Are Energy Companies and Brand Marketing Strategy Like Oil and Water

Every so often, an oil company experiences an environmental catastrophe of disastrous proportions. As evidenced by the recent Gulf oil spill, the Exxon Valdez oil spill and countless other eco-disasters, these occurrences are a tragic occupational hazard of the energy industry. In theory, they should not be a surprise — anymore than an earthquake in California would be a shocker. Of course, a big enough tremor in Los Angeles will generate nationwide news coverage. The question from a brand marketing standpoint is simple: is there anything oil companies can do, given the probability of an oil spill?

In order to answer this question, it is helpful to back up and look at the consumers’ view of the industry. When it comes to the consumer, oil companies have a unique advantage over, say, a perfume company. This is that the oil companies offer a necessity. Everyone needs oil; perfume is a luxury.

From a branding and marketing standpoint, this advantage actually has negative connotations. The oil companies are really big and really profitable — even when the economy is in the proverbial toilet. In the deep recession year of 2009, when almost everyone was suffering financially, the oil companies made billions of dollars in profits. A 2006 FTC study of gas price manipulation found that the record increases in gasoline prices were “not substantially attributable to higher costs.” It seems the oil companies always take advantage of their financial opportunities with no regard to consumer goodwill. These companies are often viewed as monopolistic, money-grubbing, price-gouging, predatory goliaths. In a 2008 Harris poll of 20 major industries, only the tobacco industry had a lower rating than the oil companies on the topic of how good or bad a job they perform in serving the needs of consumers.

You could say, from a branding perspective, energy companies are already starting off on the wrong foot. After all, what is there to love about an oil company? Do you trust them? Do you have any affinity to any oil company? Do they do anything for you as a person? Do they make you feel good in any way? This makes it all the more difficult for an oil company to perform branding and marketing tactics that prepare for the worst. The energy industry has to rank among the worst PR and branding industries. We know all about the 1989 Exxon Valdez nightmare which was widely considered the worst corporate PR fiasco of all time. But what has the industry done to counter its image since then?

One could argue they actually have made some positive strides. Let’s take the current Gulf oil spill. BP has a real disaster on its hands, and they have clearly learned a lesson from Exxon’s PR disaster. The CEO of Exxon was nowhere to be found until six days after the Valdez disaster. When he finally did appear, it was only to hold a press conference to deny responsibility to disclose the plan to clean up the mess. He also blamed the media for turning the spill into a big deal. His refusal of media interviews and complete lack of remorse highlighted one of the worst PR gaffes in history. It conveyed an “ivory tower-esque” tone of arrogance. To his credit, the CEO of BP, Tony Hayward, has learned from Exxon’s PR mistakes and has been on air and is taking full financial responsibility for the spill cleanup.

Create A Priceless Reputation with Strategic Public Relations

As Warren Buffet quipped, “it can take 20 years to build a reputation and only five minutes to ruin it.”

Of course, everyone wants a good reputation. But how do you get one and more importantly, keep it? Companies often enlist the help of a public relations firm for a crisis plan or issue management. Others know they need to be ready for a “problem,” but dont believe its “that much of a concern right now.” When companies talk about building their brands, they usually mean “good news marketing,” launching products/programs and supporting sales.

But equally important is galvanizing your brand against disaster before a crisis hits home. Its easy to get complacent. No one wakes up saying, “today will be the day that the stuff hits the fan.” When that day arrives, however, the strength of a company’s reputation is its best protection.

The closest thing to reputation protection that appears on a balance sheet is termed goodwill. Having a reservoir of goodwill can make all the difference and sustain a company through bad times.

Investopedia defines Goodwill as an intangible asset on the balance sheet that typically reflects the value of a strong brand name, good customer relations, good employee relations and any patents or proprietary technology.

While the term intangible asset sounds nebulous, public relations is used every day to tell concrete stories that provide credibility and entitle a positive reputation. Step by step, reputation is built on goodwill that emanates from reliable products, excellent service and sound business practices across the board not from fluff.

Public relations strategies and tactics should be major elements in any plan to build positive relationships with the stakeholders who determine your organizations success. While there are multiple key audiences including stockholders, boards of directors, regulators, legislators and other influencers, its worth mentioning several ideas for fostering quality reputations among three all-important groups.

(1) Employees: Employees can be your biggest fans or your loudest detractors. If they dont believe the talk, they wont do the walk. Too often, internal communications are tagged on as an afterthought. Put employees front and center, involve them in your communications plans and company initiatives and make them your best ambassadors.

(2) Media: Its amazing how many company leaders have never met the reporters in person who write about their companies. Knowing the media is the best way to build credibility in the good times and get a fair shake when things go wrong. Its easy to do. Have a proactive media outreach program. Tell your good news stories; be an industry thought leader. Dont have your first interaction with a reporter be in the middle of a crisis.

(3) Clients: Organizations need to fall in love with their clients; its that simple. Talk to them; listen to them; give them little presents; keep your promises; be good to them. And they will love you back. That translates into everything from easy-to-understand product information and engaging social media programs to cordial customer service and valuable website tools.

Coke survived a potentially large scale ban on Coca-Cola drinks in Europe in 1999 because it had longstanding trust with loyal consumers and stockholders alike and was able to trade on its goodwill.

Toyota worked diligently to regain its reputation following the “gas pedal” crisis; Chances for recover are strong based on its long-term excellent reputation. Arguably, BP has a steeper road to climb without the same stockpile of goodwill upon which to draw.

Top leadership needs to pay attention and provide resources to inculcate the values, culture and programs for an organization to build and nurture its reputation. Indeed, it may be a CEOs most important contribution.