COMMENTS FROM THE MARKETING FRONTLINE - news, views, soapbox observations and general riffs on all things public relations, marketing and communications, PR 2.0, social media, word-of-mouth and brand engagement.
Grey Executive Chairman, Paul Gardner, was reported as saying that Australians based brand trust on foundations including consistency, delivery on promises and open communication.
No argument from the PR Warrior on that score!
What is your brand doing today to build trust with its customers and broader constituency?
If this week's Kraft Vegemite iSnack2.0 saga tells us anything, it's that the people are (generally) always right and brands that get it wrong need to quickly and publicly make amends if they want to remain in favour with the public.
The story so far...
Kraft created a new Vegemite product (for non-Australian readers, Vegemite is an iconic Australian brand, albeit one that is now owned by a US company).
Part of the promotion of this new product was a competition for the Australian public to name it. Kraft, cannily, launched the product in-store with the words NAME ME featured on the label. It sold heaps and some 48,000 entries were received. You could say this part of the promotion was a roaring success.
Then came phase two: Kraft's announcement of the product's new name - iSnack 2.0
Reaction was swift with the new name well and truly being held up to public ridicule and derision (and you'd have to say for good reason - let's just put it down to a momentary lapse in marketing judgement).
Anyway...
The tide of public opinion was so great that Kraft backflipped and within days had announced they'd be dropping the new name.
The company announced that a shortlist of names from the original promotion would be voted on by the people, and the entry with the most votes would become the name of the new Vegemite product.
Skeptics were many. A lot of social media chatter (traditional media journalists weighed in too) floated the theory Kraft had deliberately chosen a crap name for publicity purposes. Kraft deny it did any such thing.
The Lessons
Kraft did one thing well in particular: they listened to the public and quickly changed tack by dropping the iSnack 2.0 name.
THEY SUCKED IT UP! They took the hit and bent to the will of the people (classic PR tactic) rather than going back in to their shell like a lot of other companies would have done.
This was exactly the right thing to do.
Unfortunately, their press release smacked of defensive corporate speak (here's a sample):
"The new name simply has not resonated with Australians" - No, really? Why not tell it like it is - we made a mistake, the name sucks, and we're pulling it.
And this (in response to the allegation the whole thing has been a publicity stunt):
"We are proud custodians of Vegemite, and have always been aware that it is the people's brand and a national icon."
Guys, cut the jargon. Who talks like that (apart from inward-looking marketers)?
Another lesson: Make sure you get the domain name and Twitter handle. Others have beaten the brand to it and have had a great deal of fun at Kraft's expense.
No doubt Kraft is pissed at the level of criticism thrown at it - as my 12-year-old daughter acutely observed: "Companies hate being told they're wrong" - but under the circumstances, I think the brand has come out of this okay.
Yes, egos have been bruised and the marketing department is probably feeling a little dazed and confused right now, but the level of publicity has been huge and the new product will probably be a roaring sales success.
In true 2.0 form, the debacle reached such a level of notoriety that the wonderfully-named Epic Fail Store quickly whipped up a t-shirt to cash in on the controversy (below). Hat-tip psfk Good Ideas.
Further to a previous post regarding the Social Media Summit 2009 in Melbourne, I gave a presentation called 'The Role of Social Media in PR...and Selling it to the CEO'.
The 'role' bit is okay - social media is a natural fit with modern-day public relations (but only if PR practitioners let go of the past and wean themselves off press releases that are polished and spun within an inch of their lives).
The 'selling' part is the hardest because social media is counter-intuitive to most things a CEO holds dear - control of the message, and control over who disseminates information from the organisation.
Some major companies, like Ford, Dell, Starbucks and Microsoft, have long familiarised themselves with social media and today are considered to be corporate leaders in the space.
In selling the concept of social media to the powers-that-be, my advice is to start with the positives i.e. Wouldn't it be great...
...if we could communicate directly with our consumers and stakeholders?
...if people actually listened to and interacted with us?
...if we could build a community of fans or advocates for our organisation?
Well, social media can help you achieve those things, better and faster than ever before, but only if its wholly accepted and encouraged by the head honchos, and the 'open brand' attitude is imbued across the organisation.
Is selling the CEO on social media your job?
If you're the person responsible for trying to get the CEO on board, you need to be 'the full bottle' on the vagaries, nuances, ethics and etiquette of the social web; you need to immerse in the space and get an intuitive feel for what works and what doesn't, as well as fully understand the potential pitfalls and opportunities that exist by 'opening up the brand' on the web.
Put simply, you are kidding yourself if you think you can properly understand social media without fully experiencing it first-hand, and that means jumping in personally and getting your feet wet, preferably before trying to sell it to the boss!
Reading about blogging is all well and good (and recommended), but by starting and maintaining a blog, you will learn very quickly what it's all about.
Reading about Twitter is all well and good (and recommended), but only by setting up a personal account and participating in the Twitterverse will you get a solid grounding in the subtleties of the micro-blogging platform.
You get the drift...
Of course, if taking the positive tack doesn't work with the boss, perhaps try using fear:
The new reality is that people are more empowered than ever before (they have a voice and they're prepared to use it).
Shouting at people (one-way broadcast of messages) doesn't work effectively any more.
Nor does chest-beating or the use of spin and polished corporate jargon.
Throwing your message out there and expecting people to listen is fast becoming a waste of time, money and resources.
Find out if any of your competitors are using social media and then show the boss examples of their activity (this may prick the ego into action!).
It's obvious social media isn't a fad but a fundamental shift in the way people communicate, connect and collaborate - to do nothing will mean your company will be left behind (there's a school of thought that companies have something like 12-18 months' grace to get into social media, experiment and make mistakes...after that period, the public will expect you to be social media ready and engaging with them online...and they will be less accepting of those companies that get it wrong).
Judging from the questions asked of presenters and having chatted with a broad range of participants during the day, one major theme kept recurring: a lack of control when it comes to implementing social media as part of a broader communications strategy.
Indeed, the fear (anxiety/uncertainty) was almost palpable, with the perceived 'threat' of social media almost totally overshadowing the tremendous opportunities to be gained from opening up a brand online.
The bulk of attendees (and it was a good turn-out) worked in public relations and communications roles within government (local, state and federal levels), as well as for government authorities, not-for-profit organisations and blue-chip corporations.
The issue many of them had was the potential for negative feedback if they opened up their organisation via social media. It seems the powers-that-be are not all that welcoming of the thought of public criticism.
Also, how can they 'control' the organisation's voice via social media?
Many of the PR people remarked that only certain people were allowed to 'speak' publicly on behalf of the organisation, thus the issue of empowering of staff to engage with the public via social media channels was a vexing one.
Personal Versus Professional
Another bone of contention among conference participants was the blurring of lines between 'personal' and 'professional' use of social media.
Some companies were concerned staff using Twitter, for example, would make comments that could be construed as having come from the organisation itself.
Believe it or not, many organisations are still blocking social networking sites such as Twitter and Facebook in the office.
There was the story of one company CEO who, overcome with enthusiasm following a workshop on social media, wanted to rush back to his office to set up a Facebook account. He was promptly told by one of his executives he wouldn't be able to do that - the company's IT department had blocked Facebook...classic!
I read with interest this week that McDonald's was given the 'green light' to establish an outlet at the new Royal Children's Hospital in Melbourne, albeit with a revised menu policy.
As you could expect, there was some resistance. If my memory serves me correctly, it was the same situation when Macca's wanted to open an outlet in the existing Melbourne Royal Children's Hospital. They won that battle too.
McDonald's wins these controversies for a number of reasons. Undoubtedly there is some deft lobbying going on in the background but a key reason is because McDonald's has learnt well the art of building a bank of goodwill.
There's a classic definition of public relations as thus: "Doing good and telling people about it".
McDonald's has long mastered the spirit of this definition.
This, from the Encyclopedia of Public Relations: "During the 1970s, (Al Golin, Chairman of Golin Harris) Golin and McDonald's Ray Kroc developed the concept of the trust bank, meaning companies should make deposits of goodwill to draw upon in times of crisis."
How much 'in the black' is your brand's bank of goodwill?
Which financial institution is spending too much time 'swatting at flies' while it's currently being 'burned at the stake by the mob'?
The company in question needs some no-nonsense, pragmatic PR advice - and they need it quickly!
Why waste time trying to sue bloggers who dare criticise you when what you should be doing is focusing on rebuilding your reputation (such as it is).
Put simply, this banking group is a 'fax machine in an internet world'. From where I sit, they're detached and out of touch.
However, the good news for them is they currently have the perfect opportunity to wipe the slate clean and rebuild their brand.
Which bank am I talking about and what advice have they been given?Click here for the full post on parkyoung's In Brands We Trust blog (written in conjunction with David Park).
It hasn't been a good week for one of Australia's largest brand marketers, Pacific Brands.
Hot on the heels of giving themselves significant pay rises, the Pac Brands board retrenched 1850 staff. Naturally, the media was all over it.
(To be fair, Pac Brands is not the only company to axe large numbers of staff nor give its senior executives hefty increases in remuneration, but its actions have caused more public outrage than most).
The rationale provided by the company certainly wouldn't have helped matters.
The following is sourced from an article by the Australian Financial Review (Feb 27), page three. (As is Fairfax's wont, you need to be a registered subscriber to view much of the newspaper's content).
This is reportedly Pac Brands CEO Sue Morphet's response to the question 'why cut so many?':
"Greater business level empowerment and flexibility within a non-negotiable compliance framework will ensure more efficient and effective decision making."
WHAAAAT?
Communication plays a critical role in the corporate retrenchment process. Apart from communicating openly with stakeholders including workers, unions and government in the run-up to any decisions being made, the tone of language used when speaking with the media and others is absolutely critical.
Morphet is not the only senior executive to speak corporate psycho-babble that no-one understands. It's a trend, and a very bad one.
According to the Fin:
Ford did some "outbalancing" of 450 staff last year.
Citigroup expected its "near-term headcount to be down 20 per cent" when it recently cut 50,000 jobs (yes, that's 50,000 jobs).
"Starbucks looked comparatively impotent when pursuing 'operational efficiencies' to cut 685 jobs".
And so the article goes...
"Rightsizing" (job cuts)
"Investment experience" (when writing down $225 million).
"Monetisation process" (God knows what that is!).
"Management adjusted" results (WTF?).
Use of such nonsensical language frustrates all in its path - shareholders, sharemarket analysts, media and the public. It's designed to bamboozle but only succeeds in reinforcing the well-held notion that big business is extremely out of touch with 'new world' realities - no wonder trust in companies has become such an explosive issue (Check out previous blog post: Corporate Australia Cops a 'Bloody Nose' in Edelman's Latest 'Trust' Findings).
The Fin rightly applauds "old-school" Gerry Harvey who closed five Harvey Norman outlets late in 2008.
"The stores can't make money", Harvey reportedly said.
PR firm Edelman has just released the Australian results of its 2009 Edelman Trust Barometer, an annual study that takes the pulse of consumers' views of government and big business (My previous post on this subject looked at the Trust Barometer's global findings).
Here are some interesting (scary?) snapshots of the Australian data, along with some PR Warrior commentary:
Trust in business
in Australia is in decline with 74% of survey respondents indicating they trust
business less than they did last year. PR WARRIOR: WTF? If these were sales figures, whole departments would be sacked - in fact, it would be too late, the company would already be out of business. Given the level of trust in a company has a considerable effect on whether a person will buy goods and services from them, this has got to be high on the agenda of marketing, PR and C-suite executives of large companies, surely?
Trust in government
is high - 56% - trust in business is low - 43%. This is the largest gap in
trust between government and business in the developed world. For example, in
the U.S., trust in government is at 30%, and trust in business is at 36%. PR WARRIOR: This is an interesting stat. Maybe having a government that's still quite new and hasn't worn out its welcome yet might be a factor. If anything, it underscores the fact that trust in business is very low (anecdotally, you'd think governments would tend not to rate well in the trust stakes, so this is indeed a positive for Rudd & Co).
Banks, media
companies and insurance companies are the least trusted in Australia -
significantly less than in China where banks are among the most trusted. Technology, biotech
and the food are the most trusted in Australia. PR WARRIOR: No surprises here given the global economic meltdown; interesting that technology rates high in trust. Maybe iPod-driven?
CEOs are the
least trusted source of information when forming an opinion of a company.
Eighty-one per cent of respondents do not trust the CEO as a source in
Australia, the US and Europe. PR WARRIOR: This is a damning statistic and given we live in a hyper-connected world where openness, transparency, accountability and corporate social responsibility are expected of CEOs and corporations, you would think - hope - that Australia's business leaders see the light and start ditching the over-rehearsed, jargon-laden corporate speak and start communicating in a more 'humanistic' way with the public, indeed all stakeholders. As Barack Obama's 'digital kingmaker' Ben Self urged Australian leaders recently - it's time to drop the corporate speak and start dealing with your supporters, customers and partners like human beings.
Independence
drives trust: 70% of respondents trust academic or expert opinions – this number rises to 82% among respondents aged 25-34. PR WARRIOR: No surprises here - it'sa main reason public relations experts either hire, or attempt to influence, key opinion leaders within industry, academia and the community so they in turn can spread the word and reinforce credibility.
HERE'S THE KICKER ROCK STARS:
Eighty-seven per
cent of Australians would refuse to buy from a company they do not trust, and
93% said they chose to buy product or services from companies they trust. PR WARRIOR: If corporate Australia continues to waste money blasting one-way messages at people (advertising) at the expense of rebuilding their declining reputations, not only will their advertising become increasingly less effective but consumers will continue to drift away, preferring to give their business to companies they perceive to be more open in their communications, more transparent in their dealings and more community-minded in their actions - indeed, more 'trustworthy'.
As the name suggests, it's an annual survey that, in essence, takes the pulse of consumers' views in terms of their perception of government and big business.
Needless to say, without even looking at the report, after such a tumultuous year you could intuitively take a stab at its findings - and that is the public's trust in business and government is at an all-time low.
That would be my gut feel anyway. And I know I wouldn't be alone.
Okay. I'll have a quick scan of the report.
(Coffee break while I digest the document).
Yep. Pretty much spot on. A BIG thumbs down to business and government worldwide (although Western countries fare worse than their emerging counterparts). And the media also took a hit, with levels of trust in television, newspapers and business magazines all being well down on previous years.
All this obviously begs the question: Why do government and business continue to alienate and marginalize the general public? Their audience. Their stakeholders. Their bread-and-butter. It's a worrying trend, particularly at a time when consumers are becoming more and more empowered with each passing day, thanks to the internet and social media.
The disconnect is currently chasm-like. Will it get even bigger (a scary thought) or will government and business wake up and start taking measures - bold measures - to mend their fractured reputations and their frayed stakeholder relationships?
"This year, the world had more reasons than ever before to suspend its trust— and for the most part, our data reflect this. Nearly two in three informed publics—62% of 25-to-64-year-olds surveyed in 20 countries—say they trust corporations less now than they did a year ago. When it comes to being distrusted, business is not alone. Globally, trust in business, media, and government is half-empty; and trust in government scores even lower than trust in business" - 2009 Edelman Trust Barometer.
In his blog, Edelman head honcho Richard Edelman provides a well-rounded summary of the report.
I was going to go through his points one-by-one and provide a few crisp and salient PR Warrior comments along the way, but who needs all that negativity? And that's what it is. Negativity. Gloom. Black clouds.
Bottom line, the general punter (referred to in the survey as 'informed people', whatever that means) is fast losing trust in the people that matter.
What's needed on the part of government and business?
Following are some suggestions from a communications perspective (N.B. I say 'communications' because the way a company communicates with its publics is highly reflective of its attitude, philosophy and convictions i.e. an open and transparent company will/should communicate in a manner that's open and transparent; likewise, an organisation that is 'closed' and controlling is likely to be somewhat of an uncommunicative beast):
A genuine sense of inclusiveness.
Honesty, transparency and authenticity in dealings and communications.
An ability and willingness to join the conversation and engage in two-way dialogue with consumers and stakeholders.
A desire to listen (with an empathetic ear).
Equally, a desire to eat 'humble pie' and act (when necessary).
Communicate with spirit and conviction...believe in what you say...become involved...tell a story...have a point of view...make an impact!
If large organisations don't change the way they act and communicate, these levels of trust will continue to drag at unacceptable levels, eventually becoming a millstone around the necks of those brands and organisations that simply don't 'get it'.
There's always a flipside :-)
But of course those companies that do grasp the new market realities - and subsequently do something about it from an organisational point of view and are open and proactive in their marketing and communication efforts - they're going to get such a kick-along it's not funny.
The time is ripe for brands to take advantage of the general malaise and apathy in the community to stand out from the herd (and by 'brands', that could mean an individual - hello? Barack Obama - NFP, government authority or corporation, large or small).
Companies are always trying to stand out, to be different. Their main weapon of choice has often been advertising. Unfortunately, as trust in advertising (not to mention interest) continues to erode, new and bold strategies and tactics are required.
Some fantastic opportunities lie ahead for those smart-thinking brands, organisations and individuals that have built a solid and genuine bedrock of goodwill and trust.
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