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20/07/2012 02:40
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Brand crisis - Brumby’s burns 50% goodwill - no brand resilience
Brumby’s CEO, Deane Priest, subsequently quit citing poor judgement. What we noted in Why building Brand Breadth is important for Crisis Management is that if an organisation is wellprepared in their brand and social architectures then they can not only potentially limit the risk but also have a much more efficient and effective means to respond and to measure the effect of their responses. We wrote previously how brands can adopt the concept of brand resilience and build out their social strengths in order to gain the positive brand value, and to be prepared for brand risks and to be better placed to handle the storm. We also noted that while the good news contributing to a strong brand mostly takes a long time to accumulate, the bad news happens at lightning speed. You can follow the outbreak of Brumby’s crisis in images at our Gallery of Social Intelligence on Brumby’s Brand Crisis One of those firestorms just engulfed the Retail Food Group through the CEO of their franchised Brumby’s Bakeries issuing a “foolish and ill-considered” memo. The memo told store operators to blame price rises on the Federal Government’s Carbon Tax which came into force on July 1 2012. What we see in the case of the Retail Food Group is a kind of benign neglect of social. It would appear to be more a case of ignorance than one of understanding, sizing up the options and risks, and then positively deciding on a social media strategy based upon on its full risk management and brand merits for the whole organisation – holistically across the layers of parent, franchise, franchisee and customers. We draw those conclusions for a number of reasons: • Nigel Nixon the CEO of RFG seems to have no profile on Linkedin • Tracey Catterall, Marketing & Innovations Director, Retail Food Group and who posted an apology on the Brumby’s website has an almost zero profile on Linkedin • While Brumby’s has a Facebook page it has no Twitter account that is obvious, and no links to Facebook or Twitter or any social

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Brand crisis - Brumby’s burns 50% goodwill - no brand resilience

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media from its website • Donut King on the other hand has a link to Facebook from it’s homepage, but not to Twitter or any other social networks and has no apparent Twitter presence • Michel’s Patisserie has no links to any social sites from its homepage, and no apparent presence on Facebook nor Twitter

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Lastly, the neglect of social strategy has allowed a rabbit warren of tangled brand and social presences which are a perfect illustration of a social architecture in disarray. For example Michels franchisees have Facebook pages, but no there is no corporate one, same on Twitter, same for Donut King on Twitter, same for Brumby’s on Twitter – not there – and multiple franchisees on Facebook – who are they, how do they represent the brand, what is their role in building brand breadth, how do they play a role in the current brand crisis?

Why is all that important? Because just going that far makes you stop and take a breath if you are thinking of how they could respond to this brand crisis. No effective social strategy can be developed without a thorough social assessment and in this case that assessment is doubly important. For Retail Food Group, a public company listed on the ASX, the brand damage does not just stop at Brumby’s. Donut King, and Michel’s are its other major brands and assets. The RFG website is totally focused on selling new franchises and the cashflow depends on ongoing fees paid by franchisees which in turn depend on gross sales of franchisees. Given that things are reportedly not good in other areas of the business this carbon tax social network fiasco is extremely serious. Not only are ALL those brands under attack but we see the public spectacle of Donut King and Michel’s distancing themselves from Brumby’s and everyone distancing themselves from “head office” with plenty of employee comments to that effect in social. In a multi-leg franchise system you want the whole to be offering more value than just the sum

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of the parts, whereas in RFG’s case the parts are now attacking each other. The system as a whole is seriously fractured – and that is not going to be cured by “hiring a social media expert” as we’ll explain further down. By the way the “distancing themselves from head office” is part of the RFG script sent to franchisees for staff to use in “conversations” with customers. Overall a very bad idea to script this like a political speech and only reinforces the fracture of the system, the incompetence of Head Office, the continuing “facelessness” of the executives from Brumby’s and Head Office, the idea that messages can be “pushed out” and that staff can be used as a channel despite their beliefs. If we briefly refresh on the components of Brand Resilience model, Brand Resilience is a function of Brand Promise + Brand Experience (Depth & Breadth) + Brand Friction + Brand Stock. Brand Breadth is a new idea which embraces all the “non-operational” touch-points, and especially social media and the “social presence” of a brand. This concept of Breadth is crucially important today for brands, because it has a significant impact on Brand Resilience.

and the fire from Brumby’s, remarkably, has not spread there yet – 155,000 Likes. 2. Relatively strong Brumby’s Facebook presence – 43,000 fans – but well under attack. 3. RFG does have a spread of experienced brand managers (according to Linkedin) who may be able to collectively focus on effective ways to mitigate the overall damage to the brand portfolio 4. As a public company RFG presumably has reasonable funds to sustain the investment required to recover from this debacle

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SWOT Strengths Weaknesses Opportunities Threats
How would you assess Brumby’s and the RFG’s current ability to manage this brand crisis? Here is an assessment, based on a few hours scanning the social web. (Note on the right that Brumby’s 100% positive sentiment in social media has plummeted to 47% negative in the last 7 days.) Strengths 1. Strong Donut King presence on Facebook Weaknesses 1. Lack of Executive presence in social, and therefore one assumes lack of experience in understanding social, is a key weakness 2. Lack of social assets and in particular a social strategy linked to business goals 3. Lack of a community strategy and reliance on open social networks 4. A fractured and disjoint approach to social

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media presence across the group i.e. a poor social architecture 5. Clearly, no social governance procedures and associated Board processes, thus increasing the potential risk (it’s impossible to have good social governance around a poor social architecture). Opportunities 1. The various brands does have some Brand Stock which they will have to eat into for this crisis, the parent company itself has none. 2. RFG can learn from other social disasters and recoveries such as Domino’s which is a very relevant case study, and well recovered, even to the extent of them establishing a website devoted to their own strategy and recovery at PizzaTurnaround.com! 3. The principles of managing a PR crisis are also well understood, and perhaps they need Jane Jordan-Meier ASAP! 4. The damage in social media may possibly be more smoke than substance, from a few activists and trolls as in the case of one of the Qantas social media debacles we analysed, which RFG needs to find out ASAP in formulating their response.

as consumers become more aware of the relationship to RFG and the “faceless” head office 3. Social can’t be fought by faceless staff and if the executive teams remain faceless and without presence in social then the risks of failure are much higher 4. Treating this is a “social media” exercise rather than a business strategy with social elements which touch every part of how RFG and its franchises and franchisees operate is a major threat to a successful outcome for all stakeholders – shareholders, franchisees, employees, and the public.

Social media expert might be part of the problem
That last Threat #4 is a key to understanding how to take RFG and the whole system forward. All well and good for a “social media expert” to be fighting the fires. But of course that is all in a strategy vacuum in the absence of a coherent social strategy linked in to business objectives both at the parent RFG level and the franchise level. In this type of business it’s a complicated multilevel analysis which is required, with proper business methodologies and fact-based decision-making. This embraces social strategy, social business intelligence, social communities, and social governance – and none of that relies on a social media expert. In fact confining thinking to marketing and social media is certain to lead to disappointing outcomes.

http://igo2group.com/blog/brumbys-brand-risk-crisis-lacks-resilience/

Threats 1. The RFG brands have low Brand Friction, and thus customers can move away quickly, especially when mobilized around such an emotive issue as the environment 2. The Brand Stock, or goodwill, is substantially locked in Donut King, and leveraging it into the fight for Brumby’s might cause even more damage to Donut King and Michel’s

Preparing for and managing a crisis
In the meantime the Brumby’s brand crisis remains in full swing and what’s needed is a plan for effectively dealing with that. If we recall Jane JordanMeier‘s advice from her book, “The Four Highly Effective Stages of Crisis Management: How to manage the media in the digital age” there are clearly defined, identifiable stages that the media, both old and new, report a crisis:

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• Stage 1, where the spotlight is beaming squarely on the incident – the “breaking news” stage where people want to know more about the event itself; • Stage 2, where the beam broadens from the event to the “victims” and the response – how could this have happened, how is the organisation responding, who is responding, who is the perpetrator? This is where RFG/Brumby’s are now. As Jordan-Meier explains it: This stage is key. This is the make it or break it stage, the reputation forming stage, the stage where the rallying on social media sites, both negative and positive, becomes a focal point. The spotlight, with widening and growing intensity, points at the organization and persons who appear to be at the center of the storm. It will roam around and catch whoever will talk about what’s just happened. Experts start to appear on CNN, victims start talking in-depth about their experiences, and the organization starts to give its side of the story. • Stage 3, is the blame and finger pointing stage, with the key focus being “why”, and everyone has an opinion. The spotlight has become a floodlight and your crisis is beamed everywhere in every channel by the informed and the uninformed; • Stage 4, the spotlight begins to dim as you’ve reached the fallout / resolution stage. The caveat being that your “sin” is forever recorded and discoverable – you can’t take it back and a crisis might flare anew again if you slip up. That’s the predictable pattern, and the good news is that you can prepare for it, which RFG did not. The bad news is that brand disasters now happen at lightning speed, which means that you need to prepare ahead and to sow some fertile ground – which is one of the key elements in “preparation”

and Brand Breadth – and as we’ve shown RFG unfortunately lacks this brand breadth as a foundation. We’ve seen that many brand crises are where social media marketing has backfired – which is why proper planning for social media and crisis planning is essential. How well do you think Brumby’s and the Retail Food Group has handled this brand crisis so far? Please comment below. WalterA Follow @adamson http://xeeme.com/walter Tweet to @igo2

http://igo2group.com/blog/brumbys-brand-risk-crisis-lacks-resilience/

Related post: How Brand Breadth can be used to enhance Brand Resilience. Curated reactions on Storify Brumby’s Brand Crisis Social media intelligence on this story at our Gallery of Social Intelligence on Brumby’s Brand Crisis See also Social Media Monitoring Tools For Effective Crisis Management by @janejordanmeier

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