15-47 Segment 1: Business Blunders: Cleaning up the mess

Synopsis: There have been a number of incidents recently where large companies or their spokespeople give the business a black eye by their manufacturing practices or illegal behavior. What can a business do to bounce back and once again create trust with its customers? Our two business specialist discuss the issue and offer advice about how companies can avoid problems with their brands as well as how to clean up the mess afterwards.

Host: Gary Price. Guests: Zain Raj, author of Brand Rituals: How successful brands bond with customers for life. Edgar Papke, author of The Elephant in the Boardroom: How leaders use and manage conflict to reach greater levels of success.

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Business Blunders: Cleaning up the mess

Gary Price: The great American political writer Thomas Paine said, “Character is much easier kept than recovered.” A number of large companies have probably thought that after their spokesperson sullied the business’s good name. Even if a company continues to put out a quality product with care and efficiency, the mistakes of someone representing that business can undo years of hard-won success. It seems odd that only one person can cause so much damage, but according to Zain Raj, author of Brand Rituals: How successful brands bond with customers for life, the spokesperson embodies the company’s brand; and the brand is what connects the business to the public…

Zain Raj: Branding is about making sure people understand what a specific product or service can do for them. And almost every company that makes a product or a service should be using it, and I hope they are, because if they’re not, they’re not going to win.

Price: Raj says that brands are carefully nurtured, and grow when the company delivers what’s promised and the public accepts it. He says that there are four steps companies follow when they’re trying to cultivate a brand in the marketplace…

Raj: Step number one: make sure that everybody that could potentially be a user of the product aware; make sure that they know that you exist by using traditional advertising methods across all of the channels. The second thing you do is once you’ve told people that you exist, tell them why you exist, which is create interest in wanting to try your product. And then once they’ve actually tried it, make sure that you’re delivering the product consistently enough so that the trial becomes something they want to continue doing and it becomes a repeated action. If you can do that all the time, then you become part of their lives. And then the final thing you do is make sure that you are doing and delivering the product in a way and doing things that make the customer feel like you are doing it specifically for them. And if you do it that way, then you become a bond, and that’s how you build a place in their life that no other product can create.

Price: That last step is especially important if the company employs a celebrity spokesperson. Recently a very well-known and successful brand, Subway sandwich shops, suffered a black eye when its spokesperson Jared Fogle was charged with child porn and child sex crimes. Raj says that he, himself, was affected by the news and is considering his loyalty to the brand…

Raj: Any brand that builds its dependence on somebody, like a spokesperson that’s outside of their franchise and outside of their control, in a lot of ways is taking a huge risk, right? Because you know, you cannot control what people do. But for Subway, and you know I am a big, huge Subway eater, right? And a customer. But with Jared, it has definitely damaged their brand; it has definitely made me look at the food and go, “do I want this food?” because it creates a very uneasy feeling, nothing I can specifically articulate.

Price: So what should Subway do to regain the customers like Raj who might turn away from their products because of the scandal?

Raj: Very quickly get beyond get beyond that by focusing on their food. By making sure that they’re out there actively, in some cases aggressively, pitching their food and talking about how great the quality of the food is, how healthy it is, how fresh it is. And the more they can do that, and the louder they can do that, and the more consistently they can do that, they will get away from the negative angst that’s been created about them among their customers.

Price: Once the scandal is played out in the news, should Subway try their luck with another spokesperson?

Raj: Absolutely not. They’re not going to do that for a while. And I would suggest that when you’re a food company, you know spokespeople are great for a tactical period of time but, frankly, if you are marketing food, focus on your food. Tell me why your food is better and why I should come to Subway versus going to a McDonalds or a Boston Market or a Burger King or anywhere else. Tell me why and show it to me. And if you can do that, chances are you’ll get me out there more often.

Price: It doesn’t take a celebrity pitchman to create a crisis. Raj says that back in 2009, all it took was a lapse in service and a creative, angry, customer to cause a lot of embarrassment for United Airlines…

Raj: A few years ago, a guy called Dave Carroll, a musician from Canada, was traveling with his band and they were connecting through parts of the U.S., and as they were waiting on the plane somebody pointed out that the guys who were loading the plane were throwing some guitars around. And he was in absolute shock because he looked through the window and saw that they were throwing his guitar. He gets to his destination and realizes that his guitar neck is broken, reaches out to United and they basically did not address that issue. You know they ignored him, they basically claimed it was his problem. He finally got to a point where he says “listen, don’t give me the money, I’ve already gotten my guitar replaced. Just give it to charity, but I’m not going to let it go.” And they did nothing.

Price: Guitarist Carroll decided to take the issue to the next level…

Raj: This guy ended up writing a song called United Breaks Guitars, uh, posted it on YouTube and that became a huge sensation. In a few months there were almost 15-million people that had seen it, but ironically what it did was it actually got United to the table. Literally the first couple of days, they had 150,000 views. United now calls him and says, “Hey. Take this thing down. You know, we’ll give you the money, we’ll give you everything.” And he goes, “no I’m not. Too late. That horse is out of the barn and now you can’t shut the barn door.”

Price: Raj says that a crisis can make a company rethink their processes, make a change and become more responsive to their customers. And that’s exactly what he says United did…

Raj: It actually caused them to rethink their entire customer service model, right? Because you cannot ignore in today’s world it doesn’t matter how big a company you are, or how small and insignificant one flyer may be among the millions of people that fly you, you cannot ignore them because each individual today has the ability to connect with billions of people globally through something that everybody should recognize called the digital world, right? And so what happened was United ended up absolutely changing the customer service organization, they change a lot of their processes and approaches, and I think that helped United get through a significant period of transition. I tell all my clients, I tell anybody I talk to, and when I travel there is no reason for you to treat anybody poorly. And if something happens as a brand, address it quickly and solve it now.

Price: The authority to “solve it now” resides with the head of the company – the CEO. Edgar Papke says that a good leader won’t shove the problem under the carpet – or let staff ignore it either. Papke is a leadership psychologist, speaker and author of the book, The Elephant in the Boardroom: How leaders use and manage conflict to reach greater levels of success…

Edgar Papke: For a leader to keep their head down and not wanting to recognize or acknowledge the conflicts that are occurring around them, or they, themselves, are engaged in, I would suggest to you that that’s a sign of a weak leader, is someone that spends all their time avoiding. People around them are expecting them to have the courage to confront. And there’s two pieces here that I’d like to be clear about that I go into in the book: One is the definition of what confronting conflict is. Confronting is simply to face the truth, to step into the truth. It doesn’t mean I have to have an answer or a solution to the conflict, or an idea of resolution. It just simply means that I need to be able to, as a leader, point out or face that there is a conflict and it needs to be talked about and dealt with.

Price: The second point Papke makes is that a leader who doesn’t face conflict is the biggest elephant in the room. When it comes to a company crisis that damages the brand, Papke says that a good leader needs to get out in front of the problem, such as Lee Iacocca did with the Chrysler bailout in the 1980s…

Papke: My definition of getting out in front of it is to acknowledge it as soon as one’s aware of it. And to, as leaders, I call it spotting elephants, is go out and look for those conflicts. Not only are they opportunities for change and for innovation and creativity and addressing issues, those are moments that really define, as you have just done with Lee Iacocca, and that’s how we define leaders. They’re the ones that are able to step into it. And I think the more in today’s world, I think the greater your consistency of behavior and in line with who you want to be in your integrity, that’s the building of your legacy.

Price: As Zain Raj said earlier, one of the keys to keeping loyal customers and resolving conflicts – big or small – is responsiveness. Many businesses think that if they have a website, that’s all they need to connect with customers. However, Raj says it takes more than a website and a Twitter feed to get and keep people coming back to your brand…

Raj: No company should get onto the social media bandwagon unless they absolutely and clearly understand that social media is not media. Social media is the ability for you to open all the doors and windows to your business to allow your customers to kind of talk to you at any point in time and get to you at any point in time. Unless you have set up a system to respond to them when they get to you, 24/7, 365. Now you might ask iIsn’t that old news?” Well, ironically no it’s not. There are so many companies, even larger ones that have social media campaigns and programs that don’t have the ability to respond to their customers if they complain, or they have a problem real-time.

Price: He adds, though, that digital media has made it easier for consumers to get the straight scoop on products and services without any company whitewashing or interference…

Raj: Word of mouth has always been powerful, it’s been for millennia and it’s not going to change. What’s happened with the world of digital is we’re given the power and exponential impact, right? And so today, how Dave Carroll was able to get 15-million people worked up against United Air Lines. It’s the same thing with everything else. It’s like I will trust another customer who actually tells me. I’ll give you my example of buying on Amazon, right? I will never buy anything, it doesn’t matter how simple the purchase is, unless I’ve read at least some of the reviews of people before I buy it. And it has saved me so much grief by doing that.

Price: You can read how companies attract and keep loyal customers in Zain Raj’s book, Brand Rituals, available now. He also invites listeners to his website at ZainRaj.com. For a look at what makes a good leader in the 21st century, pick up Edgar Papke’s book, The Elephant in the Boardroom, and visit his site at EdgarPapke.com. To learn more about all of our guests, log onto our site at Viewpointsonline.net. You can find archives of past programs there and on iTunes and Stitcher. I’m Gary Price.

 

 

 

 

 

 

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