Safeguard your corporate reputation from attack

Millions of internet users around the world recently received an e-mail proposing a consumer boycott of oil company ExxonMobil (Esso in the UK). Recipients were urged to 'join the resistance' and boycott ExxonMobil service stations until the company was forced to back down. The proposed boycott has nothing to do with irresponsible environmental policies, collusion with oppressive regimes, or exploitation of an under-paid workforce. Instead, it is founded purely and simply on the participants' desire to pay less for their fuel.

The organisers' simplistic reasoning is that a boycott will force ExxonMobil to reduce its prices, encouraging other oil companies to compete with price reductions of their own.

The process of internet activism that took off in earnest around 1995 has clearly moved into a new phase, when a campaign based on purely commercial rather than ethical grounds reaches so many people. Its actual impact is hard to measure using standard methodologies – a difficulty compounded by the fact that ExxonMobil is already under pressure from a boycott campaign organised on environmental grounds. But the success of ethically motivated activism aimed at companies such as Shell, Nike and GAP has already illustrated the power of the internet to influence the policies of multinationals.

A forceful storm
The ExxonMobil price boycott campaign is one of the latest incarnations of an increasingly forceful storm of consumer action, sometimes known as consumer terrorism (though, for obvious reasons, this term has been used more cautiously of late), designed to teach the major corporates – in the words of the ExxonMobil mailing – 'that buyers control the marketplace, not sellers.' The fact that such campaigns now reach millions, despite circulating almost exclusively via the internet and word of mouth, illustrates how major corporations are in danger of being outflanked by new forms of communication and by changing consumer attitudes.

The majority of companies and brands are ill equipped to counteract, or even comprehend, these new threats. But a new generation of specialists in an emerging discipline known as community marketing is developing a range of applicable tools and methodologies. With the traditional media becoming more diffuse and ineffective as a vehicle for marketing communications, community marketing is mapping out the terrain over which future brand wars will be won and lost.

Every business has a vital ongoing need to understand how it is viewed by all the external communities whose views and actions could influence the environment in which it operates. Inevitably, it is the more spectacular instances of damage inflicted through poorly managed reputational risk that grab the headlines. Perrier is an early example. More recently, the 1995 confrontation between Greenpeace and Shell over the proposed sinking of the Brent Spar oil rig in the North Sea provided a clear illustration of the supremacy of perception over reality. Greenpeace's case was dubious at best; but the campaign captured the public imagination and Shell was forced to back down.

Consumer behaviour is rapidly evolving in new and challenging ways – and companies who have yet to take on board the altered realities are in for a tough time. A new generation of consumers, with a new set of expectations and requirements as to how corporations should behave, are communicating and organising to an unprecedented degree through online media. It is no coincidence that the sudden surge of anti-corporate anti-globalist activism that erupted in the mid-1990s (eloquently chronicled in Naomi Klein's 2000 book No Logo) coincided with the internet's coming of age as an international medium of individual-to-individual community-to-community mass communication. The corporations brought to book by consumer activists in the nineties were behaving no differently from before; it is simply that the standards by which they are judged and the communications channels open to their accusers have both shifted decisively.

Companies must now expect to be judged, not purely on their ability to generate financial value for their shareholders, but on the social and environmental impact of their operations and those of their suppliers and customers worldwide. Companies are now expected to act ethically and responsibly. Perceived exploitation of low-paid workers, collaboration with oppressive foreign regimes, environmentally damaging practices – any of these can cause serious damage to a company's reputation. Conversely, companies which can demonstrate their espousal of a responsible approach can establish a significant competitive advantage.

Encourage criticism
Openness and transparency are among the key qualities demanded of today's corporations. Companies that have traditionally turned a deaf ear to criticism would be well advised to think again. Complaints should be encouraged. Only by embracing and responding to criticism can a company optimise its relations with the various communities with which it interacts. Equally, by tapping into the conversations taking place amongst affected constituencies, a company can understand its own strengths better, and act to maximise them. Trust is the key – and trust is easily undermined. The crux of the anger against Monsanto has been its refusal to label GM products transparently. Attempts to stifle adverse commentary are often unproductive – the infamous McLibel case, in which every last shred of the fast food giant's dirty laundry received a public airing, is a case in point.

More information is available to more people, more freely, more cheaply, and more quickly than ever before. And this process can only accelerate. The successful corporations of the future will be those that learn to swim with the tide, to respond to changing expectations. Without a frank, actively managed dialogue between the company and its communities, management will learn too little too late to manage risk and opportunity effectively.

Communicate effectively

Community marketing is about getting in touch with these communities, understanding what they think and feel about your company, and implementing cost-effective strategies to deliver measurable positive change in the way they relate to your company and its brands. This is an unfamiliar and challenging task, given the diverse and diffuse nature of the sum discussion of a company and its brands. It is, however, absolutely essential for companies that wish to operate profitably, dynamically and safely in the twenty-first century.

For those who remain sceptical about the existence of such communities, the following recent example may prove instructive. I was talking to the European marketing director of a mobile phone company about the community-marketing angle to the proposed launch of a new handset. He expressed a strong doubt that – with six months still to launch – there was much to talk about at that stage. A quick search on the internet instantly threw up 2,500 hits. There were clearly many separate online communities already actively discussing his as-yet-unlaunched product. This is indicative of the dramatic change in the way consumers relate to and communicate about brands.

Consumers of all types of goods and services are becoming more sophisticated, more ready and (aided and abetted by the new technology) more able to exercise choice in the selection of suppliers. They are far less susceptible to the relatively crude mass marketing techniques that still dominate the external communications of most companies.

The average consumer is bombarded with between one and two thousand brand messages each day. The end result is mostly a blur. Yet many businesses still think primarily in terms of brand awareness. They rely on traditional forms of marketing that seek to push a homogeneous message to an undifferentiated composite target customer. Most companies' marketing is in the hands of major agencies who find it easiest to parcel their clients' spend into a small number of high-profile activities.

Community marketing is about giving external audiences the information they need to engage in a positive discussion of your brand. It is not about manipulating people, but about getting closer to them, understanding how they relate to a company's products and services, and then engaging in specific activities that will help them to feel more positive about the organisation.

Often, the communication will be via some form of electronic media. But it could also involve sponsoring local projects and initiatives, or promptly altering particular aspects of business processes or customer service to answer concerns, and then ensuring the company gains credit for the changes.

By managing the relationship between a company and the communities with which it interacts in an informed and intelligent way, businesses can realistically expect to develop an enduring source of competitive strength. Equally crucially, an organisation that is listening to – and responding to – the full range of external discussion of its activities runs a massively diminished risk of straying into areas where its reputation could sustain damage.

Zak Hydari is group director, Zapp Investments,

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