Stakeholders are the jury

ALL BRANDS, personal and corporate brands alike, have all sorts of things being thrown at them all the time - issues to manage. How they react to these issues will harm, protect or enhance their reputation and, in some cases, even precipitate crisis situations.

But brands are not just sitting ducks waiting for the world to act on them, they also make decisions and take action that – if not properly thought through and calculated, might lead to situations of major issues or crisis management, the last place any brand wants to find itself.    

There was a time when people (and other entities) who hold stakes in brands could be counted with the fingers on one hand. Historically, those stakeholders comprised of two groups only, shareholders and customers; with the latter often dubbed ‘the target market’ in antiquated marketing terminology.

Even employees were not considered stakeholders by some brands. They were simply part of the furniture, to be informed of major developments in the business on a need-only-basis. Back then, things were a relative walk in the park for marketing people. But that time has evolved.

Despite this, you’d be surprised how many brands are still stuck in the past.  There are big brands, small brands - private and public - in this category.

Today, we all hold some form of stake in the brands that operate within our space, whether we patronise those brands directly or not. We’re either customers or we care about someone who is, an employee, or even a community whose well-being is impacted by the brand’s conduct. In some cases, such communities might be located thousands of miles away, exploited textile workers or endangered natural species habitat in Africa or the Far-East. We will round one another-up to participate in protecting and enhancing the interests of those stakes.

Stakeholders are not limited to natural persons. Activist groups – also dubbed ‘brandivists’ –  increasingly, play significant roles in holding brands accountable. They range from loners operating behind the anonymity of their computers or smartphones, with many online followers; a handful of loosely connected individuals, linked by a popular online platform and only brought to action when an alert comes up; to well-oiled machines like Greenpeace, trade unions, and other rights organisations that can mobilise protesters anywhere in the world within the click of a keyboard button.

Here in South Africa, many brands are still ignorant, underestimate, or simply forget the extent of harm to reputation that can result from negligence and bad treatment of customers. Public sector bodies are included in this space.

Ts & Cs

Many still rely on the courts and ubiquitous “Ts & Cs” for protection. We’re all familiar with the line ‘Terms & Conditions apply’ at the end of most product and service advertisement. These are used for supposed protection even when they fail to either meet basic provisions of consumer protection law or simple common sense.

When it comes to corporate reputation management, ‘common sense’ should, in most cases, be considered alongside legal sense. The problem with “Ts & Cs” is that they’re often drawn-up by a team of lawyers with only the narrow interests of the company in mind; and with very little understanding of popular sentiment, no matter how nebulous the term may seem.  

We’ve seen how several large brands have been found wanting in recent years and months when they either failed to win court actions against legitimately unhappy customers or to understand prevailing public sentiment in determining what action to take when cornered.

Cell-C couldn’t convince the court to act against a customer who erected a banner accusing it of offering bad service; Woolworths managed to win a court interdict against the DBS campaign but failed to win outright support in the court of public opinion; and Pick n Pay couldn’t win support when it tried to dodge calls to withdraw its sponsorship of a festival that was being used as a Trojan Horse by right-winger and apartheid-denier Steve Hofmeyr.

But some brands do get it right. Following several days of negative and speculative media coverage about their acrimonious split, and a clear threat to reputation, HCI’s Marcel Golding and Johnny Copelyn - former comrades and longtime friends - were swift in agreeing to jointly address HCI’s board, staff and media in order to put their separation into perspective.

Following this Golding, who had just been forced to resign as CEO, extended a gesture of friendship to his former employees, offering them a share of a large bag of money from his own pocket. HCI was also swift in denying accusations of political influence of their editorial decisions. They did not deny, however, that attempts were made to influence editorial decisions; only that such attempts failed.

But in another case, MTN was accused of being disingenuous by a  disgruntled customer after taking action that, to the company, seemed legitimate, but failing to communicate it effectively, with empathy. It was accused of wrongfully deducting R89 from Kagiso Maluleka’s account without first warning him that it would. MTN explained that it did in fact communicate its action.

According to Eddie Moyce, MTN’s Chief Customer Experience Officer, “it was a matter of debiting a misallocated R89, owed to MTN, from Mr Maluleka’s account. The misallocated amount was to his benefit because it paid for two months of his contract term before the contracted was closed in June 11, 2014, instead of April, two months earlier. Maluleka is still unhappy, even after approaching the ombudsman.

Big brands might be used to fighting big battles in the courts, but they easily fail to realise that it is the smallest of things that can bring serious harm and, sometimes, irreparable damage to corporate reputation. Customer word-of-mouth can buttress brand reputation; but it can also destroy it if taken for granted.    

As for the likes of the South African Parliament, SAA, SABC, Eskom, Nkandla, political parties, and other public brands, we need a separate discussion on them!

Merry Christmas!

* Solly Moeng is brand reputation management adviser and CEO of strategic corporate communications consultancy DonValley. Views expressed are his own.

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