Lessons from the Best Global Brands 2010: Building trust and stability in the age of transparency
This year, Interbrand’s annual Best Global Brands 2010 ranking of the top 100 brands was notable for showing a remarkable shift in consumers’ spending habits. Public scandals like the BP oil spill and Goldman Sachs’ mortgage securities fraud compromised consumers’ trust in brands, and as a result, consumer loyalty was at an all-time low. At the same time, the stops and starts of the recession have created savvier, more budget-conscious consumers who are just as likely to cut spending by choosing private label toothpaste, as they are to match a Zara skirt with a pair of Christian Louboutin shoes. And not only are brands more vulnerable to shoppers’ unpredictable whims, but tools like social media mean that consumers also have more control. Today’s consumers now have the ability to watch and respond to every brand’s move – positive or negative.
[wcm_restrict]The challenge for today’s brands is to adapt to this new real-time environment and the increased call for transparency. The real test will be if brands can use these channels to forge deeper relationship with customers. While the rules may be shifting, the long-term sustainable advantage gained by building a strong brand – a brand that builds stability, trust, loyalty, and drives a premium price – remains consistent.
Figure 1: The Interbrand Best 100 Global Brands 2010
A look at two brands’ performances from this year’s table offers insight into how brands can navigate today’s marketplace. Santander, which made its debut on this year’s list, is a best-case example of a brand that stayed true to its brand promise and saw it pay off. Goldman Sachs’ performance, on the other hand, should be viewed as a cautionary tale – what can happen when a brand loses sight of its brand promise in a risky, real-time landscape.
Santander: building trust and stability through brand
Unlike many of its financial services competitors, Santander emerged from the financial crisis, relatively unscathed. Unlike competitors, Santander stayed out of U.S. subprime mortgages, instead doing business the old-fashioned way, with 80 percent of revenues derived from retail banking. When explaining his decision to opt-out of the fast lane to the media, Emilio Botin, the company’s 76-year-old chairman claimed that it all came down to a tried and true belief: “If you don’t fully understand an instrument, don’t buy it. If you will not buy for yourself a specific product, don’t try to sell it. If you don’t know very well your customers, don’t lend them any money.” It is because of this transparency, honesty and respect for its clients that Santander is seeing so much current success. Time magazine may have called it “the most boring bank in the world,” but after the crisis, its conservative approach is looking more appealing than ever; it is a brand that played it smart and safe. As a result, it is a brand that consumers can trust.
Santander has also done a good job at leveraging its promising position, by embarking on a number of aggressive acquisitions since 2008. Now the Eurozone’s largest bank, it has plans to further establish its presence in the U.K., the U.S and Latin America. While so much expansion can be tough on a brand, Santander is moving quickly to rebrand all of its acquisitions under the Santander name and launched substantial marketing campaigns in the U.K., which resulted in an increase in brand awareness of 72 percent between 2004 and 2010. Santander has also been innovative when it comes to social media and mobile campaigns. For example, Red Brick, a bridge-building puzzle game available through iPhone and Facebook apps has increased awareness.
Goldman Sachs: what happens when you lose sight of your brand promise
Goldman Sachs, on the other hand, has seen its reputation tarnished in 2010. After emerging relatively unscathed from 2008’s financial, Goldman Sachs has since faced enormous animosity from the public, as information about its conduct over the past 10 years comes to light. Even as the brand performs better than ever, allegations of fraud continue to scar its reputation: First with the SEC’s accusations that it defrauded investors by shorting its own investments in subprime mortgage, then with news that the firm helped Greece conceal its financial weaknesses with inventive accounting when the Mediterranean country first applied for membership in the EU. To the general public, it has come to epitomize the dysfunction of Wall Street—the greed, risk and lack of ethics that drove profits over the last twenty years, but went relatively ignored until the recent collapse.
Unlike Santander, Goldman lost sight of its brand promise. This is a company that built its reputation as a trusted advisor to its investment banking clients and considered its first and most important business principle to be “our clients’ interests always come first.” While Goldman’s employees were clearly very engaged, it is evident that this promise was not used as a central organizing principle. If client’s interests came first, then Goldman’s employees wouldn’t have behaved the way they did.
As Goldman continues to face bad press, it has been making efforts to reevaluate its codes of conduct, tightening up standards and enforcing a mandatory transparency between employees and clients so the risks associated with any give security are understood. But unless it ensures that this is communicated with weight and importance to employees, it will have difficulty swaying public perception. While its recent image advertising campaign is a move in the right direction, it needs to focus within to achieve real change. The brand may continue to prosper financially, but until it gets its external perception in line, it faces obstacles in the long-term.
As Santander and Goldman Sachs demonstrate, in 2010 trust and transparency were the key messages for brand to communicate. And yet, while the rules and priorities may be shifting in today’s unpredictable marketplace, the foundations of strong brands still hold true. As long as brands stay true to their brand promise, communicating it authentically and effectively at every touchpoint, they are likely to weather even the most difficult of challenges.[/wcm_restrict][wcm_nonmember]
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About the Author
Jez Frampton is Interbrand’s Global CEO responsible for managing the firm’s worldwide interests and enhancing its strategic and creative offerings. Jez is a member of the Marketing Society, the Chartered Institute of Marketing, the Market Research Society, the Design Business Association, and the Institute of Directors. He is a frequent lecturer on the subject of branding.