America's bedrock financial brands in crisis during a social correction (lessons of Perrier & Tylenol revisited)

an updated discussion of these points was posted 12 18 09

addendum: 5 4 09 lot's of great generalized reading on this topic lately. One in particular is Time Magazine's article What Banks Are Still Missing: Trust  (the last paragraph says it all)

Last year, right about this time, I posted a revisionist perspective on the troubles encountered by the Perrier and Tylenol brands many years ago. My intention in correlating these two different brand cases separated by years was to offer a simple comparison of how social mood impacts the shared perceptions of established brands in times of crisis. What distinguished these cases in some people's thoughts was how the events that precipitated each brand's individual crisis were of dramatically different kinds of circumstances but, the lessons drawn for managing brands instruct us differently. Perrier's brand crisis began small and grew exponentially (in a very short time horizon) because of an internal error and was worsened by inaction. Tylenol's recurring episodes of tampering led to crisis and were randomly imposed upon the brand from outside, so some people naturally threw their hands up and asked 'how can these completely different circumstances be compared?' 

My conclusion (then) was how what really matters can be seen by stepping back and viewing how the markets surrounding the brands were perceiving the events and especially, the brand in light of the public perception of the two primary states of social mood (social expansion and social correction). This was my opinion then and it remains that way a year later.

If we use these two historic cases and my larger point here as a platform from which to see the unprecedented events today, it both confirms this perspective and offers some updated instruction about how top brand managers might incorporate this insight today.

In lieu of a longer post, here are the threads in a helpful order that will make this point productive for your consideration. 

1. read the first post again in this series about how to re-frame the Tylenol/Perrier brand experiences
2. give two minutes to the broad social trend threads of a social correction (the period we are now in)
   
3. Read the latest post at the media blog about Trust and What Characterizes the idea of Partnerships during a social correction
4. Then come back and read the few paragraphs that follow...a more universal image of this idea should develop. 

The financial crisis that erupted this fall has matured.  It is wildly complex. If you do not follow such issues closely it can be overwhelming to organize the endless details as they emerge. There is no mistaking the destruction of wealth and trust in this country and around the world and there is also no mistaking the complete destruction of several of America's top financial brands. Since the point of this is to discuss branding, let's (just like in the Tylenol case study) set aside the tragic consequences of today's financial events and take a very good look at the implications to enterprises when crisis directly impacts a brand during a social correction.

By uploading the three brief sets of points I suggested before reading this, you can now easily begin to draw some broad conclusions about changing social values, crisis, and a brand's place in these circumstances. What is the prognosis for the bedrock financial brands in the US five or ten years out? I believe it will soon be apparent. In my opinion, the true impact will evolve in our shared thinking over more than a decade because no matter how many laws will be put into place to reinvigorate trust, brands are a social partnership built upon trust...and trust is a "social tool" that changes with social mood.   

Many of America's top financial brands have been eviscerated.  Any remaining glow of good will I read about in the resulting forced mergers is like the phantom feelings left behind from amputated limbs. The pain to our social psyche has not begun to be realized yet and will prove so deep over the next decade that any early notions associated with reinvigorating such brands will later feel like fool's errand. I realize just how harsh this may first sound to earnest marketers (and even policy makers) who look back at many decades or a century of service and feel there has to be equity remaining to be salvaged and revived.

The larger behavioral picture that is emerging in the world of consumerism is demonstrating the expected consequences of what is best labeled a 'social correction'. These social trend patterns are not a series of chance events. They are part of a natural cleansing process that changes how we (social beings) create when we gather in groups. 

Last year when I described my position in the Tylenol Perrier discussion and I anticipated parallel events would be forthcoming as the social correction developed, it was impossible to see an example of this order of magnitude larger but the implications for all brand marketers are unmistakable.

• Brand's exist in the realm of perception

• Public perception can be shaped by an always evolving social mood (sometimes it evolves much faster than other times)

• The resolution of crisis occurring in or near a brand's center of social utility will be heavily mitigated by the evolving social mood at the time of the event & workout  

Brands are essentially living entities (attached to emotive energy in our thoughts) and from this perspective, they interact with generalized shared perceptions in any marketplace even if (especially when) the underlying product can be described as a commodity.  The use of brands by enterprises is subject to the very limitations of social perception they rely upon for good returns in building trust and loyalty.  If at anytime, Ray Crock's chief product (the hamburger) became associated with a universally developing social fear, there would never have been "billions and billions served". (Obesity, while pervasive, is not universal.)

And while this suggests that the obvious implications for fallen bedrock Financial brands are less than some may secretly hope in the years ahead, this realization opens up opportunity for those willing to use the insight in a pragmatic (or even parallel) manner. Nature abhors a vacuum. One exists now and only in time will marketers realize its significance in more than little bits. Crisis is something we always must be prepared for even if we do not live there...just as opportunity often appears very different during social corrections than during periods of social expansion.    Dave