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The current U.S. economic environment is certainly a trying time for most businesses but eventually this period will end giving rise to unique business opportunities for firms that are correctly positioned.  Biz360 was asked a novel business question by a top-tier firm in Silicon Valley to help them in formulating their “break-away” strategies.  Specifically:  are there any key learning experiences, including positive and negative ones, in managing a firm’s communications during an economic crisis?

Biz360 analysts looked at over 18,000 news stories related to the current economic crisis from a September 2008 through March 2009 timeframe for GM, Chrysler, Citigroup, AIG, Merrill Lynch and Sun Microsystems and how they managed the public’s perceptions of their brands.  Metrics included Coverage, MediaSignal, a measurement of audience reach based on the circulation / viewership of media coverage tempered by how prominently a brand was mentioned in the article, and Tone, a measurement of how  positive, neutral and negative a particular article was concerning a particular business.

GM and Chrysler were top newsmakers in coverage related to the economic crisis.  Primary coverage drivers for the automakers included 1) Lack of Planning 2) Layoffs 3) Viability 4) Earnings and 5) Financial Responsibility.

Financial firms Citigroup and Merrill Lynch and Insurance conglomerate AIG garnered next highest media visibility in stories that mentioned  1) Earnings Losses 2) Federal Bailout Burden on Taxpayers 3) Questionable Business Practices and 4) Planning for the Future and 5) Executive Compensation.

Summary of Key Media Issues

Auto Makers

1. Planning for the future – basic business effectiveness
2. Lay-offs – sticking it to the ‘little man’
3. Viability
4. Earnings
5. Financial responsibility

Financial Firms

1. Earnings
2. Taxpayer burden
3. Business practices
4. Planning for the future
5. Executive compensation

Overall

§         Auto makers were chastised more for basic business competency whereas Financial firms were pilloried more for moral / ethical issues

§         Neither outcome was pre-planned

§         Issues differ for different market verticals

PR Opportunities That Eluded GM – An Example

• GM is an excellent example of “missed opportunities”
• GM is now effectively characterized as a incompetent business, uncaring of its employees, a non-innovator, and which may no longer even be viable
• Did you know:

–         A Buick won the 2009 Best Car of the Year award (Money Magazine)

–         The ZR 1 won the 2009 Automotive Excellence Aware for Performance (Popular Mechanics)

–         Cadillac won the 2009 Best Resale Value Award (KBB)

Conclusions

• Both the finance and automotive brands were not proactively aware of the issues, nor their details, confronting them
• No effective response strategy was in place
• No public awareness of steps being taken, or other positive factors, which could lessen the impact of the stories that grew to dominate their brands
• The finance brands were among the most positively perceived global brands nine months ago and are now arguably the most vilified brands
• The automotive brands have been suffering from a longer-term brand erosion – and we know many of the specific issues as to why that exists within today’s media – issues that could be addressed at least to some extent
• In the time that a major brand becomes initially aware that something can, or will, be an issue and the time that everyone is fully aware that it has now become a major PR issue is small
• GM and AIG are not necessarily managed by complete incompetents, yet these mission critical media issues escaped management’s early warning systems and now threaten these companies’ continued survival

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Key issue with marketing research.  Overcoming a common, but frequently overlooked, weakness in many marketing research studies — many marketing research professionals go to great lengths to discover what are the right issues andthe right topics for their research studies.  Such exploratory research may utilize tools such as focus groups, diads, or simply chatting with the right people or examining the right blog. 

Unfortunately many other researchers do not make this level of investment beforehand.  Instead, they draft their questionnaires or moderators’ guidelines, plunge ahead, and then proceed to analyze the resultant data and make a myriad of recommendations.  Results which may turn out to be entirely off the mark or just plain wrong in key respects.    This reminds me of a play on an old adage:  “Garbage in and gospel out.”   Partly, this is why many marketing and business professionals who need and value this kind of insight have such a low regard for expending resources on marketing research – a low ROI.

A good beginning.  Beginning in the first half of the 20^th century, marketing research began to take on the guise of science, employing sophisticated sampling techniques, strict screening of study participants, well-designed questionnaires, and complex statistical techniques that produced accurate results.  But the latter part of the same century saw the growth of dual working households, the spread of telephone answering machines and of mobile phones.  All of these new-found obstacles to interviews were coupled with a proliferation of telephone surveys and direct marketing callers which dramatically and adversely impacted people’s willingness to participate in a survey. 

The end of the beginning.  In part, to keep up with the need for marketing research information, comparatively easy to arrange online focus groups and online surveys arose followed by the growing construction of large panels of people who would participate in research studies for a fee or reward.  .  At the same time, marketers grew leery of “professional participants”, people that marketers were unsure of who they were or their appropriateness in participating in their studies.  And concerns grew for the reliability, accuracy and projectability of information derived in this manner.   

A new opportunity to derive consumer insight is emerging.   Never before has the voice of the consumer been so accessible and transparent as that contained in online social media and product reviews.  Now actual buyers of products and services are talking with the online world in general, other prospective purchasers in particular, and you, their marketer – if you will listen.

These “hand-raisers” will freely provide you  the strengths and weaknesses of products, your competitors’ products, the means to better position these products with them via their own language used in their conversations, and a host of other valuable competitive differentiators.  Recently, in October 2008, I was involved in an Opinion Insights research study for two prominent builders of the latest craze in notebooks, the light-weight, inexpensive, “netbook”.  We were hearing early on that many of the first wave of purchasers were displeased with the significantly under-powered systems (RAM and CPU) in spite of the low prices and extraordinary portability of their new netbooks.  The manufacturers of these new systems were essentially unaware that a brewing adverse backlash within the marketplace could be building.  Product marketers are beginning to introduce newer, more robust netbooks albeit with trade-offs at least in terms of higher price points.

Marketers and researchers are only just beginning to tap into this new source of consumer information.  By consolidating the thousands of online opinions, researchers can lay much of the groundwork and enable traditional research and product planning to be as pointed and efficient as possible.  We are at the early stages of effectively promoting a dialogue between consumers and marketers and maintaining the trust and convenience that existed for all before the end of the beginning of marketing research described above.