#50 – Tesla’s reputation recall, the Ripple effect, and do consumers want political brands?

#50 – Tesla’s reputation recall, the Ripple effect, and do consumers want political brands?


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A packed show this week. We dress down Tesla and talk up Ripple. We also discuss what consumers want brands to take a stance on.

Each week, Erin Jones and I take a look at the most interesting reputation management stories, answer your questions, and share valuable ORM tactics. In this week’s episode:

If you have a question you would like us to tackle, please leave a comment below or on my Facebook Page.

Transcript (forgive us for any typos):

Andy Beal:                  Welcome to what we hope’s going to be another good show. In fact, this is our 50th, so yay us for making it halfway to 100. Good show this week, and we’re going to start off with a story about Tesla. Now, I don’t know if you know, but there’s been a product recall. Tesla’s announced that they’re recalling 123,000 Model S cars, because a fault with the power steering.

Now, it’s a proactive move by Tesla. There’s no major issues. It’s not like cars are crashing en masse or anything like that. And it only affects the power steering, so you can still drive it, but it’d be like driving an old school car from ’70s or ’80s where you just can’t move the steering wheel too easily, so not a huge deal.

However, I tweeted it out, and I used my normal hashtag, #ReputationRoadkill, because this is what I think a negative for Tesla’s reputation. Well, somebody called me out on the tweet, and I’m going to read you the tweet. I’m not going to tell you their name, you can go find it if you want. And I’m not saying this to embarrass them, I think they have a fair point, but here’s what they tweeted me.

They said, “Geeze, I don’t recall you saying the same for the Ford recall a couple of weeks ago when 1.2 million steering wheels were at risk of coming off while driving. Ford’s recall was a lot bigger deal. The recent ‘Pile on’ attack of Tesla is really not fair.” Now, first of all, I didn’t see the Ford story, or otherwise I would have tweeted it out, so it’s not like I’m playing favorites here.

But two things jumped out to me. One, it’s interesting that Tesla has a lot of brand evangelists that love everything that Tesla does, and Elon Musk does, and it’s good to see them coming to the defense of Tesla, ’cause Tesla didn’t reply to me. It was just I’m assuming somebody who’s a fan of Tesla. And two, with all the hype that comes from this higher expectation of quality, almost feels like Tesla has failed to live up to that expectation here, and so I think in my opinion, it seems fair to hold them to a higher standard.

But Erin, you’re a fan of both Ford and Tesla, so I’m going to be interested to hear what you think about this. Should we hold Tesla to a higher standard, or is this just part of what car manufacturers do?

Erin Jones:                  You know, funnily enough, to get started, I found the tweet amusing, ’cause you do have a reputation for being the founder of online reputation management. It seems like people look to you to call out the fault of every brand that should have their attention. I think we’re going to have to get a Kickstarter campaign set up for a warehouse of assistants to find all of these stories for you.

But back to your original question, I do think that hyped brands have a greater social responsibility, or a greater responsibility to put out a great product. It feels like Tesla is the new Apple of the current generation, and whether it’s fair or not, the public makes this happen. The brand’s personality and what they’re putting out really dictates what people expect from them, and Tesla has set themselves to a higher standard, and as a result, the public holding them to a higher standard.

Andy Beal:                  Yeah. I mean, Elon Musk is definitely the grandmaster of pulling the strings of hype, and talking great things, announcing great products, but if you look at Tesla’s track record, they actually have a record of missing the mark in a number of ways. This is not their first recall, and I saw they’re in the news again today for not being able to ramp up production of the new car that they’ve got coming. It’s almost like you live by the hype sword, or you die by the hype sword.

And in my opinion, if they want to maintain this Apple-esque reputation, they can’t afford to have these misses, these issues. You’re right, when we see Apple have problems, whether it’s antennas or batteries or screens, that really stands out and will hurt them a whole lot more than if it’s LG that has a problem with a phone or a tablet. I think that we hold Tesla to that same high standard, they have that same fan base as well, which is going to come to the defense of the brand, which is great.

But I think that you’ve almost got this … I hate to use the word uber, ’cause I’m crossing definitions here, but you’ve got this uber reputation here, this super reputation, and I think along with that, we should hold them to a much higher standard.

Erin Jones:                  I agree, and I think that there might be a little bit of schadenfreude associated with this as well, where we really want them to do well, but then we also want to see that they’re not completely infallible. When they do make a mistake, people talk about it because there’s a little bit of gratification in seeing the mighty stumble. I go back and forth, you mentioned I am a fan of both companies. I have had a Tesla on order since 2016, haven’t even chosen a paint color yet, and just when-

Andy Beal:                  You have plenty of time.

Erin Jones:                  Right? Just when I start getting really frustrated, though, they send a car into space with rockets that can land. You feel kind of bad complaining about things, when they’re doing these really phenomenal, innovative things that we’ve been told repeatedly are impossible.

Andy Beal:                  Yeah, and you’re part of a movement, right? You’ve bought into this movement, this revolutionary technology, you’re going to be one of the people not on the cutting edge, you’re going to be on the lunatic fringe of car technology, right? So it’s really exciting, you’re a part of that, you don’t want anything to dent that. You’re an evangelist, and it’s almost like apologetics. In Christianity there’s apologetics, which is basically defending the bible, and in reputation, we have it’s almost like apologetics here.

But the issue that I have is how long can Tesla maintain this? Because they’ve built their brand and their buzz based on these amazing electric cars, but 2018, and next few years, every car manufacturer’s got electric cars, and we’re going to see some really sexy electric cars coming from other places. So, if that’s all Tesla’s got to hold onto, and then not meeting the hype, so if they’re just, if all they’ve got is, “Hey, we make really cool electric cars,” but on the flip side of that there’s recalls and they miss deadlines and all that kind of stuff, then they’re going to lose that advantage, because hey guess what? Ford and Chevy and Jaguar, they’re all making really cool electric cars, and they have recalls and missed deadlines too.

So now you’re on a level playing field Tesla. What else you got? And maybe that’s why they’re sending cars into space and building these batteries and all this kind of stuff, ’cause they’ve realized that, “Hey, everybody is catching up when it comes to electric car technology.”

Erin Jones:                  And I think that they should probably take a look at Apple. We’re talking about Apple and Tesla being similar. When Apple came out with the iPhone, it was new and innovative, and sexy, and amazing, and then they stalled out on their innovations and other brands did catch up, and other brands had less expensive phones with other options that Apple didn’t provide.

I think that Tesla’s following that same path, so they’re really going to have to impress us pretty soon, or people are going to stop paying attention and stop putting them on that pedestal.

Andy Beal:                  Yeah, and there’s another angle there that we can explore another time, and that is I strongly believe, I’m an Apple fan, but I strongly believe the quality and the focus of Apple has dropped off since Steve Jobs passed away, ’cause Steve was synonymous with Apple. The reputations went hand-in-hand, and I think Tesla certainly needs to be careful that their reputation goes hand-in-hand with the brilliance of Elon Musk, and so they need to make sure that that stays in place, and that they pay attention to both. But that’s probably a story for another time, ’cause we need to move on.

Okay, so Tesla is known for Elon Musk and for these electric cars that are really fast, really sexy, and Ripple wants to be known for something else. Honestly, I’ve only heard of Ripple once or twice prior to this story coming out, but Erin’s going to fill us in on the details.

Erin Jones:                  I am. You know, speaking of Ripple, it’s a cryptocurrency, I probably can’t speak to this completely intelligently, so let me move forward a little bit, but crypto hasn’t traditionally had the most wonderful reputation, and along with that, public education isn’t typically known as being flush with funding.

So, this past week, actually on my birthday, woohoo, DonorsChoose, which is a crowdfunding website that teachers and educators can use to raise money for classroom needs and educational experiences, last week they were given an amazing gift. Ripple fulfilled every teacher donation request on the DonorsChoose website.

Andy Beal:                  Wow.

Erin Jones:                  What that means is that they donated 29 million dollars to fulfill wishlists, so 30,000 public school teachers in states all over the nation are receiving books, school supplies, technology, field trips, and any other resources that they may have requested. I’ve seen notes from teachers that asked for a rug for their classroom and it was fulfilled. That’s really, really neat, and they did so through participating in DonorsChoose’s hashtag, #bestschoolday.

It’s an event that was kicked off about two years ago by comedian Stephen Colbert. He announced that he was going to pay for every school project request in his home state of South Carolina, so Ripple upped the ante this year on their third year, and fulfilled every request. A couple of different … Oh, sorry.

Andy Beal:                  Carry on.

Erin Jones:                  I was just going to say, this is really neat because they haven’t traditionally had the best reputation, being in the crypto space, and with the markets horribly abysmal, where they’re at right now. I don’t know if this was an effort to change their image, or if they just wanted to make a great gesture, but what an amazing way to get people’s attention.

Andy Beal:                  It was, and I think I read that there’s an estimated one million public school students who will benefit from this, and I’m a big fan of anything that helps with teachers and teacher pay. I think that our first responders, our military, and our teachers don’t get paid anywhere near enough. We are going to suffer from that going forward as a country. Okay, end rant there.

But here’s my question, though. You are right in that this is positive for a cryptocurrency, because they are like second, third, fourth place behind the giants, and we’ve talked about on this show how Bitcoin’s reputation, when you talk about Bitcoin, really the thing you talk about is how volatile it is in terms of its valuation, right?

So, this is a chance for Ripple to be known for something else out of the gate, but I’m just having a hard time believing that 29 million dollars spent on teachers was the way to go for Ripple to have a long lasting benefit to its reputation. Because I just checked Google just a minute ago, and there’s no mention of this on the first two pages of the web results at all.

It’s not carrying any reputation weight there, so yeah, it’s a real feelgood story, really tremendous kudos to them for doing that, a lot of people are going to benefit from this, but I just don’t know if this is something they’re going to look back on and say, “Hey, this is really what sparked us. This is what we can point to that says that this is the day where Ripple got a fantastic reputation and jumped ahead of the competition.” Do you see something different?

Erin Jones:                  This is something we’ve talked about in the past, and I think what happened here is millions of people who have never heard of Ripple now know that Ripple exists. This was not the grand gesture. I think this was the serve that’s going to allow them to propel themselves into everyday life, if they take it.

Andy Beal:                  Also, they’ve got to back it up now, right? It’s one thing to do a good act. Any company can do a good act. Hey, if even United Airlines or Wells Fargo could go out and donate a ton of money to a worthwhile cause, but are they going to demonstrate? Is Ripple going to demonstrate that they have a brand alignment now with this kind of altruistic support of education? How are they going to carry this forward and not let it just be a one-off act?

I’m having a hard time seeing that if you’re going to invest 29 million dollars, I don’t see the correlation between fulfilling teacher requests, which is admirable and very well needed, and I appreciate them doing that, but then as a cryptocurrency, where do they take that?

Erin Jones:                  I agree. That’s something, it’s actually a point for our next story that I wanted to make, but I think that they’re going to have to really play this well, otherwise it’s going to be 29 million dollars here and gone.

Andy Beal:                  Right. Well, let’s dive into our next story ’cause you’re right, I was tempted to dive into it, so let’s bring it up, ’cause it really does play in well. We don’t do things by chance on this show, so Sprout Social surveyed more than 1000 US consumers to better understand how people want brands to communicate their position and engage in conversations on political and social issues.

There’s a lot of stats here we’re going to talk about in a moment, but one of the things that jumped out is that it is important, especially if you take a stance on something that matches your core beliefs, or matches what it is that your brand’s doing. Let’s tie that back into Ripple. I just don’t see how investing in funding teachers ties into a cryptocurrency, and I think that’s where they’re going to have a hard time, I don’t want to say cashing in on the goodwill, but it’s like planting a seed that doesn’t match the harvest you’re hoping to get.

If you plant tomato seeds and you’re all about growing oranges, then I just don’t see how it’s going to help you. I think that’s what ties into this survey is it’s one thing to do something really good and to take a stance on something, a social issue, but you’ve got to pick and choose where they are. That’s what comes out of this survey. What else jumped out to you from this survey? ‘Cause there’s a lot of good stats in this, lot of good statistics.

Erin Jones:                  What really surprised me is that people overwhelmingly do want their brands to have a social conscious, but they want the brands to know that that stance is not going to sway them as a consumer. It was a little bit contradictory to me.

Andy Beal:                  Yeah, ’cause 66% of consumers say it’s important for brands to take a public stand on a social and political issue, yet 66, the same number, say their minds are rarely changed by that brand’s opinion. Along with that, 44%, I am reading these ’cause this is a lot of numbers, 44% would buy more if they agreed with your stance, but 53% would spend less if they don’t agree.

There’s more risk than reward. They want you to take a stance, but if they don’t agree, you’re not going to change their mind, and they’re more likely to boycott from you than to buy from you, so you’re really taking a risk, unless you pick a stance that is shown to affect your customers and their interests, or their employees.

For example, 58% said that all companies should be vocal on human rights issues, because that affects everybody, but only 33% said the same about immigration, because that doesn’t affect everybody, and they don’t want you to make that your cross to bare or your hill to die on. You’ve got to be really careful here, and we’ve talked about this. Politics is generally not the issue to take, ’cause you’re going to alienate.

But then again, if you can find a good social issue that matches, whether it’s the environment, or whether it’s human rights, or whatever it may be, if it matches what it is you’re offering, and what it is you sell, then you can walk that fine line between alienation and winning over a whole lot of new customers.

Erin Jones:                  I almost feel like Ripple read this post before they made their donation. Their press release said all the right words. “Our students are going to be the next technological leaders of our culture, and we want to provide great education so that we can have great developers in the future for our products.” They did this, taking a stand and tying it back to what they do. I’m just not sure about the longevity there.

Andy Beal:                  Yeah. Now, if they can show, if the leaders of the company can show the education, what they said in their statement, was not just spin and fluff in order to get as much hype, if they can show that they actually have a heart for education and students and teachers, and they can keep this going through the life of the company’s brand, then I think it’s a great move.

But if they just wanted to jump on something, if they were sitting around a table and going, “Hey, this is getting popular, Colbert’s behind it. Hey, let’s go ahead and just fund this. This will get some good publicity,” but then they don’t follow through on anything again on that topic, then I think it’s a waste of 29 million.

Erin Jones:                  Right, and the study does say that education was one of the safest places to take a stand with 45% of people supporting it, and only 21% of people thinking it’s not a place that a brand should take a stand. If we’re using this study as a litmus test, they may be in good shape. I think that one thing that they need to be careful about is [inaudible 00:19:43], but another thing that we’ve talked about in the past is they’re going to have to be really able to make sure that their cause doesn’t outweigh the actual message of their brand and what they do-

Andy Beal:                  True.

Erin Jones:                  … which goes back again, to what we were discussing earlier. If what you’re talking about matches the message of your brand, they can propel each other equally, but if it doesn’t level out, then I think that’s where brands are going to see problems.

Andy Beal:                  Yeah, ’cause we’ve seen plenty of companies spend millions of dollars on feelgood Super Bowl ads, and we remember the ad, but we don’t remember the company. We don’t remember their product, ’cause the two don’t go hand-in-hand, there’s no synergy there, so it ends up just being a waste of money.

I thought this was also interesting in the study. We talked about political, I just want to share this stat with everybody. 82% of Liberals feel brands are credible if they take a stand, but only 46% of Conservatives feel the same way. Boy, we could spend an entire show dissecting that, but we’ll just leave it that you should know in general, the political persuasion of your audience, of your stakeholders, because if they lean more Liberal, they’re really going to applaud you for taking this stand. If they tend to be more Conservative, then maybe not so much.

Erin Jones:                  You know, I think that’s a really interesting statistic, and a little bit dangerous territory to look at, but the other thing associated is brands should also know how vocal their audience is going to be on specific issues that they take on.

Andy Beal:                  Yeah. All right. We’re out of time. It’s definitely good to take a stance on something, but you don’t have to do it at a big global level. You can do it on a small, help a small non-profit, or small group. Don’t think this’ll only work if you can find 29 million dollars. Start small, build your brand locally. If you have any questions, or would like to dive into any of these topics in more detail, feel free to go to our Facebook page. AndyBealORM, or go to AndyBeal.com. Leave us a comment on any blog post. Erin, as always, pleasure chatting with you.

Erin Jones:                  Thank you so much for having me.

Andy Beal:                  And thank you guys for listening to our 50th episode of Reputation Rainmakers. We hope you’ll enjoy us again next time. Thanks a lot, and bye bye.