Why Apple Bounces and Banks Splat: The Challenge of Reputation

21 January 2014

Last week’s Cog Blog was about what people think about organisations, and why that matters. Today’s continues and expands upon that theme.

A positive reputation creates a carapace around an organisation that sees it through the tough times. It gives a business ‘bouncebackability’. A good example is Apple, whose reputation was for many years the personal responsibility of the guy at the top, Steve Jobs. Jobs recognised that if he could create a sense of something close to unconditional love amongst his loyal customers those same loyal customers would forgive him almost anything. When problems hit the loyalists would shrug and assume that Apple/Jobs would sort it out. As indeed they/he invariably did.

Compare and contrast Apple with Blackberry. Also benefiting from a fierce band of loyalists, almost despite themselves, when Blackberry’s network failed the opprobrium heaped upon them by these loyalists was close to terminal. There was no sense within the online forums that Blackberry ‘would sort it out’. Blackberry doesn’t have ‘bouncebackability’.

Nor indeed do banks. In fact they have the exact opposite. ‘Splatability’ perhaps. They’re seen to mess up – even when they don’t. Furthermore they keep making the same mistakes. They understand the need to advertise – all the time, even when they screw up (was it really wise for NatWest to run their ‘Helpful banking’ ads in newspapers the day after their systems failed in early December last year blocking thousands of customers from access to their money?). But advertising alone doesn’t build a reputation. Certainly it can help, if it’s long-term and consistent but you have to follow through in everything you do. Everything and everyone communicates; everything and everyone counts.

What banks (and train companies, many airlines, mobile phone operating companies, and utility businesses) seem to miss is that reputation is multi-dimensional. When (to continue the bank example) the banks’ investment arms behave as they have done, whilst still paying huge bonuses, the general public doesn’t make the distinction between high-street branches and the City. After all, why should they when they’re both part of the same organisation?

Every time you have to wait for ages on a phone to talk to a human; every time an airline or train company fails to communicate why there’s a delay; every time a poorly aimed mailer drops through the door, or appears on a social media site; every time you hear of how badly a friend (or a friend of a friend) has been treated by his employer; all of those experiences add to a company’s or brand’s reputation.

As with brands, any organisation’s reputation is made up of the views of multiple groups. As Jeremy Bullmore put it: “People build brands as birds build nests, from scraps and straws we chance upon.”

And so it is with reputation. It is created and continuously adjusted by the overlapping views of those who come into contact with the business, be that as users of the product or service, as members of staff, as suppliers, as regulators, as journalists, as analysts, as friends and families of any of the above.

That’s why it’s complicated. What I think of my Samsung phone is in part shaped by what others think, say and write. What others think or say is in part influenced by what I say or write. When I read that the new Samsung curved TV was monstered by critics at the recent CES that has an effect on how I feel about the Company, and by extension about my phone.

The way that reputation is measured doesn’t help organisations understand, or guide them in their future strategies. The metrics are too simplistic, too one-dimensional. One feedback I received to the last post (from an employee of a large market research firm) said in effect reputation is a function of sales. It isn’t (Apple is by no means market leader in laptops or phones; the major high-street banks still have the majority of market share in the UK) – but the fact that a large research company seems to think it is speaks volumes.

Reputation is both complicated and important. It’s also largely ignored by most CEO’s, who pass it off (as they tend to do with most activities tied to marketing) as puffery and smoke and mirrors. One way to change this is to root any Board level conversation about reputation not in the language of the research world, but in the language of the Board. That means a more joined-up, multi-faceted, financially-focussed, business-like approach.

It’s a challenge that the market research world can answer by focussing more on client needs and less on internal hierarchies.