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The art of the apology is something that occupants of the C-suite would be well advised to study and learn
January 28, 2008 ET
Bloomberg
O CULPA MIO Three in a long list of chief execs who’ve had to beg the public’s pardon (from left): Mattel’s Robert Eckert apologized for lead-tainted toys; JetBlue’s David Neeleman for letting passengers rot on the runway; and Apple’s Steve Jobs for uneven iPhone pricing
What’s happening? Have business leaders suddenly abdicated control? Are financial expectations overtaking common sense and good business judgment? Or have corporations lost touch with their customers?
“All of the above” could be one answer. But a more accurate explanation is that our world of instantaneous and ubiquitous communication has given customers more power to hold CEOs and companies accountable than ever before.
Branding 101 taught us all that a brand is more than a product name or a company logo and that loyalty can’t be bought with an ad. Brand loyalty is a gift from customers to companies that consistently earn their trust and demonstrate credibility over time. It can also be taken away at any time.
When a company or brand delivers what is expected time after time, customers begin to trust the brand. When a company acts in accordance with the image it projects, then credibility develops. But as credibility and trust grow, brand failures become more costly.
Dell lost customers’ trust when service slipped. Mattel lost both trust and credibility over lead-tainted toys. OK, so much for product-related problems; what about the corporate brand image? Herbal-tea maker Celestial Seasonings incurred customers’ wrath by ignoring its advertised corporate image of environmental stewardship when it poisoned prairie dogs on its property. Who would have guessed that prairie dogs were important to tea drinkers? That question is the point of this discussion.
There is an unwritten contract today between customers and the brands they buy. First, they expect companies to consistently deliver what they advertise. Second, they expect the companies they do business with to treat them with respect and to be honorable and forthright.
Unfortunately, brand research all too often stops with product or service quality. What is not well understood is that everything a company does affects the brand in the eyes of the customer. Google’s decision to use solar energy for its server farms reinforces what Google stands for and strengthens the Google brand. A company’s decision to outsource manufacturing or IT isn’t just a financial decision; it affects employees, community political leaders and, most of all, customers.
Spend time to understand what makes customers loyal
In the everything-is-brand world, every person in the company, from contract employees to managers to executives to directors, must be responsible for maintaining and increasing brand value. Key brand decisions are not just product- or marketing-related; they can be decisions involving outsourcing, environmental policies, corporate-contribution recipients, high-profile lawsuits, layoffs, plant or office closings, treatment of employees, animal testing, low-cost suppliers, product-quality control, service-response times, information-leak control and even the control of pests on corporate land.
How can you possibly know which issues will touch a customer nerve and negatively affect brand loyalty? It’s simple: Ask them.
Companies need to spend time to understand what makes customers so loyal. They need to go beyond research on products and services and understand what the customer believes are:
• The best and worst experiences they have had with your company.
• The company’s values.
• The company’s social and ethical responsibilities.
• The major differences between the company and its competitors.
Once you have the answers, weave them into your company value statements, CEO messages and especially employee training. The most well-crafted brand message, PR or advertising campaign can unravel the moment a customer talks to an employee on the phone. The way your employees treat customers, handle complaints and answer questions about shipping or billing is the true test of your company’s values. A five-minute call will prove to your customer whether your values are real or a mere marketing slogan.
Probe for the little things that can be overlooked
At one time, probably when you joined your company, you received an employee handbook. Everything you ever wanted to know was laid out in carefully crafted statements covering the history of the company and its founders, the mission, current executives, and maybe even a code of business conduct. On the inside back cover, likely expressed in bullets, was a list of the company values. The message to you: That’s it! Employee education accomplished! Now get to work.
It just doesn’t work that way, folks. Employees need to understand how their roles fit into the brand promise and how they are expected to embody the company values. They have to know that they will be held accountable. And this is not accomplished in a training session. It happens when the entire management team, down to the first-line manager, embraces company values in the way they act, speak and communicate to the outside world as well as to employees. It happens when employees are honored for handling difficult customer situations. It happens when the company has a misstep and management fixes it immediately and, if needed, apologizes for it.
When you start to think most employees understand the company values, it’s time to test it. Probe for the little things that can easily be overlooked. In one company, the corporate operators were trained never to let a customer call go through to the CEO, but to divert it elsewhere. Unfortunately, an unhappy CEO of a very large account called and demanded to talk to the company CEO and was told, “I’m sorry, sir, the CEO doesn’t talk to customers.” The operator knew the rules but didn’t understand the values of the company.
When you believe employees understand their role in delivering on the brand promise, broaden the communication to partners, channels and suppliers. If you start this process before employees are engaged, the first interaction with a partner, channel or supplier will inevitably create a massive credibility gap that will take months, at least, to close, if it can ever be closed at all. Partners, channels and suppliers also have to be held accountable for delivering on the brand promise, but as we’ve all been taught, we are only as good as the company we keep.
Always ask: “Is it good for the brand?”
Now it’s time to start communicating your message and brand promise to customers. Tell them what you stand for and what they can expect when they do business with your company. Open customer communication channels on product and non-product issues and take their input seriously. Consider a customer advisory council and possibly a CEO blog to communicate key decisions that customers really care about, not decisions that make the executive team look good or are aimed at influencing the financial community.
One last thought: Make sure every executive, manager and employee in the company understands what is important to customers and that every meeting ends with one question: “Will this decision help or hurt our brand?” And don’t let anyone forget the prairie dogs.
Don Frischmann is a principal at Rubicon Consulting and a former executive at Symantec and IBM. This commentary originally appeared in Financial Week’s sister publication Advertising Age.
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