In the March 22 Sunday New York Times, an excellent ongoing series follows small businesses and how they are coping with the recession. The story includes a profile of the owner of a small restaurant, and a quote that shows the fundamental role of reputation. Despite financial pressures, long hours and far less business, Mouhamad Shami says he has made no changes in his recipes:
“On quality, I don’t cut corners. Customers, they put their trust in me. I live for that reputation, and that means a lot to me because I want to be remembered that way…he was honest, and he served us from his heart, not just to get his living and didn’t care.”
This is a real-life demonstration of reputation’s link to values–in this case, quality, integrity, and a sense of legacy. And it demonstrates the universal expectation on both sides of any business relationship that reputation functions as a catalyst for business decisions and behavior.
Mr Shami, like a lot of business owners, is making difficult, conscious choices to protect his reputation and the future of his business. He expects his customers will base their decision to come back — at least in part – because he is an honest purveyor of a good product and he cares. His customers’ experience and expectations give him credibility — credibility that he earned.
At a dark moment for Mr. Shami’s business, he isn’t focused on self-promotion for the sake of a transaction. He is thinking about what he sells in the context of a real relationship, one that involves him personally. Businesses of every size make the same choices as they and their customers struggle to cope with the economic crisis. It may not always feel so personal, but perhaps it should. Certainly most senior executives in companies see their own personal reputation and their company’s reputation as intertwined, if not inseparable. In the best, most successful companies, it is not unusual to find that employees see a fundamental connection between their own identities and the perception of the companies they work for by customers, friends, and new acquaintances. It isn’t surprising that one sign of a low point in a corporate crisis is when employees stop telling people they meet where they work. In fact, AIG has, according to some reports, advised its employees not to tell people who their employer is, presumably to forestall any comments about what happened there. That’s a step beyond the usual reaction, and it’s unlikely to work.
Back to Mr Shami. His quote is also a great illustration of how brand and reputation work in practice, and the example applies to any product or a business. Is he talking about making claims about his product, telling people “I’m still here” like the new ads for GM’s Saturn brand? No, he’s protecting his own basic values and the fundamental attributes of his reputation. He’s trying to make sure he can deliver on the positive expectations that he has already created among his customers.
Talking about the difference between brand and reputation, the shorthand I like is: brand is what you say about yourself; reputation is what others say about you. There is no doubt that brand is and important concept, especially when visibility is the objective. It’s part of the equation that is within control of the owner. But when a company or a product is judged and talked about among its customers, investors, employees and other constituents–especially at times when legacies are created or destroyed– reputation is the driver of decisions.
If you doubt the fundamental nature of reputation, just re-read Mr. Shami’s quote–it could have been said by anyone, at any point in history, and it would be just as relevant. When you think about the role of reputation in every decision you make about a person, product, service, or institution, it isn’t hard to see that reputation was the original risk management tool, as old as human interaction.
By the way, the article says his restaurant is called Alfanoose, and it’s on Maiden Lane in New York’s financial district. I’m going to try it when I am next downtown at lunchtime. Not only because I like Middle Eastern food, but because now I know he’s there, and Mr Shami’s comments earned my respect and a positive expectation about his food. If that’s not a definition of public relations in action, I don’t know what is.
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As Mr. Shami demonstrates, adherence to core values during difficult times can distinguish a business and its reputation.
Difficult times also create opportunities for companies and their leaders to enhance their reputations through the power of an innovation that addresses the zeitgeist or demonstrates solidarity with customers — or, this winter, in the case of Hyundai, both. In January, as the big three U.S. automobile manufacturers were being criticized for being out touch with the national mood Hyundai’s American subsidiary introduced its Hyundai “Assurance Program”. The Assurance program, which reportedly has its roots in timely and insightful focus group research, gives a Hyundai purchaser the right to return his or her new car in the event of a job loss. This innovative program reflects an astute understanding of the current anxieties of Americans facing an unpredictable economy, and signals Hyundai’s willingness to help alleviate some of that anxiety. Over time, it may be prove to be an interesting case study on the reputation value of stepping forward at with a good idea when the times call for empathy and innovation.
While many companies are holding back on new initiatives while they get their bearings, Hyundai stepped into a void in its industry at a time when many Americans were foregoing new car purchases. A bold, customer-focused expression of confidence during a time of worry and uncertainty will be noticed now and likely remembered later. In the meantime, Hyundai’s proactive empathetic communication to customers about a program that matters to them will no doubt contribute positively to the company’s image and reputation. The full page article on Hyundai’s initiative in this week’s New York Times Magazine is an early indicator.
http://www.nytimes.com/2009/03/22/magazine/22wwln-consumed-t.html
FWP
To update my prior comment: The resonance of Hyundai’s Assurance Program can now be seen in this week’s announcements by Ford, and then GM of their own payment protection plans to help customers overcome anxiety about the impact of a potential job loss on their ability to make car payments. Hyundai, by being ahead of its competitors in accurately assessing the American psyche in the downturn, continues to be cited favorably in the coverage as having taken the leadership position on reaching out to address the concerns of consumers. The follow-on programs by Hyundai’s competitors help to further enlarge the reputational boost Hyundai received for stepping into the breach and going first.