THE BLOG
09/13/2013 12:22 pm ET Updated Nov 13, 2013

The Day That Branding Died

During the financial crisis, brand promises were broken amidst a dearth of accountability. When Lehman Brothers fell and set off a chain of reactions that threatened the global economy, business leaders focused on operations and overlooked their customers' emotional experiences.

While Americans waited for the economy to stabilize, the things they owned lost value. During nine agonizing months, from September 2008 until markets steadied in the summer of 2009, millions of Americans lost their jobs, their homes, their retirement dreams, and the sense of security that once came with ownership.

The practice of branding rose to prominence in the 1950s and 60s when quality brands needed to differentiate themselves from competitors. It was the era of mass production and mass consumerism. To compete, marketers devised a careful methodology for packaging, promoting, and advertising their products. Branding was the art and science of projecting an image and an aspiration at consumers.

In a crisis, however, people don't want to be treated as consumers and they don't want information projected at them. They want someone to understand their concerns and to help them rebuild. However, in 2008, listening and demonstrating empathy were not highly valued business competencies. As a result, customer cynicism intensified while branding lost its supremacy in the marketing department.

Tipping point
Before the crisis hit, several long-running trends were already influencing business communications. First, the slow and steady decline in trust of both business and government was already dire. According to former Harvard professor Joseph S. Nye, 1964 remains the high water mark for trust in the federal government when three quarters of the American public said they trusted government.

By the summer of 2008, that number had fallen dramatically and Gallup's polling showed just 12 percent of Americans expressed confidence in Congress. That same year, the Edelman Trust Barometer reported that trust in business trailed government in most areas.

Second, social media was already shaping customers' expectations and sense of entitlement. People were no longer satisfied to receive a company's messages or seek out information on their own. Instead, they wanted to engage.

Collaboration and engagement with brands through social media provided the first defensible proof, by way of data, that customers were prioritizing experience over ownership. Not only did people want to voice their perspectives, but they wanted to feel heard, also.

Third, the diffusion of brands, enabled by social media among other channels, created a sea of noise that turned people off. In 2004, The Economist reported on a study by Yankelovich Partners that showed 65 percent of people said they felt bombarded with advertisements and almost 70 percent would value a product or service that allowed them to avoid marketing pitches.

Empathy prevails
Today, brand is something teenagers cultivate on Facebook. To differentiate themselves, companies are learning how to reach customers more authentically. In contrast to the financial crisis, when customers were traumatized and businesses said and did very little to reduce anxiety, recent crises offer more hopeful examples.

After the devastating Japan earthquake and tsunami in 2011, businesses found ways to reach citizens, not consumers. At Google, programmers built an online Crisis Response Center that used a map of Japan to relate geographic locations with breaking news. In addition, Google created a tool called Person Finder, which was active on both English and Japanese websites to help people locate loved ones.

In 2012, after Hurricane Sandy destroyed a large swath of the northeast, Verizon and AT&T deployed trailers into devastated areas. These mobile power stations helped customers charge phones and computers or simply access the internet. Because these companies listened to people's needs, they were able to devise meaningful solutions that helped people when they were vulnerable.

These goodwill efforts are considerably less costly than traditional advertising. In the case of Hurricane Sandy, goodwill efforts allowed customers and employees to interact directly with the brand during a moment of need, thereby increasing employee engagement and brand equity simultaneously.

The morning after the storm, Governor Chris Christie toured his ravaged state. He walked the streets, he listened to citizens, and embraced homeowners. While Mayor Michael Bloomberg directed an impressive crisis management operation from a centralized location, Governor Christie stayed on the move, spending time with people. He instinctively knew that when people feel vulnerable, the single most human thing a leader can do is to show them that he cares.

According to Gallup, his brand did very well as a result. In April of 2011, 49 percent of Americans could identify Governor Christie and 27 percent had a favorable perception of him. In June of 2013, those numbers jumped to 72 percent and 52 percent, respectively.