How Brands Achieve Forgiveness

with
Shelly Rathee

You can also watch this interview on my YouTube channel

Table of Contents

  1. Brand transgression
  2. Why consumers forgive brands
  3. How fun names affect brand forgiveness

*PS. Below you will find an auto-generated transcript of this episode.

Intro

Arek Dvornechuck:
What's up branding experts? Arek here at ebaqdesign and welcome to On Branding Podcast. And today my guest is Shelly Rathee and Shelly is the Marketing Professor at Villanova University. And she's an expert in Advertising and Branding. And especially when it comes to things like Consumer Behavior, Behavioral Science. So Shelly shared with me her recent study. Which is right here on "How fun names affect brand forgiveness of hedonic and utilitarian products". And this is the study we are going to talk about on today's podcast. Hello, Shelly, thank you for joining us today.

Shelly Rathee:
Thank You, Arek. It's a pleasure. Thank you for having Me.

Arek Dvornechuck:
Thanks for taking the time. So in your research, you talk about things like brand transgression and brand forgiveness, and specifically how using fun brand names or fun branding in general can lead to that brand forgiveness. Right? And as it pertains to both hedonic and utilitarian products, so first I wanted to start off with, you know, explaining to our listeners those keywords or those concepts, so that we are on the same page. So starting brand transgression, uh, this is basically when brands fail, right? So they do something that upsets their customers. So basically they fail, they don't fulfill their obligations as a brand. Right. So can you start with explaining to our audience what is brand transgression and maybe you can give us some examples.

1. Brand transgression

Shelly Rathee:
Yeah. So that's absolutely right, Arek, what you say. So theoretically brand transgression is a broad concept and it includes an array of, uh, negative events. So what it really means is that, um, it will include instances when a product fails. It'll also include an instance when a consumer's expectation is not met and also other times when, and the value of the brand consumers are not happy with it. Um, so it actually includes, uh, two different concepts in it, theoretically. So one is performance related transgression and the other is value related transgression so, uh, let me explain these two concepts with some examples. So like the name suggests performance related transgression is related when there is an issue with the core function of the product or a service. So here are, the examples can include if we find some lead levels in toys, or if we have an issue with the, uh, with the automobile, some of the part in it. So recently there was this, uh, lawsuit, which was filed, uh, against trader Joes, uh, because it was found that in five of its meal packages, there were high levels of lead. So that's an example of product level transgression now on the other hand value based transgression is a transgression when the issue is with the value of the firm. So here, the examples could be, uh, like when the celebrity does something, uh, which people don't like, and it affects the brands they're endorsing. It could also be, uh, when the CEO of a company makes some sensitive remarks. So mm-hmm, uh, more recently, um, the CEO of McDonald's, um, he sent a text message to the mayor of Chicago, where apparently he was blaming the death of two Latino and black children on the children's parents. Now that's a example of value-based transgression mm-hmm so, yeah, so these are the two different concepts that are part of it now, because brand transgression is such a broad concept. It is important for different brands and companies to know that it's normal just when the product is damaged. It is also when the value is off and that's what is important. And so today it is not matter if, but it is a matter of when brand trans risks. In fact, uh, a recent research, uh, which was published in wall street journal in 2020, found out that 66% of the consumers who were surveyed, they were unhappy, or they encountered a problem with the product or a service, which was higher than in 2017 when they were surveyed. And, uh, percentage was 57% at that time. So that's how the brand transgression has been increasing in the recent years.

Arek Dvornechuck:
Right? So, This is great. So some of my key takeaways for our listeners, so as you are already explained to us brand transgression is not a matter if, but rather when it happens and there are two tires basically of brand transgression, it could be, you know, performance related, as you mentioned, there is something wrong with a product like you gave us this example in your research, like a new garden house with a leak, right? So expectations are not met and then could be value related where for example, the CEO makes some incentive, different remarks or whatever it might be. That's another issue, right? Also in your research, you mentioned about unsanitary food practices. That's another example in regards to Starbucks and burger king, they have faced this issue in the past. Right? Okay. So since we know what brand transgression is, now, let's talk about how to achieve this brand forgiveness. So can we do to create a buffer against, you know, negative consequences? And as you said, because it's not a matter if, but when it happens, right? So can you give us some examples of why customers forgive brands and what we can do in order to achieve that brand forgiveness?

2. Why consumers forgive brands

Shelly Rathee:
So forgiveness is a big concept, theoretically, right now, just like love and hate. It's a complex concept. But what we know about forgiveness is, intuitively that it is understood when consumers are ready to let go of negative emotions towards a brand. That's what intuitively forgiveness means. Now there are a number of factors, um, that can influence how fast consumers forgive and whether they forgive consumers at all. But I'll today talk about three most important factors. The first important factor that influences consumer forgiveness is that how do firms when a crisis happens or when a brand transgression happens. Now, the response could be two. One could be that they really apologize for the mistake they did. And the second could be where they do not apologize, but they justify the wrongdoing. So let me share some examples for these two scenarios. So for the event, in two case where they actually apologize, there is this example of Ikea when it launched in Saudi Arabia. And when they launched in Saudi Arabia, they launched this regional catalog, which removed the images of females in their catalog. Whereas there were images of the women in the corresponding catalog, in the English catalog, which was in other countries. So there was this backlash, people were unhappy that they removed the images of females. So iCare at that time came forward, they apologized for the decision, and they said that they regretted that they made that decision. So that's an example of when they apologized. So a second example is in 2015, when Netflix sudden increased the prices of its streaming service. Now we have to remember that back in 2015, Netflix was transitioning from the DVD delivery system to the streaming service. So during that time they had these two services that they were offering, and it was offered as a bundle. People could buy these two businesses at a bundle of $10 per month, month. Now, suddenly, um, in a day they changed this business model and they separated these two businesses and they started charging different price for different services. So people were, of course they were unhappy. There was increase in the price by at least 60% in the price. So at that time, the CEO of Netflix did not correct the situation, but what the, uh, CEO did was he came forward. He wrote an open letter on the blog and he explained that what was the transition that was happening in Netflix and that this was a business decision and how it will affect them in future. So he explained what was happening. So that's a justification, all wrong. He justified mm-hmm yeah. Now a second factor that can influence consumer forgiveness also depends on how strong the bond is of the consumer with the brand. So we call it as brand loyalty. Now we know brand loyalty helps brands in different circumstances. It has these different favorable outcomes, but it also helps during brand transgression. So take the example, classic example of a Volkswagen transmission scandal that happened sometime ago. So if you remember Eric during that time EPA, which is the environmental protection agency in the United States, they issued a notice to Volkswagen and they found out that Volkswagen had manipulated that diesel engines in a way that it was meeting us standards during the testing. But in real world, when the people were actually driving, the emissions were actually 40 times more. So it was a big worldwide it scandal because this software was used by Volkswagen in 11 million cars. So what happened initially in the initial months, their sales dropped, their shares dropped and so on, but in about six months, their sales started increasing. And the reason that exploits believe that the consumer loyalists, who were really, really loyal to Volkswagen, at least in European countries, they did not change Volkswagen because they didn't want to get into that hassle where they were changing the brand. So that's an example of when you have strong loyal customers.

Arek Dvornechuck:
Strong point, right. Between the brand and the customers. Right? So, um, that's a great example, thanks for doing this. So we can understand what's the concept behind it, as we can all relate to big brands like that. Right. Okay. So since we understand the concept of brand, transgression why brands may fail. And then what are the factors when it comes to brand forgiveness and how you can deal with that? You can either apologize for these mistakes, or you can justify these mistakes as you give us those examples. And also an important factor is that point between the brand and the customer. So if there is a lot following that may, you know, might be easier to deal with the situations like that. So basically your research, we started with something broader and talking about, a brand trans brand forgiveness. And now I wanted to talk about more specifically, you know, focus on your research. So, because in your research, you focus on how fun brand names and fun branding in general can affect that brand forgiveness. So can you talk to us about, you know, some of the findings of your research, how those names can affect brand forgiveness, how those fun names can affect that?

3. How fun names affect brand forgiveness

Shelly Rathee:
Yeah. So my research is about fun branding strategies. And I specifically in the paper talk about fun brand names. Mm-hmm now brand names could be fun and they can take different firms. They could use either cute fonts like trader Joes does, uh, they could either use a name that has inherent playful, meaning like Facebook. It has an inherent, fun, playful meaning, or they could use names that have colored fonts, or they might have use emojis and symbols in the brand name. So in my research, what I find is that all fun brands are not equally forgiving, but it depends on what kind of a product the brand is associated with. So as such, um, so if the product is indulgent, um, like chocolates and sports car, then fun brand name strategy does not help these brands as much. If the product is like, uh, health and wellness products or insurance for that matter. So now this research actually falls in the third strategy that how people or consumers forgive brands. And that is about if there is this brand personality. So these brand personality creates certain expectations in the minds of the consumer. So what really happens with fund branding strategy is that when consumers see that, okay, people are using, or these brand is using this fun brand name, therefore they have this expectation that this brand is going to be fun now. So they have certain expectations about the brand. Now, when fund brand is used with a product to worry, which is more functional in nature. So there is this disconnect, a fun brand for a product like insurance. It doesn't make sense. So then what really happens in the event of a brand transgression is that these brands get more leeway because there is disconnect when they get this more leeway, people are willing to forgive more. Now, on the other hand, when the product is also fun and indulgent, and the brand is also fun and indulgent, everything matches. So it needs to be perfect. So in the event of a brand transgression, then these brands do not get as much leeway. Now, when they do not get as much leeway in the event of brand transgression forgiveness is less. So that's what the whole idea is about. I can actually talk about these two classic examples. What is happening today in terms of let's take an example of Google versus Facebook. Perfect. Yeah, so like we know Google, um, is a platform which is popularly known as a search engine. Uh, it is more so, uh, a functional product category. On the other hand, Facebook, like I said, it's a social media platform. It's a more fun and indulgent product category. Now, both of these brands have used fun strategy in their names, if you think so, like Facebook, the name itself is fun face with the book. On the other hand, Google, we know all the time it uses these fun doodles on its platform all the time. So it has also used these fund names over the period, but clearly we know that there is a negative sentiment, more for Facebook. Um, also people critique Facebook more than they critique Google on the other hand. So that tells us that all fun brands are not equally forgiving. Um, but it depends on what product category they cater to.

Arek Dvornechuck:
mm-hmm right. That's a great example. And we can definitely all relate. Uh, yeah, so some of my key takeaways, so fun brands can influence consumers by, you know, boosting referrals, increasing a product, perceived value tastiness and things like that. But besides that, as your research are found, it can also help you in the advantage of brand transgression right. So, and in general, a fun branding strategy using a playful meanings associations, and you give us a lot of examples actually in this research. So I recommend you guys can check. I think there is an article we're gonna link to your article in the description box. So you guys can check it out, but you actually give us more examples, you know, of how we can, what we can do, how we can use fun branding strategy to prepare for brand transgression if it happens, right. So we can deal with that correctly. And there, you also include a few practical tips. So basically how we can use that. Uh, this is basically for FIMS who spend a lot of money on brand naming, right? So they can use your research and the insights to find better strategize, better names for, for the brands they work with. Right.

Shelly Rathee:
That's right, Arek. So the direct implication is for brands that have these dedicated to functional category, right? So these brands can actually change their name in a way that is more fun. Of course you cannot rename and restructure the whole name, but probably for certain promotions, or when you go online, you can twist your name in a way that it is more fun. So now when you are catering to this functional degree, but the brand is more fun. Um, then there is this disconnect and people can be more forgiving of your brand.

Outro

Arek Dvornechuck:
Okay, Shelly. So as we are approaching the end of our interview, please let us know how we can find more about you, you know, to learn more about the work you do, whether it is for those, for branding studios and agencies who wanna use insights and your teachings or creatives like myself who wanna learn more from you.

Shelly Rathee:
So yeah, I do not have a website right now, but if you go online, you can find my page on Villanova's Website. Mm-hmm, uh, where I have a page. Also, you can find my research more on Google Scholars. So that's the best way you can download my papers and read more about my work.

Arek Dvornechuck:
Okay. So I'm gonna link to your page on, at the university and to the article, right? So thank you very much for coming on the show. I really appreciate that.

Shelly Rathee:
Thank you. It was a pleasure, Arek.

Arek Dvornechuck:
Thank you. Shelly, bye.

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