The top story in today’s U.S. media is the decision by NBA commissioner Adam Silver to ban Los Angeles Clippers’ owner Donald Sterling from the game of basketball for life, in the wake of his profoundly racist comments released late last week by website TMZ. Silver, in his first major decision since stepping in to his new role three months ago, acted decisively in asking team owners to endorse his call for a mandatory sale of the team by Sterling.
What must not be overlooked in this story is the decision by 13 brands to discontinue a relationship with the team until the ownership changed, before the announcement yesterday by Commissioner Silver. This is an important evolution of the brand, which has taken on the role of advocate for the broad community of stakeholders. Brand moves well beyond functional attributes toward a deep relationship with its community, which relies upon the chief marketing officer to act in a manner consistent with the values of the society. Seen in this context, the decision by CarMax, Kia, State Farm and adidas* was a natural progression toward brand as leader, forcing change. I appeared last night on CNN to discuss this new level of brand responsibility.
I spoke with four experts last night, including Professors Stephen Greyser and John Quelch of Harvard Business School* (both ran the marketing department at HBS), David Kenny, CEO of The Weather Channel and former CEO of Digitas, and Gary Sheffer, vice president of corporate communications and public affairs at GE* and chair of the Arthur Page Society, the top association of PR executives. Here is their take:
Greyser said that this was a “co-branding” issue. “There was no way to separate the Clippers brand from Sterling. This is very unusual for owners… perhaps with the exception of Mark Cuban with the Dallas Mavericks or the late George Steinbrenner with the New York Yankees. But all of the brand associations were now bound to be negative. Even the Clippers players by turning their jerseys inside out were saying that the brand was unacceptable for the moment.” He noted that the sponsors continued to use the stars from the team in their advertisements (Blake Griffin for Kia, Chris Paul for State Farm) with no brand identification.
Quelch pointed out the power of social media in helping brands to make this quick determination. “By their intimate connection to individual consumers, brands can now much more quickly ferret out the true sentiment of the vox populi. The brands are tuned in but are also held more responsible for their sponsorships.” He noted the withdrawal of support by sponsors from Lance Armstrong in the wake of reports of his use of illegal substances.
Kenny said that brands are acting more quickly than before because they must. There are higher expectations because brands are more completely connected. “It is a totally transparent world. Stories move from peer to peer.”
Sheffer said that one of the core Arthur Page Society principles is “prove it with action.” It is the reality that must be fixed before any effective communication is undertaken. He also noted that the chief marketing officer and chief communications officer are inextricably linked as brand and corporate reputation now work together.
I want to give a bit of further context for expectations of brands from the Edelman brandshare study of last fall. Here are a few key statistics about what matters most to consumers and whether brands deliver on those needs:
- Communicate openly and transparently about how products are sourced and made — Importance 54 percent… Performance 12 percent… Gap 42 points
- Listen and respond thoughtfully — Importance 49 percent… Performance 10 percent… Gap 39 points
- Gives back to community — Importance 49 percent… Performance 12 percent… Gap 37 points
- Conduct business in ways that align with people’s values — Importance 46 percent… Performance 10 percent… Gap 36 percent
How to reconcile this wide gap between the expectation and delivery on brand sharing? The findings are clear; establish Shared Goals by asking people about their needs and helping consumers to succeed at what is important to them. An example is adidas asking women to photograph something that motivated them to work out, which changed the brand’s preconceptions about consumer goals. Then demonstrate Shared Values, specifically on sourcing, conducting business in a way that aligns with values and giving back to community. You will be rewarded for doing so; 92 percent of people want to do business with companies that share their beliefs.
Given this as backdrop, it is clear that the decision by the 13 brands was exactly correct. Brands establish trust with our customers by showing leadership, by putting engagement and integrity ahead of making money, because in the long run you earn relationship capital by doing the right thing and quickly.
Richard Edelman is president and CEO.