How to Drive a Brand Into a Ditch

April 3, 2014

CoreBrand recently released its Top 100 Most Powerful Brands Reportour proprietary research that provides a market-view evaluation of brand strength across a range of industries and business categories. One of the more interesting aspects of the annual report, aside from the overall ranking of brand strength among leading, publicly traded Fortune 1000 companies, is being able to see what brands have been winners, and what brands have been losers over the past year in terms of their brand strength improving or declining.

In this year’s report, there were a number of notable ‘losers’, like CBS, Walgreens and UPS, who lost some ground in their brand strength relative to 2014. On the flip side, there were a number of ‘winners’ who, to their credit, made gains, including Amazon and Google, who both emerged as the year's biggest winners.

However, there was one brand among the winners in 2014 that may want to hold off on popping the champagne corks just yet, despite improving six places in 2014, from 99th to 93rd in the overall rankings. That brand is General Motors (GM), a company currently embroiled in what will likely be a brand damaging recall controversy.

Now of course, GM is not the first, nor will they be the last automaker to issue recalls for problems with their cars that have had serious, and in some cases tragic, consequences. But what is unique about the GM recall is that the company seems to have no clue as to the depth of the problem or what damaging information remains, being continuously waylaid by new revelations regarding the failure to disclose problems they were aware of, or failing to notify customers or regulators about the dangers these problems posed to drivers. And it is this violation of trust across their many stakeholders that will be hardest for GM to fix; from customers returning after suffering years of lousy products and indifferent management, to legislators who risked careers to vote for a company bail-out that was central to the company’s resurrection. Now GM’s honesty and morality is being questioned, and a criminal investigation is a real possibility.

So what should GM have done? Well, some years ago, I was involved in a similar crisis when Midwest gas utility Nicor was accused of violating stakeholder trust in the late summer and fall of 2000 because the utility bungled the removal of mercury-containing natural gas regulators from customers’ homes and businesses.

In the process of removing the old equipment, mercury from the regulators was leaking into the basements of homes and businesses, and once the media got wind of this, it was plastered on the front pages of newspapers and used as the lead-in for TV news broadcasts throughout the Midwest. Stories, with pictures of families standing outside cordoned off homes, while men in HAZMAT suits worked, were everywhere! Wanting to hunker down and wait it out, Nicor was convinced to…

The result was, while initially taking some hits in brand image and reputation, over time the media began to run out of newsworthy items and information to use as leverage for negative stories. And the ongoing measurement of stakeholder perceptions revealed that levels of concern, anger and anxiety towards the brand went down, and the brand image began to rebound. Eventually, the crisis faded to the back pages as other current events and controversies began to take center stage. Ultimately, subsequent research revealed there to be little, if any, long-term damage to the brand.

Sadly, General Motor, either willfully or through incompetence, did not take this approach, and the result is the brand may be in serious trouble, as new and more damaging revelations seem to emerge with each news cycle. And the time may already be past when a sincere, forthright, and honest owning up to the problem will do any good, though that remains to be seen.

So, as we look ahead to the 2015, what is your over/under on where GM will land in next year’s Top 100 Most Powerful Brands Report?

blog comments powered by Disqus
Brandlogic and CoreBrand have become Tenet Partners — Where brand meets innovation®. More