Brands With White Hats

White HatIn the digital age, every aspect of marketing lives in a glasshouse. Here’s how to make a response plan that’s bulletproof

In January, the world turned into their pearl-clutching grandmothers when NPR’s This American Life ran a story about the conditions of a Chinese factory that manufactured Apple products. The conditions were deplorable, the workers were poisoned, maimed even, and Apple was to blame. The story spread rapidly, and within a few hours, was picked up by every major news outlet and trickled down to Twitter feeds around the world. Then came the retraction two months after the broadcast: “I have difficult news.” This American Life host Ira Glass wrote in a press release, “We’ve learned that Mike Daisey’s story about Apple in China — which we broadcast in January — contained significant fabrications. We’re retracting the story because we can’t vouch for its truth.”

But the damage was done. Apple, ranked the world’s most admired brand for four years running, went into damage control mode and took a shot at transparency. Apple issued a press release in February announcing that the Fair Labor Association would conduct voluntary audits of its factories in China at the technology company’s request. In March, Apple CEO Tim Cook made a visit to China to tour the factory in question.  

The story has since become old news in many consumers’ minds, but the long-term damage for Apple is still unknown. The real story here, though, is that in the digital age, consumer perceptions of transparency and responsibility are key to brand loyalty. And even a seemingly infallible company like Apple is vulnerable.

In fact, the Apple factory uproar has turned into somewhat of a cautionary tale for brands whose aim is to create relationships with consumers. Bottom line: In the digital era, the consumer cares and can find out anything about your company, true or false. It’s time to usher in the age of brand transparency and responsibility and marketers seem up for the task.

Getting Social

It’s not surprising that social media is leading the charge in corporate transparency and responsibility. It’s also not surprising that it’s catching some marketers off guard. Just five years ago, Twitter was in its infancy, and Facebook was still a place where college kids planned their next kegger. Fast forward to 2012, and both social networks are the platforms for many sophisticated and costly advertising and marketing campaigns. But such rapid change in a short amount of time has left holes in brands’ social strategies – namely ones where they aren’t recognizing that the consumer has more control over the brand’s message than even the marketers themselves.  

“I don’t believe companies have the control any more,” says Mike Germano, CEO of Carrot Creative, a Brooklyn-based new-media marketing agency. “It’s more a political campaign than an ad campaign. You know there will be positives and negatives. You need to be out there with the information that people can easily search so you are ahead of the battle in real time, which is important.”

Although losing control over a brand’s message seems worrisome, there is really nothing that can be done to change social media’s new role in a company’s image. That’s OK, though, because smart marketers know that being reactive is the key to creating better relationships with consumers.

Looking back at Apple’s recent crisis shows how the brand effectively handled the aftermath of the negative publicity through savvy reactions. Addressing the allegations, implementing new safety audits and even sending the CEO on a tour of the Chinese factory were all efficient efforts in mitigating the PR disaster that was created. Social and traditional media caught on and disseminated the company’s moves. Apple’s consumers appeared pleased not just by the results of Apple’s reactions, but also that Apple seemed to care enough to take action.

“In terms of when addressing negative actions by a company, no company wants to be proactive with that, and 99 percent of the time, the situation only lets you be reactive. So companies need to have good social listening tools. They need to be proactive in creating a plan so they can effectively react,” says Germano.

Thus, a preemptive strike isn’t necessary, so long as a planned reaction system is in place and, most importantly, is swiftly implemented.

“The old world thinking is that any corporate communication needs to go through 15 degrees of approval, and I think that social media is proving a challenge,” says Zach Newcomb, executive account director, Rokkan, a digital marketing agency. “They need to figure out the key elements most important to their consumers and I would argue that its timeliness of response.”

In fact, if there was one thing brand managers should have learned from the BP oil spill, even making a few wrong decisions quickly creates a better perception than waiting too long to do what will ultimately solve the problem.

Strategy: Looking good is as important as being good

Marketers are well aware of how consumers perceive brands and what they expect from the brands they support. In creating successful digital strategies to incorporate transparency, marketers are now forced to include the consumer in the conversation.

“Brands need to identify and reach out to the most active consumers and make them part of the team,” says Jack Myers, media economist and editor of the Jack Myers Media Business Report. This team, Myers says, is built exclusively through social media and for good reason: “Social media is the fundamental link between brands and consumers. It’s the foundation of the relationship, not a layer. It is the foundation of the advertising and marketing campaign.”

Social media can also be finessed to build trust between consumers and brands. Glimpsing most brands’ Facebook pages will show a well-maintained social platform that is frequently updated with information on product launches, corporate news and press detailing good deeds the brand engages in. The same goes for brands’ Twitter feeds. Many brands update multiple times a day and actively engage with their consumers. Was the bathroom at the Olive Garden where you had lunch particularly dirty, for instance? Tweet at the company. When Olive Garden tweets back a simple “Sorry!” or “We’ll fix that,” they are doing more than addressing a problem. They are establishing a relationship.

“Social media is restoring a lot of trust for brands. It’s enabling them to respond in real time to their consumers, to do crisis management better and customize messaging to speak to specific segments of consumers,” says Newcomb. “But there is a huge hurdle for larger brands that need to deal with the challenges of the freewheeling effect social media brings to the table.” 

To that extent, bigger brands generally have a harder time navigating the social ecosystem.

“Working with a smaller brand, you see a lot of the decision makers and the ones who shape the voice of the brand are much more accessible and are able to communicate with their consumers. Smaller brands are usually younger and more comfortable with empowering their employees to use social media,” Newcomb says. “For larger brands, it’s a more difficult challenge. Their internal politics are usually one of the largest obstacles they face. They can leverage influencers and establish connections with social media to help establish trust.”

The Consumer as Sleuth

Of course, perception is not just based upon how brands interact with consumers through social media. Nowadays, anyone can find virtually everything about a company through a few clicks and keywords.

“Consumers are more aware of how to access both sides of the story, and they listen. In the past, traditional media stories were reported by news organizations so corporations were put on the defensive,” says Myers. “Now, corporations can be proactive and more in control of their message directly with the consumer. There is no third party to interpret that message.”
Germano sees the good in the new transparency era: “There is nowhere to hide anymore. It doesn’t matter. You don’t have control anymore, but what it also allows for is for people to open up and explore.”

In 2011, it was not uncommon for companies to release sustainability reports, indicating many companies’ desire to resonate with consumers’ desires for eco-friendly products.
Consumers now feel that it is their own responsibility to complete their due diligence so it lets a company put its best face forward, if you will.

That’s especially true of younger people. The consumers who really demand brand transparency are 25-and-under Millennials who grew up with high-speed Internet and online news sources. They’re not only savvy consumers, but they are also caring consumers. They won’t stand for their companies mistreating their employees, their customers or the environment. And if there are any accusations of such behavior, the Millennial consumer will find it. There really is nowhere to hide, but that doesn’t spell bad news for brands.

“The consumers who have grown up to be mistrustful of brands tend to be over 25. They have different needs than consumers who have grown up with the Internet as part of their lives,” says Myers. “They’ve grown up with a trust in brands – they tend to give them the benefit of the doubt. These younger consumers are open to response from companies before they make judgment.”

“In terms of brands, you’re starting to see a greater sense of trust with those brands that actively engage in a conversation with their consumers,” adds Newcomb.

But more than trusting that brands are on the up-and-up, the young consumer has specific needs that new brands are catching on to, namely social interests and will do extensive research before making a purchase.

Environmental concerns, of course, are a big issue. But increasingly, consumers want to know about the company’s fair-trade policies and employment record.

“I think that consumers are able to now really dig into a brand to find out if it satisfies all the things they consider valuable,” says Germano. “With digital, you don’t have an excuse to not say where your company stands. There are no ad dollars going into it.”

The moral of the story for Germano? “Social media is great for good brands, and social media is horrible for bad brands.”

Next story loading loading..