Branding tends to be a mysterious practice that, in recent years, has grown and become tangled with social media platforms in unique ways. Today’s post by guest blogger Juliana Davies highlights some of the mistakes that major brands like T.G.I. Friday’s have made on sites like Facebook, in a way that limits the new need for well-educated and clever “Internet” brand strategists in today’s business ecosystem. Juliana was involved in crafting this year’s best-ranked MBA programs, where more than sixty schools were assessed on the viability of their virtual academic programs to, among other things, create graduates with skills to tackle problems in an Internet-based branding environment.

Brands That the Best MBA Programs Can’t Save:  Examples of Mistakes and Missteps (by Juliana Davies)
In today’s business climate, the concept of ‘branding’ – creating and preserving a company image that is attractive to prospective customers – is highly important. While some branding strategies have earned companies widespread acclaim, other measures have been significantly less popular with customers and investors.

In the age of online business and social media marketing, industry analysts recognize several branding ‘missteps’ that can greatly hurt companies. Two Harvard Business Journal contributors recently noted that companies should not “expect people to stick around for nothing”; in order to implement an engaging online experience, the brand should use social media to reach out to customers and facilitate networking opportunities between site visitors. However, online technology can also harm a company’s image. For example, Business Insider reports that restaurant chain T.G.I. Friday’s recently offered a promotion, whereby the first 500,000 Facebook users to ‘like’ the eatery’s mascot, Woody, were entitled to a free burger. However, the company was not properly equipped to handle the overwhelming response; Woody reached his quota more than two weeks before the promotion ended, and T.G.I. Friday’s extended the offer to 1 million fans. Ultimately, the restaurant failed to deliver on its promise to any of the entitled individuals – and Facebook became “a forum for angry fans to vent their frustration with no moderation.”

Drastic changes to a company’s image can also lead to negative feedback, as Accenture recently learned. In 2000, Andersen Consulting parted ways with the Andersen accounting group and decided to adopt a different brand name to reflect the split. A Norwegian management consultant suggested Accenture, a portmanteau that symbolized “accent on the future”, and company executives embraced the idea. However, as TIME reports, the new name was instantly reviled as nonsensical corporate jargon. The negative buzz eventually led to a $100 million loss for the company. Radio Shack committed a similar blunder in 2009 when it dropped ‘Radio’ from its name and simply became, ‘The Shack’. While company marketers were probably striving for simplicity, many customers felt the new name ran counter to the brand’s high-tech image. Harry McCracken of Technologizer argued that the original name was “one of the company’s greatest assets”, while he characterized ‘The Shack’ as simply a “lousy name.”

One final branding mistake that companies make is to prioritize saved revenue ahead of customer interests. In response to the economic recession, many well-known businesses were forced to increase their prices; customers bemoaned the hikes, but appreciated the transparency. Popular DVD retailer Netflix, on the other hand, abruptly announced a 60 percent price increase for customers who received DVDs in the mail and had access to streaming online content (the company’s two core offerings). A significant number of customers found this strategy to be somewhat underhanded on the company’s part; more than 12,000 left negative comments on the site, while thousands cancelled their subscriptions. According to The Huffington Post, Netflix CEO Reed Hastings later conceded that the announcement was poorly handled.

Branding strategies do not always succeed – and sometimes, they downright fail. However, companies that emphasize customer engagement and cultivate a public-friendly brand image are much likelier to benefit in the long-term.

Share This