Corporate Eye

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Archives for December 2008

Should Corporate Sites Air Their Business? American International Group (AIG) did, and it Worked!

Are the websites the appropriate place to be casual or direct with customers? Or, should that be done in a direct letter to the customer?

Just how much information should corporations release about their financial dealings (and otherwise) to customers?

The Function of Corporate Communications

A corporate web presence is usually created to keep a line of communication open between the company’s customers or investors and the company’s executives. This can be as lengthy as several paragraphs or as short as one-liners (as in Tweets) or emails. In many cases, a company’s blog or website is the first place people will turn to in order to get a better idea about the company and their practices. Corporations can also use blogs to really gain strength in the marketplace and develop a strong presence in the minds of consumers.

Corporate blogs also serve to keep the public informed and abreast of what’s going on in a particular area of the company, or, about news developments and/or discoveries. Although blogs are generally positive in nature, there are instances where the blog may discuss issues that are uneasy or embarrassing to deal with. When, and if this happens, there must be some type of mechanism in place to deal with the situation and create the best possible outcome for the company, no matter what.

That Will Be $1 Please

American International Group (AIG) has been under heavy, heavy fire in recent months about their financial activity and their dire need to be bailed out of a particularly unpleasant and unpopular financial crisis. The mega-large U.S.-based insurance brokerage group was bailed out by the government to the tune of $150 billion not too terribly long ago. They have also been under heavy scrutiny for their various financial actions and activities and have tried to offer explanations for their activities via their website. Taking a look at the press release where AIG discuss the company’s finances, I noticed that AIG seems to try to answer the accusations and scrutiny by explaining (in detail) why they’ve decided to take action and what they expect to have happen as a result. This is ultimate corporate responsibility and excellent media relations because it shows that the company is not ignoring the pink elephant in the room, nor are they offering a myriad of excuses. They have responsibly faced what has happened and have addressed it directly. Whether using the website to discuss certain issues was a (opinion) mistake or not, AIG did quite well in facing the issues and answering to the public about their actions. 

The news press release that announced that Mr. Liddy and other executives of AIG will not receive a salary (or a significantly reduced one) for the years of 2008 and 2009 shows not only an immense understanding of the company’s financial obligation, but also shows that the executive team understand and are sensitive to the company’s needs and the public’s perception of them as leaders. Did it work? Was that a good idea? Will it be effective and profitable for the company? No one has any way of really knowing how the entire situation will turn out. But, because the company’s top executive has decided to receive only a $1 salary for 2008 and 2009, and the company’s top managing executives are going to forego their annual bonuses, they are showing that the bailout will not be for naught. Discussing it affirms their intentions and shows everyone they’re serious.

But, On the Website?

Was AIG’s website the proper place to make such an announcement about the company’s decisions? Why wouldn’t it be? Actually, the site was the perfect place to make that type of announcement. Corporate media relations announcements are not meant only for journaling the company’s highs, profits, sales or growth. Well-presented corporate media relations announcements can help a company excel in the marketplace, whether things are favorable…or not. It is not the job, function or duty of a blog to only paint rosy pictures of the company. To do that could possibly backfire and cause other potential problems. And, in order to avoid said problems, companies should allow their communications to be transparent. However tact should be used in choosing the right words and tone for the media.

After reading about the salary decrease, you may perhaps find yourself thinking about just how serious a move that was for AIG and how serious they must be in getting the company back on track. So really, the website is the best place to make such an announcement. It is the best place to air the company’s “not-so-good” news. It is the best place to reach out to customers, outside media, investors and other interested parties. Hence, for AIG, discussing it on their website, in the open  and upfront is going to be the best place to get their message out and convey their seriousness in the process.

The Equator Principles : A Brief Overview

Dalmore Boys Club Spot The Ball
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Anyone remember spot the ball competitions? A strange photo of football action had the ball removed and you had to place an X where you thought the ball was. The winner won something, possibly cash.

Talking about business sustainability without mentioning money is a bit like a spot the ball competition. You know it’s there, an essential part of what’s going on, but spotting it can be very difficult indeed.

This is where the Equator Principles (EP) come in; a set of benchmarks put together to bring a sense of sustainability to business financing.

Governance of the Principles
The initiative was created in 2003 by the leading banks of the day, including Barclays, Citibank and ABN Amro. It uses the policies of the World Bank and the International Finance Corporation (IFC) as its foundation.

They apply to all projects which financial institutions may engage in with financing of over $10m. This includes both direct lending by the banks and financial consultancy.

In addition, the working groups which govern the principles are not wholly focussed upon the banks. They include representatives of NGOs, Socially Responsible Investment analysts and the banks’ client base.

Inevitably this means that the banks and their clients complain that the principles go too far while the NGOs complain that they don’t go far enough.

This is good and it is heartening to see both sides engaging with one another and feeling able to air their views freely.

Equator Principles Homepage

The Equator Principles Themselves
There are Ten Principles. Any institution signing up to them commits to ensuring any project it is involved in with a spend of over $10m will conform to these principles.

They are relatively simple and straightforward and define the standards, management systems, consultations and monitoring which the bank should require of the client.

These provide a clear pathway for any institution wishing to improve the sustainability of its activities. These steps are underpinned by policies from the IFC and World Bank which provide the real meat.

For instance, the principles embrace both the IFC’s Eight Performance Standards on Sustainability, ranging from Cultural Heritage to Pollution, and the World Bank’s 41 industry specific Environment, Health and Safety guidelines.

ABN Amro
Equator Principles Figures

Transparency and The Equator Principles
When the EP was first launched there was one major criticism which was levelled at it: transparency. Much like the UN Global Compact, in it had placed more emphasis on signing up institutions than on monitoring their commitment.

To try and rectify this, the principles were updated in 2006 to include a tenth principle to which requires institutions to report at least once a year upon their activities under the principles.

As a minimum this requires banks to report the number of projects they have been involved in. The associated guidance notes encourage institutions to break the information down further, for instance by country or sector.

Detailed figures, such as those provided by ABN Amro, give a tiny glimpse into which projects a bank has been involved in. However this should be only the start if the banks’ disclosures.

For example: what about the bank’s governance? Is the EP included as a standard part of staff training, as appropriate? How will a bank monitor EP compliance and how will it censure a client if they fall out of compliance?

The Equator Principles Should Lead Finance Sustainability
There is no doubt that the EP acts as a force for good within the banking industry.

In the past year its membership has grown by nearly 20%, includes a quarter of the top investment banks in the world and has recently embraced Industrial Bank Co, one of the largest banks in China.

However, having a ball is only the first part of a good game of football. The rest of the sport is made up of robust rules and regulations to ensure one side or another isn’t unduly favoured.

If the quality of the benchmark’s disclosure requirements isn’t improved the EP could encourage accusations of being a vehicle for greenwashers.

This would be a shame because finance is undoubtedly modern society’s main driver. As such the EP should be a leader, not a follower, in ensuring a sustainable economy is built.

Websites Play Major Role in Customer Satisfaction and Brand Loyalty

A new study by Foresee Results shows that consumer product websites can have a significant impact on customer satisfaction and brand loyalty.  If you’re having trouble selling your executives on the importance of investing on a great website, then take these results into your next meeting.

When compared with less satisfied website visitors, satisfied visitors are:

  • 81% more likely to return to the website
  • 109% more likely to recommend the website
  • 59% more likely to recommend the product
  • 73% more likely to purchase online
  • 41% more likely to purchase offline [Read more…] about Websites Play Major Role in Customer Satisfaction and Brand Loyalty

    • New Study Shows Brands Have 60 Seconds to Deliver a Message

    We all know that brands have mere seconds to deliver key messages before consumers move on.  New research from Tube Mogul proves that fact by providing the percentage of an audience that sticks around while watching videos.  Here are the findings:

    • After 10 seconds: 89.61% of the audience continues to watch
    • After 20 seconds: 80.41% of the audience continues to watch
    • After 30 seconds: 66.16% of the audience continues to watch
    • After 60 seconds: 46.44% of the audience continues to watch
    • After 2 minutes: 23.71% of the audience continues to watch
    • After 3 minutes: 16.62% of the audience continues to watch
    • After 5 minutes: 9.42% of the audience continues to watch

    What do these statistics tell us?  If your video is longer than a minute, don’t bother.  Best case scenario – keep your videos under 30-seconds or at the very least, make sure your most important messages are included within the first 30-seconds – including your call to action. [Read more…] about New Study Shows Brands Have 60 Seconds to Deliver a Message

    Connect with Your Customers Using the Ozzy Osborne Method

    When you are trying to reach your customers through media relations efforts, it is a good idea to be as creative, as out-of-the-box thinking as possible. You want to make a significant enough impact with your customer base so that your business image is not easily forgotten by those who partake of your business. You definitely want to be unforgettable.

    Media relations creativity can run the gamut of hokey, wild media stunts to well-thought out, strategic marketing tactics that gets your company noticed, which is, your ultimate goal. Customers react to different marketing strategies.

    Samsung performed a classic and highly popular commercial showing the rocker trying to communicate with a fast-food worker, a taxicab driver and a psychologist. He was somewhat unsuccessful, that is, until he started texting his requests to the service people. The commercial is a very good example of just how effective media can be if placed in the right hands of the right people.

    The Samsung commercial with Ozzy Osborne is also a classic example of how creative and effective companies can be with their marketing message. Customer relations is marketing relations and marketing relations is media relations. In other words, the media venue is a significant player in how corporations reach customers and maximizing the exposure of their offerings.

    Media Creativity

    What can you do with your business to spark creativity and make a splash? Here are some suggestions that you can incorporate into your own business to enjoy the Ozzy effect.

    1. Be Innovative and Creative in Your Strategy. If you can’t find a celebrity to endorse your product, consider using local celebrities. Community business people, politicians and CEO’s are all good ideas for getting someone who can call attention to your site.

    2. Maximize Your Products. Use what products you already market to re-position yourself and your business. Many times, consumers may not “get it” at first, but if you present your product in a different media setting, they may look at your company and your product in a different way as well.

    3. Give the Customers What They Want. There’s nothing like having a whole lot of somethings that you can’t sell. Make sure that your media product is more about something that consumers want and less of what you think is cute. In business, the sale of products and services are generally moved by how the customer feels at the time of the transaction.

    What can you or your corporation do to get the Ozzy effect in your business? What wild and creative things do you think would work? Does it depend on the industry, the marketing department or the individual?

    Is Your Brand on Twitter?

    There are many brands that leverage Twitter for communicating with customers.  Whether those brands use it to dispel rumors, for customer service, or simply to share information isn’t as important as the fact that they’re taking the time to join the online conversation. 

    In an interview in Conde Nast Portfolio Magazine, Twitter CEO Evan Williams shared some insight into the future of Twitter, which might make you think again about jumping on the Twitter bandwagon if you’re not already there.  In the interview (via InternetNews.com), Williams stated that growth is a major initiative for Twitter whose user-base has grown well into the millions since its launch in 2007.  Competitors have launched, but Twitter has emerged as the micro-blogging leader.  The future is bright, but not golden. [Read more…] about Is Your Brand on Twitter?