Brand resilience. Now it's the turn of the people’s car!

by Nick Ramshaw

Is Chelsea’s defence resilient enough to re-capture last season’s dominance? Why have the stock markets shown such great resilience since China’s recent economic downturn? Will Jeremy Corbyn be resilient enough to survive being leader of his own party?

  • What is resilience?

    Resilience. Everyone needs it, apparently. The word is everywhere right now and is becoming the buzzword that knocks journey into touch. And just to be clear, the dictionary defines it as ‘the ability of a substance or object to spring back into shape’. So now you know.

    In the world of branding, there have been many examples of resilience. Skoda has done a remarkable job transforming its reputation from joke car to genuine player, thanks to VW’s stewardship. Ryanair has been working hard to build its reputation by improving customer service and its attitudes towards customers. Micheal O’Leary has finally worked out that making life better for passengers, leads to having more passengers, and more sales. Who would have thought? But Malaysia Airlines, after the incidents of flights MH370 and ME17, has decided that its brand is too damaged to continue, so will rebrand. Sneakily, it has also used the opportunity to take considerable cost out of the business by creating a new company.

  • So what of VW?

    What impact will the emissions scandal have on the brand of the world’s biggest car manufacturer? Will it survive? Will it need to rebrand?

    These are the big questions that I’ve been thinking about all week, as the story unfolds. The CEO, Martin Winterkorn, has just resigned and the share price has fallen by 30%, so they have a real fight on their hands. This is a brand that was created in 1937 and has been responsible for some of the world’s most iconic cars like the Beetle, Golf and Campervan (or Type 2 to give it its proper name). The brand has already shown great resilience, by prospering for nearly 80 years and overcoming it associations with Hitler. Adolf had a hand in the design of the original ‘People’s Car’ which evolved into the Beetle, insisting on an air-cooled engine so nothing could freeze. Interestingly, at that time it was said that the entire project was financially unsound and only the corruption and lack of accountability of the Nazi regime made it possible (1).

  • How serious is it?

    For me, the fiddling of emissions data is more serious than a technical error that requires cars to be recalled, even if it has such serious safety impact. The current claims are far worse, in my view, because VW has intentionally mis-lead so many people. People who are conscious of their impact on the environment, and have tried to do their bit by buying a diesel car, based on the emissions data published by VW. And I include my own wife in this. She bought a diesel Audi A1 last year, for these very reasons, and now she feels duped and embarrassed to be adding to climate change rather than helping slow down the effects.

    How ironic that the company that means ‘People’s Car’ should do this. It beggars belief that software has been developed to rig tests, to gain market advantage. And it has been done throughout the world affecting 11 million vehicles (2). I suspect that CEOs coming out to admit they have screwed-up, to be quickly replaced with new, just as highly paid executives will not be enough. This brand really needs resilience.

  • How do resilient brands behave?

    In my opinion, doing some or all of the following should help:

    1. Be honest
    Both with yourselves and your customers. If you try to get away with things, the world will find out. The internet is the great leveller.

    2. Know your customers
    Knowing how they feel is key. And this will change as they are humans after all. Get close and get personal, and do not take anything for granted.

    3. Always review
    Constantly review what your are doing the ways you do it and check your behaviours match your values. Change is the new constant.

    4. Be open-minded
    Open to new thinking and ways of doing things. This is what people expect and demand.

    5. Be proactive
    Don’t leave things and hope they will go away. They won’t. Take the lead, even if its scary.

    6. Act fast and always do things quickly
    Make sure customers know what you are doing, and do it quicker than you think it needs doing.

    What is happening to VW is a salutary lesson for all brands. Whilst I can’t believe it has done what it has done, I think the brand will survive. It will take a major financial hit (quite rightly) and I hope everyone who has unwittingly bought their car believing it is something else are properly compensated. This sounds like the next PPI mis-selling scandal.

    (1) Tooze, Adam (2006). The Wages of Destruction: The Making and Breaking of the Nazi Economy.

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