Reputation: what is it good for?

We focus too much on the value of reputation at the expense of its purpose.

Business leaders increasingly recognise the importance of reputation. But is there too great a focus on the value of a good reputation, instead of asking: a good reputation for what?

Shareholder value skew

Many of the metrics that seek to measure the monetary value of reputation base their models on market capitalisation. This is not dissimilar to the way brand equity is measured. The problem is not only that reputation equity metrics are over a decade late to the party, but a number of research papers point to the deficiencies of focusing on shareholder value for the long term performance of a business.

Shareholder value, when coupled with quarterly reporting, incentivises quick wins over long-term performance. This means firms with large reputation equity values, might be artificially overcooked and see sharp falls in the future. Shareholder value also focuses reputation studies on publicly listed companies and, particularly, US stocks because of the large data sets available about them. This skews our understanding of reputation to one type of company listed in one part of the world. We end up with a very US-centric outlook.

Value, purpose and direction

Reputation is often referred to as a strategic business asset, however, if something is truly strategic, you need to know more about it than its monetary value or whether it is ‘good’. You need to know which factors affect it, where it helps your business, where it’s a hindrance and how it can be deployed advantageously.

London’s black cab drivers have a good reputation. Their vehicles are iconic the world over and they know London intimately. Their great reputation for getting people across the city quickly hasn’t stopped them being Uber’d by a cheaper, on-demand rival whose drivers have satnavs.

Meanwhile, the dabbawalas of Mumbai, who equally have a fantastic global reputation and are also known for getting things across a city quickly, are now working in partnership with Flipkart, an Indian online retailer, to deliver online purchases across Mumbai.

In both examples, the group in question has a good reputation. However, what they have a good reputation for and the context within which they operate mean that while one group sees eroding incomes, the other is growing into new roles.

Disruption

As we see disruption across a number of business sectors, reputation has become one of the few protectable and transferable assets companies have. However, to fully capitalise on your reputation you need to understand its drivers.

Tata Group, the Indian conglomerate, has a reputation for hands off ownership, trusting management and investing in the companies it buys. Its purchase of Jaguar Land Rover saw Tata enter the luxury segment of the automotive market when its previous sector experience was largely limited to manufacturing and selling very basic trucks and buses almost solely for the Indian market.

Jaguar Land Rover has grown strongly under Tata’s ownership following years of anaemic growth under previous owners Ford; a company that on paper had the experience and scale to grow the Jaguar Land Rover brand.

Tata went through extensive discussions with suppliers, union representatives and government officials to reassure them of its plans. Its reputation helped the firm buy its way into a new sector in which it has subsequently built a strong market position.

Strategic view

Reputation can be strategically important and it’s right that chief executives are increasingly showing awareness of this. However, we should move beyond discussions of good or bad when talking about reputation and stop trying to construct value metrics derived from shareholder value.

Only by understanding what companies have a reputation for and the context within which they operate can we provide truly strategic advice on business issues.

This post was originally published here at evolvinginfluence.co.uk.

Consultancy is a luxury good

The marketing of consulting services needs to move beyond pens, pamphlets and parties.

“We need to be talking to the c-suite.”

“We should to be advising on strategy, that’s where we can add the most value.”

“Prospects should view us as providing consultancy, not just delivering services.”

Phrases like these are said in the boardrooms of almost all service businesses. But how can they be achieved?

Whether it’s accountants trying to expand from audits, or law firms pushing to move beyond drafting contracts, everyone’s got their eyes on growth and the larger fees that come from consulting.

The problem is that while audits need to be conducted and contracts need to be drafted, consulting isn’t a practical, day-to-day business need. Companies have to want it.

So how, in the eyes of your clients, do you move from the supplier of services to the provider of advice?

The answer is to learn from the business sector that is the ultimate embodiment of want over need: luxury.

Brand

Luxury marketing is all about the brand. Having defined its mission, vision and values, a company has a framework for creating a consistent experience for everyone it comes in contact with.

Everything from your marketing strategy to the way you answer the phone can be defined consistently and simply if you have a strong brand. To some, ensuring a consistent approach to details may seem excessive, but anyone in luxury will tell you it’s the details that count. If you want to deliver a truly consistent customer experience, you need a brand framework through which you choose the details.

Exclusivity

Another hallmark of luxury is that not everyone can have it. For consulting firms, this has two very specific applications.

The first is that your customers need to feel exclusive. Small gatherings, hard to access venues or tightly controlled attendance are key. Yes, it’s a little cutthroat but people like to feel special.

The second is that you cannot do everything. You can’t cover every sector and every specialism. If you do, then you’re not luxury, you’re mass market.

What don’t you do?

Indeed, being mass market really is the crux of the problem for most firms. Partners and directors want big fees but are often uncertain when deciding what their firm does and, crucially, what it doesn’t do. A well-defined brand can help work through that problem. It’s the first step in starting those c-suite conversations.

This article was originally published here at evolvinginfluence.co.uk.

Mediocrity carved in stone

The first image conjured up by Dickens in Great Expectations is of the main character, Pip, at his parents’ grave, imagining what they were like based upon the inscriptions and the shapes of the letters on their tombstone. If future Labour party campaign managers were to look solely at Ed Miliband’s pledge stone when judging their predecessors, I suspect they would not form a favourable opinion.

Metaphors

Politicians love a metaphor. Other than avoiding answering a question entirely, metaphors are their favourite rhetorical tool. They constantly talk of “paying off the credit card bill” or “fixing the roof while the sun shines”. Taking big concepts and communicating them clearly and simply is essential in getting your message across. Businesses should learn from this.

Ed’s stone, however is a cautionary tale. By having his pledges carved in stone Ed Miliband has made his metaphor too literal. Like almost all metaphors, when taken literally, they fall apart. Having pledges etched into stone is a grand gesture that screams, “trust me!” And one of the first things most copywriters learn is that when you tell people to trust you, they tend to be wary.

Messaging

The message implied by the gesture is terrible, but it’s made worse by the words used. The language is vague and the pledges are subjective. When Moses came down from Mount Sinai, he did so with Commandments that were simple, mainly objective and bold. You know exactly where you are with “Thou shalt not kill”, however, “Controls on immigration” isn’t exactly a zinger.

The use of vague language is inexcusable when we know that Labour’s campaign team can do better. In fact, they have done much better in this election. Just two weeks ago they released this poster stating that Labour would recruit 20,000 more nurses:

20000_more_nurses_labour

It’s a clear, direct and objective pledge. People understand it and it can be measured. Somehow, this boldness got watered down when it came to chiselling some words into stone. It was changed to the nice but prosaic “An NHS with the time to care”. Who cares for people in hospitals? Nurses. What do you need more of if you want people to feel they’re getting good care? Nurses. So why not go with the clear pledge? It’s on a poster and has been shared across the web. It’s already out there. Reiterate it.

Businesses can take two lessons about communicating effectively from this campaign blunder: don’t stretch metaphors too far; and be clear and direct because vague messages just blend into the ether.

This article was originally published at evolvinginfluence.co.uk.

A list of thoughts from my first year in business

Evolving Influence launched a year ago. I’ve penned a list of thoughts that have circled in my mind as I’ve reflected on what has been a very lively year.

It’s an unordered list but not an unstructured one. I’ve broken it out into sets of four, but it’s not a poem. At best, it’s a thoughtfully formed list.

Relationships matter
The world is a friendly place
Lots of people will find time to give you advice
You have to do the work yourself

Principles matter
Trust yourself
Be honest with yourself
Know what you aren’t

Ideas are best shared
Ideas are ten a penny
Good ideas are a pound a punnet
Ideas made real are rare treasures

Winning business is exciting
Being scared is exciting
Turning down business is liberating
Only do good work

The cut and thrust builds self-confidence
Don’t believe the hype
The cut and thrust is bruising
Do not despair

Everyone wants good things for you
People are willing you to succeed
There’s no shortage of cheerleaders
You have to do the work yourself

This list was originally published at evolvinginfluence.co.uk.

Why we joined the Creative Industries Federation

The New Year has brought with it the usual lists of major trends in marketing for the coming year. By and large, the lists are interesting, thoughtful and likely, on the whole, to be accurate. What these lists do not contain, however, is anything with eternal relevance. In marketing, one of the few things that will be as relevant in 1,000 years as it is today is creativity.

I first learned of the Creative Industries Federation in a newspaper article about its launch. An organisation set up to promote the UK’s creative industries sounded like a very good thing indeed, so I looked it up and requested more information. The organisation seemed to have such a clear idea of its purpose that, having only read the website and exchanged an email or two, I signed up my firm.

When I sit with a blank sheet of paper, I possess neither the arrogance nor brilliance to presume I can fill it with creativity entirely on my own.

Successful marketing needs real creativity. You cannot build brands and businesses on fluffy thoughts and lazy ideas. The question is: where do creative ideas come from?

Well, when I sit down with a blank sheet of paper in front of me, I possess neither the arrogance nor brilliance to presume that I can fill it with exceptional creativity sourced entirely from my own thoughts. I draw upon the vast creativity of the artists whose work I can access online and in galleries, at concerts and exhibitions. I speak with colleagues and friends. I stretch ideas to absurd proportions. I leave them to fester and see how they develop. I go through many creative processes but sitting at the very core of it all is the creativity of others.

Let me share a practical example. Back when I was a student, I was writing an essay on immigration. I struggled with bringing clarity to the ideas I was trying to express. At the time, Institute of Contemporary Arts had an exhibition that touched some of the issues I was writing about. I went along and was particularly struck by one work, by an artist whose name I sadly cannot recall, where a light bulb had been taken from a supermarket in Germany and placed in a Korean store in the US. There are a number of immigration narratives stitched through that piece; in particular, it makes a wonderful point about the unseen benefits of immigration very simply and clearly. It helped me greatly with my work. I’ve loitered in galleries ever since.

Moreover, many marketing specialists have arts-related backgrounds. I’ve worked with designers who started out in fine art and copywriters who are poets. It’s rare to meet a creative specialist who doesn’t have a side project or hobby. The number of screenplays, novels and short stories quietly saved on the servers or PR firms and ad agencies is astounding.

A creatively rich environment is essential for marketing. We must protect and promote the arts and creativity of the UK if our marketing and advertising potential is to be fulfilled. So, why did Evolving Influence join the Creative Industries Federation? It seeks to secure the future of a business critical resource.

This article was originally published here at EvolvingInfluence.co.uk.

The unquantified self

Beta metrics don’t hep us know ourselves, they merely provide us with known unknowns

One hundred years ago someone used a ruler and drew a line an inch long on a piece of paper. Yesterday, some found that piece of paper and, using a ruler, measured that line and found it to be an inch long. This didn’t really happen but the point stands: an inch is an inch.

Hypothetically, if a year ago, I had a Klout score of 50 and earned 2,500 Nike Fuel Points and today I have a Klout score of 55 and earn 2,000 Fuel Points, am I more influential and less active?

The correct answer is: I don’t know.

In that time both Klout and Nike have recalibrated how they calculate their metrics. Your scores from last year aren’t being measured on the same scale. A fuel point isn’t a fuel point. A Klout score isn’t a Klout score.

Now, of course, we want the most accurate metrics we can get. However, part of the appeal of metrics is that they help us understand how things have changed over time. Am I more influential? Am I more active? What is the trend? None of these questions can be answered if metrics aren’t consistent.

Wearable technology has emerged as the big trend at this year’s CES. These devices will capture a lot of data about us and a considerable portion of the captured data will be presented back encouraging us to improve ourselves but behind the hype many of these metrics will be no better than your own gut instinct.

So wear the bracelets, track your scores and enjoy the positive communities built around them, but remember that all you really know is that you don’t know. These beta metrics are Rumsfeldian ‘known unknowns’.

Reputation vs. Brand

Much is written about the rise and rise of reputation. I took a look at Google Trends to see how popular reputation was in relation to brand. It turns out brand is much, much more searched for.

The below chart shows the findings. I set the parameters to searches in the UK focused around business and industrial issues.

This isn’t an insight or a significant finding, but it is interesting and worth being aware of.

made with ChartBoot

A huge thank you must go out to @JrAthletics for helping set up the plugin for the above chart. Please do follow @JrAthletics on Twitter and check out the website juniorathletics.co.uk.

A tale of two retailers

As Christmas approaches and the nights draw in, families gather and stories are told. Well, gather round my digital kin and let me draw a scene in your minds of two iconic British brands with the help of two iconic British scribes.

Two retailers, both alike in dignity,
In wintry London, where we lay our scene,
For festive sales targets, break new advertising,

Where creative minds, leave creative egos green.

It is the best of times, if you’re John Lewis, it is the worst of times, if you’re Marks & Spencer.

These two titans of British retail are going through very different experiences. John Lewis continues to grow robustly whereas poor M&S, despite the strength of its food business, desperately needs to turnaround its declining, core clothing business.

In what has become an annual marketing tradition, both have released their Christmas adverts this week, hoping to lure shoppers into their stores.

The ads take strongly different approaches.

John Lewis features a single product in an ad full of emotion and heart-tugging narrative. Meanwhile, M&S sticks just about every last piece of clothing it stocks into a fairy tale fantasy that usefully has a supermodel in her smalls a couple of times.

The way their messages are delivered couldn’t be more starkly different but don’t for a second believe that one aims to sell and the other is brand building. Both seek to sell, sell, sell.

The difference is that John Lewis is confident in the knowledge that customers like its products. Indeed, the ad’s headline characters — a hare and a bear — are now products too; you can buy cuddly toy versions of them. So the message is, we know what Christmas is all about and we have the perfect presents for your loved ones. Buy them at John Lewis.

Marks & Spencer, or Magic & Sparkle as it brands itself in the ad, needs to change opinions about its clothing range. A clothing range that has seen sales drop for nine successive quarters. It’s not going to do that by saying it’s got the right presents for the people you care about. It’s got to demonstrate that it actually does have those products because the shoppers don’t think it does. So it spends the ad saying, ‘Look, this is nice. So is this. And this too. By the way have you seen this?”

Despite the different approaches, both ads are far, far better things that the retailers do, than their competitors have ever done.

NOTE: I apologise profusely to William Shakespeare and Charles Dickens

Who wants to be acquired?

Companies are increasingly sophisticated with their direct marketing. Personalised letters and emails arrive, the contents of which are often tailored based on some sort of segmentation. Then the message is ruined as someone you’ve never heard of, with a job title like ‘Head of Acquisition Marketing’ or ‘Senior Customer Retention Manager’, signs it off.

Now, these people are senior marketers within their organisations. They’ve worked hard, they’ve helped to create an advanced direct marketing programme. Why then, do they undermine their sophisticated marketing structure by signing it off themselves? Why not the ‘Head of Customer Service’ or someone else who’s actually customer facing?

No one wants to be marketed to, still less do they wish to be acquired. So build the systems, develop the segments, come up with really creative content, but then take a step back. Stand in the background and let client facing people step to the front. You’ll acquire more customers from the shadows.

Back in the day

electra-deluxe-right-side-black-motorcycle

The UK’s economy might be coming back to life but people are still feeling the pinch. Wages aren’t keeping up with prices, times are tough and people are hankering after ‘the good old days’.

We see it everywhere. In politics, UKIP are making the most of people’s yearning for a bold, ‘call a spade a spade’ Britain. Both Labour and the Conservatives are pushing policies that preach to the faithful. We’re back to the days of left and right. The third way has gone away.

Meanwhile in literature, we’re witnessing the continued rise of historical fiction with authors like Hilary Mantel and Philippa Gregory winning awards and having their books turned into hit TV dramas.

In terms of brands, we’re seeing some great old names return. The Truman brewery, originator of the IPA, is back in London pubs. Last week, it was announced that Royal Enfield motorcycles are coming back home to the UK, having sat out the past 30 years in India.

Other brands are drawing upon the past in their advertising. Notably, Coca-Cola’s ‘Grandpa’ healthy living advert seeks to push an old fashioned lifestyle as the solution to the very modern issue of obesity. We’ve also seen the return of the Tetley Tea Folk and NatWest piggy banks.

Even brands with little history, like cycling apparel maker, Rapha, and clothing firm, Jack Wills, are basing their growth on heritage values.

Like the tight economy, this trend isn’t likely to go away any time soon. So there’s no harm in digging into the archives and finding the warm, familiar signifiers of better days. People are grasping after comfort blankets, smart marketers will provide them.