Troubled Toyota

Photo credit: angusw on Flickr

I feel compelled to share some thoughts on Toyota’s brand troubles.

Jim Lentz, president of U.S. Toyota sales, acknowledges that the situation is embarrassing, “but it doesn’t mean we (have) lost our edge on quality.”

Maybe not. But here’s the problem. First we learned of the accelerator problem. And now we’re hearing about braking problems with the Lexus and Prius. If we just had the accelerator issue, consumers might be willing to give Toyota the benefit of the doubt. But with other problems coming to light, consumers may now question who Toyota really is.

Is Toyota the auto company who can be counted on to build reliable, high-performing vehicles? Or is Toyota a brand that’s no more trustworthy than any of the other big brands?

Toyota has always ranked exceptionally well in the perception of value category. The current crisis now threatens to undermine that precious asset.

What’s the lesson?

Well, for starters, you can never let up on guarding your reputation.

As I’ve said many times before, brand building is a marathon event (probably more like an ultra-marathon). It’s tough, takes a long, long time and there’s no shortcuts. You build your brand mile by mile by mile.

But if you let up for a moment, if you slip, if you fail to do what you need to do, if you let your customers down, brand value that’s taken decades to build can be destroyed in an instant.

Guarding your brand’s reputation must be an obsession. It’s a total commitment.

Through all of the media reports on Toyota’s troubles, one of the ideas put forth is that the Japanese auto manufacturer had gotten complacent and overly focused on growth.

In fact, you can go back as early as 2005 and 2006, Toyota was talking then about the need to fight complacency and re-focus on quality even as it pursued growth across the globe.

Wasn’t it the Japanese who taught us that the relentless pursuit of quality and continuous improvement is key to growth?

For Toyota, the worst may not be over. We’re hearing reports that Toyota knew about the accelerator problem for over two years. And according to a U.S. House of Representatives committee, the sudden acceleration problem has been linked to 19 deaths in the last decade.

I think this is the most troublesome part of this story… that Toyota may have hid from its own problems. All of the sudden, it’s not just reliability and quality issues, it’s a question of integrity.

My view: Toyota will need to work hard, very hard, to bounce back from this crisis. They need to earn back the trust they’ve lost, and they need to rebuild the perception of high value.

Part of the value of having a strong brand is the ability to weather a storm when things go against you. Toyota will benefit from the brand equity it’s built with consumers, especially Toyota loyalists. But rebuilding the brand equity lost won’t happen overnight. It’s going to take years.

For more on Toyota’s troubles, see Toyota’s Chief Steps Forward to Apologize.

Brand Aid for Haiti

I can’t imagine watching helplessly as my own daughter struggled for survival, pinned down by some steel bar, unable to escape the rubble of a major earthquake. I also can’t imagine hearing her cries, knowing I could do little to help. The very thought is unbearable.

I came across this story on CNN. And, sadly, the story ended tragically. Though freed from the wreckage, this poor girl didn’t make it. Doctors couldn’t save her, devastating her family and all those involved in the rescue effort.

So many heart wrenching, tragic stories are coming out of what was already one of the poorest countries in the world.

While devastating and horrific, these are the stories that inspire us to act, to do what we can to help.

Individuals act. Communities pull together. Organizations get into motion.

Businesses and brands also offer support in various forms.

Consider brand aid for Haiti. Here’s a rundown based on what I can find on the Web of how the world’s top brands are responding to the tragedy. This list is limited to the world’s top 10 brands, based on Interbrand’s Best Global Brands ranking of 2009.

1. Coca-Cola: The Coca-Cola Foundation has donated $1 million to the American Red Cross as well as water and other beverages for immediate on-the-ground relief efforts.

2. IBM: I have not come across any public announcement from Big Blue. However, the technology giant does provide support to the U.S. State Department’s Center for International Disaster Information, which plays a major role in disaster relief and recovery efforts.

3. Microsoft: Initial commitment of $1.25 million, including cash and in-kind contributions. The company is matching employee donations. Microsoft is helping to drive awareness and donations for relief efforts through MSN and Bing. In addition, the company is working through NetHope, a group made up of some of the world’s largest humanitarian relief organizations, which focuses on ensuring that these organizations are prepared to react quickly and effectively to work together during an emergency.

4. GE: Has pledged $2.5 million to support relief and recovery efforts and is running a corporate matching contribution program. GE says it’s working with its partners to assess response efforts and determine next steps to help restore infrastructure and services to the impacted areas.

5. Nokia: Unknown.

6. McDonald’s: Contributing $500,000 and matching donations from Arcos Dorados, the company that operates nearly 1,700 McDonald’s restaurants in Latin America. Total estimated contribution: about $1 million. Funds will go through the International Federation of the Red Cross. The team in Latin America is running a grassroots program that’s expected to generate an additional $500,000.

7. Google: $1 million to the relief and recovery efforts. Google also has a link on its homepage to information, resources and ways everyone can help.

8. Toyota: Has pledged $500,000 in donations to be divided equally among the American Red Cross, Save the Children, and Doctors Without Borders. The auto company is matching any employee contributions to those organizations.

9. Intel: The computer chip giant has made no public announcement as far as I know, but Wendy Hawkins, executive director of the Intel Foundation, notes on the company’s corporate social responsibility blog that over 700 employees made donations to relief efforts within the first 24 hours of the catastrophe. The Intel Foundation has committed to match employee donations and contribute an additional $250,000. Intel, like Microsoft, is also supporting relief and recovery efforts through NetHope.

10. Disney: $100,000 in humanitarian aid to earthquake victims through the Red Cross International Fund.

As I gathered this information, I couldn’t help but wonder about the motivations behind brand aid. I began to question whether these brands are acting out of concern for the larger social interest, or out of self-interest.

At the end of the day though, my feeling is that little value lies in casting aspersions on the intentions behind brand aid. Haitians need all the help the rest of the world can offer.

And even if brands are acting partially out of concern for how their response to a major human calamity is perceived by consumers and other stakeholders, isn’t that a good thing? Don’t we want to them to feel that they’re accountable for their response?

I think we want a world in which companies/brands put people truly at the center. We want a world in which companies/brands embrace new imperatives beyond profits.

We understand the need for businesses to make sense economically, but the price of entry includes social and environmental responsibility. The price of entry includes acting in ways that fit and reflect consumers’ values.

Consider what McDonald’s CEO Jim Skinner had to say when announcing support for Haiti: “While we don’t have McDonald’s restaurants in Haiti, our contribution reflects our commitment to people all over the world.”

Well said.

When Asking for Fans or Followers, Be Remarkable

I picked up skis for two of my kids last Monday. On that same day, I bought a sandwich.

The next day, I became a Facebook fan of Boyne Country Sports, where I purchased the skis. And on that same next day, I had forgotten about the sandwich, which I’d found a bit too plain for my taste.

Now, here’s a look at the design of the large banners I saw hanging from the ceiling of the Boyne Country Sports store as I bustled through with two pairs of skis in my arms.

In contrast, take a look at the strip of roughly cut paper taped to the cash register at the sandwich shop.

Now you answer me based on those photos: who’s doing the best job seeking fans?

Look, if you’re going to seek fans in your own physical space, be sure to do it right.

When I saw the Boyne Country Sports Facebook/Twitter banners, I thought: “Now that’s a great way to let people know you’re out there.” You couldn’t miss the banners as they were hanging from the ceiling all over the store. And it certainly didn’t hurt that the sales folks were so helpful. One of the sales reps actually helped carry the skis to my car, all 4 feet and 11 inches of her! It also didn’t hurt that I’ve been doing business with this store for the past four years or so and I’ve always gotten exactly what I wanted with no hassle.

In contrast, the sandwich shop’s miniscule effort to win me over as a Facebook fan was about as plain as the sandwich and the service. I might have missed the message altogether if the topic hadn’t already been on my mind.

If I was running a sandwich shop, I’d be sure to have a much larger sign for all to see. And if it meant having some sort of Facebook invite card affixed to the toothpick holding the bread together or the pickle on top of the sandwich, I’d make sure I didn’t miss an opportunity to turn a satisfied consumer into a fan.

You see, even the small moments of truth matter.

When you’re seeking fans in your own physical space, you need to show you’re interested and put it out there. Don’t be shy. This isn’t some kind of dating game where you need to avoid coming on too strong. Instead, show the ones you want that, yes, you’re really into them and here’s where they can find you!

If you don’t plant the seeds in their minds, chances are they won’t seek you out on their own. No seeds. No growth.

At the end of the day, it’s about being remarkable in everything you do. It’s about the total customer experience, from the value of the products and services you deliver to the way you reach out to build relationships with consumers.

If you’re paying attention and striving to be remarkable in all the little things you do, including how you engage potential fans, chances are you’ll build remarkable brand equity. Don’t do that and chances are you’ll stunt your growth.

Should Nike Drop Tiger?

To drop him or not to drop him? That is the question sponsors like Nike are facing in the ongoing drama of the Tiger Woods scandal.

I was disappointed to hear about Tiger Woods’ transgressions. His behavior didn’t match with my image of him, of what I had come to expect from him.

And without a doubt, I’m not the only one who feels let down! Tiger has disappointed hundreds of thousands of fans, supporter and partners. He’s promised to redeem himself, but certainly those efforts will take time.

Accenture has chosen to drop Tiger.

Nike, seemingly, is preparing to stand by him. Indeed, the chairman and co-founder of Nike, Phil Knight, claims Tiger’s infidelity won’t irreparably harm the golfer’s career. He says the scandal surrounding Tiger will ultimately be seen as “a minor blip” in his storied career.

I think Peter Himler’s comments provide insight into why Accenture and Nike have taken different paths. In essence, Accenture was far too wrapped up in Tiger. He was their one guy. Nike, on the other hand, has a whole stable of athletes tied to their brand. They can afford, Himler says, to take a wait-and-see approach.

At the same time, Nike golf = Tiger! Nike’s built their golf franchise around him and through him. So no doubt the franchise has a lot riding on how this story develops from where we are today.

What do you think? Should Nike drop Tiger or wait and see if the Tiger brand can withstand and recover from its self-inflicted tarnishing?

Life and Brand Reminders from the Pink Glove Dance

Wow, I love the latest viral YouTube sensation: the Pink Glove Dance from the Providence St. Vincent Medical Center in Portland, Oregon, and Medline, a privately-held manufacturer and distributor of health care supplies and services.

The video features more than 200 hospital employees, everyone from doctors, nurses, lab techs and administrators to kitchen and janitorial staff.

Shot early in November, everyone in the video is wearing pink latex gloves (provided by Medline), and they dance and sing to Jay Sean’s R&B song “Down.

Prepare to be inspired! See the video below.

The video has generated a huge response, with 3.4 million views and over 6,400 comments. That’s as of the writing of this post. These numbers will no doubt rise much higher.

I see at least three important reminders about life and branding from the Pink Glove Dance.

1. Know your place. You are part of something bigger.
The most successful brands care about something bigger than themselves. The people behind the brand are motivated and inspired by a bigger idea, one that essentially acts as the organization’s center of gravity.

And we’re not talking about any old big idea. We’re talking about an inspirational idea, one that motivates the organization to deliver on the brand promise.

A brand with ends that are far too inwardly focused, or one that lacks clarity, is on a pathway to irrelevance.

2. Don’t take yourself so seriously.
Professional? Yes. But that doesn’t mean the brand and the people behind it need be boring, dull and lifeless. They should be themselves. They should be authentic. And they should not be afraid to take risks, let their hair down and have some fun. All work and no play is the formula for a bland, not a remarkable brand.

3. There’s someone stronger than any of us, and that’s all of us!
Living a brand is a team effort. In the case of the Pink Glove Dance, I love that the video features people at all levels of the organization.

A long time ago, I came across a story that you may already be familiar with. It’s the story of a writer who was following a famous brain surgeon on his rounds one day.

On the way to the operating room, he observed the surgeon stop and talk to a man mopping the floor. They talked for about 10 minutes before the surgeon left for the operating room. The writer, curious by what he had just seen, approached the man and said: “That was a long conversation.”

The man mopping the floor replied: “The doctor stops and talks to me quite often.”

“What do you do at the hospital?” the writer asked.

“We save lives,” the man answered.

I’m a big believer that winning brands are built by a diverse group of people who share the same vision. They understand their individual roles, but they also embrace the difference-making power of others and work together to achieve the vision.

It takes a whole team of dancers. They may not always be perfectly in sync. Some may perform better than others. But at the end of the day, it takes each one of them to make a difference for all of them.

At the end of the day, how we live our lives and build brands comes down to an important choice: will you sit it out or dance?

I hope you dance.

Did I miss anything? What, if anything, did you learn from the Pink Glove Dance?

Fab Ford Fiesta Movement

We’ve heard a lot about the Ford Fiesta Movement campaign. You know the one: Ford gives 100 savvy social media types a Fiesta for free for six months so they can share their experiences online. Sure, it’s a hip move given all the hype around social media. But will the rubber hit the road? Will it translate into sales?

Well, the Fiesta hasn’t even launched yet and won’t until the summer of 2010, so it’s still a bit early to say whether this campaign is a slam dunk. But, oh boy, it’s no air ball!

Consider this: content generated by this class of 100 has resulted in more than 4.3 million video views on YouTube, more than 540,000 photo views on Flickr and more than 3 million Twitter impressions. According to Jim Farley, Ford’s group vice president of global marketing, 60 percent of the public is aware of the brand. I came across this data in a Detroit Free Press piece on the Fiesta campaign.

Wow. Talk about building brand presence… and, again, doing it so far ahead of the vehicle’s launch.

Double wow: creating this quality brand presence came at a fraction of the estimated $50 million plus investment that would have been required if Ford had chosen to run a traditional media campaign.

I am not one who believes it’s an either/or choice between traditional and new media marketing, but one just can’t ignore the kind of results Ford is seeing from its Fiesta Movement campaign. As we have seen from this campaign and a growing body of examples, social media offers tremendous potential to build brand presence and do so much more economically.

Fire in the Brand Belly

I’ve had a lot of time to think about my business life over the past several months. And I’ve come to an important conclusion: business is so personal.

I say that because our lives are… right now! Whether you’re at work, at home or at play, those are your moments. How do you want to spend them? Put differently, in what state do you want to spend them?

Do you want to be in a bored state, dulled and numbed into just another number at your place of work (because a number is exactly what you’ll be if you allow yourself to fall into that state)? OR, do you want to be in a state of constant exhilaration because you can’t get enough of what you’re doing?!

I choose the latter. I’ve always felt that way. But now, after time as a free agent away from significant distractions, I feel this way more than ever.

And let me tell you (I’m sure you’ll agree!), unless you have a fire in your belly about the brand you’re a part of, work is going to feel a lot like work and the brand itself will suffer or at a minimum be just that bit more vulnerable to lost opportunity.

You’ve got to have passion for what you do. You’ve got to have a passion for your brand. If you’ve got that fire, then you’ll be more than a brand ambassador. You’ll be a raving fan. And don’t you think a big difference lies between those two (ambassador and raving fan)? I want the raving fan on my team. I’ll take ambassadors, too. But I want a large share of raving fans, too. Each has their place.

Think about your organization as it is today. Does it have fire in its belly? Are people excited to tell and share their brand stories? If not, then back up, return to this fundamental brand building block and find ways to get the fire burning.

Sometimes, all you need is smoke. And when it’s lit, fan the flames. Get the fire burning strongly in your brand belly.

I’m going to be looking over the next while for organizations/brands that do this well. If you know of any, please share them here.

What Would You Have Done in Adidas’ Shoes?

Put yourself in Adidas’ shoes for a moment.

You’ve invested millions as a sponsor of the University of Central Florida’s men’s basketball program. And then, one of its players, who happens to be Michael Jordan’s son Marcus, refuses to wear Adidas basketball shoes in an exhibition game.

Why? Because he wants to wear a pair of Nike Air Jordans in honor of his father… understandable, right?

Reasonable though? Smart for Adidas? Umm… I’m thinking NOT.

Adidas didn’t like it… and that’s why they’ve pulled their sponsorship, costing the university up to $3 million.

Early media and public reaction has been harsh towards Marcus. “He’s a spoiled brat,” most have said.

As it turns out though, the root of the problem may lie in miscommunication between the university and Adidas and careless assumptions that the Nike exception for Jordan would be okay. Reportedly, Marcus made it clear to the university early on that he would only wear Nike shoes. The university assured him, based on the word of some middle manager at Adidas, that this wouldn’t be a problem.

But Adidas’ higher-ups had a big problem once they became aware of the situation. And I understand why they’re annoyed, don’t you? You’re using a high profile sponsorship opportunity to, ultimately, benefit your brand. You’re paying millions of dollars. Nike isn’t paying a penny. But Nike gets significant exposure because one of those players, who happens to be the son of a legend, is wearing their shoes, not yours. Talk about counter productive.

I wonder if the Adidas middle manager that gave the initial thumbs up to the university still has a job right now because I’m almost 100 percent sure no higher-up would have given an outright approval on a Nike exception for Marcus.

Clearly, the process broke down here between the university and Adidas. Both parties messed up. They should have nailed this whole thing down much more firmly.

The online conversation on this topic that I’m seeing is going in two different directions right now.

On the one hand, people are placing the blame squarely on Marcus, as noted. To many, he went way over the line here, should have backed down for the team and the university and worn Adidas. Based on what we’re learning though, Marcus is likely not the one to blame for this situation. This is a breakdown in communication between the university and Adidas.

Now, on the other hand, I’m seeing a lot of talk about Adidas’ poor handling of the situation. The thought here from some observers is that Adidas should understand Marcus’ reasons and allow him to wear the Nike Air Jordan brand without pulling any sponsorship dollars.

For Adidas, this whole situation has put them in a tough spot and potentially caused some consumer backlash. How much backlash, I’m not so sure. But it’s certainly not ideal for Adidas to have this kind of attention. And Nike is simply standing on the sidelines. For them, this is golden coverage. And they may yet go from the sidelines to the playing surface, stepping in for Adidas as the university’s sponsor. Yes, that would translate into another round of favorable attention for Nike.

Could Adidas have handled this situation differently? Did they make the best move here? Should they have allowed Marcus to wear the Nike brand as an exception? Could they have possibly won any brand points by doing so, or would that have been foolish? What’s your view?

Meet the Boom and Y Online, or Bust!

I was reading from Kenneth Gronbach’s The Age Curve: How to Profit from the Coming Demographic Storm, a work in which he argues that changes in marketing and business today are based on the size of the generations we are selling to.

Based on his analysis, only the Baby Boomers and Gen Yers are attractive groups. Why? They’re huge. They represent the greatest opportunity, and they are, in their own ways, significant consuming forces. Gen Xers, he says, lack the critical mass to command marketers’ attention and dictate what will sell and not sell.

This is fascinating stuff. But what I actually found most interesting was a comment that isn’t central to the book’s thesis, though certainly is related. And that comment has to do with the place of each generation in our wired world.

The Baby Boomers, says Gronbach, are immigrants to the Web and all things digital. Generations X and Y are natives. Isn’t that a great way of explaining it?

Why is this important? Well, recognizing the importance of the Baby Boomers, one might leap to the conclusion that traditional marketing methods will remain an important part of the mix. After all, it’s the Gen Xers and Gen Yers who are into all this social media Web stuff, right? They grew up with it. They’re the naturals.

Wrong. Very wrong. The immigrants are hungry for what the natives perhaps take for granted. If you look at data over at Steve Rubel’s Micro Persuasion blog, you’ll see that Baby Boomers are gobbling up social media at a much faster pace than Gen Yers. See Social Networking Demographics: Boomers Jump In, Gen Y Plateaus.

Perhaps it’s because, as Gronbach says, the Baby Boomers are into anything that will make their lives easier and save them time.

Enter the wonderful Web world.

It’s almost as if the social media Web was created for Baby Boomers from the get-go. So, yes, the Baby Boomers may be immigrants, but they have quickly adapted and evolved.

And hence, how brands/organizations market to them must evolve as well. As Rubel says, there’s a misperception out there that only Generations X and Y are Web savvy and wired. This simply isn’t true. Baby Boomers are plugged in and engaged, and they’re ripe for marketing via the Web.

To win in the future, brands must have comprehensive online engagement plans or risk irrelevancy and extinction. Brands that delay much longer will face the consequences: natives won’t know them, and immigrants will forget about them.

Social Media: Where Negatives Are Positives?

If you read my previous post (What is Socialnomics?), then you know I had the chance to review the book Socialnomics, in which author Erik Qualman offers a number of insights and observations on social media.

One of those insights I’d like to share is his counsel for individuals and businesses to accept negative comments originating from social media and, in fact, to “relish the critical feedback.”

Qualman feels the way he does for various reasons, which he articulates in both the book and on his blog. See Negative Feedback Is Not So Bad. In sum, he says we have much more to gain from embracing the negatives.

But in full view of everyone? Try convincing most business leaders that they should embrace negative comments on the corporate blog or Web site. Most of them have only ever followed the rule of accentuating the positive as much as possible and avoiding any reinforcement of the negative. After all, why upset customers and create perception issues by displaying negative and potentially damaging comments? It just doesn’t make sense, or does it?

I do appreciate Qualman’s argument that embracing the negatives gives your brand a chance to shine in a public forum. By putting everything out there for all to see, you have the opportunity to show your mettle. You have the chance to demonstrate what you’re made of, to demonstrate how well you listen and respond.

You messed up on an order and you’re going to make it right? Prove it. Show just how good you are at resolving problems.

You believe in two-way dialogue. Prove it. Show just how willing you are to listen and accept input.

This all comes down to authenticity and transparency, key attributes in a socialnomic world. As Qualman says, it’s okay to be seen as less than perfect because consumers and buyers already know that’s the case! Nobody’s perfect. You don’t need to pretend. All you need to do is strive to excel in staying true to your brand promise and values. When you fall short, admit it and take action to get back on track. The people you care about will respect you for it.

If you’re looking for an additional read on this subject, look no further than Jeremiah Owyang’s Web Strategy blog where he tackles the question: What if they leave negative comments on my site/blog/forum?

In his view, negative comments come with the social media territory. If you want to be seen as open, you must fully open up… to the good, the bad and the ugly. And if you want to be seen as confident, with nothing to hide, you’ll embrace the negatives with the positives.

I’m sure some of you have addressed this topic before. Could you please share your views and perspectives or point us to similar discussions in the blogosphere? I’d love to dig deeper on this one.