5 Ingredients For Saving Toyota’s Brand

Toyota’s recall and the way that it has handled the problems so far has certainly eroded consumer trust in Toyota. Does this mean that the Toyota brand is dead? Not necessarily; it depends on how the company responds to this crisis going forward.

While there will definitely be a lot of negative sentiment in the short-term, Toyota can come out of this period with renewed strength in its brand if it delivers on the five elements of my C.A.R.E.S. model for service recovery: communication, accountability, responsiveness, empathy, and solution.

There will be twists and turns to Toyota’s brand perception over the next several weeks, but the long-term impact won’t be seen for at least several months. If Toyota can get passing marks for how it C.A.R.E.S. through this period, then it should be able to save its brand. But if it doesn’t, then…

The bottom line: During a crisis, intensify your focus on customers

10 Innovation Steps For CEOs

As I’ve described in the 6 new management imperatives, senior executives need to turn innovation into a continuous process. This is even more important in this economic downturn where innovation is sorely needed, but can be easily ignored during cut-backs.

In a book called Innovating at the Top: How global CEOs drive innovation for growth and profit, researchers at INSEAD examined the innovation efforts at nine corporations: 3M, Research in Motion, Genentech, Unilever, SAP, Bosch, Nokia, Infosys and Toyota. The research uncovered ten innovation drivers:

  1. Appoint the CEO as the innovation champion
  2. Celebrate an innovation culture
  3. Engage more innovation partners by sharing knowledge
  4. Organise diversity to promote positive friction and cross-fertilisation
  5. Use customer needs to drive simultaneous R&D and Business Model Innovation
  6. Set high-quality standards and demanding challenges
  7. Encourage youth and keep a challenger mentality
  8. Appoint appropriate decision-makers and encourage transparent information-sharing
  9. Use processes judiciously
  10. Incentivise people to innovate continuously

Given my focus on customer-centricity, I really enjoyed these quotes:

Innovation, based on the needs (of customers), is faster, cheaper and a more dependable approach.
     – Fujio Cho, chairman of Toyota Motor

Unless our researchers realise what the outside world is and what is happening in the trenches, their innovations will have no value for the customer.
     – N.R. Narayana Murthy, chairman of Infosys

The bottom line: A recession is a great time NOT to forget about innovation.

Gen Y Brands Gain, Financial Brands Lose

Interbrand just published its annual ranking of the 100 best global brands. Here are the top 10 brands on the list:

  1. Coca Cola
  2. IBM
  3. Microsoft
  4. GE
  5. Nokia
  6. Totota
  7. Intel
  8. McDonald’s
  9. Disney
  10. Google

Here’s some of the other interesting details from the rankings:

  • Google is the only new entry to the top 10; it was 20th last year. Which company dropped out? Mercedes-Benz was 10th last year and is 11th this year.
  • The listing also provides the change in value of the brands since last year. Here are the biggest changes in brand value:
    • Top gainers: Google (+43%), Apple (+24%), Amazon (+19%), ZARA (+15%), SAP (+13%), and Nintendo (+13%)
    • Top losers: Merrill Lynch (-21%), Gap (-20%), Morgan Stanley (-16%), Citi (-15%), Ford (-12%), and UBS (-11%).
    • The top gainers are what I call “Gen Y brands,” they came to age during the early adulthood of 20 year-olds, while the losers are dominated by large financial institutions.
  • There were 7 new brands on the top 100 list this year: H&M (#22), Blackberry (#73), Ferrari (#93), Giorgio Armani (#94), Marriott (#96), FedEx (#99), and Visa (#100).
  • The highest ranked company on last year’s list that did not make this year’s top 100 was Kodak (#82 in 2007).
  • For fun, I went back and looked at the top 10 brands from 2001. Here they are:
    1. Coca Cola
    2. Microsoft
    3. IBM
    4. GE
    5. Nokia
    6. Intel
    7. Disney
    8. Ford
    9. McDonald’s
    10. AT&T

The bottom line: Just about everyone recognizes this: 

The Satisfaction Quarterly Report, Q2 2008

The American Customer Satisfaction Index (ACSI) just released its Q2 2008 report that covers the following sectors: Internet news & information, portals & search engines, automotive, electronics, major appliances, and personal computers. As I mentioned in a previous post about the ACSI, it’s a great research effort that doesn’t gets enough visibility.

Here are some highlights of the new data:

Ratings Of Firms

  • Top rated: Toyota and BMW
  • Top rated relative to industry average: Apple and Google
  • Largest improvement (since last year): Google and Apple
  • Lowest rated: AOL and HP
  • Lowest rated relative to industry average: AOL, Chrysler Jeep, and Ask.com
  • Largest decline (since last year): Whirlpool and HP

Ratings Of Industries

  • Top rated: Electronics
  • Largest improvement (since last year): Internet Portals & Search Engines
  • Lowest rated: Personal Computers
  • Largest decline (since last year): Major Appliances

While it’s interesting to look at the data, I also like to read the commentary by Professor Claes Fornell who puts the customer satisfaction results in context of the overall economy. Here’s an excerpt from his Q2 2008 comments:

Future consumption growth is impeded by many factors, chief among them house-price deflation (which has trimmed household wealth), tougher credit conditions, a worsening labor market, and continued high fuel and food prices… Under these circumstances, even if customer satisfaction were rising, it would be difficult to offset pocketbook limitations. But since ACSI shows no aggregate growth, the outlook for more aggregate spending growth continues to be bleak… The ACSI forecast suggests a third quarter spending growth of no more than 2.3% and the economy will continue to struggle… But all is not doom and gloom. E-business and technology lead the way. Customer satisfaction for e-business is up by almost 6%.

The bottom line: Satisfaction may be down, but Apple and Google are doing something right

%d bloggers like this: