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Preserving Brand Equity in a Corporate Turnaround

brand equityWith rare exception, companies assign very little planning or resources to proactively managing the effects of a restructuring on its brand equity. While financial and legal considerations will always be the primary focus, a tangible sophistication gap has long existed between workout arrangement skills, compared with what’s required to preserve a company’s goodwill among internal and external audiences during a corporate restructuring.

Brand communication is considered a fuzzy management science by many legal and financial professionals and can be discounted by the C-suite as well. However, in our digital age, rumor and misinformation can incur permanent damage to a company’s reputation with lightning speed. A communications strategy largely consisting of press releases or cryptic statements from management falls far short of what is required to protect an enterprise’s most valuable asset — its brand.

Why Brand Equity Matters

A brand is the promise a company makes to its customers. Brands help customers understand what a company knows, what it stands for, what it will deliver and why they should trust it. Brands involve far more than a firm’s name, logo or website. Simply put, marketing is what a company does to promote its brand. Brand equity is what people believe the company is.

Marketing academics and practitioners promote plenty of convoluted definitions of brand equity. For the sake of this discussion, brand equity is best defined as the sum total of market perceptions, customer loyalty and employee engagement. If those three factors drive a company’s revenue, then building and protecting brand equity must be a strategic priority, particularly when the enterprise undergoes any change or event that may negatively influence those factors.

Brand equity has always mattered to companies. What has changed over the past decade, primarily as a result of the internet, is a company’s loss of control over information related to its brand and the democratization of influence. A company’s senior management and traditional media sources no longer have exclusive or primary control over brand equity. Anyone with Facebook, a Twitter account or a blog — including employees, customers, competitors, short sellers or dedicated troublemakers — can erode (or bolster) brand perceptions. Restructurings provide perfect opportunities for those opinions to be heard and considered.

Preparing A Game Plan

During a restructuring, it is critical that preserving a company’s brand receives the same level of attention by senior management as financial and legal considerations.

Anything short of that commitment can signal to employees, customers, business partners and other key stakeholders that their interests and concerns will take a back seat to the personal agendas of the corporate owners. Post restructuring, the rebuilding of trust and confidence with audiences that shape a company’s brand equity is far more difficult (and expensive) to achieve, because negative and incorrect facts and opinions have online visibility that can last for many years. As the classic FRAM oil filter commercial suggested: “You can pay me now…or you can pay me (much more) later.”

With an upfront commitment in place, most of the heavy lifting in creating a game plan to protect a company’s brand equity in a restructuring is front-loaded: strategic planning, delegation of responsibilities and a sense of urgency are the critical success factors.

Here are some primary considerations in preparing and implementing a game plan:

Treat Restructuring as Crisis Communication

In terms of its potential to inflict long-term damage to brand equity, a restructuring can be as significant as a product safety recall or financial fraud. Most audiences won’t understand the purpose or logistics of the transaction. Many will assume restructuring is simply a tactic to enrich senior management. The overall impression will be that the company is in trouble or going out of business. Don’t underestimate the significance of the turnaround or the sense of urgency that’s required to communicate properly with key audiences on a real-time basis.

Refine the Core Messaging

How well and how consistently the company explains what’s happening and what’s likely to occur will have the greatest impact on how audiences respond. It is critical to provide an accurate, clear and concise description of the reasons for the transition and provide insight into the company’s plans and expectations. It is critical to express empathy for those affected, especially for those who have lost their jobs. Internal pressure from legal advisors to say very little about the restructuring or to communicate in legalese often requires pushback from management.

Tailor Core Messaging for Each Audience

There is no “one size fits all” strategy when communicating a restructuring event to diverse internal and external audiences. Because employees, customers and business partners all have very different motivations and concerns, the company’s core messaging must be tailored to address the “what’s in this for me?” factors relevant to each target audience. The substance of the messaging remains the same. The tone and details will change relating to areas of greatest concern for each audience.

Select & Manage Communication Channels

Tailored communications are of little value if they are not delivered to the intended audiences through an appropriate channel. Employees, for example, will respond more positively to email, and face-to-face (or televised) meetings/town halls, than they will to statements posted on the company’s website or intranet. Communication with business partners may best be managed through personal phone calls from their company contact. Ideally, establish dedicated channels (an internal microsite, for example), and do not mix restructuring-related information with normal course business communication. In all cases, the most damaging scenarios occur when an important audience receives restructuring information from a third party or indirect source — the news media or on social media — before hearing it directly from the company.

Apply Listening Tools & Respond Immediately

Several online tools, with capabilities far beyond GoogleAlerts, can provide real-time insights into where a company is being mentioned and what’s being said. This window into market sentiment is a necessity during a restructuring, but it will be of tangible value only if a company has the capability to respond immediately and appropriately to rumors and misinformation. Keep in mind that each social media channel has its own protocol and culture and requires specific skills to communicate effectively. If a company lacks channel-specific expertise in social media, engaging outside help is essential.

Centralize All Communications

With lots of moving parts — multiple audiences, tailored communications, different online and direct channels — the potential for inconsistent messaging and inaccurate information is very high. To manage those risks, establish a very simple and strict protocol with respect to how and when transaction-related communication is managed. The game plan should include individuals covering multiple disciplines. A single individual should be responsible for implementation and keeping the team informed of progress and problems at all times.

Start & End With Employee Communication

Employees have a personal stake in the company’s future and a direct influence on customer satisfaction and loyalty. At all times, depending on how they are treated, employees can serve as strong brand ambassadors or insidious brand terrorists. Because a restructuring strategy’s success will rely, in some measure, on their cooperation and support, a communication plan should be heavily weighted in tactics designed to keep them informed and to give them a voice in the process.

Anticipate Unpleasant Surprises

Plans designed to protect brand equity during a restructuring rarely follow the script. Part of the initial planning process should include a whiteboard session to address all the possible “what if” scenarios, ranging from union problems to negative media coverage to legal or regulatory problems. It’s unrealistic and unproductive to create detailed communications strategies for all of these potential issues, but considering them in advance enables identification of their early signs and a quicker response should they occur.

Despite the negative connotations, restructuring can serve as an opportunity for a company to demonstrate its true character and to build respect and loyalty from existing and new audiences. If, as Hemingway suggested, “Courage is grace under pressure,” then a company’s behavior during a restructuring — in terms of what it says, how well it manages the process and how it backs up promises — can significantly strengthen its brand equity.

To accomplish this goal, advance planning is more critical than good intentions. A company of any size, without a deep bench of internal talent, and lacking specialized communications experience, can preserve the brand equity it has worked so hard to establish. That effort starts and ends with a commitment to transparency and an acknowledgement that brand equity is a very fragile asset.

Note: This article was published in the November / December 2017 edition of ABF Journal, found here: ABF Journal Nov/Dec 2017

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Fighting Online Brand Sabotage 101

Brand Sabotage May Warrant Ninja Tactics

Complaint websites such as Yelp, Glassdoor and Ripoff Report – that empower actual and imaginary customers or employees to anonymously post their accurate or bogus comments online – have created new brand-related challenges and opportunities for their corporate targets.

Thanks to search engines and social media, anyone with a computer and a personal agenda can now inflict substantial, long-term damage to the reputations of institutions that may or may not be deserving of their viral sabotage. It’s become a dangerous and foreign world for CMOs, PR heads and others charged with protection of their company’s brand; especially for small and mid-sized companies lacking the sophistication or deep pockets to mount a serious defensive strategy.

At the risk of oversimplification, here are a few down & dirty street-fighter tactics that should be on the do-it-yourself checklist of every company that’s a real or potential target of brand saboteurs:

Keep Your Eyes Open – This advice appears rudimentary, but many companies don’t bother to stay on top of online content.  At the very least, all companies should use Google Alerts to keep track of what’s being said about them online. This service is free, but does not provide a comprehensive view of everything that’s being said. There are scores of sophisticated social media monitoring solutions, tailored to meet your budget and level of interest. Here’s a list of them.

Take the High Road First – If your company has made mistakes or fallen short of expectations, it’s best to man up quickly. If there’s a way to respond directly to a negative post, then admit your error, offer to make amends, and follow through on any promises you make. Negative posts are opportunities to showcase your company’s integrity and to build goodwill.

However…if it becomes clear that an employee, customer or competitor is using social media primarily to inflict brand damage, it’s appropriate to protect your company in a far more aggressive manner. The basic ninja tactics and rules involve:

Hit and Run – At the risk of being labeled a “troll” by the strange subculture of people whose hobbies include trashing companies online, it’s worth the effort for your company to fight fire with fire, by anonymously posting contrary opinion and evidence, on a selective basis, to discredit the brand saboteurs. If your defensive post is well-crafted (which means it’s not totally obvious that it was written by someone from your company), readers will conclude that the saboteur may not be correct, or at least that there is a difference of opinion.

Avoid Fistfights – If you employ anonymous hit and run tactics, never go toe-to-toe online with saboteurs by responding to their follow-up posts (where they will accuse you of being a shill for the company.) If you engage with them, your original post will lose its credibility, you’ll give them additional opportunities to trash your brand, and it will attract additional attention. If you can’t maintain your discipline, then don’t use hit and run tactics.

Call In The Cavalry – The odds are, if you’re running a successful business, that you have plenty of satisfied employees and customers. The problem is that brand terrorists are always more motivated to trash your brand than your brand ambassadors are likely to praise it. The solution is simple: swallow your pride, and ask for help from your fan base. Don’t tell them what to say, but do provide them with the specific information (or send a page link) they will need to post their positive opinions where it will have the greatest impact. Solicit at least one positive post every month, and don’t forget to thank those who take the time to help you.

Become Transparent – In a world driven by search engines, no news is longer good news; in fact, no news is a brand liability when you are the target of a brand saboteur. The most effective way to reduce and offset brand sabotage is to consistently generate online content that positions your company in a positive manner. This does not simply mean pumping out a press release every time your company introduces a product, wins an industry award, or appoints a new vice president. The content with the greatest value – both in terms of viral shelf life and marketing impact – provides insight into your firm’s intellectual capital…so that target audiences have a clear understanding of your company’s value proposition.

Pull Out the Legal Saber – If the damage caused by brand saboteurs is substantial and consistent, your company should consider legal means as a last resort. This can be expensive, but some companies have succeeded in neutering false and defamatory posts by first filing a lawsuit against the author of the post (not against the website or search engine); if successful in that suit, obtaining a court order related to the offending post; then presenting that court order to Google…which typically will honor the court order by removing the webpage with the offending post from its search index. Although this legal tactic will not remove the post from Ripoff Report, Yelp or Glassdoor, the post will no longer appear in Google search results, which is a significant damage control victory.

Many companies will continue to do little or nothing to prepare for online brand sabotage, on the assumption that it’s unlikely to ever happen to them. Like the classic Fram Oil Filter commercial, they can pay a little now, or pay a much bigger price later.  But there’s a growing list of CEOs who regret having rolled the dice with their company’s reputation at stake.

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