Brand Values and the March of Folly
Once upon a time, there was a beer that made Milwaukee famous. It’s name was Schlitz. But the people who were managing the brand devised a clever scheme to wring more profit from it. They pulled a fast one on consumers and substituted cheap corn syrup for the more expensive barley malt. Then they crossed their fingers and hoped no one would notice. But consumers did notice and they reacted angrily. Schlitz market share dropped off the edge of the cliff. Today it stands at a puny 1% of the beer market. A once famous brand was consigned to ignominy because one or two marketing geniuses thought they could disregard its core values.
In a recent column I counseled against selling your brand’s soul to the devil. It’s often tempting to do so in order to reap a short term gain, but it is a betrayal of all that the brand stands for. Worse, it breaks a vital contract with the consumer.
Imagine how you would feel if a friend of many years - someone you thought was honest and loyal, someone you trusted - swindled you or embarrassed you publicly. How would you react?
In talking about brand values, I’m not talking about the monetary value of a brand but values that are central to the brand’s character and soul. Values such as honesty, truthfulness, reliability, sincerity, inventiveness, humour, curiosity, honour, loyalty, integrity. Some of them sound distinctly old-fashioned as if they had been wrested from the pages of the great Victorian novelist, Anthony Trollop.
It is the values of a brand that generate brand loyalty. If a customer is to be loyal to a brand, the brand has to be loyal to the customer. That’s not brain surgery. That’s just common sense. Yet it’s amazing that, in the quest for greater profits, some brand managers are willing to compromise the brand’s core values and undermine its integrity.
Some time ago, Standard Life ran an advertising campaign featuring employees smiling into the camera and promising that they will keep their word. There was a time when people would be puzzled by such a campaign. Surely keeping one’s word is a given? A company that didn’t keep its word would be out of business in no time flat. Yet here is a company that believes it has found a competitive edge, presumably because keeping one’s word is not common practice. If the brand managers at Standard Life are right, what does that say about the mores of the marketplace today?
A friend and I each drive an Audi. It is a great product, is beautifully finished and handles like a sports car. What the brand managers at Audi don’t realise is that, as good as the car is, if the total brand experience falls short, the brand suffers. One of us, despite repeated attempts, cannot get his phone calls to the dealer answered, the other feels he is being overcharged by his dealer. The result is we’ve each lost trust in the brand. “I wouldn’t buy another,” said my friend at lunch, sadly shaking his head over his Floridian grouper.
A few years ago, Globe & Mail columnist, Andrew Willis, wrote about the sense of betrayal he felt when his mom’s mutual funds were being mucked about by fund managers who let market timers flip in and out of their funds skimming profits off ordinary investors. While apparently no laws were broken, the Ontario Securities Commission said that, “There have been clear violations of the principles of fairness to clients.” What the fund companies were doing may not have been illegal but it was clearly unethical. For their transgressions, they were fined a total of $156.5 million. And who were these companies? Well known advertisers who spend millions every year trying to establish brands that investors can trust; AGF, AIC, CI and Investors Group. What were they thinking?
A number of years ago, the American historian, Barbara Tuchman, wrote a sobering and cautionary tale entitled The March of Folly. In the book she asks the question, why is it that organizations, institutions and governments so often act contrary to their own best interests? Her answer; folly pure and simple. It seems that there is no shortage of folly in brand management. AIC’s slogan is, “Buy. Hold. And prosper.” One might be forgiven for cynically interpreting it as, “Buy, hold and let others prosper.” Or interpreting AGF’s slogan as, “What are you doing after work? Market timing.”
It’s axiomatic that your brand’s core values must be clearly articulated and understood and fiercely guarded against compromise. Only then can you hope for brand loyalty and trust.
Arguably the most precious asset a brand possesses is the bond of trust it establishes with its customers. Break it in a moment of folly and it could take years and many millions to regain. Even then you’d need a lot of luck on your side.