Meet the Expert
John Berard
President, Credible Context
- President, Credible Context consultancy
- Board Member, International Association of Privacy Professionals
- Board Member, TRUSTe
- General Manager, Fitzgerald Communications
- General Manager, Fleishman-Hillard
- Deputy General Manager, Hill & Knowlton
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Actionable Messaging and Competitive Positioning
President, Credible Context
Common Problems
- Customers are more likely to see you as who you were once upon a time, and not as who you are today.
Like everything else, companies have life cycles, too. First they are born; then they grow, change, expand, and with age, adapt and retarget themselves over time. If they do not, they risk stagnation, or even a dwindling away, or being consumed by another company. The potential problem in this natural evolution is that companies often get ahead of their customers and enter new markets or design new offers that are beyond what they have been known for in the past. This creates a gap with customers because the customer base is slower or more reticent to evolve.
Take the case of Google. Rapid growth triggered a multitude of products, acquisitions and partnerships beyond Google's core search engine capacity, most notably toward communications hardware. While Google has been successful in bringing a host of other companies to market, it keeps being pulled back into "search" because this is where customers see Google's proper place, and this is where they feel the most comfortable.
Customers are likely to perceive a company the way they did when they first engaged with it, regardless of the evolutions that have taken place within that company over time. Ultimately, unless that company is actively engaged with its customers, its customers are likely to become disenchanted and even destabilized because the company is no longer what they thought it was.
Actionable messaging is essential in securing and maintaining a company's customer base. It also allows a company to maintain contact with its customer base even as, and especially when, it evolves. Actionable messaging is the tool to use throughout a company's life cycle to enable customers to see you as you are, as you truly are, and not as you used to be. It's goal is to make sure that a company does not get too far ahead of its customers. If it does, it risks alienating them and at the very worst, causing them to withdraw their business and take it elsewhere.- Companies often struggle to get proper market value from a recent acquisition or the introduction of a product.
- Finalizing suitable acquisitions or introducing new products are very important steps for any company. So imagine your company's dilemma if you do not get proper market value from the activity you have just invested in, or from the money you have spent to design, manufacture and distribute a product? If you don't get proper market value, then you have dug yourself into a proverbial hole and undermined your company's financial stability.
So what's the answer? Actionable messaging ensures that the marketplace, however you want to define it for that particular offer, understands the validity and relevance of an acquisition or the introduction of a new product. It allows a company to obtain and maintain the value of whatever it has enacted or transacted in that instance.
Gannett, a leading media company and owner of powerful brands like USA Today, and the Tribune Company, the second-largest newspaper publisher in the the U.S., both recently acquired a set of local television stations. In order to prevent viewership erosion and to maintain the stations' local and loyal customer base, both conglomerates used actionable messaging to communicate their continued commitment to these local markets and their viewers, while simultaneously communicating to the investment community the long term value they were creating from these acquisitions.
In each case, actionable messaging worked to enhance or inform and reinforce the acquisition's market value. So, a small station that had been owned locally for decades was now part of a national broadcasting company. The value of this transaction was conveyed in such a way that the viewers who had previously relied on this station now believed the acquisition to be a good thing for them and for the station's future. If they had not believed it, then the acquiring company would have lost a valuable audience to competitors; it would not have benefitted from the proper market value for its investment, and it would have suffered both financial loss and the loss of market credibility. - Executive turnover within companies can have a disproportionately powerful effect on markets.
- Company executives come and go, with some big name departures and their selected replacements making national headlines and dominating media channels for weeks or even months. In order to minimize the market effect of executive turnover, actionable messaging can help a company explain its decision as the most reasonable and intelligent choice within the context of day-to-day operations. In these cases, actionable messaging is used to reassure shareholders, employees and customers, and more generally, the markets themselves.
Apple is a perfect case in point. With the death of Steve Jobs in 2011, Apple very swiftly named Tim Cook as the new CEO. Not only had he stepped in to replace Mr. Jobs and assume day-to-day operations several times during Jobs' periods of illness, but he also brought a great deal of business acumen to the company. Although Cook was not a visionary like Jobs, actionable messaging ensured the delivery of reassuring information at a delicate time: that Apple needed Cook, an administrator, a nuts and bolts supply chain negotiator, and a respected and responsible manager of a global staff of 80,000 people, and not another visionary, to take over.
Regardless of a company's profile and expertise, executive turnover can obviously have a powerful positive or negative impact on markets, competitors, customers and stakeholders. Actionable messaging can minimize the negative effect, or maximize the positive effect, and thereby aid in a smoother and more logically accepted company transition. - Consumer faith in a company or product can be easily shaken, causing share prices to underperform.
- What are some of the reasons that a company's share price underperforms? There may be some technical explanations, or generalized market decline, but most of all underperformance is linked to faith. The act of buying a share of stock, is, at the end of the day, an act of faith. And when that faith is shaken because of a faulty product, bad press, competitive overshadowing, a broken or unfinished deal, an executive departure, or disappointing growth or profitability figures, investors' faith can be undermined, which causes them to question whether or not they should hold, buy or sell the shares.
Here is yet another area where actionable messaging can help turn a problem into a possibility. Actionable messaging can help an underperforming share price by bringing into balance more factors that can be used to judge the true strength and health of a company. The role of actionable messaging, when working on behalf of a company's share price, is to identify a matrix of reasons or factors why the company should be supported, and then to nurture and promote these factors equally so that they always remain in well-balanced proportion, even if one of them becomes problematic. These factors can include things like cash-flow, operating margins, R&D investments relative to revenues, cost-savings plans, profitability and year-over-year growth.
Actionable messaging affords a company an improved opportunity to be better and more accurately represented in terms of the true value of its shares, and to protect itself against the derailing or imbalance of one of these factors. - Managing a crisis, such as being the defendant or plaintiff in a lawsuit, is part of most every company's life cycle.
- Being a defendant or plaintiff in a lawsuit implies having a certain skill level in crisis communication management. When a current or former employee becomes involved in any kind of legal action, this thrusts the company employer, either past or present, into the limelight and also shrouds it in questions: Is this behavior systematic or systemic within the company? Or was this behavior solely the responsibility of the individual? Is there anything else I need to know or should be worried about regarding this company? Even when under indictment, a company still needs to carry on "business as usual" and maintain daily operations, so it's a slippery slope to navigate.
Let's take the example of JP Morgan, which endured great legal scrutiny for its ties to Ponzi-schemer Bernie Madoff and its performance in the financial markets. This scrutiny ultimately led to a $2.6 billion settlement. During the indictment, actionable messaging enabled putting a fence around the legal problem so that the day-to-day running of the company's business could be continued. Companies of all kinds, not just financial institutions, also come under scrutiny and must be able to deal with the legal implications and challenges without upsetting or weakening their customer base.
This is only possible if that company has a strong crisis management policy in place, which of course, in critical situations such as these, acutely depends on actionable messaging to keep the company's legal matters separate from its normal business activities.
Actionable Messaging and Competitive Positioning:
Common Problems
Expert Topic