Archives/ Monthly Archives/ February 2014
News of a recall of the Toyota Prius this morning reminds me of the travails the brand suffered with recalls a few years ago, and in turn of a slide which a lecturer of mine liked to use in a media class of which I was part.
It pictured the investor Warren Buffett, and a quote of his: “Lose me money and I‘ll forgive you … lose me reputation and you’re fired!” The premise being that, while profits may come and go, reputation is hard earned and easily lost.
I like the sentiment, but I do wonder whether brand reputation is quite as fragile as we like to make out. I think the evidence suggests brands are more resilient than we give them credit for. Back to Toyota. In the face of those recalls a few short years ago, the mud was being slung from all angles, much of it directed at the heart of the brand proposition “The best built cars in the world”. One could only presume that some of it would stick, and that market share would suffer. Did it? Here in Ireland, we read last week that Toyota was once again the best-selling car marque in the key sales month of January.
Cadburys, Nestle, Johnson & Johnson, P&O … lots of brands have been in the dock at some time, but mostly it fails to shake them fundamentally. I think the misconception leans too heavily on the Perrier benzene crisis in 1990, a debacle from which the mineral water brand never recovered. Perrier managed it badly, but there was also a particular market dynamic at play there, with rivals capitalising on the opportunity to encroach on its near monopolistic position, which at the time was already coming under threat. And so Ballygowan became our Perrier.
One thing the Perrier case does tell us is that while crises may not break a brand, how you handle them does matter. History proves consumers are actually quite a forgiving lot, so long as they see you’re doing your best to remedy the situation. Cue a well-prepared crisis management plan. Communication in the critical early phase was sadly lacking at Perrier, and it paid the price. By contrast, Tylenol’s brand reputation was salvaged because of prompt actions by Johnson & Johnson in removing product from the shelves and in communicating well with customers.
As consumers, we become attached to brands. It’s a relationship of trust that is built over time. Like all relationships, it can no doubt be severed irreparably, but if the brand owner works hard at keeping it going, that trust can see it withstand some rocky moments.
And, of course, most crises will have an upside – lots of publicity will drive awareness, and in Toyota’s case, dealers will welcome thousands of customers into their premises to fix the Prius. As Mr Buffet would surely say, now there’s an opportunity.