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Brand reputation is subtle but significant: as many organizations continue to discover, along with reputation. And as we postulated it in a previous blog post: Brand and reputation, what is the difference.
The holy grail is to enjoy a reputation entirely aligned with the brand, where the way in which customers – past, current and future – perceive an organisation is identical to how all the stakeholders connected with the company experience it.
But as reputation can’t be managed, and brand perception is wont to change at the whim of online influencers and market influences, perfect congruence rarely exists outside of marketing textbooks.
So what are the consequences when brand and reputation clash? Can a strong brand image help an organisation ride out a reputation crisis? Or will brand always suffer when reputation fails?
As an online shopping experience, Amazon remains unsurpassed. Comprehensive searches and product comparison, competitive prices, quick delivery, the ability to buy from third-parties, and member discounts all helped make it the leading retailer in the US in 2018, with $232bn in net sales. But its reputation doesn’t match its success.
Attacks by US Senator Bernie Sanders, among others, over low pay and poor working conditions in its fulfilment centres; accusations of anti-competitive behaviour, such as banning sales of Apple TV and Google Chromecast products from its sites; and investigations for tax avoidance in the UK, China and Germany and many other countries, have all served to tarnish its wider reputation. Yet they keep logging on and shopping, and Amazon has been judged the most valuable brand in the world in 2019.
At the time of writing, Amazon’s strong brand appeal and consumer love are sufficient to ward off the attacks from other quarters. But as we have seen with Facebook in recent months, a tipping point can all too quickly be reached. Companies with strong brands but a poor reputation are especially susceptible in these circumstances and can find themselves without the necessary reputational capital to quickly recover
In a developed world increasingly obsessed with health and wellbeing, soda, snack and chocolate companies have been having a hard time of it, and Cadbury is no exception. Beyond supplying products linked to the obesity epidemic, its reputation was nearly destroyed in 2006 when a salmonella outbreak in its factories was followed by a six-month delay in alerting the public to potential dangers from its chocolate bars, costing the company millions in recalls and fines. Cadbury famously salvaged itself by focusing on the brand, not the products – epitomised in a drum-playing gorilla and the message to live your life to a glass and a half full. The feelgood message made people associate good times, rather than bad hygiene, with the company.
And they didn’t stop there. In the face of the 2018 ‘sugar tax’ brought in by the UK government, Cadbury further invested in its brand, with an ad campaign about healthier choices, leading to the confectioner being shortlisted as Brand of the Year by Marketing Week .
But it hasn’t all been marketing spend. Cadbury has backed up its branding with authentic action, by going beyond the government requirement that sugar be cut by one fifth, taking 30% out of its bestselling Dairy Milk bar. As a result, good branding and a good reputation now go hand in hand.
In September 2019, one of the world’s oldest travel agencies ceased trading after 178 years. Unable to overcome debts of £1.7bn, it declared bankruptcy, affecting 600,000 holidaymakers, around 150,000 of whom were left stranded, and putting 20,000 staff out of work.
How could such a strong, internationally recognisable brand – owned by a company which effectively invented the package holiday, with its own airline flying to 82 destinations – collapse so suddenly?
Online competition, declining interest in all-inclusive resort travel, Brexit, and the cost of running an airline all contributed. But underlying these factors was a flagging reputation, which had been undermined by a series of damaging events over recent decades, including the deaths of two young children at one of its partner hotels, and its lamentable response; as well as reports of financial difficulties and a continuous backdrop of negative media commentary.
While its brand remained strong among older customers who valued its high street outlets and telephone support, among the new generation of independent, web-savvy travellers, Thomas Cook’s poor reputation had resonated more loudly.
Strong brand appeal can sometimes outweigh the negative effects of a flagging reputation, or even prove a substitute for it. Hit the consumer sweet-spot, and an organisation could flourish despite the drag of poor corporate practices.
But, as Thomas Cook found, in the long term, reputation is ultimately the arbiter of licence to operate. Companies with strong brands but weak reputations can only paper over the cracks for so long, before the entire edifice collapses.
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