Category Archives: corrupt companies

The Authentic Brand: A Precious Asset Developed Through Transparency, Customer Experience and Ultimately, Loyalty

By James D. Roumeliotis

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Honest by ad. A pioneering company launched in January 2012. The company is unique in communicating about the supply chain of its products and pricing.

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Trust is a hard thing to come by these days whether between people or between people and brands. When the founders of a start-up build a brand from the ground-up or the executives of an established one are in modus operandi mode, taking a cautious approach to their brand image, in both scenarios, ought to be part of growing and preserving the business with a constant eye on the future.

Sadly, nonsense, and plenty of it from ubiquitous brands, is probably the best noun to describe what consumers are offered by many companies selling their products and services to them. Whether it is advertising, package labeling or an overstated pitch by their sales staff, the information presented may be deliberately misleading. With some brands, it is the tiny print in disclosure statements which defeat what is promised in larger and bold advertising headings. The majority of consumers do not read small footnotes. Think of the worst offenders of this practice: the cellular phone/telecommunication providers, insurance companies, credit card providers, as well as the automobile manufacturer promotional offers and pharmaceutical advertisements – to name a few.

Deception concealed as sincerity: How to chip away at your brand

The key to a successful business growth, along with reputation, is truth in advertising, delivering on promises made, avoiding deceit – and marketing the brand, not the product. Contrary to popular belief, a brand is not a logo, label or product but rather a relationship with customers. It is a promise. Branding, when carefully executed, adds value to a company including brand equity. This is considered intangible brand value. By applying a short-term revenue and profit strategy at the expense of long-term negative consequences, a business’s brand reputation will ultimately lose its luster.

In the 2015 Harris Poll Reputation Quotient®, published the reputations of the 100 most visible companies among the U.S. general public. What appears on the top five, among other notable brands as consumers perceive them, are Wegmans Food Markets, Amazon, Samsung, Costco and Johnson & Johnson respectively.

Consumers have high and explicit expectations from brands, thus anticipate what the brand promises via its marketing material and/or what is stated on the product packaging. What a brand actually delivers and how it behaves in the process is what consumers get to feel.

A brand which utilizes short-term sales and marketing tactics for quick short-term gain fails financially in the long-term by acting in an ethical way. As marketing maven Seth Godin rightfully proclaims, “In virtually every industry, the most trusted brand is the most profitable.” As with our personal lives, trust with branding is based on what one does, not what one says.

Boosting sales and market share via misleading and deceptive tactics

According to a 2013 Harris Poll, regarding the most and least trusted industries, the advertising industry was near the bottom of the list when rated up against many other business sectors. Seemingly, truth in advertising is a misnomer. Misleading and deceptive advertising by many marketing and branding executives, give the entire industry a negative perception.

The food processing domain is no more honest with labels that claim to be healthy but without support with any concrete scientific facts. Food companies tout their devious label claims of organic, nutritious etc. – although an absurd amount of sugar and/or sodium is present in the ingredients along with unnatural artificial ingredients). Kelloggs even went as far as having to be ordered, by the courts, to discontinue all Rice Krispies dubious advertising which claimed to boost a child’s immunity system.

Then there is the “premium” orange juice from popular brands such as Tropicana, Simply Orange and others which are highly processed, and usually stored for several months before reaching consumers at the supermarket fridge aisles. This processing method is used to retain the juice from spoiling. However, during that process, it also strips the flavour which is injected back into the product, once it finally gets packaged, to give the juice its original orange flavour. Not surprisingly, the orange juice producers do not make any reference to this anywhere.

Informative and authentic eye-opener documentaries such as Food Inc. and Tapped have upped the ante in terms of the exposure shared with the public to what is wrong with the food processing/food chain and water bottling sectors respectively. Moreover, the GMO debate with the exceptionally well-connected and deep pocketed Monsanto (the St. Louis-based biotech giant and world’s biggest seed seller) will not be going away any time soon.

Other industries notorious for deceit are banks and cellphone/telecommunication companies with their hidden fees. These blatant revenue generators are sales at any cost – short-term gains, of course. These companies guilty of gouging seem to be testing the limits with consumers – as if the latter are ignorant. Those absurd fees evidently enrage the culprits’ customers.

Employees reflect the brand

First and foremost, trust begins with company employees. If they are well trained and treated with respect and transparency, the employees will trust their employer and radiate their enthusiasm, as well as loyalty to their customers by going the extra mile.

Along with a brand being a valuable asset for any business, people also fit into the equation as an important asset. This is where hiring the right people, on-boarding them, training them adequately and empowering them all create a positive impact on customer satisfaction.

Many brands are myopic to the point that they unintentionally and unknowingly allow their dissatisfied customers to go away without a thought. Front-line staff is either not trained properly and/or lacks the proper attitude to handle clientele appropriately.

During the industrial era, consumers would simply purchase what was produced, shopping where that product was available and paying the price the retailer demanded. In essence, the manufacturer and the store were in position of strength. As products and consumers have changed over the years, the concept of ‘brand loyalty’ and ‘consumer insight’ came about. As we progressed into the new millennium, the transparency and unrestricted information available on the internet has changed all of that. Today consumers are not only better informed but they are also in control. They can make or break a brand through their actions. So what does this say about listening – and acting?

Consumers will no longer refrain from informing companies on what may have gone wrong ─ whether it’s a particular brand or a competitor’s. With the numerous platforms for consumers to make their voices heard online, brands have to be very reactive and not allow anything to chance. In an age when the consumer’s outcries and influences spread quickly, the results can signify lost sales and a deterioration of brand loyalty.

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When all is said and done

Building and nurturing a brand is what makes an enterprise gather wind under its wings. Common intelligence dictates that the way a customer is dealt with reflects on the integrity of the brand, and the image of the company in the mind of the consumer.

A “Brand” is a promise of something that will be delivered by a business. This promise comes in a form of quality, an experience and a certain expectation in the mind of the consumer. It includes the Unique Selling Proposition (USP). Marketing, on the other hand, is about spreading compelling messages to your target audience while branding is a combination of words and action. Marketing is extroverted and communicates quickly, while branding is introverted and a slow process if it’s to produce any real impact. Effective marketing activities are vital in developing a brand. When combined successfully, branding and marketing create and promote value, trust, loyalty and confidence in a company’s image, products and services.

According to an Edelman’s Trust Barometer, it was revealed that 77% of respondents refused to buy products from companies they distrusted. More disturbing is that 72% said they had criticized a distrusted company to a friend or colleague.

When customers are treated with honesty and delighted by a particular brand experience, they begin to bond emotionally with the brand. They become brand loyalists and advocates – buying the brand more often and recommending it to others. This behavior serves to build the brand’s reputation. This approach is priceless –even though it may take longer to take positive effect.

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Filed under brand equity, Branding, Business, Business success, catering to picly clients, corrupt companies, stimulating brands, total customer experience

The Inept Organization: Weak Leadership as the Culprit

by James D. Roumeliotis

Embarrasing Moment Photo - Pants down

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How often do you come across a company, either as a consumer or at a business relationship level, and realize how frustrating it is to deal with?

To understand and penetrate the corporate governing structure and “culture”, you need look no further than the upper echelon of the hierarchical tree. It is here that procedural decisions are shaped and executed. An entity’s leadership is expected to head the enterprise by governing its long-term growth and sustained wealth.
Moreover, there is a constant search for the “right” human resources. Recruited and fresh talent must resemble the leadership in tone and style. Call it the organization’s DNA. Exceptional organizations are good at these types of corporate strategies, thus strengthening performance effectively.

We notice that in certain types of B2B transactions, there can be scope for unscrupulous behavior. One or both parties are tempted by “disservice” during their business exchange. Shortsightedness might lend itself to make this underhanded approach appear “profitable” on paper. Such relationships inevitably end badly because they are not conceived with trust or respect.

Success Breeds Success

Companies that foster the right attitudes and strategies put the firm on track for success. Examining their corporate histories, you can witness a trajectory of growth. They have a tendency to dominate their markets and “win” through competent talent, innovation, and an entrepreneurial mindset within the leadership at the executive level. These choices underscore the prosperity and rapid growth of the institution. An examination of Google or Facebook shows this quite nicely. They are not built like “traditional” corporations nor do they act like them.

Organizational leadership is accountable for creating value for customers, employees and its owners/investors. When Bill Gates conceived Microsoft, he put the firm on track for providing constituent audiences with what nobody else could provide. Understanding “asset” management in an expanded meaning of the term guaranteed that Microsoft would succeed under Gates stewardship.

The opposite is equally true. When top executives lack knowledge or experience for board positions, they should not be promoted to these leadership roles. Some family owned firms run afoul here and this brings up the issues of sustainability and corporate governance. Another weakness in running an organization, in my view, is pushing for short-term profitability at the expense of solid planning. For example, with large organizations, competence is not the primary value but rather connections, politics, and clever tactics. Such “benefits” can usually compensate for incompetence.

No business can continue to prosper unless it attracts fresh and eager talent. Despite the dilemmas within the financial world, top organizations consistently lure new talent with lucrative compensation packages. It is easier for a firm such as Goldman to tap the “best” because of its reputation, size and success than a small local financial player.
When Goldman recruits they know where to look, whether it is Harvard or the London Business School. Prospects will already contain the seeds of the corporate culture in their past. Given the “right” conditions, new talent blossoms. Qualifications are never enough. They are a starting point reinforced by attitude and values. The selection and screening process is designed by HR to weed out inappropriate candidates.

Take the case of Michael Page, the global recruitment firm. Ever wonder when you pass one of their buildings on a Friday evening why the staff at the pub all seem to resemble one another, whether men or women? They were intentionally selected to match a model.

To give another example, Microsoft’s interview process includes quizzing candidates with challenging technical questions. This practice not only assesses problem-solving and knowledge ability, but also explores the ability to perform under pressure, which is a key skill required to succeed in Microsoft’s intense work environment.

One thing is firmly certain ─ the best-managed companies have “one” factor in common:
They are constant achievers in their respective industries. These companies exude managerial excellence. Financial performance is the result of this style of management. Consider companies such as Boeing and Under Armour, among others, which thrive and considered as “America’s Best Managed Companies” by Forbes magazine.

Deeds Not Slogans

Companies with inept leadership usually fail in the first year or two, but even established companies can stumble badly when they outgrow the capabilities of the founding team. Research by the U.S. Bureau of Labor Statistics demonstrates that nearly 6/10 businesses shut down within the first 4 years of operation.

To be a successful entrepreneur is not an effortless task. It takes plenty of sacrifice. A new generation of young entrepreneurs think the road is smooth and a fast track to easy wealth. Not everyone will become Mark Zuckerberg. Obstacles and sacrifice are part of the deal. Harnessing opportunity and overcoming challenges daily to top the competition is constant work. These conditions are true no matter what the sector of business engagement or company size.

Telltale signs of weak organizations can be traced to inept leadership. The following points highlight the deficiencies:
• Poor customer service – slow or no customer inquiry replies – abysmal handling of sales and service complaints. Service is portrayed as a reward, not a right or benefit.
• No Unique Selling/Value Proposition. Companies need to define and articulate their unique value proposition and deliver on it consistently. Create the platform for sustainable and competitive advantage.
• Operational deficiencies – various ailments and no structure
• Absence of or very little communication among staff and management. Divisions aren’t well-coordinated and do not function as a team.
• No transparency. There is hardly any openness from management.
• Unethical practices – short-term selfish objectives in search of market share. Top executives should promote social norms and principles as moral agents.
• Lack of proper execution of decisions and with new products/services.
• Productivity incentives should be implemented to boost results and employee morale. People must be given a reason to work hard and be efficient.
• Creativity is practically non-existent. An absence of innovation and employee empowerment will hurt progress and stifle new ideas.
• No clear vision/strategy – there needs to be a strategic vision that reflects a truly unmet need and has the commitment of a dedicated CEO. That means that there is a well-defined target audience with a distinct value position that is differentiated, meaningful, and deliverable.
• A weak sales force along with an unattractive compensation plan.
• Favoring nepotism and bias – promoting family members over other qualified employees often leads to resentment or, worse, prompts valuable non-family employees to leave the company.
• Poor hiring practices – should hire for attitude and train for skills.
• Slow/delayed decision-making process – too many layers – overwhelming bureaucratic structure.
• High turnover, which leads to poor employee morale, reduced intellectual capital, lower service levels, higher operational costs and decreased productivity.
• Management in a state of denial about their organization’s shortcomings – remaining with the dysfunctional status quo
• No channel strategy. Some companies focus on building a product, but don’t think through how to get it into the hands of customers. Even if your product is great, unless you can sell directly, you may be dead in the water without strong channel partners.
• The hidden game – corporate politics – power plays by a handful of individuals for their own benefit to the detriment of their colleagues and the company.
• Misrepresentation of brand(s) – too much hype – empty promises – not delivering on expectations – leads to dissatisfied clients who will alienate the brand.
• Weak financial controls – cash flow dilemmas – over leveraged/undercapitalized (high debt-to-capital ratio) – not reinvesting a certain percentage of profits for future growth.
• Absence of sound marketing program(s) and/or brand strategy. A brand is defined by how it behaves, from the products it builds to how it treats its customers, to the suppliers with whom it works.
• Growing too fast and not staying on course as the company grows.
• Lack or very little employee training & development.
• Deficient in control systems – reactive rather than pro-active.
• Lack of continuous improvements or complacent.

Top executives need to be accountable to the ownership or Board of Directors – whichever applies, or at least to an outside arm’s length and neutral party such as an adviser who can also play “devil’s advocate” when necessary.

Good Organizations Matter

The way to solve an organizational problem is to confront the structural issues with a moral sense of purpose and ethics. For its clients to receive stellar service, the firm must have its house in order. Besides structure and an efficient operation, employees should be trained and empowered to do their jobs efficiently.

Seth Godin, a renowned marketing strategist, stated succinctly: “If you want to build a caring organization, you need to fill it with caring people and then get out of their way. When your organization punishes people for caring, don’t be surprised when people stop caring. When you free your employees to act like people (as opposed to cogs in a profit-maximizing efficient machine) then the caring can’t help but happen.”

Companies that disrespect their employees and shut-out clients get willfully isolated and have a short life span through an erosion of market share and significant loss of revenue. A company’s goal should place emphasis on serving its people properly and fairly. Higher morale generates higher profits – though occasionally other priorities hinder that objective, for example, self-serving behavior by certain executives.

Enterprises spanning a wide array of industries, have earned distinction as “well-” or “best-” managed” by demonstrating business excellence through a meticulous and independent process that evaluates their management abilities and practices – by focusing on innovation, continuous training, brainstorming and caring for their employees’ well-being – as well as investing in meeting the needs of their clients.

In a nutshell: Well-run companies thrive no matter what by hiring the right people, taking good care of them, listening to customers and never ceasing to innovate and improve.

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