As marketers, we spend countless hours on brand development – developing the structure, look, and feel of our brands. But, how much time do we spend in consideration of the risks we can experience? Given the growing importance of transparency and trust, socio-economic issues, and the ever-growing sharing economy, we must shine a light on brand risk.
While there is no official definition of “brand risk.” I think we can all agree that it can be defined as anything that threatens our ability to sustain profitable operation. Generally, those risks can come from operational or regulatory issues and decisions which impact consumer behavior. However, today we know that crisis and brand risk are not limited to product tampering or threats of violence. We are all vulnerable.
Brand Risk Today
About 60 days into the realization that we were fully into a pandemic, The Brand Finance Institute estimated 500 of the world’s most valuable brands could lose up to $1 trillion in value! I don’t know about you, but that figure is stunning. Additionally, the inability of brands to weather the focus on racial equality that is currently on the minds of most Americans will surely make that number rise as more brand values plummet.
Pandemic and demonstrations aside, modern brands are more at risk than ever before because they no longer live in the creative department – ensuring logos are the right size and color. In our world of social media, word of mouth, and experiential marketing, the brand ultimately belongs to your customer and team members more than it does to the marketing team. Moreover, destroying your brand can be a quick as a snap and post of a picture. Modern brand management is a complex process that requires a holistic approach.
Like most successful programs, brand management must be a C-suite down, cross-functional initiative to elevate the importance to the entire organization. Organizations that take this approach have the added benefit of being able to respond to a crisis quickly, with all departments moving in the same direction because everyone has the same understanding and shares the desired outcome.
However, brands are a ball of emotions, and because brands are tied to trust and emotion, the risk is potentially destructive. It can often be difficult to see the oncoming backlash until it’s too late. I’d like you to consider being risk-aware in your brand efforts. That’s not to say you’re going to examine every decision from 100 different perspectives. That will only slow you down. Being risk-aware means you can detect threats early and respond quickly.
Signs of Brand Risk
While there are several risks brands can suffer, there are four primary risks to casino brands.
- Awareness can decline as a result of lack of (or inappropriate) advertising, ineffective promotion, or simply not being where your customers are.
- Competition can put you in a different position in the customer’s mind. Experience can do the same. Additionally, the speed at which we are now required to respond to customers while simultaneously creating promotional messages can often leave us cutting corners, resulting in inconsistency in our messages. The flip side is that brands that can’t be nimble can often be left behind.
- Consistent, aligned customer experiences build loyalty. These experiences are the by-product of our offerings and our team members. Minor shifts in either can quickly bring the brand house down. A solid foundation is a must.
- Legacy brands can be caught resting on their laurels, easily allowing competition to shift, adapt, and capture our market share.
Culture is at the Root of Brand Risk
It always starts with the heartbeat of the brand – our team members. A company must have a specific definition of the desired brand and the values that can bring it to life. These elements must be embedded in the culture of the organization.
Team members are telling the brand story every day. They are continually interacting with key stakeholders, shaping the image of the brand. The first step is to hire the right people, but this can only be done if Human Resources and our partner recruiters are knowledgeable about the brand. When was the last time the vision was shared with an external recruiter? I don’t mean adding the boilerplate language to a job posting but providing them with a deep understanding of what your team members need to accomplish.
An obvious (but often misused) tool is customer experience training designed to identify misalignment between actual and desired behaviors as a reflection of the brand. Social media has empowered today’s consumers to quickly spread the word of their dissatisfaction, whether that is with your product, service, or experience. Empowering frontline staff to do what is necessary to turn a bad experience into a good (if not great) one and correct issues quickly is essential. We must continuously remind ourselves of the importance of the preservation of our customer relationships.
It is not uncommon for there to be a different understanding or view of the brand from department to department, but also from management to the line. If your internal understanding varies, what do you think the brand looks like from the customer’s point of view? A brand is introduced by marketing but brought to life by the actions of many team members who may not be aware of the vision.
Tools to Mitigate Brand Risk
It is our job to invest in the proper tools and training of our workforces so they may realize the role they play in the advancement of our brands. Training team members on messages and behaviors is critical to the health of the brand.
Brand style guides have traditionally held the dos and don’ts of graphic application. A more contemporary utilization of the standards is as a mechanism for bringing the brand to life. Standards should be built to scale thoughtfully, but easily.
Teach team members how to see and report potential risks. We naturally think about reporting a spill on the ground or a malfunctioning kiosk. Still, without an understanding of the desired reputation and what things can hurt the brand, team members are left in the dark (like an unreported blown fuse).
Finally, keep your team members happy by creating and meeting expectations. Few things kill a brand faster than a disgruntled team member.
Operations as the Brand
Are the values of the organization indeed in operation?
Does your external communication match your internal each day or only for special occasions?
You can guard against potential risks by closing the gap between what you say you do and what you do, both heart of the house and in front. The operation must be a reflection of the brand with every decision. Let’s look at value as a brand as an example. If your position is value, consider waiving ATM fees rather than increasing them. Some operators think slashing prices projects a value brand, but it just says “cheaper”. Look for ways to add value rather than slashing prices. Conversely, if you are the value operator, adding a high-end steak house may not be the best amenity.
As operators, we must all look beyond our logos, understand the values, and then inform our decisions through that lens.
Additional risks to your brand reputation can come from vendors, partners, and agents. It is critical that you proactively educate these third parties on your brand and the values attached to it. If they cannot advance your goals, perhaps you should reconsider the alliance.
How to Manage Brand Risk During a Crisis
There are a few approaches you can take to manage your brand during a crisis.
Avoiding the risk of being judged is a tactic that rarely works because it usually entails reducing or eliminating marketing spend. A wiser approach is to reconsider HOW marketing funds are invested and how these shifts might improve the lives of customers.
Taking concrete actions that create a positive impression for all stakeholders can be tricky but not complicated. The conversion of production from small-batch beers to hand sanitizers lead the way for more prominent companies to do the same. The same could be said for companies that switched production to provide new sources of PPE for healthcare workers. More than words, the actions told the story of the culture of these brands.
There was unanimity in the most recent Edelman Trust Barometer study. Consumers expect brands to absorb short-term losses in protecting the financial security and well being of their employees — guaranteed wages, insurance, and sick leave. Putting people over profits will inevitably erode short-term profitability, but it is an option for managing risk as it should strengthen long-term gains.
Innovation or creating changes that will reduce the impact of the crisis and perhaps increase post-crisis profits is another option — and another reported Barometer finding. Adjusting the elements of the marketing mix (which is already happening with most casino marketing plans), the product offering or distribution (such as many retailers eliminating shipping costs or vending machines turned into “mask-o-mat” machines to dispense much needed PPE) are examples of innovative thinking.
What You Should Be Doing Today
- Continue engaging by using the appropriate content and tone. It is important that I stress continuity. While we’re juggling several responsibilities, the flow of information must continue for both customer and employee engagement.
- Inform and empathize by focusing your message on solutions rather than selling. Given the skepticism over fake news and diminishing trust in the media, trusted brands are being looked to for reliable information. Over half of Barometer responders also indicated they weren’t even paying attention to new products or messages unless they are designed to help them navigate their new normal.
- Build your reputation rather than your campaigns. Consider how your brand and the actions you take on behalf of the brand can improve the lives of others.
- Play a long game. While day to day improvement leads to overall gains, you can’t just look at the day. The decisions you make should be made with an understanding of how those actions can build long-term profitability.
- Collaboration has never been more critical as it is during a crisis, but the concept cannot be used to rescue the brand, it must be part of the brand culture for it to be of any value.
One of your company’s (if not THE) most important assets is your brand and reputation. Measurement and the tracking of metrics linked to brand value should be an ongoing process. Consider a brand audit to evaluate your position, strengths, and weaknesses in the marketplace. This checkup should cover internal and external branding as well as the guest experience.
Ongoing measurement (preferably independently) of the state of the brand can aid in keeping score (yes, an actual scorecard) of identifiable risks and how you stand against them versus the competition in the minds of your target customer, as well as how these indicators may have shifted over time. Maintain ongoing conversations with customers and those of your competition through both informal and formal research. Understand and agree to goals, set benchmarks, and regularly check for changes.
Monitor trends that have the potential to impact your brand and your business. This can help you understand and identify early warning signs and give you a jump on the issues.
Change is Here
Some brands will be unable to weather the current market pressures. Already distressed retail brands, and even some we consider “iconic,” are quickly fading from the consideration set. It will get worse before we see it get better as the current crisis further expands the divide between brands and consumers.
The shifts in our way of life brought on by the pandemic (first) and followed by the reenergized spotlight on racial injustice is changing the way we think, behave, and how we chose to reward businesses with our dollars.
For most of us, our markets can now be categorized as “mature.” Competition continues to knock at our doors, not just from other casinos, but from other entertainment options. We rely on our brand strengths, not only to attract and retain customers but to do the same with team members and partners. Your brand is a priceless asset, and damage can have a lasting and dramatic effect.
More importantly, this is the moment when our brands can step away from the crowd and demonstrate how we deserve the loyalty of consumers.