Consultancy BrandReputation research suggests as much as 84% of online users now turn to the net for reviews before making purchase decisions. But few marketing executives are either aware of the fact or equipped to manage these reviews which are often negative or mis-informed.
- Consumer electronics 56%
- Home Furnishings 33%
- Apparel 21%
- White Goods 45%
- DIY & Garden 18%
- Entertainment Products 12%
- Sports Goods 9%
- Food 2%
As consumers become more savvy about using the Net, so they will increasingly turn to 3rd parties for advice rather than trusting the brand owner who is seen as dishonest and opaque.
Marketing executives need to rethink brand reputation and who constitutes the owners of the brand. As Dr John Sullivan described it, “the new owners (of your brand) are a complicated mix of individuals who use a variety of communication channels to influence your brand without your knowledge, consent, or guidance.” As more consumers turn to reviewers, so their first experience of the brand comes through third hands, these opinion formers are now meaningful stakeholders in the brand, but few marketing executives actually pay them much attention.
It has been a truism of brand marketing that you talk to the heart rather than the head, but if the warm fuzy communications are taking place in an ocean of negativity, you will get no traction.
Ryanair is the most fascinating case study for the student of reputation management. Brilliantly successful and yet widely reviled.
Reputation theorists argue that truthfulness/honesty are key ingredients for long term reputation. With Ryanair it is always hard to tell where truth and fabulation meet. If you take Ryanair’s word for it: they never make a mistake and simply have to change their scheduling or drop airports because of new taxes or airport fees.
For example is Ryanair’s threat to reduce services at Shannon by 75% about the 10 Euro fees or because they are struggling to make the numbers – who can say (Irish Times). Likewise reductions in winter services was anything from 40% to 7% depending on how or who you listened to. (see Financial Times report)
Journalist reporting often makes it no clearer what is happening. For example when Ryanair announced it was terminating most of its schedule from Manchester airport, the Guardian reported that 600 jobs were threatened whilst the Telegraph simply stated 600 jobs to go.
One of the key attributes of Ryanair’s PR strategy is to draw attention to hidden costs in the system. Announcing their departure from Manchester they provided a telling narrative for why it was necessary: “Airlines have been reducing fares in this recession but the one static factor has been in relation to airport charges. It is a huge undertaking to fill planes on a rainy winter day in Manchester when you can fly them down to the Canary Islands from somewhere else,” they declared, never acknowledging that the landing charges of £3 was covered by the fees they charge for accepting debit card payments which costs Ryanair only pennies. As their own hidden costs rise, this could become a dangerous risk to their reputation for honesty. Complaining of Stansted charges, O’Leary declared, “”People have to pay £10 just for the privilege of getting on and off this rain-sodden and weather-beaten island,” but surely we could say something similar about getting an online check-in without which you cannot even get in the airport.
Ryanair’s strategy of blaming someone else rather than themselves helps to position themselves as “people’s champions”. It will unravel if customers begin to question the veracity of what Ryanair says – do they believe Ryanair or Manchester Airport. Ryanair will struggle to radically cut more costs in future even if they charge for toilets or make people stand. Driving up profits through charging more for luggage or checking-in does not seem, long term, the way to grow the brand.
Ryanair is one of the most popular airlines in the world. It certainly flies more people than any other airline in the world. It is also one of the world’s most unpopular airlines judging by surveys of passengers. What’s going on?
Ryanair was not the pioneer of budget airlines, but it has been the most aggressive purveyor of the technique and perhaps the most famous example of the type, outstripping rivals like Easyjet. It has build its budget philosophy around low cost rather than cheap and in being upfront about what you are paying for. They pioneered the technique of charging taxes separately to highlight what the cost of taxes is and in the form of Michael O’Leary they have a voluble and cheeky CEO on whom few critics have landed a punch.
In the past few years the Ryanair story seems to have darkened as their business model is increasingly driven by extras that enable them to continue to advertise cheap flights and yet still charge passengers a lot more via online check-in charges, payment processing charges. It would seem as though the costs of providing the services have been squeezed out and now they are seeking to have their cake and eat it. Advertise low fares but charge the customer a lot more.
Their customer service philosophy is different and highly O’Learyesque – don’t delight or even please customers: just get them there cheaply and on time. It is airline travel as commodity service rather than high value service.
The problem for the Ryanair reputation is this: they are losing their reputation for being low price. They may continue to proclaim, “we are lost cost”, but increasingly for customers the experience of being double charged for one payment, having to pay for checking-in calls that into question. A straw poll of my friends revealed that none were happy with Ryanair.
- all felt that some charges were deliberately exploitative of customers.
- Ryanair staff were rude and that the system was designed to confuse and punish customer mistakes.
- None would fly Ryanair by choice, only because they were the only airline flying to a particular destination.
They do not mind paying for food or baggage. They don’t mind queuing for seats and they don’t mind having to check-in online.
Ryanair portray themselves as an engine to drive down costs, but the accounts reveal that profitability is really about advertising low fares and then charging as much again on top. As more and more customers recognise and discuss this, one senses that the Ryanair brand will be associated with being a cheat.
The Ryanair strategy on reputation management is strike first and offer a withering character assessment of the critic. Increasingly it does not wash with customers. Ryanair will need to look more carefully at how it charges as rival operators exploit the Ryanair reputation gap. For Easyjet, this represents a huge opportunity if they can continue to drive out costs but deliver an honest service and establish themselves as customer champions.
Apple’s reputation has always been good thanks to the passionate advocacy of the Mac Fan Boy club who respond vociferously to any public criticism of their god. Regardless of the poor performance of the iPhone, they are hysterical in their support of any and all Apple products. The result is that few of the problems that arise with Mac products – broken screens, overheating batteries, poor reception are properly aired in the media. According to techcrunch, that may be about to change as the tech community begins to return back to Microsoft.
Partly this is down to fashion. As Apple has moved mainstream, it has begun to lose its cool among techheads and the silicon valley internistas. Now everybody has an iphone or Macbook, it is no longer cool to be seen sporting one. Much better a linux netbook and Android phone.
My experience is that many of the people I meet who use iphones complain like hell about them. People who use ipods love them without ever being aware of any other products. For many consumers, an ipod is the only portable music player – a walkman without competitors. That says more about the cluelessness of the competitors whoc are still struggling with the combining of hardware and software.
When it comes to the reputation management, apple’s fans have been the reputation managers for the company. Apple itself always seems secretive, paranoid and slightly nasty. The problems facing Apple are threefold in this area:
- what happens when the company has to manage its reputation and not rely on its fans
- what happens when things like appstore do not rally such a lot of money losing developers
- when competitors finally get it! or android enables the hardware guys to produce phones that match the slickness of the iphone?
To date negative comment about apple gets drowned out by fans… when the fall silent.. then it will be interesting.
Companies often focus their brand efforts on customers and potential customers, ignoring other potential stakeholders who can be equally vociferous in their criticisms.
Brand promises need to apply equally: consumers, employees, suppliers and business partners. In fact depending on your industry there could be many stakeholders to consider. If you are an oil company or mineral producer, local enviromental communities can have a major impact upon your reputation. Witness the recent connection between Shell and their operations in Nigeria.
If you have a product recall, consumers will complain, but a sacked employee or unpaid supplier can be even more vehement attacking your reputation.
The problem all companies face is that stakeholder access to channels for complaint is proliferating fast – blogs, forums, social networks, twitter, and personal web projects. In the past stakeholders had to engage with journalists and persuade news organisations to cover their story. Today, they publish and you are damned.
What can you do?
- Work on your management processes: if you always pay your suppliers late then you are simply inviting criticism. If you sack employees unfairly, they have every right to complain.
- Investigate complaints so you can demonstrate that you are serious about being a good organisation.
I hear more and more of unscrupulous companies attacking their competitors by posting false negative content from supposedly unhappy customers. In today’s world where more and more people using engines like google to research and find companies online it’s critical to make sure you are on top of your online reputation.
Competitors will try and beat you where ever they can and protecting your online reputation could mean your survival. Having another company attack their competitors is not new, but how they can do it today on the internet is. It’s very easy to get negative content about a company to the top of Google and way harder to get rid of it once it’s there. So taking pre emptive measures is the best way to protect your business reputation online.
Unfortunately like newspapers when people read about a company they take it as fact so make sure they are reading what you want them to.