I’ve always believed that reputation can be shaped (and word of mouth driven) by great customer service.  Just look at Jetblue or Zappos as examples of building phenomenal brands selling commodity items but with great customer service. 

To back this claim up a bit more, I took a survey of 60 professionals on LinkedIn.  First I asked them what had the greatest impact on their opinion of a company.    When the choice was “what people say” versus news, search engine results and customer service, then “what people way” was the overwhelming choice.  This makes sense as a bad experience might be chalked up as the exception if ten friends say they love it. But when this option was dropped, then customer service was the overwhelming winner for what impacts the opinion of a company. 

Why is this important?  In the end, companies have a lot more control over their customer service than word of mouth.  So perhaps instead of focusing resource on WoM and other PR related tactics, they should start seeing customer interactions as a primary PR tool.

So, is this good or bad for public relations departments?  If they can quickly develop capabilities and influence in training and measuring (from a reputation perspective), customer service and other customer facing interactions, then I believe it can be a huge boost.

PS NOTE: Unlike previous posts, I’ve chosen to leave out the company name.  I’ve decided that the point of this blog is not to bash companies publicly (there are plenty of others that do that) but to learn lessons from the action of others. 

Here’s the apology I got after they sent out a messed up mass email.  I did not even notice the original email but the apology caught my eye, starting with the subject line.  And I came away thinking that this is an honest, transparent, customer oriented company with a great sense of humor.

Subject: Poll Everywhere – We’re Boneheads

Hi Ephraim,
Just wanted to apologize and say that we know your name is not "FNAME"   Oops.
We’re so bad at this spamming thing… We don’t even know how to do a proper mail merge!
Jeff

I wasn’t thinking happy thoughts about Poll Everywhere before this email.  I am now.

The brief background:  Amazon got into a bit of reputation trouble last week when they deleted books from people’s Kindle e-reader without notifying them (including, oddly enough, 1984).  This was the result of the books being bought from an Amazon seller that did not have the right to sell it.  However, consumer sentiment was that this was a personal violation by Amazon and one that highlighted that you don’t really own them the way you own physical books (people asked if Amazon would have raided houses to take back books illegally sold?).

But then Mr. Bezos comes out with an apology so straightforward, it would be hard to doubt both the sincerity of the apology or of the commitment to doing better for customers:

This is an apology for the way we previously handled illegally sold copies of 1984 and other novels on Kindle. Our "solution" to the problem was stupid, thoughtless, and painfully out of line with our principles. It is wholly self-inflicted, and we deserve the criticism we’ve received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission.
With deep apology to our customers,
Jeff Bezos
Founder & CEO
Amazon.com

The apology was issued on the Kindle forum and customer feedback on the forum was overwhelmingly positive.  You can see it here.

This is a great example of what makes a great customer service reputation – a combination of the right communication and business action..  It’s not that the service is perfect as that is rare, it’s that the company is honest about their mistakes and aggressive about fixing them.

McKinsey makes some key points about what companies need to do on the reputation side.

"As a result, responses to reputational issues can be short term, ad hoc, and defensive–a poor combination today given the intensity of public concern. And therein lies a problem that companies must solve quickly: even as reputational challenges boost the importance of good PR, companies will struggle if they rely on PR alone, with little insight into the root causes of or the facts behind their reputational problems."

But Paul Holmes picks up on the unsaid theme – that it’s a management consulting agency, not a PR agency, making these important points:

I wish I could push back more aggressively against this–the idea that public relations is about "spin" rather than "changing business operations and conducting two-way conversations" is particularly offensive–but the reality is that the authors seem to have formed a pretty accurate impression of how most corporate communications departments actually work.  (This is where I would ordinarily go into a rant about the inherent problem with naming public relations departments "corporate communications," which is that public relationships are defined not by communications, but by actions, but you’ve all heard it a hundred times before.)

Finally, he pulls another solid quote that outlines what the most effective PR counselors do (hint, communication is not at the top of the list, understanding audiences and recommending actions is).

The authors’ conclusion: "Companies should emphasize three priorities. First, they need to assemble enough facts–most important, perhaps, a rich understanding of key stakeholders, including consumers–and not only the product preferences but also the political attitudes of consumer groups. Second, companies should focus on the actions that matter most to stakeholders, something that may call for an exaggerated degree of transparency about corporate priorities or operations. Third, they must try to influence stakeholders through techniques that go beyond traditional PR approaches, with an emphasis on two-way dialogue."

To those public relations professionals that see themselves as lead reputation counselors – do your measurement reports analyze media relations and social media measurement or do they measure reputation?   If the former, then you are a media relations or social media (or both) professional.  if the latter, then you are a reputation counselor.  Do you measure it all?  Then you are probably a well informed senior corporate communications / public relations professional.

I raise this as I regularly hear public relations professionals talk about managing reputation but then have measurement reports that focus on media or social media measurement.   Measuring media has never been a substitute for measuring reputation.  It has always been a good measurement of the effectiveness of the media relations function, but that is but one function in a communications department (even if it is a central one). 

Lately, companies have tried to use social media to measure reputation as social media is heavily driven by user generated content, meaning it has the voice of the audience.  However, only a small segment of the popular is actively engaged in the conversation (see slide 20 of Accenture’s research which includes how many people are not regularly engaged in the social part of social media – click here).  As a result, if you rely on social media measurement to measure public attitude and reputation, you may be getting a skewed portion of the population and one that does not represent broader sentiment (see an example in this AdAge article on the Twitter outcry to a Motrin campaign here).

So what should those who see themselves as reputation managers do?  Look to measure sentiment wi th the broader audience.  Ideally, companies would regularly conduct surveys.  This can be cost prohibitive so, in that client situation, we look at solutions that at least give us a voice of the audience – small virtual focus groups, short surveys, analysis of search engine data and so on.  This does not replace other forms of measurement but we’ve found it is a good start in knowing, directly, what the reputation of a company is with our key audiences.

In discussing public relations counsel, I often hear discussions focus on reputation over understanding the public.   However, some of the best reputations are earned by taking a PR approach that relies first on understanding the public, then by making business decisions around that understanding, and, finally, communicating those decisions and related actions.   An article on M&T Bank Corp in Fortune focuses in on this approach:

In the article, M&T Bank Corp. Chairman and CEO Robert Wilmers is quoted with the following take on public relations:

Bankers should do what he calls "public relations" – not burnishing an image but actually relating to the public and its needs. At M&T, regional banking heads live in their communities (vice chairman Michael Pinto is based in Baltimore, New York Metro head Kevin Pearson in New York City), and their employees get involved in everything from volunteering at a bake sale to schmoozing the local pols. Every area has its own advisory board made up of merchants who weigh in on key loans. President Mark Czarnecki, who started as a bank manager in 1977, says the bank has learned that the closer a customer lives to a retail branch, the better he performs on his loans and the more bank services he is likely to use.

There are a few very notable points about M&T Bank Corp’s approach to public relations:

1. Mr. Wilmers takes the time to understand his business’ audience in order to make the best decisions for his company and customers.  The result is a positive consumer reputation.  One could look at their local approach to management (placing senior executives in the markets they oversee) as a business move driven by both business and PR considerations as management understands that just locating executives near customers drives a reputation that results in more business.
2. Business decisions drive reputations.  This is a redundant point but it needs to be hammered home.  If you read the whole article, you’ll find that the result of a key business decision is, in fact, the desired image (a local bank that understands customers) and reputation (a solid business approach that others should consider emulating).   This is not a bank that makes business decisions then  wonders how to achieve a certain reputation and image. 
3. Research research research.  Understanding an audience takes research.  It can be a in-depth survey or having executives meet and talk to the public/audience (I tend to recommend both but, if only one, do the latter).

There were engineers in almost every country, and way too many product people. We had one product management person for every three engineers,We had a lot of people telling engineers what to do but nobody fucking doing anything. Excuse me. I knew that would slip out one of these times. (click here for the audio)

Her honest approach to communications (talking the way she talks, not the way someone trained her to talk) seems to simply reflect her approach to business – no one doubts her sincerity and seriousness because she’s honest to a f***ing fault about getting things done.  Here’s a good outline of her style at GigaOm.

I’m one of the (few? many?) public relations professionals cheering on this style of communications.  While it’s often not appropriate, it is how people (including executives) talk in the real world and that needs to always be kept in mind.   When an executive doesn’t use their natural language style but instead gets caught up in PR speak (yes, I said it), audiences detect and that affects the trust factor.  People are more likely to believe someone they can relate to and people easily related to people who talk like they do.  

So have I actually told an executive it’s OK to curse?  Actually, yes (ping me as I’d rather not call out that executive…but they took my advice and it f***ing worked).   While executives should stay on message, they should also communicate messages in their natural, honest style.  And if that f***ing means dropping a lot of f***cking f-bombs, then f***cking do it.  You’re more likely to be believed.  And from what I’ve seen, no one doubts that Carol is seriously focused on fixing broken things f***cking fast.

You can find more examples of Bartz’s “real world communications” style at Alley Insider here.  

In a recent earnings call with Wall Street analysts, Mr. Bass was reporting a lousy last quarter for the last year and a murky, at best, outlook globally.  When an analyst, fishing hard for good news, asked what regions were immune to the global slump, Mr. Bass made it clear he would not try to spin bad news into good:

Well, I think Antarctica has been relatively immune, maybe Greenland, as well, although not Iceland, as we all found out.

Enough said.

(note: I first picked up on this in Fred Hickey’s High-Tech Report and you can get the full background from Barron’s).

In government, communications people are policy people; they know the details as thoroughly as those charged with the implementation of the policy…In business, communicators aren’t always business people nor are they close to the strategy of the company.”  He added that many CEOs fail to understand the value of communications. 

In my experience, the public relations counselor with the full grasp of the company’s strategy and technical understanding of its business are also able to relate the strategic value of communications to their CEOs.   PR counselors without this knowledge base are often seen in a tactical function and brought in after the strategy has been set. 

As is the ongoing theme of this blog, the PR skill required to be at the C-level table includes the strongest possible understanding of business in general, an analyst like knowledge of industries, a C-level understanding of a client’s (internal or external) business model and the ability to use this knowledge to help the C-level management manage a company’s reputation.

Bill George, former CEO of Medtronic; and professor at the Harvard Business School

[Siemen’s] competitors should have come out and stated their own anti-corruption principles…CEOs need to face reality…CEO’s often go into denial, and that’s the worst thing they can do.  it’s a huge mistake to hire a PR firm and ask it to restore your image – Bill George, former CEO of Medtronic and currently a professor of management at Harvard Business School.

Mr. George not only provided some very good PR counsel, he also highlighted a reputation problem with the PR agency industry’s reputation (yes, ironically).   Hiring a PR agency is often seen as a way to order a good reputation.  As this quote shows, smart executives know that is not the case.  

PR counselors, and in particular agency based executives, need to be consistently clear that reputation is not a function of communication, but is a function of communicating business action.  Mr. George understands this, but obviously does not see PR agencies as a source of this type of business counsel.

The level of respect for an agency’s work always goes up when clients see that clear, specialized business counsel, not simply PR counsel, is being provided.   Bill George’s quote is a strong reminder of the importance of this approach.  

Of course, for this to happen agencies have to start hiring based on strategic business smarts and not simply tactical smarts.  But that’s or another post…

P.S., I was recently asked why, as an PR agency owner, I would post advice to other agencies.  Simple, these are PR industry issues which, if solved by more agencies addressing them, would result in more and better business for all of us.