When soft power hits the hardest in brand and reputation

Leading in culture means leading in business, says Sérgio Brodsky, but culture also has the power to break brands and destroy reputations.

‘Know thy customer’ – there is not a more powerful maxim for those working in marketing. Yet, brands have come to be seen as putting their interests before the interests of those they were intended to serve. Consequently, as noted on the recent AFR Magazine Power Issue, “playing defence rather than offence sums up much of how the power game is played in Australia in 2017”.

But in times of cultural confusion, following the tides of influence will only dilute the intangible value that made brand the most important asset of modern economies. Leading hard, meaning, low prices and all sorts of sales deals will fail to deliver long-term profitability, as repeatedly showcased on last month’s Field-Binet Australian tour.

Hence, leading with meaningful, inclusive values and cultural relevance are the ingredients to help elevate Australia’s power play. When it comes to brands, implications are twofold:

1. Leading in culture means leading in business

Soft power was defined by political scientist Joseph Nye as being a country’s ability to attract or persuade others to do its bidding, without having to resort to any form of coercion. This matters because – as demonstrated in research by BT Rocca Jr, professor at the University of California, Berkeley – countries that score high on cultural attractiveness export more. Every 1% net increase in soft power raises exports by around 0.8%, meaning that, winning hearts and minds also wins sales.

What’s more, a favourable reputation plays an important role in attracting the best talent, suppliers and investment.

 

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This is the case with the State of Tasmania. Tassie has the highest rate of positive word of mouth recommendations for any destination in Australia, and is second only to New Zealand. Taswegians and visitors (domestic and international) have already been advocating and speaking positively about their travel experiences in Tasmania.

As a result of this tremendous soft power, visitation numbers are growing encouraging further investment from airlines, hotels and infrastructure in general. According to Tourism Tasmania CMO Emma Terry:

We have found that Tasmania has this uncanny way of capturing people’s hearts. There is something really honest and down to earth about Tasmania and visitors really connect to both the place and the people. We have tried to capture this in our marketing efforts over the past few years to give people a broader sense of Tasmania. I think the strong growth in visitor numbers (9% growth from June 2016-17) and the positive word of mouth are all testament to embracing culture not just scenery.”

2. Culture can make or break brand and reputation

Society is placing an increasing importance on business ethics, and stakeholders are more prepared than ever before to hold corporations accountable for their actions.

However, focusing on reputation at the expense of brand can lead to product offerings that languish in the market. On the other hand, concentrating on brand and neglecting reputation can be equally dangerous, resulting in a lower stock price, difficulties in attracting top talent and even product boycotts.

Simply put, brand is about relevancy and differentiation (with respect to the customer), and reputation is about legitimacy (of the organisation with respect to a wide range of stakeholder groups, including but not limited to customers).

For example, Dove took the world by storm when it first launched its ‘Real Beauty’ campaign, unambiguously leading the gender politics debate. Many years and dollars in soap sales later, a recent three-second GIF ad on Facebook is now damaging the company’s reputation. Intended as a ‘beauty of diversity’ display, the image of a black woman removing her brown shirt to show a white woman in a light shirt was rather interpreted as a ‘dirty’ black person cleansed into whiteness.

That said, even an outstanding reputation almost never comprises any unique characteristics that an organisation can own and be known for. We may love and recommend the local general store that makes its own soap, but there is still only one Dove.

To shift Australian brands from walking on eggshells to stampeding their values to the masses, measured amounts of bravery and ethics are required. Cultural coherence, however, is what can stop bravery from getting stupid or ethical preaching from becoming boring.

 

Further reading

 

 

Image copyright: wayne0216 / 123RF Stock Photo

Sérgio Brodsky
BY Sérgio Brodsky ON 24 October 2017
Sérgio Brodsky is an internationally experienced brand marketing professional having worked for some of the world's greatest strategic communications agencies. Sérgio is a proven thought-leader, speaking at industry events, lecturing and regularly being published worldwide. He is passionate about cities and culture and the role of brands and technology in society. Sérgio is multilingual and holds a BA in IP law and an MBA in global brand strategy and innovation. Follow him on Twitter: @brandKzar.