If a company’s corporate identity looks out of date, everything else suffers by default. It is necessary to invest in image-building campaigns to maintain a reputation during recession, says Paul Gander
Taxi drivers in Newbury tell the story of when the AirTouch directors flew in from California for the first time to meet their Vodafone opposite numbers. “No, there must be some mistake. We want the corporate headquarters.” Dismay, or disbelief, followed when they were assured that this modest market town, a far cry from its Silicon Valley equivalent, was where they should be.
Similar contrasts have been drawn between the (literally) concrete incarnations of the Vodafone and its counterpart in Germany, Mannesmann. Of course, three-dimensional manifestations of the company image, whether these are retail outlets or headquarters, are a critical element in any overall identity. And yet, as Vodafone’s recent heavy-hitting corporate advertising illustrates, the company brand resides in much more than that. When it is strong, as in the case of Vodafone, it can play a major part in shoring up credibility, whether for a City audience, an internal audience or the consumer.
Springpoint consultancy has worked with the Vodafone brand since 1996. It began the process of identity renewal with a three-month period of canvassing opinions and perceptions both internally and externally. But, as managing director Fiona Gilmore explains, implementation of the identity, even on a purely UK level, has been slow. The next few years will see the image of “lively, rich discourse” translated worldwide. “It is to do with transforming and integrating a culture without losing local nuance,” she says. In the case of Germany, up to now this “nuance” has included a sharp distinction between the corporate brand and Mannesmann’s D2 consumer brand.
Timescales for implementation are inevitably long with this sort of real-world identity, where everything from tangible product design to retail staff training has to be considered. But corporate developments at Vodafone show how important it is to build flexibility, as well as longevity, into the identity.
It is often easier to contrast the corporate brand with the consumer brand than it is to actually define where corporate identity begins and ends.
As Interbrand Newell and Sorrell explains, smaller companies may work quite successfully on a tactical level, with “identity” encompassing little more than a logo and design style. In cases like this, says joint managing director Tony Allen, the narrow definition of identity means it does not require day-to-day cultivation.
But for many larger companies with accumulated goodwill to protect, the corporate image is much more complex and far more important. “These firms will not relegate corporate identity to a tactical level, since for them it means their reputation, and is the single most important source of new business,” says Allen. He cites the example of Arcadis, an infrastructural engineering company with its headquarters in the Netherlands but operations all over the world. Because the company has grown largely through acquisition, strong and consistent identity is imperative internally as much as externally, bringing with it a set of specific values.
Riding through recession
Allen believes that such attention to the corporate brand is now more widespread, at least among larger companies. Research shows, he says, that far more directors see the value of brands residing in image rather than products and services. “People are not only getting hired as image and reputation managers, but they are riding through recessions,” he points out. There is a realisation that if corporate image is neglected in a tougher economic climate, it can mean loss of position once the good times return.
The CIA MediaLab Finance Director’s Survey makes less encouraging reading. It suggests that marketers still have to fight to persuade their colleagues holding the purse strings to invest in brands. The research shows that, with business costs under pressure, almost a third of finance directors questioned would cut the marketing budget ahead of human resources, training and research and development. Between 1996 and 1999, the proportion saying that measuring the effectiveness of marketing overall was “quite” or “very difficult” rose from 31 to 43 per cent.
So are the branding consultancies simply talking up the market? There does seem to be a greater appreciation – at least among marketers – of the strategic significance of corporate identity.
We are still being hypnotised into believing that the boom and bust cycle is avoidable, that there is a Third Way here as in everything else. But many businesses remain nervous about the economy’s ability to stay on an even keel indefinitely. One point of view says that it is precisely because favourable trading conditions will not last for ever that investment in corporate identity is a sound long-term strategy.
Nearly three-quarters of marketing and public affairs directors questioned in a Europe-wide MORI survey in 1993 believed a strong corporate identity was helpful during recession. This was, of course, itself at the height of the last major recession.
Some responses to the survey question, commissioned by identity consultants Henrion, Ludlow & Schmidt (HLS), showed that the sense of “knowing and trusting” a company becomes more rather than less important when times are hard. By building on an organisation’s strengths, says partner Chris Ludlow, brands can be protected in advance from the effects of a downturn.
But beefing up the corporate brand can bring other benefits. As we have seen, in business sectors such as telecoms, recently characterised by rapid consolidation as national markets become global, a convincing identity can help the more acquisitive players to fight their corner. But as the results of a brand repositioning and revitalisation feed through, the smaller fish in the industry pond are also more likely to become targets for acquisition rather than being simply sidelined.
When HLS began working with German mobile phone operator E-Plus in 1998, it was very much in the shadow of Deutsche Telekom and Mannesmann. Here, rebranding started with an audit, and extended to brand development, positioning, corporate design and logo, all communications, retail and exhibition design.
This shot in the arm for the corporate image brought with it tangible benefits, such as a substantial increase in turnover for a pilot shop opened in DÃÂ¼sseldorf. Together with an improved network, it also helped to bring E-Plus to the notice of France Telecom, which acquired the company in September last year.
In the absence of any firm evidence to back it up, ascribing success to the brand – and especially the corporate brand – rather than the product becomes largely a matter of faith. Since corporate identity is rarely allocated a budget of its own, other marketing initiatives will often take precedence, especially where there is a more immediate, more tangible benefit.
According to Bamber Forsyth principal Clare Fuller, clients may need convincing that, with a limited budget, the corporate brand rather than promotions for specific products or services should be given priority. “One company had to choose four or five initiatives out of a possible seven, and was going to drop corporate identity,” she says. “But in the end they decided to go ahead with it, since they realised it was the foundation stone for everything else that would follow.”
Even where there is no direct threat from a general recession, some industries such as construction and paper are known to be cyclical, says Fuller, and should plan an inspiring identity for the troughs while business is on the up. Some larger corporations, irrespective of the sector, reappraise their image as a matter of course once every few years.
She says: “Unfortunately, for many it is only when they are given a kick up the backside by some turn of events that they actually start to consider corporate identity.”
Although not specifically a corporate identity specialist, brand consultancy Wickens Tutt Southgate (WTS) was responsible for the new Littlewoods company identity. Client services director Mark Gandy says the common ground between product brands and the corporate brand is increasing, with internal audiences now considered to be important in both cases.
Where a company has been through a lot of disruption, the internal handling of image is especially important, he believes, and often less well understood than its external counterpart. “Channels are multiplying, but they should all speak the same visual language,” says Gandy. “Company intranets are a huge opportunity to reinforce what’s already being seen in other areas, for example.”
Gandy agrees with Allen that clearer importance is being given to those individuals at board level who are guardians of the company image, internally and externally. “If the corporate brand looks out of date, then everything else suffers by default,” he says. “And it goes right through the business. It is not just top-corridor stuff; the way a cashier takes your money is as much a projection of the brand as the chairman’s address.”
All that remains to be done, it seems, is to convince finance directors to hand over the keys to the company coffers. That would be simply to acknowledge what everybody else from the boardroom to the shop floor already knows: the corporate brand is central to any organisation, and can survive evolution but not neglect.