CIPR members receive 5 CPD points and PRCA members receive 10 CPD posts for listening to this podcast if they log it at their respective CPD programmes.
Russell Goldsmith started the show by chatting with FHF’s CEO for UK & Middle East, Jim Donaldson who introduced the Authenticity Gap report.
Jim explained that to create the Authenticity Gap report, consumers were asked what their experience is of dealing with a brand as well as what their expectations are. The respondents are what FHF class as engaged consumers, so they are not necessarily the same people being asked all the questions across all sectors – they have to have been users of those services in question. Their expectations are then measured against their experiences across nine drivers of reputation, which can be split into three areas:
The results were plotted at both industry level and company level and the Authenticity Gap is the difference between experience and expectation. FHF have carried out the research in the US, Canada, China, Germany and the UK.
Jim said that the main aim for any client is to understand what the customer is looking for and whether they are meeting those expectations, but also where communications fits in. He used the example of the Automotive sector, where he said that expectation of how car companies care for environment massively outweighs what the sector is doing and so whilst those organisations may feel they are communicating about those issues, they are not meeting the expectation of their customers. They therefore need to rethink what they are doing in that space.
The aim for those companies reading the report is to not only know if they are meeting customer expectations but also how they can then differentiate themselves. They can use the data to see where the gaps are and how they can improve and put together a more comprehensive communications package.
The Authenticity Gap report also looks into the credibility of the people delivering the corporate messages and Jim is passionate about using employees as a message carrier, something he feels is underutilised. Companies are beginning to ensure their workforce represent them well, ensuring they are engaged, but Jim says this can be taken a step further, by making those people real ambassadors for your brand, adding that how companies look after their employees is an important driver of reputation.
For the main part of the podcast, Russell was joined by FHF’s EMEA Reputation Management Lead, Nick Andrews and Steph Bailey, Managing Director, Corporate Communications as well as Simon English, Senior City Correspondent of the London Evening Standard.
They kicked off the discussion by looking at what companies need to do to convince journalists like Simon that they are authentic and trustworthy. Simon’s response was simple – they need to take it seriously. He used the example of BT’s pension deficit problems as he felt that BT were not authentic when this was first reported, that they were just trying to ‘shove things through’, and hadn’t thought about the fact that some journalists would have known what the company had said in the past. Simon added that BT got ‘bashed’ by the media because, in his opinion, they simply didn’t tell the truth about the fact that they have a very serious problem or in explaining what are they going to do about it. His impression is that companies have internal meetings about the messages they are going to put out, but do not think enough about who is recieveing it. Naturally, Nick’s response was that this doesn’t happen if those companies are well advised, but Simon said his job as a journalist is to remember what big companies, like BT, would rather we’d forgotten!
In reviewing the report, Steph said that of the nine drivers, Credible Communications scored very low – people either don’t believe what companies are saying or fundamentally do not think they are being authentic. She also picked up on the the fact that value is still an important driver for people too and whilst that is obviously about feeling the product you get is worth the money you invest in it, the driver is also about what the company is doing around that value, i.e., their investment in the local community or the fact that they are investing in their employees. However, Steph said that there is an overwhelming sense of disappointment – despite what businesses are saying externally, customers are still seeing the bad behaviours coming through, which could be big companies not investing in their employees, or having a lack of attention to purpose and community
Nick explained that different sectors have different key drivers, for example in the Tech industry innovation is the key driver – there is a huge expectation for innovation but no companies meet this.
However, despite the disappointments in the expectations, the results in the report didn’t surprise Simon. He questioned why companies over promise as he feels it’s surely better to under promise and over deliver. Simon believes that by over promising, it seems that businesses are setting themselves up to fail. In fact, Steph said that she is often advising companies to dial down some of their communications where it is not authentic to what they can actually deliver, as she believes it is better to be honest and say what you are doing well. With The Authenticity Gap, Steph can go to a company and tell them which of the drivers are most important to their customers. This way, their message should become about those specific drivers.
Simon would just like to see companies keep it short and tell us the truth but Nick thinks the reason companies try and over claim is because they are desperately trying to differentiate themselves in places where differentiation is increasingly difficult.
In trying to see where some sectors could learn from others, the panel compared the Banking sector, which the report suggested has little care for customers, with the Hotel sector, that scored highly for experience.
Nick said that the hotel industry has had to go down the customer care route as there is a lot of competition – the barriers to entry in the industry is reasonably low, whereas the barriers to entry in retail banking is quite high – you don’t get many new retail banks. He therefore thinks there is complaceny in banking in relationship to the customer. He added that you are three times more likely to leave your partner than you are to change bank, which is why they spend so much money trying to get you in early, as if they do that, there is a good chance they have you for life!
Simon added to this as he said that he has recently been staying at Premier Inn Hotels, and has found that the hotels now know his pattern of behaviour, what he likes and dislikes etc. But his bank, that he has been with for 25 years, acts like each time he contacts them is the first time, that they don’t seem to know him, even though they 25 years of data about him.
Hotels were in fact the best performing sector in terms of Customer Care, but there was still a big Authenticity Gap, so perhaps expectations set too high.
In explaining how expectations can impact a brand, Nick and Steph gave the example of Ryan Air, that Steph believes does so well because it promises so little, compared to British Airways, that she said is struggling because the expectations are higher. Nick believes a customer could have the same experience on both airlines, but the expectations are higher for BA, so they will not score as well.
It’s not all doom and gloom though as it is possible for customers to have high expectations that are met! For example, Simon feels that Amazon and Charles Tyrwhitt always deliver what they promise.
Nick highlighted the fact that what companies need to look at from this Authenticity Gap report is why, in a crowded market, why people should pick them over the alternative, He therefore recommended looking at the three sets of drivers, which he explained that they are not weighted equally. For example, Customer Benefits are weighted higher but are always less than half the weighting, so the other six combined are always greater in terms of their impact. Therefore you may be spending most of your marketing budget saying what fantastic customer benefits you bring, but there are six other drivers that are often largely ignored, yet those, according to Nick, are often the ways in which you can be understood to be different.
Another sector that we looked at was the Energy industry, which has a huge Authenticity Gap within the Care of Environment section, which Nick believes is because the industry doesn’t talk about itself in ways people can relate too. He said that opening up the energy market, meaning that consumers can get their energy from many places, created an advertising war, but that’s meant that all the messaging has been around providing a service and managing how you use your energy, to the detriment of talking about what energy companies are for, how they make their money and the difficulties in achieve that. Relating it back to what Simon discussed about BT not talking about the nature of the problem they had regarding their pension deficit, Nick said that companies dont like to talk about the fact that business is often quite hard, that there are hard choices to be made and are often wrestling with some quite serious problems. He said that they dont like to talk about it because somehow that suggests weakness and difficulty. However, his view is that often, if you don’t explain to people why things are hard, then you get no credit for overcoming them when you do, because people just assume it was easy.
Simon’s advice to companies is to simply talk about themselves more succinctly and not over complicate their message. He used Waitrose as an example as he said they tried to say that they could be as cheap as Asda, but questioned why they would say it and fight that battle. In his opinion, Waitrose is where you when you can afford it, ro for snob value or as a treat because you want some nice food and so he couldn’t understand why they were complicating their message. He believes they should concentrate on a different message such as the fact that the company is owned by its employees.
To sum up, our three guests each gave one bit of advice based on what they’d been discussing:
Simon: “When he goes on lunches and has a glass of wine with a company leader, he often thinks they are ok people! So he said they should be more like that when representing their companies – not stiff and awkward but more real and authentic.”
Nick: “Companies need to take the time to understand their reputation. Look at the nine drivers and see how your company is doing against them.”
Steph: “Companies need to look beyond the executive leadership, allow the employees to tell the story becuase they are more likely to be believed and interesting.”
The Executive Summary of FleishmanHillard Fishburn’s UK Authenticity Gap report is now available, and you can request a copy of the full report, which includes industry data as well as the full list of companies surveyed by emailing email@example.com
All previous shows of the csuitepodcast series are available on this site, Soundcloud, itunes, TuneIn and Stitcher. There is also a growing community on Facebook and Twitter, where you can get involved in the discussion. Finally, if you subscribe to the show, please can you give it a positive rating and review on itunes in particular as this helps it up the charts!