The Reality of Consumer Perception
By George Anderson
Manufacturers and retailers know, while sometimes frustrating, consumer perception is the reality of their business.
The results of a new study conducted by Peter D. Hart Research Associates for General Motors is a perfect illustration of this reality.
Elizabeth Lowery, vice president for environment and energy at GM, says her company is out front when it comes to developing energy efficient vehicles. To support her contention,
Ms. Lowery points to the number of vehicles in the company’s lineup that get 30 miles per gallon or higher (20 models), its $1 billion hydrogen fuel-cell research program, gas-electric
hybrid buses and full-size hybrid SUVs rolling out early next year.
Consumers, however, have a much different view, ranking GM last among major manufacturers for producing energy efficient cars and trucks. Thirty-one percent of those surveyed
by Hart said GM is doing the worst job in this area while only 14 percent said it was doing the best job.
Ford Motors did not fare very well either in the Hart study. Twenty-nine percent of respondents gave the company the lowest mark and only 10 percent gave it the highest rating
for developing energy efficient vehicles.
Christine Morrisroe, a spokesperson for Ford, told USA Today, “There are people who don’t know we have them (hybrids), still. We’re baffled because we keep talking about
it.”
Moderator’s Comment: How can retailers and other marketers turn around negative consumer perceptions about their
business or products? Is there a case where a company has turned around its image that you can cite as a point of illustration? –
George Anderson – Moderator
The not so new lesson learned (relearned?) from all these comments is how hard it is to change perception, but it also indicates how fickle the public can be when it comes to their own decision making. Recent abandonment of SUV’s and pick-up trucks did not come about because of a change in consumer taste but because of a rational reaction to higher oil prices.
One of the major reasons for Brands and Banners is to create a distinctive shopping experience for the consumer. In an effort to reduce the advertising and promotional expenses, both manufacturers and retailers have “homogenized” their offerings. This has left the consumer confused as to the distinction between options. In the case of manufactured goods, the emphasis on cost reduction can also result in many shared components.
There is no problem with a manufacturer producing different brands or a retailer operating different banners, but they both must make sure they keep the offers distinct so the consumer understands their benefits.
Viral marketing, word of mouth, sampling, blogging – these types of quasi-guerilla marketing programs often work best, especially on small budgets. Pabst did a tremendous job revitalizing a near-dead beer brand that way a few years ago. McDonald’s improved their stagnant reputation with innovative new products, and by partnering with respected brands like Newman’s Own. Now, can anyone figure out how to help Wendy’s reclaim their reputation, which has suffered due to a single incident involving one “victim”? I still talk with people who won’t go near Wendy’s chili because of that.
You need to come clean and tell the truth and fix the problem quickly. Bob Eckert did this at Kraft in the 90’s when, instead of a few people winning vans when they bought Kraft Singles – everybody won! Tylenol, after the tampering, regained consumer confidence by staying on top of the issue and adding new tamper evident features to reassure consumers. Today’s net is simple – consumers are more savvy and fancy communication agencies can’t do the “spin doctor” anymore. Tell the truth and be sure and use viral marketing to help get the message across.
Ironically, General Motors is still arguing details and, within the last couple of days, the Chairman of Toyota announced with some fanfare that their company has devoted itself with a singular focus to improving fuel efficiency.
The automotive example illustrates one of the keys to handling negative perceptions, i.e., don’t let them form in the first place, by establishing a clear brand identity and value proposition that’s relevant for the target market.
All this suggests that negative perceptions don’t take place in a vacuum; they form in the light of current perceptions. If the ongoing perception is non-existent or negative, new negative perceptions are formed more easily than if the ongoing perception is positive.
Quick and effective response to negative developments is another way to blunt negative perceptions and turn them to positive perceptions. The J&J response to the Tylenol tampering a number of years ago is a powerful example that supports this point.
In terms of a specific in retailing, it seems to me that one retailer who has done an extraordinarily good job of turning negative perception to the positive is Food Lion.
An interesting book, recently out and reviewed in this month’s Wired magazine, has the lovely title of “Your Call Is Important to Us.” Basically, it reviews the level of b—s— (the term is used in an almost clinical manner) that prevails in lots of areas, most especially in corporate communications and advertising.
The net effect of years of consumers feeling jerked around and receiving shaded truth, has been that perceptions, once formed, are almost impossible to erase with ordinary PR or advertising. GM is certainly not alone here.
Re-establishing or re-launching a brand, especially one with a strong image based on decades of experience, is one of the really hard things to do. I suspect it takes almost as long to refurbish an image as it did to tarnish it in the first place.
Positive consumer perceptions are commercial perfections.
Consider Starbucks, Google, Lexus, etc.
Every company should be on constant guard so that it never has a single redeeming defect or reputation glued to some passé phenomenon. Today, General Motors is producing excellent technology in its automobiles but the consuming public has the perception that they are makers of stuffy 1960 cars and out-of-style models. The perception is probably wrong but it is reality.
Perception vs. Reality: Being between the rock and the hard place is a commercial tragedy. If GM can find the way out of the perception dilemma, it will become a Harvard case study and probably a miracle.
Perhaps it would be wiser to know why your brand has equity. It just may not be wise to try and change perception from the truck and muscle car leader to energy efficient and environmentally conscience. I will never equate a Mustang, Corvette, Duramax or Power Stroke with a “green machine.” It is also OK if these models are late adopters of the environmental technology while maintaining their valued image of horse power and performance.
That doesn’t mean they shouldn’t pursue that avenue or market, it just might mean that they need to do it under another brand that makes sense to the consumer while communicating implementation of new technology on popular models. This could lead to several “brands” under each banner being dropped and introduced under another “brand.” With the auto industry, there may be some concerns with fleet mileage requirements under this type of plan. Since the auto industry in the US is losing ground and has a history of valued employment, there could be a way to include all banners to comprise the whole fleet.
I don’t think that the “employee price” program is a good way to improve image, though. It sent me the message confirming that I have been charged too much for years and the discounts don’t live up to the legend or promise. I think that goes towards the honesty issue mentioned above.
Let’s see, the two companies that have spent hundreds of millions of dollars marketing tanks on wheels such as the Excursion and Tahoe don’t understand why we don’t view them as environmentally friendly? I guess the moral is you have to walk the talk if you want people to believe.
This is not a simple question with a one-size-fits-all answer. It depends on the brand, the reason for the bad image and the target audience. Blogging and viral marketing is great for certain segments, but wouldn’t work for a senior audience. Advertising works to a certain extent, but can’t efficiently reach niche targets and can be perceived as too self-serving. Working the PR route can be the most effective, which was a cornerstone of Tylenol’s program. As with anything, the situation and the market will dictate the best answer.
I agree with Peter that GM and Ford have a big hole to dig themselves out of, but it certainly can be done. The first thing these companies need to do is determine if, in fact, hybrids are a viable long-term strategy for them. If so, they need to start with the audience that will be most receptive to their message and move out from that base. They need to develop messaging based on the make up of the audience rather than the features of the product. And, they need to create an aura of “specialness” (a term from my NYU grad school marketing professor), which will be the most challenging aspect of the effort.
As for others that have been able to turn around consumer perception, examples abound. Tylenol was already cited. Exxon seems to have come back pretty nicely after the Valdez incident. Texaco also came back after its minority hiring scandal. Stew Leonard’s is as popular as ever even though its founder spent a few years in jail, and the same is true of Steve Madden shoes. The prognosis for Martha Stewart looks good, as well.
The examples above reflect cases of crisis management, in which reputable companies did smart things to overcome a short-term problem. But GM and Ford are not reputable companies — they have misled consumers for years about the quality of their cars. It takes a long time to recover from the kind of negative reputations that they have earned for themselves. They’ve dug themselves into this hole and they can’t expect to jump out of it overnight.
As stated above, selling the basic Ford transportation and utility tank for the last 50 years is not conducive to their present developments and marketing of hybrids.
The Ford representative said that they have been talking about their hybrids on a very regular basis, but this is the first time that I knew ford had entered the market. They certainly aren’t talking about it enough, if that is their intention. I have heard a lot about the employee discount program, but not anything about the hybrids.
‘Anomalous’ above had the best solution I found: it may require a new brand name in order to skew consumer perception.
I find myself wondering how, specifically, an inaccurate consumer perception of GM’s leadership role in developing energy efficient vehicles harms GM’s business. Does it affect their stock price? Does it prevent savvy automobile shoppers from being aware of the individually-advertised, energy-efficient nameplates offered by GM? Is there evidence to show that an inaccurate perception is hurting sales, especially sales of the most efficient GM vehicles that are, in fact, backordered?
Image turnarounds are plentiful, and several have been mentioned here today. I believe they have something in common: They don’t do no ‘splainin.’ They offer no excuses. They move on with vigor. Consumer awareness is fleeting, despite evidence that inaccurate information sometimes “digs in,” like the Wendy’s fiasco. In an information age, we’re barraged with new ideas constantly and, like sharks, consumers must constantly swim forward through a current of new thoughts just to survive. Shoppers are adept at moving on and prepared to do so. Retailers and other marketers should keep that in mind.
Perception is all there is. It is the only reality. It is the only way to differentiate between your view of your products and services and your customers’. All too often, we believe our view to be accurate and “real,” but it means nothing in the marketplace. It only provides source information from which to build consumer perception in alignment with our view of reality.