value works just fine. He built a fashion empire (worth over $275 million) on pornography.  “When I shaved G for Gucci into the model’s pubic hair it was meant to be tongue-in-cheek statement about branding,” Ford said in People. “We had Gucci emblazoned on everything in those days—so I said why not the pubic hair too. It wasn’t just about sex.”  Really! Somehow he continues to get away with this type of thinking. But there is a limit to what people will allow a brand to do with their brand relationship.

Unlike most advertisements which centered on a company’s product or image,United Colors Benetton’s branding building focused on social and political issues like racial integration, AIDS awareness, war, poverty, child labor, death, pollution, politics, etc. The advertisements initially succeeded in raising the brand’s profile, but eventually began to cause dissatisfaction among customers, retailers, government bodies and various international non-profit organizations.

Some of Benetton’s most provocative advertisements were of a priest and a nun kissing, a just born baby with uncut umbilical cord, a black stallion and a white mare mating, a colourful mix of condoms, a black woman breast- feeding a white baby, AIDS victim and his family taken moments before his death, people on death row, a bloody uniform of a dead Bosnian, and senior political leaders kissing each other. I am still trying to figure what all this has to do with buying a sweater or a new polo shirt.

I never thought Microsoft would be an example of shock value. In 2009, they introduced the IE8 with an online commercial called ‘Oh my God! I’m gonna puke (O.M.G.I.G.P.). The purpose of this ad was to showcase their private browsing feature that is ideal for keeping your online porn habits a secret from others people who might share your computer.  As the Microsoft spokesperson said “some of our customers found it offensive, so we have removed it.”

Super Bowl is the Olympics of branding position new and old brands.  InsurerNationwide created a buzz, but the jury is still out if it helped or detracted from their brand.  They ran a campaign depicting the death of a child, due to a preventable accident at home. The negative reaction is largely based on why share this message at a time when people want to enjoy a game. USA Today describes the ad as “depressing, upsetting, and even brought down the uplifting Super Bowl atmosphere.” You be the judge.

Understand Your Customer’s Relationship with Your Brand

Where are the brand boundaries? For Tom Ford there are no boundaries as it concerns beautiful naked people, but see if he can sell food products or toys for children. Somewhere in the process common sense must prevail.

In 2010, Gap clothing store launched a new logo to portray the brand as more modern. In two days, they heard clearly that they change wasn’t what their customers wanted.  While their goal was to appeal to a more hip crowd, their existing customers who pay the bills didn’t want anything to do with the new image. Gap was smart enough to listen to their customers and quickly react.

In 1996, McDonald’s invite “adults back to McDonald’s by enhancing [their] adult and food image” as reported in the Mac Today magazine. It took two years to develop the adult burger Arch Deluxe. McDonald’s research revealed that 72% of consumers think the chain has the best burgers for kids, but only 18% said it has the best adult burger – a huge opportunity.  McDonald’s spend an estimated $200 million in a promotional blitz to launch this new product that failed miserably. The McDonald brand is based on friendliness, cleanliness, consistency and convenience. If someone at McDonald had asked their customers if they wanted a” burger with the grown-up taste,” they would have said no.

 Does It Make Good Sense?

Or, better yet does it make common sense? Just because you have a powerful and very recognizable brand doesn’t mean people will allow you to sell them anything.

Bic, the company that sells disposal pens, lighters and razors decided they should be also selling disposable underwear – actually, a line of women’s disposable pantyhose. Besides that they were disposable, there was no credible link between the Bic brand and the product. What were they thinking? Maybe they were thinking that they could do sexier advertising now that they were into underwear like Calvin Klein.

Colgate, the toothpaste company and the first to put fluoride into toothpaste had the bright idea to market frozen meals. They failed completely. Nobody wants a toothpaste-flavoured meal. Yet there must be many bright people at the Colgate Company who reviewed and approved this opportunity with the goal to succeed. Maybe they are too close to seeing the big picture beyond the consumer’s mouth.

Final Comment

The moral of the story is use the ultimate acid test – stand back from the situation and ask yourself does this message build on your brand promise. Is it building goodwill? Will you be sending the wrong message to your existing customers? Common sense should prevail. If you screw up, be transparent and fix the problem. Time and honesty will heal most errors.

And finally, double and triple check everything and if possible get as many eyeballs on everything before it goes out. In this instant world on digital communications, it becomes even more important that you communicate clearly and honestly.  Once it’s out there, it is out there for life.