Corporate prestige, as physical health, requires a lot of time and permanent effort, but can be lost easily in a short time. In fact, the cost of a lie is not the lie, but the whole truth. Mistakes, excesses, and scandals can undermine trust of customers, suppliers, investors, allies and employees. The list is long, and they have come in the history in waves, as if economic cycles.
This is today truer than ever, when we witness a peculiar crisis, less economic and more financial, more related to demand for services than products and, above all, more related to credibility than to quality, more corporate than marketing, more related to excess debt and failed businesses than with the traditional, more global and less local. The good news is that companies with best prestige have resisted and better resist these stakes.
In any case, how have we came to this situation? And how will corporate prestige progress?
If we look at recent becoming, we see that on the one hand multitude of Internet and telecommunications era businesses should have start building prestige from best customers rather than with investors. Over time, references would have transformed in in reliability, foundations sine qua non of a company’s being. However, took too soon came as protagonists the acquisition of new financial resources to grow and of lenders, shareholders, guarantors and franchisees. So, to a flimsy base of satisfied customers was added a cavalcade of unhappy investors. These were followed by a regiment of employees in same worse state, not to mention suppliers. Hence the crisis of reliability, trust and identity.
In this, it is not surprising the return to traditional business, specialization and above all, clients, investors and employees as usual. However, today it is necessary to keep in mind that customers are an increasingly scarce asset and it is not enough and offer with added value or competitive prices, not even a ‘ single sale proposition’.
More and more the customer or consumer considers in his decisions the product/service-brand-company. In other words, it tends to be placed in a “sponsor” position. This implies a new way of relating vis-à-vis with the company, sensitive to the existence of affinity. It is about satisfaction with the product or service and satisfaction with the decision to support that company. This is the case of sectors with direct contact with customers (finance, telecommunications or energy and services in general, most affected by changes in demand, compared to consumer staple sectors that have remained stable). In addition, the consumer can also be the investor. This, we are facing product/service-brand-company-investment factor.
In a world where finances are the most globalized good the investors -and the one who recommends investments- are also a scarce commodity. Again, the 21st century company is often in vis-à-vis position with an investment sponsor, voluntary and very sensitive to affinities.
However, in our country we find that human capital is scarce too. In fact, with implementation of pension funds and stocks or options there are already cases to consider of product/service-brand-company-investment-professional development factor, aside from social groups and future generations. This is the sixth floor, were some Spanish business organizations are already working and envision the seventh, where there are very few neighbors, but abundant customers, investors and potential investors, employees and potential employees and interest groups.
The floors of corporate prestige overlap, becoming interdependent and more and more complex. But if they are well grounded and built, the building will hold.
José Mª Serrano-Pubul, CFA, Yesficom SL
