Just Make It Right

A couple of stories stood out to me while reading the news today, as they happen to have fallen on the same page, and involved well-known brands experiencing potentially catastrophic incidences. They were the emergency landing of the Quantas Airbus A380 due to a Rolls-Royce Trent 900 engine failing, and that Boeing had to suspend a test flight of its new 787 Dreamliner after a fire broke out in one of the jets.

The stories got me thinking about consumer tolerance. Specifically, what level of tolerance do people have for brands that fail to deliver on their promise and, instead, horribly screw up?  Because, lets be honest, everyone, even organizations, screw up - it's inevitable and it's what makes us human.

I feel consumer tolerance is dependent on two actions, which are not mutually exclusive:

1. How the brand handle the incident at the onset and everyday after
2. How many times the brand promise neglected (aka - how many times does the brand continue to screw up?)

For Rolls-Royce and Boeing, I don't think their current malfunctions will cause them severe damage because they are acknowledging the problem, taking ownership of it and are looking to resolve the situation.  However, if the issues continue to arise, in one shape or another, I may begin singing a different tune.

If we look at other relatively recent examples, like Toyota and BP, we can begin to learn about consumer tolerance.

Toyota and its massive number of product recalls in 2009-2010, due to unintended acceleration, sticking pedals and anti-lock brake issues, which all ran entirely counter to its brand promise of dependability, reliability, efficiency, innovation, longevity & sustainability, caused severe brand damage. In fact, Toyota experienced a 16% brand value loss due to these incidences according to the Interbrand Top 100 Brand Report.

Being reluctant to initially acknowledge the problem and suffering from three separate malfunctions is where consumer tolerance for the brand became jeopardized.  However, Toyota did eventually own up to its problems and issued massive recalls, over 9 million worldwide, including suspending sales until the situation was resolved. It is these kinds of actions that will help it in the long run.  

Although people will remember Toyota's massive recalls, they will also remember the effort they went to to ensure the safety of its drivers. However, the expectations for Toyota to deliver on its promise are higher than ever, so it can't just deliver on its promise, it has to knock it out of the park.

Then there's BP, whose accidental oil spill, and poor decisions along the way, have left the brand in anguish. Its market value was halved by mid-June and its debt skyrocketed making bankruptcy look very possible.

Pointing fingers of blame, not wanting to take ownership of the situation, not clearly communicating the situation and having the CEO say he wants to his 'life back', after 11 lives were taken and many peoples' livelihoods were compromised, did not help long-term brand trust. In fact, BP didn't even make the Top 100 Brand list, for which it was ranked 83 last year, indicating a massive loss in brand value due to this catastrophic event.

In addition, the news reports claiming BP executives chose cutting-costs over safety had a significant impact on the brand value.  However, the sun may rise again for BP as the preliminary reports from the commission investigating the spill, noted in the Economist, have found no evidence to suggest "a conscious decision to sacrifice safety concerns to save money"

Although people have very limited tolerance for any kind of failure from BP, and even the oil industry as a whole, BP is lucky in that it's in a needs market, where demand is greater than supply, with a low share price making it a great short-term investment. Having said that, if it makes any slight mistake in the near future it will lose all shareholder trust plummeting the value of the organization even further.  

Also, if BP wants to carve out a strong position for itself in the future and influence the future of the energy sector, it needs to get serious about being truly 'Beyond Petroleum' and make some heavy investments in some ground-breaking initiatives, for which they plan to roll out in an attempt to revolutionize how we will consume energy in the future. Only by creating these meaningful reasons to believe, will BP start to alter their brand perceptions. But it has to really believe in what it's doing, or like I read in the Economist this morning, "to do the right deed for the wrong reason, T.S. Elliot wrote, is 'the greatest treason'".

So, overall, I feel people are pretty tolerant of brand mistakes - I mean Volkswagen was originally founded by the Nazi Trade Union and heavily supported by Hitler, yet it became a very popular automotive brand in the 50s and 60s, post WWII, and still remains a brand loved by many.  So, as long as the brand accepts blame, is quick to make things right and consistently over-delivers on its brand promise for a long time after the incident, brands will find that consumers can be tolerant.