Netflix stock has tumbled again to an 18-month low of $75 a share based on, among other things, trust. Think about it… the company’s value has erased about $12 billion in just 104 days. Yes the company has see-sawed on promises of splitting apart services, then relenting and bringing them back together… but what they have really undone is the consumer trust and loyalty they had worked so hard to achieve.
One of the fundamental values of a brand is to earn loyalty that results in the security of future earnings. In other words, consumers will come back time and time again to both purchase your products, and also allow them to expand their relationship with you. But the moment a company breaks that trust, it is very hard for consumers to stay on board. [Read more →]
October 25, 2011 Comments Off on What Happens When We Don’t Trust a Brand Anymore? Ask Netflix.
There are many brands we love to hate. Today’s bad-boy brands de rigueur are Goldman Sachs and Toyota. Sure, we constantly complain about some of the mega-brands like Microsoft, Simon Cowell, ExxonMobil, and the New York Yankees, etc. But that reaction is a combination of jealousy of their sheer market power and resentment that we can’t live without them.
April 21, 2010 38 Comments
Today, the Lexus suspended sales of the GX 460 because a Consumer Reports issued a “Don’t Buy” warning due to rollovers in their testing. Toyota is finally listening, but consumers may give the credit to the Lexus brand, and not the parent brand – Toyota. [Read more →]
April 14, 2010 29 Comments
Back in the late 1980’s, Toyota made a bold business decision to separate its luxury products into a new company to compete directly against Mercedes and BMW. The creation of the Lexus brand quickly was followed by Nissan (formerly Datsun) renaming its luxury business Infiniti. This was brand separation with many questions. How much brand equity should be shared with the parent? Does Toyota quality or engineering bring anything to the party for Lexus? Can Toyota be believable as the manufacturer of a luxury product? Should a Lexus dealer be situated in or near a Toyota dealer? Should they look the same? Should they act the same? [Read more →]
March 15, 2010 36 Comments
We already live in a world where we are skeptical of corporate messaging and product advertising. What we didn’t need is the relentless press coverage about Toyota ignoring safety issues. This has simply put another nail in the coffin, making it that much harder for marketers to build credibility in their brands. [Read more →]
March 15, 2010 19 Comments