Revolutionary Measures

Elon Musk and brand safety – a cautionary tale

Consumers increasingly want to engage with genuine brands with a personality. And in many cases this goes back to the founder and CEO. Think of Apple and Steve Jobs, Microsoft and Bill Gates, Burt’s Bees and Burt. Or, as I heard yesterday on Radio 4, Gwyneth Paltrow and Goop.

battle black blur board game

Photo by Pixabay on Pexels.com

In a world where consumers are bombarded with slogans from faceless corporations, having a figurehead that they can relate to should be an excellent shortcut to drive success. And, in many ways it often is. However, one of the key factors that drives people to found and grow businesses is self-belief that whatever they do is right, and that they need to battle the world to maintain their success. Add in that the more success they have, the fewer people there are around them who are willing to tell them when they are wrong and you can see a recipe for potential reputational disasters.

Elon Musk is a classic case in point. He’s built Tesla into one of the most recognised car brands on the planet, from scratch, and helped accelerate the spread of electric vehicles. Earlier in the year the company had a stock valuation of $50 billion – larger than Ford, despite its much smaller size (and profitability).

Of course, the key phrase is “had a stock valuation of $50 billion”. Musk announced in a tweet that he had the funding in place to take the company private at $420 per share. When it turned out he didn’t he was sued by both investors and regulators. A further tweet after he was fined for this saw the stock fall further, knocking $10 billion off its value. And don’t forget this is the man that called a British diver involved in the Thai cave rescue a ‘pedo’ and was recorded smoking pot on a podcast.

So how can organisations combine the creativity, drive and charisma of a founder with brand safety? There are four ways to achieve this:

1          Trust the CEO
You could, of course, just let the CEO do what they like, Richard Branson style, but that’s assuming that they understand that there are limits to their behaviour. In the case of true loose cannons (like Musk), this isn’t going to work. In the case of public companies it is also going to make the share price gyrate on a daily basis.

2          Focus on the product
A longer term strategy is to shift the focus from the founder to the product. So while the CEO might be introducing what the company makes, they are talking about what goes into it and what makes the company special, beyond their own personality. Bring in outsiders such as celebrities to subtly shift away from a single founder – a good example is the Virgin Media ads featuring Usain Bolt alongside Branson.

3          Build a team
No one person can run a multi-million pound company successfully. Leaders need help, so build a team and make sure that they are increasingly seen in the media. They are never going to have the same appeal as the founder – for example compare Tim Cook with Steve Jobs at Apple. But creating a wider team will deflect some of the attention over time and prepare for the point when the founder is no longer around.

4          Have people who can say no
Probably the hardest thing for an underling to do is to disagree with their boss, particularly if they have built the company from the ground up. Not many employees would embrace such an almost certain career-limiting move. That means telling founders that they are on the wrong track has to come from boards, independent mentors and from creating a culture where messengers are not shot, but encouraged. This is another long-term process, but one that needs to be thought of early in the process.

Balancing the marketing value of a charismatic figurehead with their wayward side is never easy – just ask Ryanair – but if brands want to stay around for the long-term they need to be ready to outlive their founder and put in place a framework and culture that turns ‘me’ into ‘we’ without losing the brand essence and magic they bring.

 

 

October 10, 2018 Posted by | Creative, Marketing, Startup | , , , , , , , , , , , , , , , , , , | 1 Comment

Death of a (car) salesman

Like anything, buying a new car has positive and negative parts to the journey. The excitement of choosing and test driving a shiny new vehicle has to be balanced with haggling with a salesman in a dealership and painfully avoiding the add-ons and extra warranties that they want to burden you with (and co-incidentally give them a bigger commission than on the car itself).

Automobile dealership - service and repair are...

Yet, the internet was meant to remove middlemen and enable us to deal direct with the producer. It has worked in industries such as travel, where package holiday companies have had to reinvent themselves in an era of cheap flights, AirBnB and TripAdvisor. But for bigger ticket purchases we still rely on car dealers and estate agents rather than dealing directly with manufacturers or those selling their house.

The end of middlemen?
So why are these middlemen still here and will they survive for much longer? After all, most buyers now read car reviews online, check manufacturer videos on YouTube, get information on options from websites, and can arrange finance quickly at the click of a mouse. No wonder that the average number of dealers that buyers visit when purchasing a new car has dropped from 5 to 1.6 in the US over the last ten years. As in a lot of fields, more and more research is carried out online without needing to interact with anyone, let alone a sweaty dealer in an ill-fitting suit.

Illustrating this trend, upstart electric car company Tesla is looking to go direct to customers in the US, cutting out dealers altogether. Other manufacturers are trying more limited experiments with special editions sold online only or dealerships remodelled to be more like the Apple Store, with advisors providing information and help, but no hard sell.

The pace of technology change within the car also threatens to make the dealer obsolete. Modern cars are computers on wheels, streaming data back to the manufacturer and able to refresh their operating system remotely without human (or mechanic) intervention. Tesla regularly updates the software on its car over the air– with an upgrade in January 2015 improving the performance of its Model S, meaning it can match the acceleration of a McLaren MP4-12C.

However as a recent piece in The Economist points out, changing the system will be difficult. Dealers are a powerful lobby, and while they don’t make much money on each new car they sell, the ancillary products and ongoing servicing relationship can be extremely lucrative. It also provides buyers with the opportunity to get a better deal by haggling between rival garages – if you have the inclination to do so.

I think that there are more basic reasons for any middleman, whether a car dealer or travel agent, to survive – adding value, trust and ease. These are important concepts for any company in the digital age to embrace and it is worth looking at your business with these in mind.

1. Adding value
With the vast majority of information now a Google search away on the internet, and prices displayed for everyone to see, do you really add value or are you a hindrance to the process? Again, the Apple Store is a good example to follow. You can buy your iPad from one of a hundred shops or websites, but the help you receive and the ability to get your questions answered in a positive, unpatronising way naturally leads people to the Apple Store.

2. Trust
Do consumers trust you? Or more to the point, do they trust you more than the manufacturer you represent? One of the factors I think will hold back the demise of dealerships is that consumers trust car makers less. You only have to look at botched recalls and unreported faults to see why. Car makers are also much more distant than your local dealership, making it difficult to build a relationship of trust. That’s not to say dealers are safe – they regularly top polls of least trustworthy occupations, but in the kingdom of the blind, the one eyed man is king.

3. Ease
People have to do more and more with less and less time. In many ways the internet has made us more time-poor. Whereas before a holiday could be booked by marching into the travel agency and asking what they had available, it now takes hours of internet research, comparing the relative locations of villas on Google Maps and poring over TripAdvisor reviews. Those middlemen that still have a place recognise that they need to make things easy, providing a helpful service that cuts down the time you need to spend and removes roadblocks from the customer journey, without charging the earth.

Looking at your own business, do you meet these three criteria? If not, it is time to change, before pressure from consumers and manufacturers squeezes you out of the market.

August 26, 2015 Posted by | Marketing, Social Media, Startup | , , , , , , , , , , | 1 Comment