Brands behaving badly... spells doom
As the world faces its gravest crisis since the second world war and the Great Depression, it is inevitable that our attention will focus on behaviour – of all sorts.
Since the Covid-19 pandemic affects just about everyone, will impact every corner and sector of every economy around the world; and because the disease occupies just about every square inch of newsprint and every minute on virtually every type of media, there’s no other story in town and, in developed economies at least, it feels as if we are on some sort of war footing.
'Banking brands will come under the spotlight'
And while during the war and the Depression, negative coverage tended to focus on the bad behaviour of individuals or groups (from nations to companies), in our brand-dominated age, the focus in 2020 falls on brands.
Interestingly, earlier on in this developing story, coverage tended to focus on the brands that were doing good things, behaving altruistically.
But as the scale of the crisis has escalated, and the reach of the virus has become universal, and in the “wartime spirit” of “we’re all in this together”, it is now expected that brands will behave well, acknowledging the depth of the crisis.
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So, earlier this week the housebuilder Taylor Wimpey – one of the first construction firms to close down its sites – said it was scrapping annual bonuses and announced that its board were taking a 30% pay cut; and, the same day a number of major banks announced that, following order from the Bank of England they were scrapping shareholder dividends and were thinking of doing the same with bonuses.
Given the crucial role that the banks – who have, in the eyes of a great deal of the public yet to be forgiven for their role in the 2008 crash – are going to play in the coming weeks and months, especially as hundreds of thousands of companies and individuals teeter on the edge of ruin, banking brands will come under the spotlight more than any other brand. Already they have been criticised for being ‘too commercial’, and I think, as a result of public and governmental pressure, we can see banks becoming less hard-nosed and fulfilling a social function, perhaps even working in the service of the wider public good rather than the demands of stockholders.
Given the scale and reach of the suffering caused by this pandemic, the public – and perhaps governments, particularly if they’re looking to get re-elected – aren’t going to forget or forgive those brands which transgress, and not just banks either, which brings me neatly onto a fascinating survey – The Trust Barometer, compiled by PR giant Edelman from 12,000 respondents in leading global economies – published this week.
It says that brands' actions during the coronavirus pandemic will have a significant impact on future purchasing behaviour for consumers (as a side note, it will be fascinating to see how followers of certain Premier League football clubs, who have so far made an absolute hash of things during this crisis, react. As every marketing student knows, footy clubs enjoy unrivalled brand loyalty – if they are seen as behaving in a way that goes against current sentiment, such as furloughing ground staff whilst continuing to pay the full salaries of professional footballers, what will happen to their support?).
Already, reveals the Barometer, consumers are demanding that the must change the way they interact and communicate during the Covid-19 crisis, with 65% agreeing with the statement 'How well a brand responds to this crisis will have a huge impact on my likelihood to buy that brand in the future'. When looking at individual country responses, the figure for the UK was 64%, with China (interestingly) way out in front with 88%. One-third of respondents said they had already stopped using a brand that was not acting appropriately in response to the global crisis.
The importance of the role brands could play is reflected in the sentiment that globally 62% of consumers said they did not think their particular country would make it through the crisis without brands playing a "critical role" in the fight against Covid-19.
And, even more importantly, consumers are holding companies to very high standards – the first thing they demand of brands and their owners is for them to 'protect the well-being and financial security of their employees and suppliers, even if it means suffering big financial losses'; with 90% of global respondents supporting this statement and 52% saying brands 'must' do this to earn or keep their trust.
Another vast majority (89%) said brands should shift to producing items that help people meet the new challenges presented by the virus and/or offer free or lower-priced products to health workers and other high-risk individuals. We’ve already seen this, with formula 1 racing teams and others offering to make ventilators (and working with the NHS to design and provide equipment), companies such as Zara owner Inditex switching to mask and PPE production, Diageo providing 96% ethyl alcohol used in vodka and gin production to the production of hand sanitizer and LVMH, the luxury conglomerate, is switching production from making high-end perfumes to turning out the same. Various take-out food and coffee shops such as Pret were providing free hot drinks and discounted food to NHS staff and Uber are offering free rides and meals to NHS staff, whilst onboarding a significant number of independent restaurants and speeding up payments via Uber Eats.
This is the new normal – it’s no longer good enough to be 'great value' or 'good quality', brands now not only have to respond to the crisis in a positive way, but they also have to be seen to be doing so. 90% of respondents expect brands to keep the public fully informed of how they are changing the way they operate in light of the global health crisis.
Brands are warned against being light-hearted in their communication strategies with 57% advising against advertising that is too humorous. The public are entertaining themselves by sharing amusing videos and cartoons on social media, they don’t want brands to try to be funny and gatecrash the party. And it would appear they don’t want really want brands to connect with them regarding virus-related issues via social media with only 19-31% (depending on platform) wanting communications via Social, compared to 45% via traditional media (TV, newspapers and outdoor) or email (41%).
Unsurprisingly, the most trusted spokespeople are doctors and health authorities (trusted by 78%), but strikingly, brand CEOs and brand ambassadors/experts were still trusted by 44% and 48% respectively, meaning that high ranking directors and marketers have an opportunity to build on and reinforce themselves as trusted advisers (or need to, depending on your point of view).
So, in our new reality, brands should properly contribute to the greater good; not act alone. One of the criticisms of big pharma right now is that the companies are protecting, rather than sharing, their data – data sharing is seen as crucial to developing a breakthrough. Brands need to collaborate and work towards a common goal – we have seen this with supermarkets ensuring specific times kept free for vulnerable shoppers and sharing deliveries and data about stock levels with each other; they should solve, not sell; their marketing messages must be authentic and considered in tone, they must communicate with emotion, compassion and facts.
And what part can marcomms agencies play? I think it will be a crucial one – one of wise counsel as opposed to just being the “people who sell”. Agencies need to focus on enhancing their role as protectors of brands. In this way, traditional agencies, which understand brand stories better than anyone (perhaps even more than the brands themselves), who know the power of visual and textual narratives to change behavior and reassure, can claw back some of the ground they have lost to ‘in-house’ and the big consulting firms.
But that’s a subject for a future piece.
Tony Walford is a partner at M&A advisory Green Square