Brand McReputation
Companies can’t afford to risk their reputation
Speak to any CEO in any of the FTSE 500 companies and the odds are they’ll tell you that their corporate ‘reputation’ is critical to their company’s success. Not only that, they’ll tell you that reputation is one of their biggest fears. For as much as it can contribute to success, reputation can bring companies, big companies, down. Remember the consequences of Gerald Ratner’s after dinner speech? Remember what happened to Arthur Andersen after Enron? Oops.
So what have these so-called ‘Captains of Industry’ learnt about harnessing the positive aspects of their reputations and channelling it creatively through their brand communications? Well, seemingly, bugger-all.
There are plenty of Dumbest Moments in Business (101 actually). Starbucks got awarded a winner for not caveating a free coffee offer. Direct marketing 101. Starbucks pulled the promotion and a lawsuit was filed.
The ‘McLibel’ Case
In 2004, McDonalds sued a gardener and former postman (Steel & Morris) for libelous content after they produced the leaflet ‘What’s wrong with McDonald’s?’ In 2007, the Judge found that McDonalds ‘exploit children’ with advertising, produce ‘misleading’ advertising and are ‘culpably responsible’ for cruelty to animals. The couple failed to prove all their claims, some of which were therefore found to be libelous and they were ordered to pay £60,000 damages.
They appealed and ultimately took the British Government to the European Court where, on the 15th February 2005, the court found in favour of the couple and declared that the McLibel case was in breach of the right to a fair trial and the right to freedom of expression.
What’s important here is how a company the size of McDonalds wasn’t able to see the folly of pursuing this case and the damage that would be inflicted on their brand and reputation. If it had treated its brand with a little more care, it might have avoided a whole heap of trouble.
What happened to McDonalds brand?
Following the McLibel case, anti-McDonalds campaigns escalated worldwide:
- The website launched by Helen Steel & David Morris (McSpotlight.org) was accessed 184,675,000 times by the summer of 2003
- The Sunday Times reported that Ed Rensi, President of the McDonalds Corporation, had been removed as Chief Executive following falling US market share, promotional flops and franchisee discontent
- McDonald’s UK announced their largest ever drop in profits (71%) in 2003.
- Reports of the cost to McDonalds of the trial alone vary – but it’s likely to be double figure millions
Is the jury still out on the role of the brand in improving corporate reputation?
McDonalds may or may not acknowledge that McLibel has had any impact on its brand reputation but it’s reasonable to say that it has. It has certainly influenced perceptions. The jury will be out on the role of the brand in improving corporate reputation longer than it was in the McLibel trial. If it comes back with the wrong verdict, we’ll appeal. Because nothing improves your business more than your brand. We’d stake the Birddog reputation on it.
What do you think?
Let us know. How does the role of brand improve corporate reputation?
See how this effects b2b brands?
Or if you’ve got a good corporate branding f-ups to share, please feel free to comment below: