The perils of a tarnished brand

Today's FT carries an interesting spread on the difficulties large brands face when their reputation is somehow besmirched by public perceptions of accidents (BP's oil spill and safety record), financial impropriety (Goldman Sachs paying huge bonuses after being bailed out) or just getting too big for your boots (Starbucks global expansion). An article by Morgen Witzel and Ravi Mattu looks at perceptions of leading brands and the difficulties of Asian brands like Tata to transcend local boundaries.

One of the interesting points about the article is its final paragraph which concludes that "brand co creation" is now taking place, and that the rise of social media is accelerating this trend.

So while people interested in "branding" as a universal phenomenon always knew that a brand is a promise that only exists in the minds and perceptions of consumers and customers, we are cottoning on to the notion that people's perceptions are susceptible to influence. And, whereas in years BF (Before Facebook) influencers were limited to closed circles, the power of influence has multiplied at an exponential rate with the advent of social media channels. Therefore savvy companies are not only monitoring what is being said about them in social media sites, but actively engaging with bloggers and microbloggers because they understand the reputation enhancing possibilities of engaging with your critics and the reputation dangers if you do not.

But what the article doesn't address is that the need for this kind of engagement activity isn't just a consumer brand issue. The need is just as important in B2B brands because business buyers are consumers at work. It is worth noting that of the brands at "peril" Morgen Witzel and Ravi Mattu are citing, at least two of the five are B2B brands (BP and Goldmans) and Google is arguably as much B2B as consumer.

So while I agree wholeheartedly with their conclusions about social media and the need for Chief Executives to be brand champions I would argue that its as important in businesses that trade with other businesses as it is with consumer brands. And that the chief executives of B2B businesses that think brand management is beneath them and social media is just something their kids are into are steering their businesses into peril.