“Brands are like pieces of fine
crystal - they take time to create and are easy to break"
- Mike Isaacson
Brands are about trust
Who is a friend? A friend is someone whom you can trust, who
never takes you for granted and who is absolutely reliable when it comes to the
crunch. He does not let you down. And the test for a brand is to be a friend to
a customer. Has Volkswagen at least the diesel version been this to its
customers? Hardly and in fact has let down its targets whether its customers,
investors or even the media is something that the brand will have to live down
eventually. There is another interesting consequence of this. The scale of this
impact will certainly affect the entire German economy and make people to be
wary of German engineering which used to be such a big selling proposition in
global markets.
I came into advertising over thirty years ago because I was
inspired by it. It enthralled me. It fascinated me and I wanted to be part of
this wonderful industry that fuelled dreams and sales. One of the ads that I
really loved was the Volkswagen “think small” campaign which is given below.
What was so special about this ad and why did ‘Advertising
age’ classify this ad as the greatest ad of the last century? Let’s go back in
time to the sixties. The US has by and large been a vast country with great
distances. People love big cars as it shows affluence - the larger your car,
the more successful you were, etc. It was in this environment that Volkswagen
launched the Beetle, a small car in a country that revered large cars. The car
boldly flaunted its smallness and had ads that poked fun at itself like how a
basketball player could not get into the car and how its parts were
interchangeable. Ironically it was a German car when post war sentiment against
the Germans was still strong and the Volkswagen was the car that Hitler proudly
called the “people’s car”. Against the odds, the Volkswagen was a huge success.
The Beetle was to become an iconic brand and Volkswagen has become one of the
biggest successes globally selling millions of cars in multiple countries
harping on its reliability and the strength of German engineering. The ad line
in the middle would proclaim “If only everything in life was as reliable as a
Volkswagen”.
From where to where
I am sure you have been following the news on Volkswagen in
recent weeks where the auto major has been under increasing scrutiny and found
wanting. To put it crudely it has been deceitful and fudged pollution tests in
order to conform to standards and has faced ignominy, erosion of brand value.
The numbers are mind boggling - 4,82,000 cars effected including every possible
brand. Each vehicle could face a fine of 37,500 dollars and 18 billion the
possible penalties the brand is likely to face and it may take two years before
it can sell its diesel cars in the US and the stock has lost 20 percent of its
value. To put it simply from my point of view, a brand that I admired
enormously is now something that the world looks on with anger, suspicion and
distrust. What a fall!
Brands take time to
build
In today’s internet world a brand can be built in a shorter
time frame compared to the old ‘brick and mortar’ world and we do have examples
of brands like Google and Amazon that have been built in a shorter period than
most others. But whether you are an internet company or an old world company - branding
needs investment, consistency, resources and a clear vision to build. But at
the cornerstone of the brand’s success is a reliable product or service. And
this is where Volkswagen has failed. Its product has not delivered on accepted
global standards and to make matters worse, they have deceived the world and it
may take ages before people forget or forgive. It is difficult to forgive the
treacherous act of your best friend. Many of us had given the status to
Volkswagen, me as an admirer and I am sure several car users around the world.
Now they feel cheated, angry and disillusioned. This is the impact that brands
can have on people and that can be good when it works for you and disastrous
when it is against you as Volkswagen is just realizing.
So remember to protect your brand, zealously as you would the
most precious crystal in your collection and the very best of luck.
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