Bill Nichols

29 January 2014

PR Vital Signs: Maturity and The New Dashboard

Dr. Bill Nichols  - 012 – 29 January 2013

It’s one thing to measure, say, reputation:  quite another to understand and manipulate what influences that metric.  And for all the brouhaha about PR evaluation, here there is silence.  More or less.

For some answers,Vital Signs Report (2014) publishes today.  The first in a benchmark series, its insights flow from my recent collaboration with leading tech PR firm, EML Wildfire (1).  Its data is provided by some 80 clients and contacts across the firm’s network in the UK, US and Europe.

Unusually, we assessed the combined impact of in-house and agency teams: i.e. the total PR competency.  From the literature (2), we identified 10 possible factors or influences.  And we concluded by creating a three-part ‘dashboard’ for any PR organisation.

First up – ‘Business Results’ (i.e. leads, sales, profit)

In PR this is the P&L equivalent.  It tracks immediate gains and losses.  Here our top factor is ‘strategic planning’ (SP).  In fact, statistically, it’s the only significant factor that explains a substantial component of ‘Results’ (3).  Overall our sample is most positive about near-term SP.  It commends teams for such aspects as messaging, business strategy alignment, action plans and focused campaigns.

But our respondents are far more cautious further out.   To improve effectiveness, they highlight:  applying evidence consistently, sustaining a mission and pursuing long-term advantage.

And?  Other factors like creativity or techniques?  Actually not much else has any impact. Sobering given all the chat.

Second up – target ‘Reputation’

We see reputation as the ‘balance sheet’ equivalent.  The long-term tracking of net PR assets on the PR dashboard.  Here two factors are in play.

First, and unsurprisingly, ‘relationship orientation’ is the strongest influence on reputation. Attitudinally – the soft stuff – our teams are particularly well-placed.  They are, our sample reports, committed.  They seek authenticity.  They respect stakeholders and they will ‘go the extra mile’.  But they’re less effective at the practical execution of relationship-building.  Such as the analysis of broader perspectives, dynamic tracking of the influencer landscape and (again!) planning.

Second and intriguingly, limited evidence suggests that PR’s prized ability to generate ‘opportunistic’ activity may be a negative influence on reputation.  Short-term results gain: long-term reputational pain.

Third, bonus ball – ‘Maturity’

Our study also introduces a third lead measure: maturity.  It’s the equivalent of cash-flow and it’s a potentially major contribution suggested by the EML Wildfire team.  Maturity is a well-established construct in organisational studies.  Operationally it’s best characterised by that PR jewel: the ability to manage the unexpected and to cope with ambiguity.

To create a clear blueprint for managing maturity, we identified three factors at work.  They are professionalism, engagement and, especially, leadership.  Specifically maturity deepens as PR seniors acquire serious leadership skills and, above all, the confidence to play an active role at the C-Level.

Seeking enlightenment

As business gurus confirm, the act of measurement adds value if – and only if – it helps define and deliver a desirable outcome. Such as, in PR, a behavioural change.  This presupposes we understand the mechanism.  That we know what and how to influence the target.  A little more ‘X’, a little less ‘Y’ – that kind of thing.

But, as the Headmaster of Eton observed recently, “we live in an age of measurement and not of enlightenment.”   How true of PR.  Some cling to the old-time religion of the AVE. Others evangelise Barcelona and the new analytics.   In this ‘promised land’ we measure anything – and everything.

But we have little understanding of the influencing factors. Vital Signs Report (2014) offers our starting point.  Especially that new measure of maturity.  It correlates well with both results and reputation.  It may, we think, be the key moderator – a crucial focus for out study’s next round.  Join us at EML Wildfire to add your inputs to what is planned as a long-term project.

More to follow and, meantime, here’s to enlightenment!

-ends-

(1) Special thanks to directors Debby Penton, Lorraine Jenkins and Richard Parker.

(2)  Based on the Nordic three-dimensional service quality model.  So (A) hard/technical = (i) media platform, (ii) measurement and evaluation, (iii) techniques; (B) functional/integrating = (iv) resources/budget, (v) strategic planning, (vi) leadership, (vii) creativity; and (C) people/reputational =  (viii) professionalism, (ix) engagement and (x) relationship orientation.  Each factor successfully tested using Cronbach’s alpha: eight > .7 and two >.6.

(3) Using the 95% confidence level and multiple regression analysis.

 

 

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Bill Nichols

4 January 2014

011 – January 2014

Bye Bye Scepticism: How and Why CSR Communications Works

If the PR world has an equivalent of the UK’s PPI mis-selling scandal, it is surely the CSR-based communications campaign.   .

Note, this isn’t scepticism about underlying policy or philosophy.  Heavyweights on either side – e.g. Forbes (for) and WSJ (against) – continue to debate.  Companies may, or may not, have a social responsibility.  But, motivation aside, behaviour indicates value.  90% of Fortune 500 companies have explicit CSR objectives.  Half issue specific CSR reports1.  Even two-thirds of crusty CFOs see return, says McKinsey.

But it is serious scepticism about the current value of CSR presentation investment.   All too often CSR campaigns appear worthy and unfocused.  Just-in-case insurance policies, they ‘tick’ the politically- correct compliance ‘box’.  Yet how they work – or to what intended hard business outcome (if any) -remains unclear.

But the research case for the value of strategic planned CSR communication really is building.  And, as Keynes supposedly said, “when the facts change…”  Here’s how.

Evidence and Engagement

The B2C research ‘jury’ is already long-term supportive.  Active CSR promotion drives positive brand and product evaluations.  It also increases both satisfaction and loyalty2.

Now new US research3 is surprisingly positive about B2B.  For corporate comms professionals, it offers a practical evidenced prescription.

As a necessary preliminary, the new work distinguishes two forms of CSR engagement for B2B:

  • Business practice (BP) CSR focuses on e.g. employees and customers: think brand     sponsorship or cause-related product marketing.
  • Philanthropic (PH) CSR addresses e.g. community and third-sector: think community volunteering, social marketing or corporate charitable contributions.

BP CSR and Trust

In the B2B context, BP delivers trust and (ultimately) enhanced loyalty.  The BP toolkit is particularly powerful, the research finds, in three specific scenarios:

  • Compensating high market uncertainty or turbulence
  • Supporting/shifting product perceptions
  • Offsetting infrequent customer engagement and shallow relationships.

How and why does it work?   BP is practical or ‘instrumental.  Grounded in classic social exchange theory, it’s based on competitive ‘survival’ drivers and highlights concrete actions. This is active stakeholder marketing in which something is clearly ‘traded’.  And the acquired strong CSR reputation signals trustworthiness.

PH CSR and Belonging

But now posit situations where trust is necessary but not sufficient.  Where, say:

  • Competitive market intensity is high
  • Or the customer itself reveals a strong CSR orientation.

If your task is to create a strong association – or ‘belongingness’ – then, prompts the research, switch to the PH toolkit.

How and why?  PH activities are soft: expressive, emotional, even ‘warm and fuzzy’.  They  signal the societal or ethical.  Their outcomes are human welfare and goodwill.  They drive measurable customer identification.

So let’s leave philosophy and political correctness to others.  Even this long-term sceptic concurs: as a communications toolkit, it seems to work.  Embrace it!

-ends-

Hope you enjoyed the latest blog.  Thanks for reading and do please comment.  For earlier and regular updates join me on Astrophel for publications and blog or on Linkedin and Twitter.  

(1) Luo and Bhattacharya (2009), Journal of Marketing, 73 (6) 198-213.  (2) Bhattacharya and Sen (2003), Journal of Marketing, 67 (2) 76-88. (3) Homburg, Stierl and Bornemann (2013), Journal of Marketing, 77 (6) 54-72.

 

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Bill Nichols

31 July 2013

After the Crisis: What Price Recovery?

008 – Jul-August 2013

Picture the scene:  negative coverage fading; bloggers sand-blasting someone else; a desultory tweet or two; and the press office phones silent(ish).  The CEO has cut the decibels.  And, yes, stock is trickling back onto the shelves after the recall.

Crisis over? Job done?  You’d forgive exhausted comms and marketing chiefs for thinking so.

But they’re less than halfway there.  After containment, how next to recover on share, volume and margin?  The crisis recovery task is (at least) to restore – and (better) to exceed – the ‘status quo ante’.

Now, at this point, many a company tosses a coin.  Heads,  it’s the expensive advertising accelerator.  Tails, the price-discounting brake.  Or maybe both – and the kitchen sink.  But which choice is preferable? When and why? Surprisingly, and unlike containment, little robust recovery research evidence is on offer.

Until now.  A new study, which reviewed the aftermath of some 60 UK and Dutch product recalls (*), highlights two key influencing factors.  They are (i) the acknowledgement of blame (if/how) and (ii) the extent/volume of negative publicity.

To own up or not?

For many senior managers, ‘owning up’ (admitting blame) generates almost atavistic fear.  But it’s a powerful and cathartic PR move. It draws a line on the crisis and begins to restore trust.  If implemented (the study finds), it tends short-term to halt sales decline and sustain market share. Competitors, too, may quietly applaud since the entire product category may benefit.

But, medium-term?  Typically, advertising effectiveness decreases. So less bangs per buck and harder to grow the brand.  Conversely price sensitivity increases.  So far tougher to recover costs.

Any publicity may be good?

So what about negative coverage?  Not helpful you’d imagine.   True, on the downside, large-scale negativity associates with increased price sensitivity.  And the blight affects both the crisis firm and the whole category.  (No competitor applause on this scenario!).

But there is an upside.  It partly validates the old ‘any publicity is good publicity’ mantra.  Because, typically the raw power of large-scale heightened awareness outweighs its negative direction.  So it actually supports increased advertising efficiency.  On this tack, counter-intuitively, the greater the volume of negativity the faster the recovery!

Now, speculatively, throw in sustained PR (not a study variable) to further minimise the residual negative.  This may explain the rapid ‘bounceback-ability’ witnessed in some product recall scenarios.

Which way?

These, then, are complex effects.   Far from a toss of the coin (hit the advertising, crash the price), the  study pairs the factors to identify and support a much more nuanced four-way response:

  1. Low coverage/blame not accepted: focus on advertising, leave price alone
  2. Low coverage/blame acknowledged:  discount, withdraw from advertising
  3. High coverage/blame not accepted: go heavy on advertising, leave price untouched
  4. High coverage/blame acknowledged: the one case in which increased advertising may go hand-in-hand successfully with price discounting.

Now granted none of this is likely to set the adrenalin pumping.  It’s hard to match the buzz of fire-fighting.  Even prevention strategy development can seem more attractive than picking forensically through the ruins!

But there is a massive challenge here.  For recovery to succeed and deliver business benefits, both forensic style and careful manipulation of the key variables are crucial.

For some, crisis recovery could be just as structured as crisis management – and perhaps just as much fun!

-ends-

(*) Cleeren, van Heerde and Dekimpe (2013). .

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Bill Nichols

6 April 2013

Something Fishy and A New Narrative for Misunderstood Bankers

005 (April 2013)

A fun week for communicators.  ‘Candour’ duly re-appeared.  Fresh from its outing in the Francis NHS Staffs report, it featured in the Salz review of the Barclays Bank brouhaha. And alongside the ‘mass bloodletting’ (Financial Times) of ex-senior HBOS figures by the Parliamentary Commission on Banking Standards.

So candour is now definitely the ‘new black’ in comms and the poster-child for authenticity.

Meantime, please also welcome back the horsemeat saga. This time though in the guise of dodgy and decidedly not-so-candid fish.  (A development predicted, note, with unusual foresight in my previous blog!).

So consumer trust is getting a battering (sorry couldn’t resist) on all sides. But how do you restore a bank’s – or, er, a fish supply chain’s – reputation?

Reflecting on this rather seasick week, here are comments and recommendations from an anonymous banking insider.

“All this vitriol is unfair.  Simply out-of-order.   We need a new narrative.  Truth is we’re just an ordinary bunch of corporate managers.  Just like you’d meet in any wine bar, five-star hotel or business class anywhere.  We’ve the same motive as everyone else too.  It’s just that our opportunity was that much greater. Not our fault that it was more than the usual fiddled expenses. And the means?  Well what a smokescreen: no one understood how it worked and, let’s be fair, neither did we!

“Actually it’s doubly unfair to blame us current senior bankers.  Banks have been in the reputation ‘toilet’ for decades.   Back before 2008 they didn’t give a fig for the average lazy ‘can’t be bothered to switch’ customer: couch cash-cows we called them.  Consumers’ problem: not ours.  And as for the typical SME, to be honest banks provided a social service.  I mean, imagine looking after the local corner-shop?  All that cash, greasy banknotes, messy transactions and endless aggravation over the overdraft.

“So what then about candour and transparency?  Simply isn’t going to happen.  Give it a couple more years and it’ll all blow over.  The politicians and the lawyers, they know it.  They’re all in the same game.  £17 million for the Salz report: see what I mean?

“Now if you really wanted to fix the banks (or any other large corporate), you’d first, as the Yanks say, put the bosses right behind the eight-ball.  Never mind BASLE III and some computation no one understands.  You’d enshrine in statute clear lines of responsibility and accountability for company officers alongside total individual liability. Like the old partnership model.  Then reputation would really count.  It would be a constant risk – every moment of every day.  The senior guys would have to care!  (But imagine that principle applied in government departments or the NHS.  The politicians would never dare!).

Second, build reputation management into the banks’ risk assessment structures alongside the numbers.   That would put reputation clearly and decisively on the board.    But hey the comms girlies just do that CSR flannel right?

Third, devolve power consistently to the local branches.  Make community engagement (community knowledge and practical empowered local communications) a fundamental principle of how we banks do business.  It would transform perceptions – and performance.

Fourth and finally, take a lesson from all those proud fish-and-chip shop owners on TV this week.  The best of them know all their customers and can tell them which trawler caught which fish – even at what time!  Now imagine you knew your banker’s name. Met them socially.  Bought local services from local people.  That they could even confirm – like the old-style local building societies – the source of your loan.  In short imagine that you were connected. That you trusted and were trusted.

“Wow, what a fantasy.   Isn’t going to happen.  We’ll be more careful.  Maybe bung the government some more tax.  OK there’ll be something fishy from time to time.   But what’s to worry in the odd bad smell?  Or the odd Salzy report?”

-ends-

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