Marketing & Communications Briefs

Building Brand Value During a Crisis

October 15, 2020

The crises seem to come faster all the time.  During the first two quarters of 2020, we went directly from a crisis about the global Covid-19 pandemic, to a crisis about the resulting sharp economic slowdown, to the Back Lives Matter protests following the death of George Floyd at the hands of the Minneapolis police.  Each of these was felt widely throughout the US and much of the world. Marketers seeking clear solutions were often frustrated.  The Wall Street Journal summarized it this way: “(…) companies have struggled to determine what stories to tell and tone to strike (…) Being in sync with the national psyche has been especially hard this year (...)”[i]

Brands increasingly provide leadership

Corporate leaders have recently emerged as societal thought leaders, both in the eyes of their employees and by the general public. According to the Edelman Trust Barometer, in 2019, 64% of global consumers self-describe as “belief-driven buyers” who will choose, switch, avoid, and/or boycott a given brand based on its stand on societal issues.[ii]  This is a huge jump from the 51% who self-described that way in 2017.

During the triple crisis of early 2020, companies took a variety of actions and made time-sensitive communications at various times.  Most of these focused on Covid-19, and many of them were of the anodyne “We’re all in this together” or “During this challenging time, we’re here for you” variety.  Others described specific actions taken that directly reinforced the brand’s message and/or perception by its core audience.  Here are a few examples of these, as reported by Newswhip[iii]:

• Nike donated custom PPE and 30,000 shoes to frontline workers fighting Covid-19.
• Hotel chains Marriott, Hilton, and Statler offered free rooms to truck drivers and medical workers.
• Krispy Kreme, Pizza Hut, and Dick’s Drive-In donated free food to college graduates.
• Lowe’s donated flowers to mothers isolated in nursing homes.

 

• Farmers and supermarkets donated food that might have otherwise spoiled to food banks.

In other cases where a direct connection between the crises and a company’s activities was not as clear, companies took indirect routes to burnish their brand by way of improving the experience of customers, employees, or society at large.  Some examples:

• Whole Foods provided free masks for customers nationwide.
• Supermarkets Walmart, H-E-B, and Kroger gave cash bonuses and other financial benefits to employees working during the pandemic.
• Tito’s Handmade Vodka donated $1 million for vaccine research.

How is crisis messaging perceived?

How many of these gestures, and the resulting communications, represent genuine goodwill -- and how many are merely virtue signaling (also known as greenwashing) to create a superficially positive “as if we care” appearance?  Is there a meaningful distinction — and, if so, how do you tell the difference?  Does the “genuine-ness” of a brand’s concern matter to customers, employees, and investors?

This begs even larger questions.  Is it appropriate for brands to comment on societal crises?  Is it expected of them?  Is it required? Does having a brand “spokesperson” help?  Does it have to be the CEO?[iv]  What if some customers do not agree with the message – is the trade-off worth it?[v]

Messaging content aside, consumers do not always agree on the desirability of crisis communications.  A recent global study of consumer responses to the pandemic found that, while nearly two thirds of consumers in major markets found pandemic-related communications “comforting and reassuring,” over a third found these same initiatives caused them “anxiety and concern.”[vi]

Actions are preferred over hollow words

To be sure, many brands have taken a range of meaningful, well-perceived actions that were or weren’t directly related to brands’ core DNA. Though various studies differ somewhat in their specific recommendations, consensus seems to lean toward drawing a clear connection between brand positioning and demonstrable corporate actions. However, some commentators have noted that brands’ actions have sometimes remained unspecified, as Amanda Mull did in her essay for The Atlantic: ”American brands have rushed to show where they stand, but it’s still uncertain what they intend to o?er -- what they can o?er -- beyond greater awareness of their existence and a vague sense of virtue.”[vii]

And some observers – like some consumers – have simply remained skeptical of corporate motives. As Helen Lewis comments: “Progressive values are now a powerful branding tool.  But that is, by and large, all they are. And that leads to what I call the ‘iron law of woke capitalism’: Brands will gravitate toward low-cost, high-noise signals as a substitute for genuine reform, to ensure their survival.”[viii]  Such initiatives, in other words, run the risk of being perceived as all talk, no action.

Consumer preferences can shift rapidly

A study[ix] done during the Covid-19 lockdown (third week in March 2020) found that brands that communicated frequently at the beginning of the lockdown period (like supermarkets and healthcare) were thought to be handling the crisis better than brands that communicated less frequently (like automotive and fashion/beauty.)  But as the lockdown dragged on, consumers’ communications preferences quickly evolved – from seeking advice reinforcing government guidelines at the beginning of the period to seeking offers and discounts just one month later.  And one month after that, consumers across most sectors preferred communications that did not focus primarily on the pandemic.

Some brands look the other way

During a crisis, some advertisers may elect not only not to take a stand, but instead to avoid any association with the topic.  Some digital advertisers chose to blacklist any mention of their brand adjacent to Covid-19 reporting – which during March and April was taking up much of the news – on the grounds of “brand safety.”  This crisis non-response seems like an opportunity wasted. Marketers wishing to avoid controversy in our crisis-driven culture may soon find there are few “safe spaces” left for them in the polarized mediasphere!

The results must be monitored

If a “brand stand” on a given societal issue is created and transmitted, it must then be monitored via social media listening and traditional market intelligence channels for impact, both positive and negative.  Just think of pre-Covid-19 brand initiatives that may have seemed like a good idea at the time, but subsequently backfired in our hyper-sensitive networked world, such as:

• Dove’s 2017 body wash ad on Facebook, which was intended to celebrate diversity, showed a black woman morphing into a white woman.  The internet blew up…
• Pepsi’s 2017 “Live for Now” ad starring Kendall Jenner was criticized as trivializing Black Lives Matter — and was pulled within a day of first airing.
• Gillette’s 2019 “We Believe” ad, a response to the #MeToo movement that criticized toxic masculinity, was seen as tone-deaf.

 

Given brands’ stands on societal topics, it might come as no surprise that certain brands even have begun being classified on a red-blue continuum that in the US we are used to in describing states.[x]  Some brands have been built around a culture of social activism, wherein a response to relevant events is almost mandatory—but this can also backfire.  For example, immediately after the Floyd killing, Ben and Jerry’s posted a pro-Black Lives Matter statement on its website and social media that included several specific policy proposals.[xi] This prompted immediate social media backlash and calls to boycott the company.  Such fallout was temporary, however – sales for Unilever’s ice cream division, of which Ben and Jerry’s is a major component, were up by 26% in Q2 2020.[xii]

The experts weigh in…

Hampton Bridwell of Tenet Partners, which operates the Top One Hundred Brands database, had this to say in a webinar hosted recently by The Conference Board[xiii]: “During the triple crisis, ‘essential’ became the key anchor for brand value.  Essential brands proved that they were being authentic by maintaining a close understanding of their workforce and their customers.  Even so, $100 billion in brand value was trimmed off just the top ten brands.  Everything is being reset, and traditional demand models used by the majority of marketers are not working to address the current environment.”

 

Crisis communications expert Pen Pendleton of CLP Strategies says that in a crisis, companies are in a bind.  “Business leaders are expected to speak to the issues -- but they are typically not trained to do so.  CEOs are operational leaders, not politicians.  They now have to learn a new skill set – or risk becoming obsolete.”[xiv]

Pendleton cites the recent situation at Boeing as a case in point.  The former CEO, Dennis Muilenburg, had the support of the Boeing board in the 737 MAX crisis.  But he did not have the support of the press, and therefore, the public.  When the board finally turned against Muilenburg and replaced him with Dave Calhoun, the incoming CEO’s first job – even before reaching out to Boeing’s suppliers and regulators – was to go to the press to clearly explain the situation.

Neal Thurman, co-founder of the Brand Safety Institute, says “Rather than trying to come off looking/feeling positive about an issue it may never have contemplated prior to a crisis, a smart company picks its causes, creates evergreen awareness programs around them, and is then in a position to expand upon them in the event of a crisis.  Even if they elect to not respond to a given crisis, they can at least highlight the things they are always engaged with. If they do respond, they can show a track record and present a pre-honed message about their point of view -- rather than attempting to create one on the fly while everyone is in hyper-reactive mode.”[xv]

Consider these things

How should your brand act and communicate in a crisis?  How can you predict in advance how an action and messaging strategy will play?  Some other things to consider:

• What is the relevance of our brand to the crisis at hand?
• What is the positioning of our brand in our customers’ minds?
• How is that likely to shift during the crisis?
• Does our brand have sufficient social capital and trust to credibly address the crisis without seeming opportunistic?
• Is our messaging strategy agile enough to evolve quickly as consumers evolve?
• How and when is the crisis likely to resolve?
• Can we use this experience to build a playbook that enables us to respond more quickly and more effectively during the next crisis?

 

Tim Wood Powell is a Senior Fellow of The Conference Board’s Marketing and Communications Center, and is President of The Knowledge Agency®, a research consultancy.  His latest book is The Value of Knowledge.