Risk, Reputation and Your Brand
There are many different ways an organisation can play fast and loose with reputational risk, but let’s just focus on three. Poor customer service, shady work practices and dodgy supply chains can cost a company far more than its reputation.
- 87% of executives rate reputational risk as more important than other strategic risks.
- 41% of companies that experienced a negative reputational event reported loss of brand value and revenue.
- 88% of companies surveyed said that they now explicitly focus on managing reputation risk.
Source: Deloitte 2014 global survey on reputation risk.
Poor Customer Service
Poor customer service comes in all shapes and sizes. It usually stems from poorly trained, unmotivated, emasculated and badly managed employees. These are typically the frontline troops of any business, the receptionist, sales assistant, checkout operator and call centre agent. Ironically, it’s the people who should be the living embodiment of the brand that tend to be poorly paid and badly treated. In a world growing more competitive by the day do you really want the first and lasting impression of your brand to be one of unhelpful, surly indifference?
Along with the digital revolution came a whole new way to alienate customers. Poorly designed websites, automated call handling and online dispute management systems all have the power to infuriate. Technology has been the great leveller, enabling many firms to punch above their weight and compete on the world stage. But technology can also be a great, insurmountable barrier to customers when things go wrong.
Firms are supposed to have moved from a transactional to a relational interaction with customers. However, the first whiff of trouble and many organisations will happily pack their customers off to service purgatory. The customer support section of many a corporate website is clearly designed to abdicate responsibility for product and service failings. Instead, the customer gets a confusing array of questions and answers that usually lead them nowhere. Alternatively, the customer gets redirected to a so-called “community” or forum for help. Of course, that’s help from other customers who’ve been through the same hell as you and have survived the journey.
Bots Don’t Feel Mercy or Compassion
Customer service telephone numbers are typically hidden away in the darkest recesses of the corporate website, and emails are answered by annoying bots. Just like the killer cyborg in the Terminator movies, customer service bots cannot be reasoned with; they don’t feel mercy or compassion. The automated call handling system is another technological nightmare with its dizzying array of options within options. The most cynical of firms never actually offers a customer service or complaint option, and use baffling jargon to conceal the fact.
Over Promise and Under Deliver
The battery hens of the business world, the call centre operatives that answer our plaintive cries for help are often low paid, poorly trained and badly treated. According to Forrester Research 90% of executives say the customer experience is critical to their business, and yet only 11% think they have a clear, consistent approach to deliver it. The call centre is probably one of the greatest contradictions at the heart of business. It remains one of the first places prospects and customers go for information, advice, purchases and help. However, it is seldom aligned with the company’s mission or brand promise. Instead, call centre agents are usually hog-tied by strict company processes and procedures with little wiggle room to show initiative. Costs determine staffing levels rather than accurate forecasting of call volumes. The result is a divergence between customer expectations based on the brand promise and the actual experience delivered.
Bring the Call Centre in from the Cold
Instead of letting costs dominate service delivery, organisations should define and articulate a call centre strategy that everyone can understand and rally around. Next, genuinely align the call centre with the brand. This will help bring clarity about the call centre’s purpose and start to reinforce the brand promise with callers. Finally, bring the call centre in from the cold; make it a part of the wider organisation. After all, the call centre can provide valuable insights and data about everything from customer brand perceptions to product and service issues.
The Truth Will Find You Out
Demotivated, stressed, overworked and under-appreciated call centre staff belie the truth and validity of many a brand vision. And today, more than ever, you can be sure that the truth will find you out if you choose to adopt shady work practices to get the job done. According to the Charity People website back in 2010 UK charities such as the RNLI (Royal National Lifeboat Institution) were some of the most trusted organisations around. Fast forward a few years and things are very different. Today, public trust in the charity sector has evaporated.
UK Charity Sector: A Reputation in Tatters
The Civil Society Almanac 2012 says that the voluntary sector contributed £11.7 billion pounds to the UK economy. Charity is big business and an increasingly competitive marketplace. Sadly, in the tasteless scramble to get their hands on our money many of the UK’s charities have completely forgotten why they exist. It’s hard to think of another sector where calculating reputational risk is more important and so badly neglected. A low point for the reputation of the entire sector was the death of Olive Cooke, an elderly Royal British Legion poppy seller who took her own life while suffering from depression and plagued by charity fundraisers.
Complaints by the Thousand
In July 2015 the Fundraising Standards Board reported that the top fundraising channels for complaint in the UK were direct mail, cold calling, door-stepping and clothing collections at 16,520, 8,056, 7,618 and 6,974 respectively. Charlie Hulme, Managing Director of DonorVoice, told The Guardian: “The companies (call centres) were doing what they had been asked to do, which is to get as much money out of people as possible. Charities go to call centres and say ‘we want to get x thousand direct debits’. But clearly they want to keep their costs down as much as possible. The results are inevitable if the pressure is high and the costs are low, what did they think was going to happen?”
Hell on the High Street
Placing your brand reputation in the hands of a third party without due diligence can spell disaster. Dodgy supply chains have tarnished many high street brands in recent years, from fast fashion, food and mining to travel and leisure. Human trafficking, sexual exploitation, slavery, child labour, illegal fishing, animal cruelty and environmental destruction are just some of the crimes committed to fulfil big brand contracts.
Rana Plaza Tragedy
The infamous Rana Plaza garment factory collapse on 24 April 2013 in Dhaka, Bangladesh, left 1,129 people dead and 2,515 injured. It quickly emerged to the world’s media that many of the victims of the Rana Plaza disaster were manufacturing garments for famous brands such as the UK’s cheap chic Primark and Italian clothier Benetton. Following the building collapse Michael Connarty, Falkirk East MP, called on the UK Government to push through new legislation to end modern day slavery by forcing major high street companies to audit their supply chain. The framework requests that those companies make vigorous checks to ensure slave labour is not used in third world countries or at home to produce their goods. A fund was setup to help compensate the many victims of the Rana Plaza tragedy and their families. However, little else has been done to ensure the rights and safety of Bangladesh’s garment workers.
In a global economy many businesses have to outsource elements of their operations to third parties to deliver goods and services at competitive prices. Nevertheless, that doesn't mean they can simply abdicate responsibility or look the other way when it comes to ensuring the quality and legitimacy of their supply chain. In truth, many organisations take supplier management very seriously. They understand that it pays dividends to really know your suppliers, and how they do business.
The Extended Enterprise
Loss of reputation is just one of many risks that you take when you decide to outsource operations. That’s why smarter organisations adopt an extended enterprise approach to supply chain management. The people at the sharp end of your business are often those who full into the extended enterprise category. They are your call centre agents, resellers, dealers, delivery drivers, fitters and installers, for example. They are the ones who create and leave a lasting impression of your brand with the end user customer. They are the ones who can really help or hurt your brand. And it’s incumbent on you to provide the right business environment, sales tools, marketing support, training and incentives to ensure they represent your brand and business to a consistently high standard.
Smart Brands Know
Truly smart brands don’t spend millions on glitzy ad campaigns and sponsorship deals while forgetting about the people on the frontline. Smart brands work from the inside out, creating a clear, understandable vision that inspires and motivates people across the business. Smart brands also ensure that they align their people, processes and practices so there is a continuity of thought, purpose and action. Smart brands don’t say one thing and do another. They hire the right people, pay a decent wage, provide continual support and training, recognise, reward and reinforce desired behaviours at every turn.
Smart brands know that the people on the periphery of their business must be just as engaged as those at the centre, perhaps even more so. The result of having highly motivated, focused, well-trained people deliver your brand is increased sales, lower costs and happier customers. The only real risk is can you afford to do anything else and hope to succeed?
Over to You
Share your experiences of the extended enterprise, brand alignment, good and bad customer service delivery. Leave your comments and share this article with friends and colleagues.
About Charlie Trumpess
Charlie Trumpess is a senior marketing professional and award winning copywriter. Charlie has over 20 years varied marketing experience working with a range of blue chip clients. Charlie is a Member of the Chartered Institute of Marketing (MCIM) and a CIM Chartered Marketer. Visit Charlie’s website at www.marketing-copywriter-uk.com or join him on Twitter @charlietrumpess