28 December 2009
Wrap rage is triggered by retailers' need for products that self-merchandise without the fear of theft. Apparently US retailers suffer losses from pilferage of more than US$10 billion annually.
I'll leave you to read the post for yourself (it's informative and insightful, and well worth the time even though it's past Christmas); and limit my comments to the statistic that leapt off the page for me:
According to the 2009 Global Retail Theft Barometer, the majority of retail theft is carried out by store employees. 44% of all retail losses are the result of employee theft. 35% is attributed to shoplifting; 15% attributed to administrative error; and 4% to vendor fraud.
Not many service organizations are keen to track or report these numbers. Do you ever wonder why?
If companies don't take the time and make the effort to cascade their core brand values throughout the organization, if the company's leaders don't align individual goals to company objectives, if employees are not given a clear line of sight from their actions to the resultant impact on the company's top and bottom lines, how in the world can you expect employees to live and breathe the brand, to correctly interpret core brand values, to be loyal to the organization? Yet often line managers merely pay lip service to the intertwining of brand and business strategy. They think branding is fluffy, and don't have the time for anything that doesn't goose their numbers.
If your company isn't cranking up its brand internalization and employee engagement programs, don't be surprised if your inventory and brand equity walk out the door.
By condoning if not instigating such behaviours, senior management at these companies have lost the moral authority they sorely need to inspire and lead their troops up the performance curve. They will find it harder to recruit and retain top talent. (Yes, it matters what company you put on your CV -- and the brand associations those names conjure.) And even though the consuming public tends not to look at the pharma company behind the drug, the investing public will consider the value assigned to the stock -- a figure that's bound to be affected by the values ascribed to the company.
Thankfully, while these firms zig, a few exceptions have chosen to zag. GlaxoSmithKline and Astro-Zeneca have so far side-stepped the current quagmire; and I must imagine there are other companies that have managed to stay on the straight and narrow. Disclosure: I worked on the GSK business for a portion of this year, so will admit to some degree of first-hand knowledge and bias. GSK had a problem in 2000 with a ghostwriting program for articles targeted at medical journals; but that's behind them, and their current leadership team has worked hard to embed integrity within its corporate culture.
Pharma companies depend on their intellectual property and patent pipeline for growth. A close study of the advanced development pipelines of the top 15 companies in 2008 delivers a forecast that by 2015, more than 2/3 of this cohort will be smaller in size. When blockbuster drugs lose their patent protection and become inexpensive generic options, the pressure to resort to off-label marketing and other forms of questionable behaviour can only increase.
It will take a strong brand with moral fibre to keep on the high road. We should stay tuned -- and healthy.
26 December 2009
Unlike commercial dolphin attractions the world over, Monkey Mia has a vigorously observed policy of "no touching the dolphins". (A dolphin's head contains a highly developed organ called the melon which is the source of its acute sense of echo-location. Imagine the magnified sensation of a hundred strangers' hands pawing your private parts every day, and you'll understand why this rule was instituted.) Visitors are allowed to stand no deeper than shin-deep in the water and wait for the dolphins to approach. No sunscreen is allowed on legs because it can irritate the dolphins' eyes. And when it's time for their feed, everyone is asked to move out of the water except for volunteers selected at random and supervised by Department of Conservation (DEC) officers.
A couple of weeks back I'd blogged about Maclaren, and the fracas that started with its product recall in the USA on 9th November. A few days ago, the 23rd Dec edition of Singapore newspaper TODAY carried a report that the local distributor of Maclaren had (finally) contacted its 1,000 customers who had purchased the affected strollers to collect safety covers for the stroller hinges to prevent injury to stray fingers.
Is 44 days a reasonable time for a company to respond to a threat to its goodwill and reputation? (And we haven't even begun talking about customer safety.)
Consider this: Swedish furniture giant IKEA announced earlier this week (on 22 December) a global recall of 5,474 children's high chairs after IKEA received 11 reports of malfunctions of the locks securing the seat to the frame of the high chair. "As soon as we started to get the incident reports, we decided to stop selling the product," an IKEA spokesman said. The company is discontinuing the product and issuing a full refund to all purchasers of the Leopard high chair.
Two different companies, serving -- in this case -- one single customer segment. No prizes for guessing which one has earned my respect and trust.
06 December 2009
It's good advice, no doubt about that (I once almost missed my flight because my name was misspelt on my boarding pass). However, in doing passengers a service, a ground crew member did Singapore Airlines a disservice by amplifying an ironic, shoddy announcement to everyone and his blind father in 96-point type.
Consumers consider all contacts with a brand when forming their image of it ... whether it's a million-dollar TV commercial, customer event, online banner ad, or a visit by a sales rep. Whenever you touch a coherent brand -- as a customer, shareholder, employee, supplier, business partner, or just someone who's noticed the brand before -- it should feel the same. Otherwise the mythology, the brand story breaks. And when that happens, the magic spell is broken. You're going to have to work that much harder to earn back that trust, to win back respect.
Thankfully, SIA did just about enough on the flight down under to do precisely that.
Short post today -- I'm on vacation!
05 December 2009
Brands face the other end of this social problem. By this, I mean that as consumers get on in years, they are less open to trying out new brands. It's just human nature. We become set in our ways, and hunker down with our proven repertoire of so-called 'gateway' brands that have earned our trust to fulfil several related needs: a financial brand, an entertainment brand, a food brand, a transportation brand, and so on. That's why brand marketers scramble to get aboard this golden brandwagon for a greater lifetime share of customer wallet ... before everything is cast in stone and the 'choice' key is thrown away.
This is perhaps the biggest reason why brand stewards should plunge courageously into social media marketing -- to make themselves accessible to and engage with consumers on their own terms, through communication platforms they use, in the hope of earning an invitation into their homes and lives in time to come, before the game is over. Because consumers aren't going to be open to experimentation tomorrow as they are today.
Elvin Ong, a friend of mine and astute social media commentator, puts it eloquently in his Facebook note (http://www.facebook.com/#/note.php?note_id=141684857632): "If a brand finds it hard to break into a community now, think about how difficult it will be when communities break up into small, tighter groups made up of tightly-linked individuals with set views, lifestyle and buying habits." His note goes on to make a compelling case for why marketers should venture into social media campaigns -- notwithstanding the haziness around the most appropriate and effective metrics by which to measure success (or the lack thereof).
Irresponsible advice? Well, you're entitled to your opinion. I just think that we all have to start somewhere. No one knew how to get to the moon until President Kennedy pulled the trigger and plonked some money on the table. Caution is commendable -- but only to a point. Make sure you don't hang back until the train leaves the station, and there's no one left to befriend.
To paraphrase the SAS: Who dares, wins.
04 December 2009
Maclaren had planned to announce a product recall on Tuesday Nov 10th, but the news leaked over the weekend of Nov 7th-8th, so concerned parents jammed Maclaren's consumer hotline -- which was not set up to take those calls -- on the Monday, effectively short-circuiting any hope Maclaren might have harboured to conduct a low-key, orderly recall. The company scrambled to issue their recall announcement by the end of that day, affecting about 1 million strollers that had been sold nationwide over the past 10 years.
Significantly, the company chose not to recall affected strollers in its home base of Britain -- perhaps because there have been fewer reported cases of injury across the pond. (The company's website lists 53 markets in which it does business -- should the rest of us take comfort in Maclaren's tacit message: that our kids are less reckless and we are less litigious than the Americans?) Instead, it merely issued safety warnings -- only to amend this policy a week later to offer hinge covers to any customer who requested them, after being inundated with protests closer to home.
What can we learn from this sorry sequence of events? Can the brand's reputation for quality survive this very public smear?
First, be prepared. Conduct disaster planning and run the drills annually at the very least. We can hope for the best -- but should plan for the worst.
Second, don't discriminate. Maclaren inexplicably seemed to be treating American children's fingertips as more precious than those of children in the UK and other countries. It failed to remember that in the Internet Age, a local problem can easily become a global one.
Third, remember that some things just won't stay quiet. In a TIME magazine article on the unfolding saga (http://news.yahoo.com/s/time/20091110/us_time/08599193700300), Pete Blackshaw, a brand consultant for Nielsen Online, states that "anything relative to child safety tends to be off-the-charts viral". New mothers are more likely to use social media and start blogs than other consumer segments. The search term "Maclaren fingertip amputation" has pulled more than 5,000 results on Google.
Other brands have misbehaved -- to their detriment -- in the past. In 2000, Ford Explorers and the Firestone tyres mounted on them came under fire for hundreds of deaths and injuries caused by tyre blowouts while on the road. Ford and Firestone executives bickered publicly while a wave of negative publicity mounted against both brands on the Web. Ford finally ended up recalling 13 million tyres at a cost of US$3 billion.
In 2004 an Internet posting reported that Kryptonite bicycle locks -- a long-standing market leader -- could be opened with a Bic ballpoint pen. Other postings quickly surfaced with similar tales. The company totally ignored the blogosphere before issuing a statement after five interminable days -- stubbornly contending that Kryptonite locks were completely theft-deterrent. The final outcome: A recall of the locks which cost the company US$10 million (nearly half its annual revenue).
Thankfully, some brands are better-behaved. In 2007 a freak snowstorm hit New York's JFK airport on a winter's day. Over 1,000 flights were cancelled. JetBlue, the fledgling entrepreneurial airline, suffered a startling breakdown, and took nearly a week to get its services back to normal. The difference here? CEO David Neeleman handled the crisis with authenticity and humility. He accepted responsibility for bad decisions and overwhelmed departments. He said he'd fix the problems and promised refunds and credits for angry passengers. He apologized repeatedly on his company's website, in his blog, on TV and in print. Despite the collosal Valentine's Day meltdown, a consumer poll conducted a month later revealed that 43% preferred JetBlue, the most for any airline.
A brand's story and mythology are fundamental building-blocks of how the brand is built over time. Brand stories help to articulate the persona and identity of the brand, and define the role and behaviour you can expect from it. Storytelling conceptualizes a strategic message in a far more emotive and engaging way than a press release could ever hope to accomplish. Maclaren's website speaks of the renowned features of all Maclaren strollers (or "buggys" as the Brits would say): from "the lightweight frame, durable fabric and one-hand fold, to the above-industry standard safety features".... but its current misadventures are shredding that hard-earned credibility. Negative stories can't always be avoided. However, it is not what happens to you, but how you react to it that matters.
David Neeleman and JetBlue understand that intimately. It remains to be seen if Maclaren will recover sufficiently to make some belatedly wise moves as this saga is played to its conclusion. All may not be forgotten ... but perhaps it can be forgiven.