Brand storytelling emerges as new marketing mantra in post-COVID era
By Kim Yoo-chul
No business leader will underestimate the importance of gaining the trust of consumers to ensure a company's success and there is probably no disagreement when it comes to the grave financial consequences of losing the support of customers.
It takes a substantial amount of time to gain the public's trust, which could disappear practically overnight. That means gaining the trust of consumers is not the result of quick marketing gimmicks or half-hearted apologies for defective products or services. There are reports that show a company usually loses more than 20 percent of its value when it loses the trust of its customers.
A case in point is Samsung Electronics' Galaxy Note 7 recall back in 2016, which cost the electronics giant billions of dollars and left the doors wide open for rival products, including the iPhone and Google Pixel mobile phone, to increase their market shares.
Following unexplained fires and overheating problems, more than 2.5 million Galaxy Note 7 smartphones were recalled before production of the handsets was halted just two months after the products were launched.
In contrast, strengthened customer trust could translate into huge financial rewards.
Brand experts and marketing strategists say trusted companies hugely outpace their rivals in terms of total market value, while customers who support a brand are likely to remain loyal. Also, employees who trust their employers are motivated to work harder and are less likely to quit.
Ariel Goldfarb, a managing partner at Chicago-based brand consultancy, CurtisAlan Partners, advised big Korean brands to prioritize sharing "good stories" with their customers, because the COVID-19 pandemic has changed the way companies interact with consumers. CurtisAlan Partners created brand strategies for Starbucks, Honeywell and LifeFitness, among other clients.
The challenge for any brand is "to rise above communicating what every brand is expected to say, and instead communicate its unique values that compelled its customers to become customers in the first place," he said.
Goldfarb, who also teaches brand strategy-related courses at Northwestern University's Medill School of Journalism, added that a lot of big brands in the United States are using storytelling as a core marketing strategy in the post-pandemic era, because that strategy enables a brand's key messages to connect with the values of clients.
According to the brand strategist, storytelling lets brands communicate in a more natural and intuitive way with customers, letting them understand a product and connect with it.
"The simple truth is all of us think in narrative and increasing this sense of connection is what most brands strive for," Goldfarb said.
Kia is a good example, he said.
"I feel that Kia's rebranding story is a recent example of a strong narrative. It's a story of transformation and aspiration that feels bigger than simply selling more or nicer cars. Kia's recent rebranding of its identity marks somewhat this turning point in its evolution, much in the same way Toyota and Nissan did a generation ago," he said, calling on Korean brands to communicate their values by sharing stories of everyday people doing exceptional, non-everyday things but in an inspiring way.
"Red Bull, for example, its brand now stands for a lot more than a beverage _ it's a feeling, an idea, and a tribe that you're a part of when you buy into Red Bull," Goldfarb explained.
Increased awareness of Korean culture offers boost
Within that context, a high level of awareness about Korean culture in the United States is helping Korean brands there outpace their Japanese and Chinese competitors in terms of brand building.
"From boy bands like BTS to its soap operas, to the domination by Korean gaming teams in e-sports, and the embrace of Korean cuisine in pure and fusion forms―Korea and Korean culture has a solid foothold in the U.S. that some would say exceeds both Japan's and China's," he said, adding that he views steady investments in brand building are the key factors behind an increased awareness of Korean products in the United States.
|Samsung Electronics Chairman Lee Jae-yong, center, shakes hands with an employee of Dong-A Plating in Busan, Nov. 8. Lee visited the company as part of his efforts to pursue win-win growth with the country's small- and medium-sized enterprises (SMEs). Courtesy of Samsung Electronics|
But even top-tier Korean brands including Samsung are asked to focus more on post-COVID customer retention amid the rise of scalable start-ups. After seeing customers hesitate for years to purchase new products, top-tier established brands in the U.S. have refocused their investments on building customer loyalty instead of depending entirely on product features and related services.
Goldfarb said competitive barriers are quickly disappearing, because new talent wants to work at start-ups.
"Most big companies are better at running an existing business than creating new ones, whereas start-ups are 100 percent focused on innovation. In this context, what are the two differentiating assets that established companies have the start-ups lack: brands and customers. The billions invested in building brand awareness and meaning, which translate simply into trust, are a huge store of value that cannot be duplicated by a start-up in a year or two. The same goes with customers. It's much more profitable to retain a customer than to create one. So established brands need to invest in developing and nurturing both of these assets," Goldfarb stressed.
The professor said the escalation of product recalls and other crisis type issues typically result in increased brand awareness as the brand enters the news cycle, but at the same time bring harm to its image.
"While having lots of recalls is never a good thing, what typically damages a brand's equity and reputation is not the recall itself, but how the brand responds when a recall happens," he said.
Product recall events could span across industries due to errors in processing and faulty machinery errors. Samsung, Hyundai, LG Energy Solution and Kia, all are hardware manufacturers, have greater product recall exposures and these firms are no longer strangers to any recall incidents because recalls are on the rise hit by the ongoing supply chain issues.
"Do they delay acknowledging the issue or do they take immediate responsibility? Do they swiftly take care of their affected customers or do they come across as reluctant to do so? Do they proactively communicate to all stakeholders or do they react and respond? It is the company's response that determines the damage, and actually provides the opportunity to avoid it altogether. In the U.S., Johnson and Johnson's response to its Tylenol poisoning crisis is often cited as a case study in how a brand can come through a crisis in an even stronger position," said the professor.
In a post-COVID era, the rise of digital channels will further accelerate the shift from traditional sales and marketing roles and contribution to revenue generation.
"The most important development in the business-to-business (B2B) space is the rising mindshare and influence of marketing and marketing communications in the sales process. In terms of business-to-consumer (B2C), consumers continue to drive and shape interactions between companies and customers, and the brands that do the best job of enabling this are going to win. This means being willing to engage in interactions, not communications, and doing it in real time, just about everywhere," Goldfarb added.