Dr. Quelch outlines seven steps for CMOs to take during the recession to mitigate the reduction in consumer spending.

It’s a great article, and as marketing research practitioners, we at Synergy Marketing Strategy & Research, Inc. are pleased to see an increase in spending with some of our clients.

We believe companies who listen well to consumers, employees, and stakeholders, execute often on fulfilling their brand promise, and continue to produce excellent goods and services without compromise of quality and value will exceed during this recession.  Enjoy. Thrive. Trust and be Trusted!

Recession-challenged consumers are buying less, looking for deals, or switching to different brands, product categories, or stores. Some are even changing long-held attitudes toward consumption. To many folks, filling the home with more stuff or keeping up with the Joneses is no longer appealing.

As a result, the degree of uncertainty in business and consumer markets has soared. Yet, to conserve cash, most firms are reducing spending on the market research that would help manage that uncertainty. In the U.S., spending on market research has dipped for four consecutive quarters, and chief marketing officers don’t expect the situation to turn around soon. Most big consumer marketers are seeking to shave 10 to 20% off of research budgets.

In flush times, a rising tide of consumption can compensate for less than optimal branding, positioning, pricing, or segmentation. That is certainly not the case now. At the same time that marketers must pare down research expenditures, they face added pressure to secure high-quality data and insights.

I recommend that CMOs take the following seven steps to minimize the impact of reduced spending.

Stay focused. Savvy marketers focus their research on the products, brands, and markets that are key to their marketing strategy. In a recession, it’s essential to get a clear read on existing core customers, including those who are most loyal to the brand and those who are most profitable, rather than fritter away research resources on potential or peripheral consumers. When times are good, there is budget available for increased research on secondary products or customers. Now, nice-to-knows that are not essential will have to wait.

Enlist trusted partners. Marketers and research suppliers who trust each other and have established long-term relationships can jointly plan how to extract more insights and make better decisions based on fewer expenditures. For example, combining data sets may reveal new leading indicators of changes in consumer behavior. Tracking studies may have an edge over one-off projects. CMOs who trim costs by consolidating their budgets with an integrated research supplier should insist that the supplier aggressively explore synergies across its various component agencies as well as eliminate research redundancies.

Value experience and judgment. CMOs should tap the knowledge and intuitions of managers and researchers who’ve lived through previous recessions. In setting prices, for example, such insight can help calibrate the optimal level of price promotion offers. Experience also reveals proxies: in tough times, some marketers use research results from Sweden as a proxy for Scandinavia, rather than conducting the same research in all Scandinavian countries.

Seize opportunities overseas. Some large multinational marketers, such as Unilever, are shifting research expenditures away from Western Europe and toward emerging markets in Asia and Latin America. Relative to the developed economies, the costs of research in emerging economies are less and the payoff from incremental insight can often be greater. Brand preferences and consumption levels in emerging markets such as China, India and Brazil tend to be more fluid. Consumer research is therefore critical to aid marketers trying to cement brand preferences early on as these economies develop.

Go online with a dash of skepticism. Online research is cheap, fast, and the wave of the future. Tools like SurveyMonkey allow non-expert users to create custom surveys in minutes. As an alternative to offline focus groups, custom online panels of consumers can be formed for qualitative research on new product ideas or new ads. Taking the do-it-yourself approach rather than outsourcing to a market research firm is attractive in a cost-cutting era, but you risk getting no more than what you pay for. The opinions of convenience sample of an enthusiastic online brand community may not represent all users.

Don’t cut across the board. Just as important as knowing where to cut research is knowing where not to cut. When marketers are creating fewer new ads and introducing fewer new products, it is doubly important to use rigorous pretesting to select the strongest alternatives. In categories where the bases for consumers’ value judgments are changing, modest expenditures on copy research can prevent blowing much more money on ineffective messaging. Adding a few questions to standard tracking studies is a low-cost way to shed light on changes in customer attitudes and purchase behavior. For key products, running conjoint studies to check on shifts in price elasticities of demand and price-attribute tradeoffs can usefully improve the profitability of pricing decisions at a time when cash is king.

Keep an eye on the new consumer. No one has a perfect record of predicting the future, and the recession is making it harder for consumers to envision or articulate their needs. Even so, and despite budget pressures, smart marketers devote a portion of their market research to getting a handle on future changes in consumer behavior. Are consumers of your brand going to revert to previous consumption patterns when the recession ends? Or are they developing coping mechanisms that will endure, especially if the recession is lengthy? What new products and services will consumers be open to embracing? If, as in the financial services category, consumer confidence and trust in brands have been seriously eroded, how long and what steps will it take to regain them? Eventually, the recession will end, and future success depends on being well-positioned, based on sound research, when it does.

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Provided by Harvard Business—Where Leaders Get Their Edge

SynergyBlog has found a great post regarding the importance of corporate reputation – how to earn it and how to maintain it.

Referencing the demise of many corporate reputations, according Edleman Trust Barometer, a number of Britain’s most admired leaders sat down to discuss the maintenance of a good name…

The full transcript of the panel can be found in Management Today. Enjoy the post!

A recent trust survey confirmed that management has lost public respect. It’s not just individual businesses in the firing line, but business itself. MT brought together Most Admired leaders and other practitioners to debate the issue of how to hang onto your good name…

MATTHEW GWYTHER – Where better to start on a discussion of reputation than with Shakespeare? Iago may be a thoroughly disreputable character, but he has some sound words (Othello, III.3) on the value of character:

Good name in man and woman, dear my lord,

Is the immediate jewel of their souls:
Who steals my purse steals trash; ’tis something, nothing;
‘Twas mine, ’tis his, and has been slave to thousands;
But he that filches from me my good name
Robs me of that which not enriches him
And makes me poor indeed.

The concept of reputation or honour was around for thousands of years before Fred Goodwin. But nowadays it has moved from the individual to the corporate realm, to the point where it is one of the most important things that faces business organisations.

We’re interested in corporate reputation today – not only of individual businesses but of business generally and how this may have been affected by the downturn. Certainly, inasmuch as it is aligned to the subject of trust in business, it has taken a battering – as a recent Edelman Barometer of Trust survey confirmed.

Paul, I want to start with you, because Diageo won 2008′s overall MT Most Admired award. Your peers admired your organization more than any other. What does it mean to you operating, as you do, in a controversial area with talk about minimum prices for alcohol?

PAUL WALSH – If you are the leader of a company, what reputation means to you as an individual should be what it means for the company and vice versa. The first thing I would say is that a great reputation does not make for a great business, but a bad reputation can prevent you from becoming a great business.

Secondly, I do read a lot about ‘reputation management’ and that always makes me wince. That sounds to me a little bit like propaganda: how do we go out there and ‘manage’ this?

I would come back to basics. We are a commercial enterprise. Our job is to maximize the future cashflows in a sustainable manner, because the longer you can stretch those cashflows out, the more valuable the company is. You constantly have to look at sustainability.

Any successful company has to start with its customers, because without these people we are nothing. Consumers around the world are placing more emphasis on the reputation of the supplier, of the brand, than they have ever done. My 27-year-old son pays more attention to these issues than I did at his age. It just did not hit my radar screen with the same intensity. I think, therefore, that reputation will influence purchasing decisions.

We operate in what is certainly a regulated business and quite a controversial business. The first epiphany in the company was when we had to say: ‘We have to accept that our product in the hands of certain people does cause problems for them, for society, for their family and friends and you cannot hide away from that fact; so now, what are we going to do about it?’ That has proven to be quite uplifting. Employees have moved behind it and a lot of our communication, particularly around consumers, is linked to responsible consumption.

The skeptics would always challenge me and say: ‘Come on, Paul, you are not really about reducing consumption, are you?’ Well, yes, I am, if it means that we can go on unbridled and unfettered in our ability to market our product and in a way whereby the broader society, first, does not see it as something that causes harm and, second, does see the brands as being a champion of responsible consumption.

DAVE LEWIS – If you come to the heart of a brand, it offers a promise that it needs to deliver. That might be functional, it might be emotional. If it’s a good brand, it probably has both. In terms of creating, building and sustaining brands, it’s all about investing in and understanding and delivering against the expectations that you create. Unilever brands that don’t do that are destined to become weak over time. Whether it is an individual brand or a corporate brand, for me it comes down to trust: do I understand you, do I deliver against your expectations in a meaningful way, is that a brand that I aspire to be part of and relate to?

As far as the broader Edelman Barometer of Trust is concerned, the interesting thing was that while 44% of people will still trust what business has to say – which is quite high – 56% would not. I think the issue for the CEOs around this table is that CEOs were only trusted by 18% of people, which puts us slightly below politicians and estate agents.

JEREMY DARROCH – One of the interesting things in our sector, if you look at media and technology and what we have seen over the last 10 to 20 years, is that there has been an explosion of choice. But people are more and more careful about the companies that they do business with. It also seems to me that reputation has to sit very much on the values that you espouse. That is absolutely true at the top of the organisation but it is also true throughout it.

Values are what they are. They are not rules. They are not there to be negotiated. They simply exist. They are the value set that you seek to have in your business and they are what people will test you against. Day to day, do your actions live up to the values that you hold most dear?

ANDREW MOSS – I would absolutely agree with Paul that the tone is set at the top of the organisation, but one thing I am always conscious of is that our reputation is shaped on a daily basis by the many thousands of people who are serving our customers in our call centres – who are changing the experience of the way the company is perceived, literally on an hourly basis. That is happening as we sit and speak now. If I look at the customer complaints I receive, sometimes they are about investment performance, but a lot of them are about people being discourteous to them. These very small things have a large impact.

Insurance is a business which is about helping people when things go wrong, when it comes down to it. If you are burgled – as my daughter was two weeks ago – you ring up your insurance company and it comes and fixes the patio door at the back of the house within a few hours. That makes a big difference to your life, because you feel like you can go to bed that night and be safe. People tend to think of insurance as a financial business when in fact it is a very human business.

PAUL WALSH – Reputations are, in reality, shaped by the broad body of employees around the world, and I totally buy that. I also think that 99.99% of people in a company want the company to do the right thing. They want to feel proud when they talk to their friends, their family – whoever – about the company, because it is such a large part of their life. Therefore, I think you are pushing on an open door in that regard.

JEREMY DARROCH – One of the interesting things about that, Paul, is that if you look at the problems that the banks are facing right now, they have been caused by very, very small parts of their organisation relative to their size. Many of the problems that the big integrated banks are facing are not as a consequence of what their retail banks have done operationally; they have emerged from quite small parts of their operations. I think it reminds us all that your reputation can be defined by any corner of the organisation.

DAVID MANN – The banking industry at the moment almost needs to get out of the limelight. It is like the kid in the classroom who has been bad, and the teacher has that kid in constant focus. So every time something slips, a blob of ink comes out of the pen, it is not their fault but – guess what? – it’s off to the head teacher. If a brand does something, the focus comes on it so intensely. There are so many different ways in which people get information about companies now. The internet provides a huge amount of information – and a huge amount of disinformation.

That is coupled with the fact that you have a whole generation that puts more stock on those things. People are looking to understand. ‘Is this a company I want to be involved in? Do I want to work for it? Do I want to buy from it? Do I want to invest in it? Do I want to support it in any way, shape or form?’ People are making positive decisions on what previously would have been low involvement. The average page visit is 50 seconds, so they are cruising around the internet and forming opinions very quickly. Reputations are built on those multiple instant shots, and I think that is one of the things that is challenging everyone at the moment.

MATTHEW GWYTHER – Tim, one often hears it said that reputation is something that can take years to build but can be damaged beyond repair in a very short space of time. Is it true that the public has become more unforgiving than it has ever been?

LORD BELL – Yes. But ‘damaged beyond repair’ I do not accept. You could not expect me to. I think anything can be repaired. You might have to do amazing surgery to achieve it, but you can do it. I think your reputation should come from you, not from talking to customers. Yes, you have to talk to them and you should learn something about what they think, but they cannot know about what comes next. They cannot know what is inside you. If people think well of you, it is that much easier for you to do the things you want to do. It has nothing to do with being good or being self-righteous or being a nice person. It has a fantastically important bottom-line impact, which is that it means you can make your business more effective.

If you watched the Treasury Select Committee appearances of the bank managers, I would imagine you had your judgment confirmed that they were at the bottom of the league table of anyone you might want to be, to mix with or marry. They all behaved appallingly. None of them thought about what they were projecting to the public and they looked like a bunch of frightened rabbits who have been caught with their hands in somebody’s pockets and did not know what to do or how to get out of it.

The row about Fred Goodwin and his pension is tremendously important to all of you, because I promise you that every journalist is pumping through your annual report looking for your bonus and your pensions arrangements. I think all of you should have rung up Fred Goodwin and said: ‘For God’s sake, do the right thing in the best interests of all us.’ We certainly tried; he would not listen. If he had done the right thing, which is to give some of it away to some charitable cause, that would have done a huge service to CEOs – who, as you rightly say, are rather low in rank. You just cannot sit and look at public opinion and say: ‘I do not give a damn about you.’

KEVIN MONEY – I just wanted to share with the group a piece of research we have done about trust and how you rebuild it once it’s broken. When we first started doing the research, we thought the biggest factor would be delivering on commitments – simply being consistent over a period of time. In fact, once trust has been broken, people are looking to be listened to and to be acknowledged, for their concerns to be heard and then for action to be taken. Hence, the notion of reciprocity becomes hugely important in rebuilding trust, and what we often find is that organisations have lost the right to communicate because they have not listened. Right now, the banks are saying: ‘We are doing this.’ The public is saying: ‘We have heard it all before, we do not want to listen, we do not want to listen’. The banks have to demonstrate that they have listened first and then rebuild trust.

SANDRA MACLEOD – I think what we are seeing is a change in expectations, a call for a different kind of leadership. It’s about sustainability and it’s about things you can trust. Gone are the brash, exciting days and the high-energy days. It’s now saying: ‘What is still going to be around? What can we rely on?’ Therefore, there is almost a cautionary principle coming through, but there is definitely a change in feeling in terms of expectations and what people are looking for.

When we are talking about the financial services industry as a whole, we hear the comment ‘back to basics’. I think organisations as a whole need to really think through, very carefully and simply, the very basics about the customers and the employees.

One of the big questions in the current climate is: how are organisations energising employees to go that extra mile? But those very employees are feeling a little battered and bruised. They have lost their friends, they have lost colleagues, more and more is expected of them … How do organisations encourage that extra dynamic, particularly when the contact with the brand is through your employee? And therefore how do you encourage that best possible contact with the organisation that is the ambassador of your reputation? So I think there are some very big issues out there that are quite fundamental. It is back to basics. It does not sound terribly exciting, but I think they are very important things that are easy to lose sight of as people go through cost-cutting and other approaches right now.

MATTHEW GWYTHER – What about the reputation of business generally? There are some individuals out there who say that the bonus culture was out of control, that reward even for success is wrong. And there are even semi- socialist things being pedalled about the place now. Paul, are you going to be more worried now – when it comes to the talk about your annual package of remuneration – than you were over the previous four or five years?

PAUL WALSH – Not particularly. I think the pendulum will definitely swing, whereby there is more discussion around the fat cat subject, but I think for those companies where performance pay really reflects its performance, you should be fine. We will see an easing of compensation in our company with good reason, because the consumer is not buying, so how can you criticise that? When it comes back, it should move as well, so I am not worried about that. I do think there may be a lot of media piling on in this regard. We will get through that, we always do, but I do think it is a little more extreme here in the UK.

I am not seeing a massive negative pendulum swing against business; against banks maybe, which in many ways we were all brought up to believe were the bastions of society.

JEREMY DARROCH – I think, absolutely, business has been good for society and consumers. If, however, consumers have enough bad news and stop believing, there is a risk that you’ll see some sort of deficit of trust – and we all have to be cognisant of that, because, as a result, you do start to get unwanted, excessive intervention, because the natural reaction of governments and regulators is to seek to find places in which they can step in.

LORD BELL – I think business is at risk. What it is at risk from is not who is going to close down businesses, but the regulation, which will become absurd. It is already pretty bad – in your case, for instance, Paul. God knows what you are going to do – and there is an audience out there that is soft, ready to listen to the idea of regulation.

You will be allowed to do posters and newspapers, then they will decide on the pack promotion and slowly they will chop your legs off until you are back down to a lot of white bottles which have the words ‘gin’ or ‘rum’ written on them. That is how they do it. That is what they are starting to do to drink; it will be cars next. They are delighted by the disaster in the car industry because it is helping them hugely with their anti-car policy.

For a full transcript of the debate, visit www.managementtoday.co.uk.

THE PANEL
Andrew Moss, CEO, Aviva
Dave Lewis, chairman, Unilever UK
Paul Walsh, CEO, Diageo
Jeremy Darroch, CEO, BSkyB
Lord Tim Bell, chairman, Chime Communications
Sandra Macleod, group chief executive, Echo Research
Matthew Gwyther, editor, MT
David Mann, lead partner, strategy/products, Accenture
Dr Kevin Money, director, John Madejski Centre for Reputation, Henley
Management School

Seth pulled out a piece today which both discusses the importance of telling a compelling story and the need for that story to be true, authentic, and TRUSTED.

He says that “TRUST IS THE SCARCEST RESOURE WE’VE GOT LEFT.” Yet, he aknowledges we can’t be very successful without it.

I hope you love this peice as much as we do. And check out Seth’s Blog as often as is humanly possible!

Ode: How to tell a great story by Seth Godin

Chris Fralic reminded me of this piece I wrote for Ode.

Great stories succeed because they are able to capture the imagination of large or important audiences.

A great story is true. Not necessarily because it’s factual, but because it’s consistent and authentic. Consumers are too good at sniffing out inconsistencies for a marketer to get away with a story that’s just slapped on.

Great stories make a promise. They promise fun, safety or a shortcut. The promise needs to be bold and audacious. It’s either exceptional or it’s not worth listening to.

Great stories are trusted. Trust is the scarcest resource we’ve got left. No one trusts anyone. People don’t trust the beautiful women ordering vodka at the corner bar (they’re getting paid by the liquor company). People don’t trust the spokespeople on commercials (who exactly is Rula Lenska?). And they certainly don’t trust the companies that make pharmaceuticals (Vioxx, apparently, can kill you). As a result, no marketer succeeds in telling a story unless he has earned the credibility to tell that story.

Great stories are subtle. Surprisingly, the fewer details a marketer spells out, the more powerful the story becomes. Talented marketers understand that allowing people to draw their own conclusions is far more effective than announcing the punch line.

Great stories happen fast. First impressions are far more powerful than we give them credit for.

Great stories don’t always need eight-page color brochures or a face-to-face meeting. Either you are ready to listen or you aren’t.

Great stories don’t appeal to logic, but they often appeal to our senses. Pheromones aren’t a myth. People decide if they like someone after just a sniff.

Great stories are rarely aimed at everyone. Average people are good at ignoring you. Average people have too many different points of view about life and average people are by and large satisfied. If you need to water down your story to appeal to everyone, it will appeal to no one. The most effective stories match the world view of a tiny audience—and then that tiny audience spreads the story.

Great stories don’t contradict themselves. If your restaurant is in the right location but had the wrong menu, you lose. If your art gallery carries the right artists but your staff is made up of rejects from a used car lot, you lose. Consumers are clever and they’ll see through your deceit at once.

Most of all, great stories agree with our world view. The best stories don’t teach people anything new. Instead, the best stories agree with what the audience already believes and makes the members of the audience feel smart and secure when reminded how right they were in the first place.

We’ll not pontificate. Please read, and in doing so, may your organizations and relationships thrive.

Enjoy. Trust… and be Trusted!

From the Academy Leadership: In its simplest form, trust can be described as the belief that those on whom we depend will meet our positive expectations of them. While this may sound the same as confidence, they are different. Trust is not always rooted in past experience with others, whereas confidence generally results from specific experiences with people and is built on reason and fact. In contrast, trust is based in part on faith. We sometimes give our trust in spite of evidence that suggests we should feel some caution, if not outright suspicion, about relying on another.

Business realities now require that more power be given to those with close contacts with very discriminating consumers. No longer can the few powerful people at the top make all decisions and take all actions. Most companies now realize that they must provide people at lower levels increasing latitude in order to react promptly to demanding market forces and to progress and prosper. Thus, they must trust people to do the right thing. To do otherwise could well spell disaster for the future. Leaders can lead only to the extent that they are allowed to lead by their followers. When people believe that they are not trusted, or lack trust in their leaders, they will actively or passively resist what the team is trying to accomplish. Thus, a leader’s options are limited by excessive and ongoing mistrust among employees.

A culture of trust leads to open and honest communications. People feel comfortable “telling it like it is” and are open to constructive feedback. The organization benefits from an information-rich environment — there is little motivation for hiding bad news or engaging in political maneuvering to avoid embarrassment for mistakes. Rather, bad news is highlighted and is seen as data upon which to base timely corrective action before problems become crises. Mistakes are viewed as opportunities for learning rather than scapegoating. Problem solving and decision making improve greatly in cultures of trust since all relevant information is “brought to the table.” Although these are benefits of a trust-filled culture, trust itself does not guarantee success, but pervasive mistrust will almost certainly lead to failure.

A Model for Building Trust

Attaining and sustaining trust requires three key organizational factors — leadership style, organizational structure, and a supportive culture. These imperatives, organizational factors and their relationship to building trust are that the imperatives of achieving results, acting with integrity, and demonstrating concern provide the foundation for trust while organization factors of leadership style, structure, and culture act as supporting mechanisms for it.

Three Imperatives

Acting with Integrity — In its essence, this entails consistency in word and deed. The foundation of trust in others is a belief that people will do as they say they will do. They say what they mean, and mean what they say. More importantly, they act according to what they say. If a person fails to act consistently with their stated beliefs, or fails to follow through with their commitments, we lose trust in them. We expect a person’s words to be their bond or we withhold trust from them. Even the perception of inconsistency can result in increasing our mistrust. Gaps between what we anticipate and what actually occurs give rise to mistrust.

At the organizational level, integrity means that the actions of the organization, its leaders, and people within it are guided by and are consistent with stated values, principles, and specific practices. When this is the case, the organization is said to have a consistent and cohesive approach. This coherent approach provides a degree of predictability based on principles that lead to trust. Leaders achieve a principle-based approach by taking a few key actions.

• First, they clearly articulate the company’s purpose – its higher-order reason for existence, beyond making money.
• Second, they identify, define and ensure behavioral consistency with the company’s core values.
• Third, they communicate an inspiring and realistic vision for the company’s future. They ensure that all organizational members understand and act consistently with these three factors.
• Finally, they interpret conditions as they are rather than as they would like them to be. They are realistic and encourage open and honest sharing of information related to the current status and probable future of the business and individual performance, particularly important since leaders must be open and fair in evaluating performance and appropriately responding to it

Another critical aspect of trust is how the organization handles mistakes. Honest mistakes should be dealt with appropriately, but should not be fatal.

Demonstrating Concern — as a practical matter, most people care for and trust those who demonstrate genuine care and trust in them. People generally trust those whom they believe will protect their interests, or at least not take actions at their expense. This does not mean that we expect others to place a greater emphasis on our needs than their own, but it does entail confidence that they will not deliberately take advantage of us. When others demonstrate that they cannot be trusted to remain loyal to us or to our interests we lose trust in them. We also expect others to respect the interests of our family, co-workers, and our company. This is particularly important in regard to trusting those in positions of leadership and authority, as their concern or lack of it can have an impact on individuals as well as on larger groups.

Key Organizational Factors

Structure — An organization’s formal structure and processes can also build trust or destroy it, just as individual leaders can. High-trust organizations find the delicate balance between control needed to protect the company’s interests and autonomy that allows individual and group initiative. Organizational structures are arranged to ensure free-flowing communications — formal and informal — and encourage inter-departmental cooperation. Policies and procedures encourage behaviors that are consistent with the company’s core values. High trust organizations have mechanisms to continuously evaluate structure, policies and procedures in terms of whether they are trust-sustaining, trust-neutral, or trust-eroding.

Structure varies from bureaucratic on one extreme to versatile on the other. Organizations characterized by high levels of trust ensure performance goals are challenging and attainable and hold people accountable for achieving them. They ensure that those who implement decisions and initiatives are involved early to ensure their buy-in and support. They ensure that systems encourage open lines of communication and only institute a few rigorous strategic controls.

Culture — A company’s culture is similar to an individual’s character. It is much deeper than what appears on the surface — it defines what the organization is like on the inside. Culture is intangible yet affects every member within the company. It reflects and is the result of the formal and informal aspects of the organization. The organizational culture in large measure determines the degree of cooperation encouraged to achieve organizational and personal goals. Cultures vary from competitive at one extreme to supportive at the other. Supportive cultures enhance trust over time and reinforce the trust imperatives. Leaders increase the supportive nature of the culture by ensuring that the company’s vision is widely shared, understood, and supported; and by setting the example by living the company’s values; encouraging input from people; and treating mistakes as opportunities for organizational learning and individual development.

Concluding Thoughts

Len Kendal does a terrific job of sharing what corporations can learn from President Obama. We think he’s right…

by Len Kendall

Depending on how you look at it, the U.S. Government is one of the largest companies in the world. On March 24th, the “CEO” of this “company” utilized a Digg-Like voting system to address the most common questions that American’s had on their minds.

More than 13,000 different questions were submitted and 400,000 votes were cast to help filter the most pressing to the top. Clearly, there was no shortage of opportunity. By implementing this system, Obama used the will of the crowd to:

1) Shape the topics of discussion when addressing the nation
2) Show the crowd that the oval office is acknowledging their importance in driving the country’s success.
3) Illustrate transparency and democratization of modern government

Should brands replicate this effort?

The importance of the issues discussed in the President’s forum obviously shouldn’t be bestowed upon brands, but replicating that system could certainly prove beneficial. It’s no secret that consumers are talking about the brands they use, but if further proof is needed simply run a search on Google for “Brand X + Review.” There’s a lot of negative unhelpful chatter but if even 10% of millions of pieces of feedback are useful, then perhaps it does make sense to facilitate a conversation around improving a brand and its marketing efforts.

Legal issues aside (which do affect certain categories more significantly such as insurance) there are multiple benefits of hosting a feedback forum, to name a few:

Market Research: Focus Groups, Test Markets, and R&D Departments are very expensive. While hosting a “town hall” for your brand isn’t going to replace these entities, it’s a very realistic way of reducing the size of them. Additionally it can act as low cost experiment before launching any real products in test markets.

Reciprocation: It’s much easier to respond to consumers in one central location vs. scouring the web for brand mentions in various locations. The latter is certainly a good practice too, but when budgets and manpower make that prohibitive, a brand hosted forum is a great place to start. A side benefit is that for the consumers who are looking to engage with you, by focusing response efforts on your platform will condition the community to talk in your environment vs. their own (IF they want to hear back from you).

Personalization: Imagine you’re a person who submitted a question to President Obama and he actually read it. How would you feel? The President is obviously a person but also a symbol. If that symbol talks to you, then it turns it into a person. A person is much harder to dislike than an object. Similarly, brands are objects. But they aren’t blocked off from having a face. More and more “faces” are emerging to represent brands. Even if it’s in short semi annual sessions, a brand that gives (and publicizes) its open forum with customers humanizes that brand. The ideal situation is that people will like you for it, and when they don’t, they’ll be more likely to empathize.

On Your Playground or Ours?

There are three main paths here. Brand-driven forums like Dell Idea Storm and American Express Open Forum or conversely, user driven feedback channels such as GetSatisfaction and niche forums like “Please Fix the iPhone.”

Brand-Driven: A portal built by, moderated, and used as a spotlight for a brand. Although the volume may be smaller, the engagement is much higher and centralized.

Consumer Driven: No avenue exists for customers to voice their feedback so either they create one or join one of many broad forums that give them a voice. Unlike the above, feedback is scattered and often less constructive as there are no ears to hear legitimate complains.

Hybrid: Previously mentioned Get Satisfaction provides brands with an opportunity to participate in the discussion the feedback aggregator hosts. (Including feedback widgets and owning a profile). This is a combination of the previous two however the consumer’s voice most likely will still be stronger in this setting.

Could this practice tie into marketing programs?

What’s the biggest obstacle for hosting and moderating a town hall for your company? Cost of technology and cost of labor to manage/grow it. Because of that reality, every possible resource needs to be squeezed out of this entity to justify its existence. Besides the payoffs mentioned earlier, this forum can also be leverage for future marketing efforts.

Search: Think you’re buying all the right keywords on Google to drive efficient traffic to your site? Think again. There are topics/keywords that a company will simply not think to include in their search efforts. If you’re using a voting system to show trending topics of discussion on your own forum, you’ll know what respective keywords to buy for your search efforts. Although difficult to quantify in terms of payoff, the opportunity costs could be astronomical if you are able to sneak past your competitors in search results.

Insights and Planning: One of the most common complaints from agencies is that their client briefs don’t include enough information to build insights unique to the brand or consumers of that brand. Again, while it would be difficult to assign a specific economic value to providing more relevant insights, there are obvious benefits to having more poignant creative and better placed media as a result of more accurate insights. By watching an internal forum for top trending topics around a brand, clients would be able to feed their agency partners with more data and thus receive more effective planning.

Word-of-Mouth: Regardless if the forum is composed of your best or worst customers, more likely than not, they are the most vocal. For the purposes of making an announcement in a subtle, yet effective way, news can be built into a response within your answers. As an example, a question makes it to the top regarding your companies return policies. While answering it, the brand mentions “as of next week, return shipping is free.” This tid-bit (if genuinely a top concern of your customers) will spread across the web faster than any press release ever would. It doesn’t feel like advertising and it’s directed at the exact people who need to know about it.

People Will Still Talk Amongst Themselves

President Obama got a lot of people talking about political issues during the user forum, but this doesn’t mean that conversations won’t continue outside those walls. They will, and so will conversations around brands. The web makes it incredibly easy to discuss the brands that intersect with our lives so trying to contain that force is futile. But to pass up giving consumers a chance to also have those conversations with you is a huge missed opportunity. Let people talk to you. Let them know you care about what they have to say. Then prove it.

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Len Kendall is a digital media manager at Critical Mass Chicago where he manages strategy and activation for fortune 500 companies.

In Len’s downtime he can be found blogging at www.constructivegrumpiness.com where he tries to lend his innovative thinking to help improve brands, products, and experiences. You can also Follow Len on Twitter.

 Synergy will be featured among women-owned corporations who value both excellence in their products and service, and corporate social responsibility.

Thank you, Launch Notes, for the honor! Listen here for full interview.

American consumers and stakeholders find reasons to distrust business, political, and civic leaders every time they tune into CNN or other news outlets.

However, there’s been an unintended consequence: The diminishment of integrity in leaders has given voice to the presence of integrity in the rest of us!

Despite the global financial challenges that we face, there are reasons for optimism.

SynergyBlog is pleased that trust in leadership and trust in each other is becoming an integral part of the daily business discourse.

Today, like so many other days, I witnessed incredible sensitivity, tremendous integrity, and a spirit of giving we never hear about in the news… all in the context of commerce.

I witnessed corporations interested in sustainable practices; companies really interested in consumer needs and desires; organizations interested in the bottom line - and so much more. These virtues all demonstrated by business and civic leaders!

When we look around, it’s easy to point out the violations of trust – they’re everywhere. Perhaps we should sometimes do the harder thing and pay attention when colleagues, leaders, and everyday people do the right thing.

There’s a great peice on brand trust in Forbes by leadership guru Ken Blanchard and author and consultant Terry Waghorn that speaks to this. See the full article here:

How do you keep people trusting you at a time like this? Trust is essential in our lives, and it has been since the beginning of our country. Our dollar bills say In God We Trust. Yet today trust is all but vanishing, especially trust in our business leaders, whose greed and short-term selfishness seem to have been a major cause of our economic crisis. With negativity running amok, it is no small wonder that trust within the organizational context is slipping.

Yet that need not be the case. “Managed properly, trust can actually grow in such adverse conditions,” says Shawna O’Grady, associate professor of management at Queens School of Business, in Kingston, Ontario. “Taking this point to the extreme, consider the bonds forged between comrades-in-arms in a theater of war.”

The key to building trust in both good and bad times is to realize that none of us is as smart as all of us. There are companies that have embraced this simple truth and used it to maintain trust before, during and, we’re sure, after this economic downturn. All these companies seem to have two characteristics in common.

First, they have a higher purpose than simply making money. Let me give you a couple of examples.

Southwest Airlines, from its beginning, has expressed the conviction that it is in the freedom business. The freedom of all Americans to be with friends and relatives during good times and bad times–thus, their low price structure. Herb Kelleher, who co-founded Southwest, not only wanted to give his customers the lowest possible price, he also wanted to give them the best possible service.

As a result, Southwest is set up to empower everyone, right down to its frontline employees–to make decisions, use their brains and be customer maniacs so they can create raving fan customers.

Chick-fil-A’s purpose is to glorify God by having a positive influence on everyone who comes in contact with its stores and foods. The stores aren’t open on Sundays, even though that is often the busiest day in the fast food industry. S. Truett Cathy, the founder of Chick-fil-A, first did this for religious reasons as a devout Southern Baptist and lifelong Sunday school teacher, because Sunday is the day of rest. But it has turned out to be a good business decision. Chick-fil-A attracts many of its employees, including managers, because they know they will be able to be with their families and friends every Sunday. Has it paid off? The chain has by far the lowest turnover of restaurant managers and frontline employees in the quick-service business.

Second, companies that engender trust democratize the decision-making process by soliciting input and sharing the decision-making itself with as many people as possible. In his primetime address to Congress in February, President Barack Obama acknowledged “difficult and trying times” but sought to rally the nation with an upbeat vow that by working together “we will rebuild, we will recover.” How do you do that in business organizations?

It isn’t complicated. When leaders treat their people as their business partners and involve them in making important decisions, those people feel respected, and respect leads to trust. If you respect your people and they trust you as a leader, they will give their all to get the best results they can for your organization.

Ichak Adizes, a longtime consultant and professor at UCLA, observes how respect and trust are conveyed by both nonverbal and verbal messages. If you respect someone, you face them when you speak to them, because you are interested and want to hear their opinions. If you don’t respect them, you turn your back, because you couldn’t care less what they think. If you trust people, on the other hand, you can turn your back on them, because you feel certain they mean you no harm. If you don’t trust them, you watch their every move.

How does that work at Chick-fil-A and Southwest Airlines? In both cases, they respect their people and therefore share information with them about the performance of the company in both good times and bad. In good times, they celebrate together; in bad times, they are problem-solving partners. Does that work? You’d better believe it.

Unlike many companies today, where the top managers are locked behind closed doors, cutting costs while holding everybody’s fate in their hands, these two great businesses open their books to everyone so they can know what’s happening and go right to work cutting costs and increasing revenue.

Many leaders are afraid to share negative information with their people, because they fear appearing vulnerable and therefore weak. We have found the contrary to be true. Everyone knows leaders are not perfect. When leaders admit problems and involve their people in problem solving, respect and trust rise.

Corporate leaders may also fear Wall Street’s reaction to their trusting moves, but that’s like playing tennis with your eye on the scoreboard and not on the ball. The ball in business is results and people. If the focus is only on results, you’ll never be able to maintain or build trust in a time like this.

What are you doing? Are you betting on the brainpower of your top managers, or on the brainpower of everyone in your organization?

What’s at stake? The future of your company, based much more than you may realize on trust and respect.

Ken Blanchard is co-author of many New York Times bestsellers, including The One Minute Manager and The One Minute Entrepreneur. He serves as chairman and chief spiritual officer of the Ken Blanchard Companies.

Terry Waghorn is an adviser to senior executives in companies ranging from small to Fortune 500. He is co-author of Mission Possible and author of The System.

This behavior is alarming, outrageous, and it’s the reason my dissertation will seek to understand the drivers of trust and distrust in brands and corporate leaders – and how to restore that trust once it is broken.

The executives at AIG should do a little research of their own. They should look into the lives of average Americans and think about whether they deserve one more cent (in addition to the $170 billion bailout money they’ve already recieved) of our hard-earned money.

According to CBS News American International Group is paying out millions of dollars in executive bonuses to meet a Sunday deadline. But the troubled insurance giant has agreed to administration demands to restrain future payments.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company that has already received more than $170 billion in U.S. support.

AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

Treasury Secretary Timothy Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said Saturday.

This official, who spoke on condition of anonymity because of the sensitivity of the issue, said Saturday that Geithner had called AIG Chairman Edward Liddy on Wednesday to ask that Liddy renegotiate AIG’s current bonus structure. See full story here.

Is this ethical behavior? SynergyBlog is disgusted. How about you?

Mr. Summers stated that, “Fear begets fear,” and that “is the paradox at the heart of the financial crisis.”

“It is this transition from an excess of greed to an excess of fear that President Roosevelt had in mind when he famously observed that the only thing we had to fear was fear itself,” Summer said. “It is this transition that has happened in the United States today.”

Summers spoke amid new signs of a deepening recession. The U.S. trade deficit plunged in January to the lowest level in six years as the economic downturn cut America’s demand for imported goods, the Commerce Department reported Friday.

The economic adviser said it’s still too early to gauge the broad impact of the president’s recovery program.

“But it is modestly encouraging that since it began to take shape, consumer spending in the U.S., which was collapsing during the holiday season, appears, according to a number of indicators, to have stabilized,” Summers told the Brookings Institution, a think tank.

Summers was asked by a member of the audience what the nation’s business community could do to help speed the recovery.

“What we need today is more optimism and more confidence,” Summers said.

SynergyBlog agrees – and we’ve decided that we are going to do our part to end the recession by not allowing it to self-fulfill.

We need to establish trust in the marketplace and in our organizations. To do that we must do the following:

1. Deliver Excellence in the products we make and services we provide. Every time.
2. Exude a level of Goodwill that can be detected in the things we do and say. Is it that difficult to help a neighbor or a colleague in need?
3. Maintain the highest level of Ethical Standards in your industry sector. Promote integrity in word and deed.
4. Create Value for our clients, constituents, strategic partners, and colleagues. Ask yourself daily, “Have I delivered on my brand promise?”
5. Listen to the needs of stakeholders and act on what you hear. Responsiveness can make the difference between success and failure in these economic times.

By continuing to exemplify trustworthiness in the marketplace, we fuel the engine of confidence in the economy. One business at a time.

See the full AP story here.