I usually try to keep my critiques to categories I’ve worked in, primarily because I think it’s irresponsible for me to comment on what works and what doesn’t when I have little basis for my assessment other than being a consumer.  So I initially demurred when some folks have asked for my POV on AT&T’s new campaign, Rethink Possible.

But then I started wondering whether my expertise in other categories might actually shed some light on the issue — that’s when I realized that there are some instructive parallels between AT&T and fast food chains.  And while AT&T has adopted some of what drives fast feeders’ success, there are a couple of important lessons it might want to learn.

Before I get into those takeaways, though, I do feel the need to address two of the more inane criticisms I’ve heard about AT&T’s new effort:

To those protesting the incorrect grammar of the tagline, Rethink Possible, I say, “get over it.”  It’s important to note that I consider myself somewhat of a verbifore, or at least a lover of language (R.I.P. William Safire), so I don’t take grammatical errors lightly.  But I do understand and value the use of creative license, and I see this tagline as just that – a creatively-worded phrase that is meant to evoke and provoke by the use of seemingly grammatical incorrectness.

The folks who take issue with such license are probably the same ones who would criticize the highly successful lines of Apple’s “Think Different” and the California Milk Processor Board’s “Got Milk?” campaigns, so I’m not giving them a lot of credence.

Also people have been critical of reports that AT&T is pursuing this tact in the hopes of becoming a “lifestyle brand.” To some, it seems ludicrous for a telecom company to have such lofty aspirations.  Others reject the idea of any brand promoting a lifestyle.

But the reality is, becoming a lifestyle brand is a common brand development goal – brand managers in automotive, nutritional supplements, apparel, consumer electronics, and fast food — practically every brand I’ve ever worked on – have wanted to be known less for the products they sell than for the lifestyle their products facilitate.  I’m not saying this is right but let’s not be too hard on the folks at AT&T.

telecom and fast food – who knew?!

The telecom and fast food categories are actually quite similar in some respects.  The major brands are targeted to the mass market.  Commoditization is prevalent, as are price wars.  Competitive advertising is the norm.  And purchase/usage is driven as much – if not more — by availability (that is, coverage and hardware in telecom land, penetration and prime locations in fast food land) as it is by any sense of brand loyalty.

With these parallels as a backdrop, it’s clear that brands in both categories need to rise above the fray.  McDonald’s sponsorship of the Olympics earlier this year gave it an important reprieve from the tit-for-tat price wars which have been littering the fast food promotional landscape.  Many QSRs are trying to go head to head with Subway’s $5 foot-long offering; others are pushing unbelievably low prices.  But McDonald’s was able to increase its brand appeal with its inspiring and emotionally resonant campaign for the winter competition.

AT&T is making a similar move, abandoning its back-and-forth map and app wars with Verizon and communicating the bigger ideas behind the brand.  They’re getting away from that petty competition and trying to remind people of other factors in the value equation.

AT&T is also smart to consolidate its efforts and promote one brand/one message to all stakeholders.  In telecom and fast food both — where billions of ad dollars are spent each year and priorities among different groups often conflict — the norm is to operate in silos and this leads to message fragmentation.

But AT&T’s Senior VP-Brand Marketing and Advertising Esther Lee is quoted as explaining, “It’s not going to be the old model that there’s brand work, and then there’s consumer work or enterprise work; it’s all ‘Rethink Possible.’”  The singular message route worked well for McDonald’s ever since it launched “I’m lovin’ it.”  The theme and what it stands for has unified diverse product efforts and served as a rallying cry for all of the company’s stakeholders.

lessons yet to be learned

Despite these smart approaches, there are a couple of things AT&T could learn from fast food companies. The first is:  you’ve got to deliver on the basics before you can you credibly promote innovation or image.

New products have become the life blood for many fast food chains, but slow speed of service, unclean facilities, and rude servers quickly take the wind out of the sails of these innovations.  McDonald’s understands this and that’s why they continue to emphasize solid execution amidst their McCafe concept, McWrap Snacks, and other new product introductions.  Mastering the basics is not only the cost of entry into the category – it’s also the cost of compelling innovation.

A lot of the criticism directed at AT&T’s effort is really about the company’s failings in providing basic service. Whether it’s fewer dropped calls, broader coverage, or the ability to tether the iPhone, people want their basic needs met.  People argue that the money the company is spending on the new campaign would be better spent on addressing infrastructure and service issues (an argument I’ve previously made about Microsoft’s lavish ad campaigns.)

I’m not an AT&T customer so I’m not in the best position to judge whether or not such claims are warranted but perhaps perception is more important here anyway.  AT&T must have a base of credibility today in order to present a credible vision for the future.

The second lesson from fast food is related to the first – that is, the battle is fought in the trenches. Fast feeders know that they must win at the store level.  Regardless of the brand image the chain might enjoy, the offer at the restaurant has to compete head to head with the one across the street.

In the same way, AT&T needs to focus on their points of purchase.  Whether it’s retail stores or the company website or VARs, their new brand promise must be delivered at all of these channels.  I haven’t read anything about the company’s efforts in this area and a cursory attempt at shopping on their website didn’t reveal anything different from the norm.  Rethink Possible shouldn’t just be a brand campaign idea – it needs to drive sales at retail as well.  AT&T needs to establish competitive advantage where it really matters – that first moment of truth.

I realize there’s a limit to the relevance of fast food lessons to AT&T – the breadth of usage/applications, the purchase cycle, and the price points are just a few of the significant differences between telecom and fast food.  But I do believe AT&T would do well to embrace the commodity-like nature of their offering and glean appropriate lessons from those who have mastered such competition.

related posts:

• perception is at&t’s reality
• seinfeld isn’t going to rescue vista

The other day I found myself doing something quite curious – after having placed an item into my grocery cart, I turned around, took it out, and returned it to the shelf.  That momentary act wasn’t strange because I’m generally a decisive person — but rather because of what caused me to reverse my actions.  My change of heart was prompted by a ½” inch square – or actually, the absence of it.

You see, the product was a box of tangerines and none of contents had a Cuties sticker like the ones I had noticed on tangerines I had purchased previously.  In the split second of surveying the item, I realized they were in fact a different brand of tangerines and so I decided I didn’t want them.  I stopped to consider what had just happened – and it got me thinking about the role of brands and commodity categories.

an orange is just an orange

Generally speaking, produce is not a category in which brands have played a strong role.  Sure, Sunkist oranges

and Chiquita bananas

have been promoted through the years, but most category behavior is driven by price – and in more recent years, by source — organic vs. not or locally-grown vs. not.

But lately, I’ve noticed a trend toward more branded produce.  In addition to Cuties tangerines, products like Cherub tomatoes and Bunny Luv carrots have sprouted up.  In many cases, these branded products cost more than their “generic” counterparts – and yet, despite these recessionary times, people seem willing to pay for them.

It’s curious, especially given the recent growth of private label product.  In practically every other aisle of the grocery store, manufacturers’ brands are feeling the pressure from the store’s brands – the increased quality and consumer acceptance of private label is causing branded goods to lose facings or lower their prices.  But in produce, the reverse seems to be happening.

why branded produce

This trend seems to be fueled by the intersection of the needs of the consumer with the needs of the retailer.  Articles (1, 2)  from Grocery Headquarters magazine explain what’s going on:

Seth Pemsler, vice president, retail/international for the Idaho Potato Commission, based in Eagle, Idaho, says consumers want to buy branded produce in the same way they want to buy certain brands of packaged items. “The whole essence of brands is confidence and comfort; the idea that if I buy this brand it’s going to be consistent.”

“Intensifying competition among supermarket chains and constant price wars over center store items have led supermarket retailers to try to differentiate themselves from the competition through the use of their perishable departments, including produce, analysts say.”  Further, “consumer research continually emphasizes the importance of great produce departments as the primary criteria for selecting a supermarket to shop,” says Bill Goldfield, communications manager for Dole Food Co., based in Westlake Village, Calif.

Consumers are looking for the quality reassurance which brands promise, and retailers are looking for ways to differentiate themselves and give people reasons to choose them.  These complimentary needs have created a win-win-win situation.  Produce companies, consumers, and retailers all benefit from the rise of branded produce.

So it’s likely we’ll see even more branded produce in the future.  I just hope produce brands don’t exploit the situation and end up upsetting the apple cart of mutual-benefit.

what works

The Cuties brand actually strikes the balance well.  A few observations:

• competitive pricing – I’ve found Cuties to be priced only around 10% of above other unbranded options – and with a coupon, the price differential becomes minimal.  It’s clear the company behind the brand understands the price expectations of its target.
• perceptible product quality differential – Cuties are noticeably different from other tangerines because they’re sweet, juicy, and seedless.  The brand has come to embody this quality difference.
• well-executed brand personality – It’s not simply the use of a brand name that distinguishes Cuties, it’s the brand name itself.  “Cutie” is a perfect descriptor of the little orange balls and the name adds value to the product beyond tangible attributes.  Further the stickers on every tangerine reinforce the cute brand personality with phrases like “Root for the Cute” and “Cuties R4 Kids.”

Without these elements, Cuties would be just another brand name slapped on an undifferentiated product.  But with them, Cuties provides a great example of how brands create value.

related post:

• brands, generic-style

Andy Beal, an internet marketing consultant, award-winning blogger, professional speaker, and co-author of the critically-acclaimed book Radically Transparent: Monitoring & Managing Reputations Online, was kind enough to share a few moments with me earlier this week. 

Our talk covers topics like:

• how the social web is changing search
• the difference between brand and online reputation management
• noteworthy points about marketers and this year’s Super Bowl

We also discuss a cool company Andy founded, Trackur.  Trackur is an online reputation monitoring service that tracks what is said about you on the internet. Trackur scans hundreds of millions of web pages–including news, blogs, video, images, and forums–and lets you know if it discovers anything that matches the keywords you’ve indicated.  Fortune 500 companies, as well as small businesses, agencies, PR firms, etc. currently use Trackur as their “reputation guardian” and I think we’ll see even more uses and applications of the service going forward.  Check it out here.

You can reach Andy through his website:  www.andybeal.com .

I enjoyed talking shop with Andy and hope you enjoy listening in our conversation in the podcast below.

If you’ve been in the business long enough, you come to understand there are some basic rules to follow when running an ad on the Super Bowl.  Humor works best.  Use animals or big-breasted women – or both.  Wow people with extraordinary settings and production values.

Many of the advertisers on last night’s big game followed the Super Bowl advertising playbook to a tee (view all of the spots here).  And, yet, they violated some fundamental rules of advertising in general.

know thy customer

Last night there were at least three spots (I lost count after awhile) that tried to tap a certain manly spirit but failed.

Dockers called on all men to “Wear the Pants” and rebel against the growing movement of proud, but pants-less men.  In Dove’s spot for its Men+Care line, men were bolstered with the upbeat charge: “You can take on anything, of course you can — becaaaauuuse you’re a man!” The ad implied to men that although you previously felt inadequate or overwhelmed by others’ expectations, you can now “be comfortable in your own skin.” Chrysler’s manthem threw subtlety out the window with its defiant declarations of “I will drive the car I want to drive” and “man’s last stand.”

In each case, the message came through loud and clear:  Men have been oppressed and suppressed for too long.  Men, it’s time to stand up, take a stand, stand up for your rights, stand tall…in other words, be a Man!

Problem is, there is no problem.  Or at least, there’s not a problem men are willing to admit.

Such calls to arms fell flat with men because the consumer insight upon which they’re founded is inaccurate.

The movement in American culture of recent years toward Alpha Females, more matriarchal families, and Girl Power gave rise to the “I am woman, hear me roar” advertising anthems.  Ads which have resonated with women demonstrated that marketers understood their female targets and had something relevant to offer them.  Spots like Nike’s “I Feel Pretty” featuring Maria Sharapova proving that’s she’s more than a pretty face, and ESPN’s “Running Away” in which a woman goes running and leaves the burdens of her life in the dust, were inspired by years of women actually being oppressed and suppressed.

Men are in a different place.  They haven’t spent years trying to shed stereotypes and live up to impossible expectations.  They don’t feel misunderstood and misrepresented by advertisers.  There’s no widespread pent-up disappointment or resentment.  Perhaps there should be – and maybe there is, but it’s hidden.  And so rallying-cry ads don’t resonate with them.

Men don’t need to be inspired to embrace who they are.  In fact, I suspect men found such suggestions embarrassing, if not offensive.  They don’t need ads to tell them what to do – they’re men, after all.

These ads demonstrate that their creators don’t really understand their target. Instead of finding a message that resonates with men in a socially acceptable way, they simply took a formula that had previously worked on women and applied it to their male target.  Ironic, don’t you think?

know thyself

Second to knowing your customer, knowing yourself is the most critical rule for advertisers. A few of Hyundai’s spots make this point.

In one ad, beauty shots of a car getting a paint job and a voiceover talking about classical music sonatas are followed by the title card, “Better paint quality than Mercedes CLS550.”  Another spot suggests that Hyundai is the new definition of luxury.

With both of these ads, Hyundai is trying to position itself as a luxury brand — but it’s just not credible.  Comparisons to Mercedes and caviar are too far-fetched.  Given that the Sonata’s highest list price is still under $30K, it isn’t a luxury car.  Hyundai may be a very fine automotive brand, but it’s not a luxury one. It shouldn’t try to be something it’s not.

Instead it should embrace what it is – and right now, that is a superior choice to Toyota.  With all of Toyota’s recall troubles, this is Hyundai’s moment to shine.  And shine it did in its Body Pass spot.

In this ad, a Sonata is shown moving through “one of the most technologically advanced factories in the world” — but instead of machines and conveyor belts, Hyundai employees are shown passing the car above their heads like a rock star at a concert.   The spot closes with the title, “Assembled by 3,300 quality experts.”  This spot used a strong, visually-interesting way to make a credible and compelling point about the brand – it’s high quality.

I’m sure the spot was conceived and shot before Toyota’s troubles arose, but it is a brilliant execution – and, most importantly, one that is true to the Hyundai brand.

unsavory associations

The third fundamental rule broken by some of last nights’ spots relates to subliminal messaging.  Effective marketers use the power of suggestion in advertising to create associations to exist in people’s subconscious.  One might argue whether or not sexually-shaped ice-cubes and flashing images are used (and effective), but every advertising person knows to employ subtle tactics to create associations — like choosing to shoot an ad in an upscale setting in order to evoke a more premium image.

While these approaches are usually intended to create positive associations for the brand, occasionally unintended negative ones are made.  For this reason last year I criticized Cheetos for using pigeons in its Super Bowl ad – this year I have the same beef with Denny’s use of chickens.

Denny’s two spots featured lots of screaming chickens, panicked over the amount eggs they’d have to produce for the chain’s Free Grand Slam breakfast offer.  However, no one wants to think about live chickens when they think about eating eggs.  That’s why you don’t see cows in burger chain campaigns or pigs in bacon ads.

Denny’s not only made the association between their offer and the chickens their diners’ eggs will come from – they made it the core idea of their spots.  Most people might not have been turned off by the association when the ad ran, but the message was so powerful, some will likely experience a subconscious negative feeling if they recall the ad when they sit down at the restaurant.

Fortunately for Denny’s, their offer is so compelling, most people will ignore the cognitive dissonance.  But that begs the question – the offer is so compelling, why let a drove of chickens spoil it?!

Doritos is also an offender.  I don’t know which is worse — the thought of Doritos as dog food (as depicted in the dog collar spot) or the image of the gross gym guy spitting out a Dorito in the Dorito ninja ad.  Both have created negative associations in my mind that I’m not likely to forget soon.

Marketers should know better – and be more careful.

Just as winning in football requires mastering the fundamentals, winning in Super Bowl ads begins with adherence to simple, generally-accepted rules for effective advertising.

P.S. Most Super Bowl ad critiques are a matter of personal taste.  I’m hoping the above comments reflect a little less subjectivity and a little more critical thinking about advertising in general.  Having said that, I do want to give a shout-out to two spots which stood out to me simply because I liked them:

• NFL – the drama created by the super slo-mo of the tremendous play by Reggie Bush followed by the emotion captured in the multiple shots of fans made this spot captivating.  It stirred my passion for football even though I’m not a really big follower of the sport.
• Google – the Googly simplicity of this ad drew me in and held my attention.  Beyond that, it was such a great product demo:  it didn’t “tell;” it “showed” – the product wasn’t integrated into the story; it was the story.

I’m eager to hear your take on the spots.  Comment away!

related posts:

• my superbowl was filled with guacamole
• if a brand has something to say, say it

Once again I find myself writing a post triggered by a New York Times article on the mobile category.  Last Monday it was about the different strategies brands are taking with their mobile application offerings.  Today this post introduces some thoughts based on the piece, “AT&T Takes the Blame, Even for the iPhone’s Faults.”

As the title suggests, the article outlines how AT&T is suffering from poor – and in some cases, undue and inaccurate — perceptions. The author, Randall Stross, reports on independent research which indicates AT&T’s 3G coverage is better than Verizon’s.  He also reveals that some of the problems users experience with the iPhone are a result of iPhone design flaws, not of AT&T’s coverage, or lack thereof.  Stross concludes, “AT&T, while meeting 4,000 percent growth in data use, has acquitted itself quite nicely. But the company is saddled with an awful public image as the perennial laggard.”

This prompted a few observations and insights on the topic of “perception is reality.”  “Perception is reality” is not a new thought, of course — remember those old Rolling Stone magazine Perception/Reality ads?!  But there are a few specific dynamics in the AT&T/iPhone/Verizon situation that add insight to the adage:

1.    Consumers’ perceptions are shaped by the things they care about most.

AT&T may indeed have faster download speeds and stronger signals but, if my understanding of the technology is correct, these are benefits experienced primarily when using mobile apps or the Internet browser.  They have less impact when using the phone to make calls – and that’s what people care about most (for now).

When a call is dropped, it’s a problem:
-    it causes a clear disruption — one instant you’re communicating, the next you’re not
-    that disruption impacts 2 people – you and the (in some cases very important) person you’re talking to
-    and it requires a messy recovery – first, you have to realize the call was dropped (how many of us have continued talking on and on until we realize the other person isn’t there anymore?!); then, you have to hang up and wait for your phone to reset; then you have to redial (which often involves you getting the other person’s voicemail because they’re trying to call you back at the same time and you play several rounds of dialing/getting voicemail/hanging up/waiting for the other person to call you/deciding you’ve waited long enough and maybe the other person isn’t calling you after all/dialing again, etc.); and then finally, when you do get the other person back on the line, you have to exchange apologies and explanations and figure out where the conversation left off before you can resume it

It’s a pain.  When a mobile app doesn’t work, you just refresh or hit “enter” again and it usually works just fine.   Very little hassle; very little lost time.

So, people care a lot more about reliable voice service than about reliable data service (again, for now).  As such, AT&T’s poorer quality of voice service has shaped people’s perceptions of the brand far more than their superior data service.

• The point for brands:  It doesn’t matter how good you are at something if you’re not good at the thing people care about most. Both product development and marketing need to be focused on consumers’ primary drivers.

2.    Perceptions are also shaped by people’s expectations.

Mobile phones are a mainstream category and making calls on mobile phones is an established behavior.  As such, people expect to use their mobile phones to make calls without incident.

Mobile apps and other data-based usage of phones, on the other hand, is still a new phenomenon.  People are just discovering what is possible and so they generally have low expectations.  If something doesn’t work the way they think it should, most people are likely to chalk it up to the new-ness of the technology.  And, really, they’re no worse off than they were 6 months ago when they didn’t even have the thought of doing what they’re trying to do.

People’s perceptions of AT&T and Verizon are based on their expectations of seamless phone calling service – so again, AT&T suffers from poor perceptions.

• The point for brands:  While perceptions may be hard to change, expectations are more easily shaped.  Brands can advance people’s expectations or focus them in a particular direction.  Brands can position themselves as an advocate for a higher standard of performance, and improve perceptions of their own performance in the process (think Target and its “Expect More. Pay Less.” platform.)

3.    Perceptions of a particular product or feature are shaped by overall brand perceptions.

The NYT piece reports that Roger Entner, SVP for telecommunications research at Nielsen, explains although the iPhone’s design has “shortcomings that ‘affect both voice and data…’” in the eyes of the consumer, “the iPhone has the nimbus of infallibility, ergo, it’s AT&T’s fault.”  This might seem unfair, but from the very beginning of AT&T’s partnership with Apple/iPhone, it’s been clear AT&T had more to gain.

A few years ago AT&T was working hard to shed its old “Ma Bell” image and compete more visibly in mobile communications. The new iPhone with all its bells and whistles and Apple’s powerful brand image provided an avenue for AT&T to move its brand forward.  A 2007 press release reporting on the launch stated, “During the past several months, AT&T has been strategically transforming the brand into one that is mobility-centric. The company kicked efforts into high gear in early May to prepare for…the iPhone. The accelerated push…took the company’s branding initiatives to the next level.”

While the effectiveness of these efforts may be debated by some, the fact is AT&T started out from a weaker position and continues to suffer because of it.   Its service quality may indeed be high, but perceptions of the brand overall continue to hold it back.  Promoting speeds and feeds has limited impact; advancing a platform of brand value which resonates with consumers’ values and emotions would do so much more.

• The point for brands:  Specific improvements in your offering go hand-in-hand with improvements in overall brand perceptions. Product improvements will not make an impact if they’re not connected to the brand.  And, attempts to improve brand perceptions without tangible evidence of change will fail.  But together they are a powerful combination.  In product development and promotion, specific changes need to be tied to the overall brand value.

OK, I think I’ll give the mobile category a break for now – but I appreciate the comments from my last post and hope to hear from you on this one.

The following is a guest post from Dan Phillips, the co-founder of Skybend, a design and brand company focused on helping businesses navigate the gauntlet of electronic media. A classically trained artist turned graphics designer turned entrepreneur, Dan brings his unique perspective to branding efforts for businesses around the country. Contact Dan through his website at http://skybend.com or on Twitter via @ruqus.

Today I heard a story about the immediate impact of Twitter, or Twitimpact (that’s right you read it here first, Twitimpact). The story goes like this:

1. Celebrity eats out at a favorite Hollywood spot.
2. Celebrity skips out on bill. Claims wallet was in car and never returns.
3. Server at the eatery tweets (sent a Twitter message) about it.
4. Celebrity sees tweet and gets angry.
5. Celebrity then has her assistant pay the bill but not the tip.
6. Server tweets “NO TIP.”
7. Celebrity returns to the scene of the crime and slaps three dollars on the table in front of server.
8. Server tweets “Thank You” to the celebrity.
9. Server gets fired. Presumably at the celebrities request.
10. Server continues to happily tweet saying “thank you” to the celebrity for days off with family.
11. People feel bad for the server and add their own tweets.
12. Celebrity looks even worse.

This silly incident has forever affected the celebrity’s Brand. It could have a very real, and immediate, impact on the viewership of the celebrity’s TV show. Which in turn effects advertising dollars for the network. All because she chose not to pay for the daily lunch special. What is the ultimate cost of that lunch?

Key takeaway:

• a minor slip-up in Brand awareness is like peeing in the pool, no amount of chlorine can get the pee out.

Defining a Reputation

What is brand? For our discussion, the simplest definition of Brand is reputation. An example:

Positive: You buy a pair of Nike running shoes. The shoes perform flawlessly. You run faster and jump higher than ever before. You are now a customer for life. Telling your friends about the “experience” and the shoes.

Negative: You buy a pair of Nike running shoes. They cause foot pain, lower back pain, and fall apart. You are now likely to never purchase the brand again, and you tell everyone you know about the “experience.”

The collection of customer experiences help establish a reputation, which in turn defines a brand. In ancient times, 5 to 10 years ago, information moved much slower. It took days, weeks, or even month for your recommendations and warnings to travel through your pre-social media network. Now with Twitter, Facebook, MySpace, text messaging, and all the rest, your experiences are broadcast immediately, complete with pictures and videos. Reputations are shined or tarnished in a matter of seconds.

Key takeaways:

• Reputation is a good way to think of Brand.
• Good user experience is always the best way to build a loyal following.
• The world is connected and reputations are shined or tarnished in a matter of seconds.

What should the celebrity have done?

The celebrity should have recognized the powerful Twitimpact, and used it as an opportunity to advance her brand. The result would have been completely different had she sent the server a $100 tip with a nice note and an 8×10 glossy. The server would have surely tweeted about the gesture over and over. The celebrity’s brand influence would have gone way up.

Sure, I can see the celebrity’s point-of-view. But, when the public is watching, you pucker up so the cameras can catch it. Only time will tell what the true Twitimpact is, but I’m certain there are other servers waiting to tweet about their brushes with celebrity.

Key takeaways:

• There are millions of people waiting to tweet their experiences.
• Your brand actions now travel at light speed. It is a wonderful, yet deadly, double-edged sword.

Obviously the celebrity is a metaphor for any company, product, or service. Be careful, in today’s social media obsessed world, the Twitimpact phenomenon can cause a quick death, or an even quicker rise to greatness. Social media is not going away any time soon. So use it to elevate your company.

(image is from Duane Hoffman / msnbc.com)

CNN Money recently featured a list of 14 “brand name companies” that are going bankrupt.  Among them were Crunch (the chain of fitness clubs), Tribune Co. (owners of the LA Times and the Chicago Tribune), and Hartmarx (the maker of mens’ suits).  The breadth of companies on the list indicates no business is immune to the possibility of bankruptcy – the list included businesses in the private and public sector, from packaged goods to online services, both national and local brands.

If the bad news is that bankruptcy filings are on the rise, the good news may be that the stigma which used to accompany them is on the decline.  Whether because more people are having personal experiences with bankruptcy or because news of companies undergoing bankruptcy now regularly populate the business media, it seems bankruptcy is no longer viewed by the public as negatively as it has in the past.  And GM’s highly publicized bankruptcy was even heralded by some as the best thing that could have happened to the company.

With bankruptcy more commonplace, more business owners and leaders are considering it as a solution.  It’s important to understand, however, bankruptcy is not simply a financial transaction.  It’s a brand event as well and should be managed as such.

Here are a few thoughts on how to mitigate the negative impact of bankruptcy on your brand:

1.    Be as transparent as possible. Strong brands are built – and rebuilt – on trust.  One of the most important and urgent imperatives is to retain customer confidence in your brand.  Bankruptcy calls into question a product’s quality (is the company cutting corners in order to address financial woes?), as well as a company’s ability to address customer service needs now (are they going to pay attention to my needs or are they distracted by their own business problems?) and in the future (are they going to be around when I have a question or need a repair?)  You need to regain customers’ trust.

By communicating clearly what you’re doing, why, and how, you are demonstrating you are worthy of their reconsideration.  This is not to say that you should dwell on the details of the bankruptcy or your recovery plan – but rather, you should ensure the information is readily available to those who want it and you should proactively manage the conversation in the marketplace and with customers with open, honest communication.

2.    Follow-up as soon as possible with new tangible benefits for your customer and visible evidence that the business has changed. It will take awhile to regain any lost brand equity, but making bold moves quickly jump-starts the process.  By initiating a dramatic change, you deliver increased/improved brand value to customers and signal your intention to continuing building a strong brand.  Plus you give people something besides the bankruptcy to talk about.  A breakthrough new product — or new operating practices or innovative service policies – can go a long way to renewing excitement about the brand.

3.    Engage all of your stakeholders. Employees, board members, business partners, etc. are all stakeholders in your brand – and they’re often your most influential brand ambassadors.  As such, you should inform, inspire, and instruct them during the duration of the bankruptcy and recovery.  Ensure they are kept up-to-speed on the business status, recovery plan, and current priorities.  Motivate and encourage them by communicating a compelling vision for the future.  And empower them to communicate with others about the bankruptcy by providing them with the information and guidelines on how to do so.  If your stakeholders are focused on building the brand, it’s likely your customers will be also.

Companies may no longer need to vigorously avoid bankruptcy, but they do need to understand its brand implications and act accordingly.

Related posts:

• brands we would miss — a series
• notes on a crisis

U.S. News & World Report’s interview with Susan Docherty, North American Vice President for General Motors provided some valuable insight into the troubled car company.  Her comments made it clear that GM is operating from a reactive, backward looking stance.

Here are 5 things she said and the problems they point to:

1. “If [new CEO] Fritz [Henderson] says he’s giving a press conference, we all stop work and put on the TVs. Then we do a debrief and make sure everybody understands what the message is.” — So the Vice President of one of the company’s largest divisions is getting direction from her new CEO via the press conferences he gives?  It’s concerning that the information any CEO covers in press conferences would be new news to any companies’ employees — shouldn’t they be involved in crafting those announcements?  Not only should the people who are running the business be driving the strategy, but also they should be initiating news that is press conference-worthy in the first place. (n.b., I recognize there was probably a lot of confidentiality surrounding the leadership change, so it’s understandable that that announcement would have been a surprise — but Docherty’s comments seem to indicate this is a regular occurrence now.)
2. After President Obama announced the company’s leadership change, “Fritz Henderson held his press conference, and he said that what we’ve provided is not good enough…Then right after that we launched Total Confidence.” (Total Confidence is GM’s version of the Hyundai Assurance program.) — So it took a shocking management shake-up to get the company to realize it needed a bold promotion like Total Confidence?  It seems the company should have introduced consumer confidence-building strategies and tactics back in November when it first went trolling for bailout money.  Also more wholesale changes have been needed for quite awhile now — but the company has waited to a breaking point to seriously considering them.
3. “It’s too early to see if interest in our brands has dropped off completely from all the news…The buyer behavior data come out quarterly, and we don’t have the first quarter’s data yet.” So the company is relying on slow, standard methods to evaluate what’s going on with consumers?  As a reminder, the interview with Docherty took place on Friday, 04.10.09 — and she’s saying she doesn’t have data to gauge consumer reaction from January?!  In today’s environment, such a time lag is unacceptable.  The company needs to implement methods that allow it to keep its finger on the pulse of the consumer and to respond quickly to the learning from the research.
4. “The real wake-up call for us was the Congressional hearings in December. It was very clear from the questions they asked, and also from the questions the press asked, that the perception of our company and our brands was at least a decade old.” So prior to the Congressional inquiry, the company didn’t have an accurate view of the public’s perceptions of its brands?  Like it would have been that hard to figure out.  A company like GM has to have on-going, in-depth brand tracking research that monitors consumer sentiment towards its brands, right?  So was their research wrong?  Or were they just not listening to what the research was telling them?   Or??
5. “I had tickets for my husband and I to go the Final Four…on the day we were supposed to leave for the Final Four, we got a request from the team in Washington…I called my husband and said, ‘you need to find a friend to go with you.’” and “I was at the Detroit opera with my daughter and husband that Sunday afternoon [when former CEO Rick Wagoner resigned.]  And I looked at my daughter and my husband and said, ‘I have to go.’” So Docherty uses the stories of her sacrificing the Final Four and leaving the opera early to demonstrate how seriously she’s taking the company’s recovery plan and how emotionally impacted she’s been by the management changes.  Her comments seem to suggest that the company’s answers to the crisis are to ensure everyone understands how serious it is and to put in long hours to respond to requests from Washington.  Not quite the positive, proactive, productive stance the company needs to adopt.  (Also I must point out that any savvy media-trained leader should know to use an interview like this to talk about new innovation processes they’re developing or even ways they’re managing their teams through a leadership change — instead of relaying anecdotes about sacrificed personal luxuries that may be offensive to folks who are personally struggling to simply keep a roof over their heads.)

If I didn’t know any more about GM other than what was covered in this interview about how it’s “fighting for survival,” I would be skeptical about the company’s chances.  Docherty’s comments alone reveal some of the systemic changes that the company must address in order to survive, including:

• robust, two-way internal communication
• more proactive, forward-facing posture in developing turnaround strategies and programs
• up-to-the minute metrics, including a system for monitoring brand perceptions and responding to issues

The problem is, I do know more — and it doesn’t assuage my concerns.

John Caddell, owner of Shop Talk – Innovation, Marketing and Alliances, “a daily look at marketing, strategy and management, highlighting trends, focusing on what works and what doesn’t,” was kind enough to feature a guest post from me on his blog — my piece points out the “excuse culture” that seems to be pervasive these days and explains how it’s bad for brands and businesses — please check it out and let me know what you think.