Best of the Week: Qantas, Musk and Springsteen: Lessons in how to trash your brand
If it's about brand truth then Qantas will probably come out the other side, but how about Elon Musk and Bruce Springsteen?
Welcome to Best of the Week, kicked off on Friday morning in frosty Hobart and wrapped up on Saturday morning back at beautiful Sisters Beach. It’s been a while since I’ve been down to the Hobart end of the island. This may not be the most insightful of observations, but bloody hell, Hobart’s great, isn’t it? (Also, and perhaps less relatably, that winter drive up through the Midlands is a chore after dark, isn’t it?)
Happy National Avocado Day for tomorrow. I, for one, intend to celebrate that to the full.
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So how hard is it to permanently tarnish a brand?
Recent days and months have seen several examples of sudden and drastic damage to corporate and personal brands. I’ll talk today about three - Qantas, Elon Musk and Bruce Springsteen.
In Australia, Qantas’s collapse in reliability and customer service will be the stuff of textbooks. The company has gone from being one of Australia’s best brands to a punchline. However, the textbook chapter will come from what happens next
For Qantas, the aftermath of Covid has been a rolling reputational disaster, as I’ve previously written.
It started with call centre waiting times blowing out to the point where the common customer experience was half a day on hold to resolve what should have been relatively straightforward problems.
Then came the challenges common to many airports of security delays, and Qantas’s own problems of lost and delayed baggage, exacerbated by its (later ruled illegal) decision to make 8,,500 roles redundant by outsourcing ground services.
It doesn’t help customers’ moods that fuel costs (and Qantas making the most of high demand and limited supply) drove ticket prices are at all time highs. Dynamic pricing, innit?
The optimistic argument is that as Qantas gets back up to full speed, and things slowly return to normal, customers will quickly forgive and forget. As Adam Ferrier argues in today’s Guardian: “The amazing thing about strong brands is how little the short term matters. There are years of emotional investment. The current public relations issues Qantas is having are built off 100-plus years of being a really strong brand … this is a blip in the consumer psyche.”
He may well be right - so long as the company does indeed get its operational act back together. I wonder how long it takes before repeated bad experiences create a new mental picture for customers of how the airline is. Yes, there have been 100 years of brand building. But now there’s also been two years of almost no direct consumer experience, followed by half a year of bad experiences, which are starting to change consumer behaviour.
On Thursday night I took a completely full evening flight from Sydney to Melbourne (as coincidence had it, I spotted Ferrier stuck in a middle seat ahead of me in row 13). I know it was completely full because I got the last seat when my direct Hobart flight was announced as delayed, and the helpful lounge staff saved me a couple of hours by routing me through Melbourne instead.
One of the changed customer philosophies was that I’ve never seen the luggage bins so jammed full on a Qantas flight. It looked like the majority of those travelling had decided they were going to travel with cabin baggage only. One of the reasons our already late flight was slow to depart was because there was simply not enough room in the cabin for all the baggage so some had to go in the hold.
Marketing can’t really help with that. I reckon it only takes one or two bad experiences with lost hold luggage to create that long term behaviour change of maxing out your cabin baggage. That’s certainly the case for me after my luggage was offloaded in Darwin last time I went to London with Qantas. I now take a bigger bag in the cabin to ensure I have what I need for a couple of days if needs be. I reckon I’ll do that for years to come, and each time I pack, I’ll think about the reason why.
This is where brand and reputation is such a challenge for marketers. Qantas’s brand challenges are being created by the realities of the customer experience. Advertising can’t do much about that at the moment.
But that may also be what helps the brand come out the other side as Ferrier predicts. The orthodoxy goes that brands need to be build around truth. So when the company goes back to being a reliable, safe airline, that brand truth may, in theory, reassert itself quite quickly - particularly adults who knew it before the pandemic, particularly given the regularity with which its customers experience it.
In other cases, brand challenges come when consumers discover a new, unpalatable truth.
Take the entrepreneur Elon Musk, inextricably liked with the Tesla brand.
For years, he (and Tesla) got a pass. Even as evidence emerged over safety questions concerning Tesla’s autopilot protocols, he got a pass. After all, to build the future, you’ve got to cut a few corners.
But his brand problems only really began when he began to show more of who he really is.
Initially, it didn’t seem to hurt him too badly. His wild and incorrect accusation that one of the rescuers of the Thai boys trapped in the cave in 2018 was some “pedo guy” was driven by his massive ego. Diver Vernon Unsworth had been negative about Musk’s offer to build a rescue submarine, labelling it a PR stunt.
The halo around Musk’s car, battery and satellite innovations remained. Consumers are still willing to pay a lot more for Tesla Powerwall batteries than other equivalent brands for instance.
But with Musk’s attention seeking offer to buy Twitter, he began to come under serious scrutiny. The impulse started to look less attractive when he made a legally binding offer to buy the platform just before tech valuations collapsed.
Musk is now desperately trying to get out of the agreement. In the business world, he is now seen as somebody whose word cannot be trusted. It’s also dragged down the Tesla share price. That will only get worse when the legal battle with the Twitter board goes to court in three months’ time.
Even Musk’s most lickspittle followers (and there are a lot of them on Twitter) must be starting to reassess the halo. Musk’s problem is that a new brand truth is emerging. yes he’s an innovator, but he’s also a bullshitter.
And over the last couple of weeks, another halo has slipped.
Bruce Springsteen, who over decades build up a large and loyal following based on his empathy for (if not membership of) the working classes, has given them reason to doubt. For many years, even as the rock star has closed in on billionaire status, his blue collar supporters have not resented his financial success.
That changed when tickets went on sale this month for the US leg of next year’s tour with the E Street Band.
Sold via Ticketmaster, the new practice of dynamic pricing kicked in. Even quite poor tickets soon had an asking price of up to $4,000 - not from the scalpers, but as the official price.
Admittedly, I’ve got skin in the game. For a while, I’ve been, um, quite a big fan.
I’ve spent long enough following Springsteen that my Facebook and Twitter algorithms seemed to be showing me over the last few days nothing but shock and dismay from some of his most hardcore fans.
The word “betrayal” featured heavily.
Springsteen tickets have been on the expensive side for a long time, and in the past there were always apologists, reasonably pointing to the high cost of touring, and the value delivered from what was often approaching a four hour show.
And until now, the main target of vitriol has been the ticketing companies. A major part of the Ticketmaster business model is to be the bad guy who artists can blame when fans are being asked to pay exorbitant prices. Dynamic pricing is a new development though.
This time, fans were starting to see through it. They understood that Springsteen and his management had the power to call a halt if they wanted, but had chosen not to do so.
Springsteen has one of the strongest celebrity brands in the world. But the biggest backlash is coming from his strongest brand advocates.
Like Qantas, for Springsteen it may well come down to brand truth. Unfortunately, that brand truth looks like an unpalatable one.
Unmade Index: Back towards 700
For the first time in a while, the Unmade Index of ASX-listed media and marketing companies had more positive than negative days this week.
Friday saw the Unmade Index move up another 1.23%. It is now only just below 700 points, which is still admittedly 30% down on its 1000-point opening at the start of the year.
Yesterday was another good day for Seven West Media, up by 4.4%.
The poorest performer was Southern Cross Austereo, down by 1.24%. My guess is that this was unrelated to CEO Grant Blackley’s comments about investing in overseas growth.
Nearly time to let you enjoy your Saturday. Damo and I will be back on Monday with the Start the Week podcast.
Before I go, a reminder that we’re hiring a head of sales for Unmade, ahead of the launch of our advertising offering in October. Please do tell a (talented) friend.
Have a great weekend. And if you’re in NT or NSW, enjoy your long weekend.