Marketing Lessons from Virgin: How to Help a Brand Survive Setbacks
Branding is all about building a positive reputation for a firm – but knowing what to do when things go wrong is also very important.
Every company needs a strong brand name, something that arises not from one element but several. Each part is important, but the combination of them is what makes your brand effective:
- Brand position – this explains what you do and for whom
- Brand elements – such as the logo and slogan
- Brand essence – this sets your firm apart from its competitors, emphasising your unique selling points
- Brand promise – this outlines the most important thing you promise to them
What can go wrong?
Getting this combination right will give your firm a huge advantage over rivals who cannot do the same. But the reality of business life is that sometimes things can happen that disrupt the path towards building a powerful and positive brand name and image:
- Poor customer service
- Shortcomings in products
- The company could be embroiled in controversy, such as a multinational involved in aggressive tax avoidance
- A misguided marketing campaign that causes offence or insult could harm a brand
There may even be problems caused by reckless statements by a senior employee. Examples include remarks by jewellery mogul Gerald Ratner in a 1991 speech denigrating some of his firm’s products, or recent comments about terrorism by Ryanair boss Michael O’Leary.
These are just some of the calamities and controversies that can harm a brand. The question is, what can be done about it?
What has happened to Virgin?
A brand that has survived more than its fair share of mishaps is Virgin. Co-founded by Richard Branson, it emerged with a classic rags-to-riches story of a man who came from humble beginnings and managed to build up a business empire from scratch. Starting with a record shop in the 1970s, the firm then gradually expanded into a huge array of different fields.
Consumers were attracted by the energetic, positive image built around the positive, adventurous personality of Mr Branson. This was personified by his daring hot air balloon stunts in the 1980s, including the first successful crossing of the Atlantic.
This led to an expansion through which people have been able to fly with Virgin Atlantic, ride on Virgin Rail, listen to Virgin Radio, a bank with Virgin Money, telephone people on Virgin Mobile and get online with Virgin Broadband.
However, while the brand has continued to be successful in many ways, it has endured a number of major failings and mishaps:
- Virgin Cola – launched in 1994, Mr Branson declared it was the best tasting cola on the market and anyone who didn’t agree could get their money back. How many did ask for a refund is not known, but it failed to live up to the brand promise, only held a small market share and disappeared in the 2000s.
- Virgin Group Holdings is officially based in the British Virgin Islands. Far from being a positive for the brand, this is controversial as the islands are a tax haven.
- Healthcare provider Virgin Care was criticised for suing the NHS after it failed to gain an £82 million commissioning contract to provide children’s services in Surrey.
Each of these might have been a huge blow to a brand, yet Virgin has managed to roll with the punches and carry on thriving.
How does Virgin cope with problems?
This prompts two questions: How has it done this? And how can other firms emulate this resilience?
There are several good explanations that can be drawn upon:
- Separation: While the Virgin Group brand is a conglomerate that uses the same logo and has the same association with Mr Branson, there is also sufficient separation to ensure harm in one area is not replicated elsewhere. In other words, someone beset by late trains would not necessarily be put off Virgin Mobile.
- Goodwill: The fact that the brand had built up a very strong and positive reputation over many years. Had a calamity befallen Virgin Records in the 1970s, the outcome might have been very different.
- Strong PR: As a large brand name and group, Virgin is able to dedicate considerable resources to its marketing and PR, helping ensure it has enough good news to publicise to help drown out the negative publicity.
- Support for good causes: Examples include Virgin Startup, a charity aiming to enable entrepreneurs to follow the same dream Mr Branson did.
What could your firm do?
The question is, can a smaller firm emulate any of this?
Apart from the charity element (albeit on a smaller scale), the answer is likely to be no. If a company specialises in one area of goods or services – be it eCommerce for certain types of goods, legal services, accountancy or whatever else it may be, a failing on one specific area will hamper the whole business.
Also, if a firm is new and has not built up a strong reputation it may also suffer irreparable damage. Also, the lack of an in-house marketing or PR team to provide good media coverage is another shortcoming.
However, that does not mean your firm need despair, as outsourced services can provide for you a number of services that can help you boost your reputation.
- Organic content – news and blogs that raise awareness of your brand are not just good marketing tools: they can help build up a good brand reputation over a period of a few months, giving you greater strength to withstand any negative impacts.
- Social media management – well-managed social media can help you to keep track of what people are saying about your firm, issue swift responses to any negative publicity and give your good news stories extra coverage.
- Online reputation management – This is the kind of service that can be invaluable when a firm’s reputation comes under attack. Not only does it involve monitoring coverage and reacting to it, but also in creating a proactive strategy to generate a positive reputation for your firm.
- Search engine reputation management – this is the element of online reputation management that seeks to create a lot of coverage of your firm online that will reach page one of the search engine rankings. The purpose of this is to push anything negative of the first page, since few people go beyond the first page when carrying out a search.