Comments

Definitely a touchpoint for me. I have participated in several grass root boycotts of businesses who had poor labor track records, especially with regard for executive profiteering at the consumer or employee expense.

I think another touchpoint is an organizations relationship with the environment. More and more people are selecting environmentally friendly brands if given the choice.

All the best

Tom

Posted by Tom O'Leary at June 22, 2007 12:42 PM

This may not be a strong touchpoint for me, but it is a chink in the armor of the brand. I've had loyalty to brands like Home Depot, but since they slipped in integrity I go to Lowes more often.

Posted by Bill B. at June 22, 2007 12:59 PM

Slowly, I think it is becoming a bigger factor for me. Since Circuit City's decision, I refuse to even look at their Sunday fliers or step into their stores. I want to write their management about this as well, but haven't had time yet. Good post!

Posted by Tim at June 22, 2007 1:25 PM

Great topic Mike – people at the top not REALLY ‘caring’ for front liners is how it manifests itself in my eyes. Many of us have worked in organisations that proclaim:

“We value our staff”
“We are an equal opportunities employer”
“We value diversity.”

Picture now a wet, cold and dark winter morning, a 6 am early morning shift for the cleaner who parks her car in the staff car park 200 yards from the staff entrance. As she fights her way through the freezing cold wind and rain to the entrance she notices the empty car park spaces reserved for Directors and Chief Executive, positioned immediately outside the main entrance. She cannot help thinking the mission statement somehow just does not ring true.

Posted by Trevor Gay at June 22, 2007 2:24 PM

The fact that Ford's executive compensation is out of control is merely the bathwater, so to speak. What will ultimately be their undoing is their poor quality products. After driving a Ford Taurus wagon for the last five years, and watching the car fall apart with limited mileage, I have sworn an oath that as long as I live, I shall never put my money into a Ford again. Fix the quality problems Mr. Mulally and you shall be worth every penny of that $28 million.

Posted by Gus Murphy at June 22, 2007 8:49 PM

Touchpoint for me also.

A clear example of this is Sam's Club vs Costco.
I have cards for each
but as Costco pays a decent wage to their employees,
I do most of my shopping there.

Lack of guilt increases the shopping high.

Posted by K at June 22, 2007 10:19 PM

I definitely concur that the image of a brand or an organization is build and impacted by tacit interactions between an employee and the customer. However, the non friendly practises for employees may not directly impact the customer choice for the organization or its product. It does influence the employees approach to work which indirectly impacts sale and eventual decline of brand value.

Posted by Arvinder Singh at June 23, 2007 9:31 AM

This is definitely a touchpoint for me. When I hear these stories, I will often do my best to move to a brand where the managers and owners at least make an attempt of acting responsibly. I also will fire Clients when they don't act responsibly towards the stakeholders they work with.

Unfortunately, I just bought a Ford. Unless they clean up their act, it will most likely be the last one I buy.

Posted by Josh Patrick at June 23, 2007 5:32 PM

Wow...

In the Netherlands (and by extension Continental Europe to my understanding) it's tough to fire employees and employers are also more "socially" inclined - they fire as a last resort; hence consumers "know" that if there are drastic issues reported in the papers, it's because there was no other choice.

So poor labour records aren't a touchpoint in buying decisions. HOWEVER, if the company is seen as polluting the environment (in China for instance), or using Child Labour (or some such gross violation of labour standards) there is a giant backlash...

Hope this helps!
Arun

Posted by Arun Sadhashivan at June 24, 2007 2:56 AM

Thanks all for the comments. I suppose one of the forces at work here is the impact of managerial decision making on the morale of those on the front line actually producing the product or service. I have consulted in organizations where there is disdain for their senior management team, and you can definitely see that reflected in the work. And I think shareholders get their "fix" of short term profits while slowly, market share is decreasing. My personal opinion is that it doesn't take a genius to squeeze labor costs out. I long for a CEO who understands the difference between cutting costs and adding value...

Posted by Mike Neiss at June 24, 2007 6:23 AM

Hi Mike,
I only partially agree with you because of two points:
(1.) I often observe a limited solidarity (or even: bounded emotionality). For example when the car manufacturer Renault closed one of its biggest plants in Europe (about 10 km from where I live) it first came as shock to the whole country (that is: Belgium) and it looked like no one in Belgium, France, Germany or the Netherlands would be buying another Renault for many, many years. However, the only thing we could observe was increasing sales and very positive reactions from the stock markets. And the feeling of solidarity with the people of Renault? Well, the act of Renault was so big that it fundamentally changed the future of the Belgian labour law...and Renault sells better than ever before. So the 'bounded rationality' theory of Herbert Simon does not support your touchpoint here. Rather, I would call it 'bounded emotionality'.

(2.) As to your point that "companies make with their treatment of employees a new force in the brand wars", I think it eventually makes a difference but not in the positioning of the brand as you are suggesting. It would rather make a difference through the reïnforcement of the brand (the key words here are 'trust' and 'learning relationship'). The companies that will have plummeting sales are going to be the ones that really pay attention to Moments of Truth; a concept that the McKinsey guys borrowed from from Richard Normann, who argues that a company's overall performance is the sum of countless interactions between customers and employees that either help to retain a customer or send him to the competition. In short: I think the real difference lies in how you reinforce the brand through managing moments of truth and not so much in positioning the brand.
Kind regards,
Luc.

Posted by Luc Galoppin at June 24, 2007 8:04 AM

Mike, for me it comes down to how much I love the brand. Apple, Lexus, and the Boston Red Sox (all "Lovemarks" for me) would have to do some mighty nasty things to their employees to get me to switch, however guilty I might feel. But eventually I'd feel the negative effects of such treatment, as a consumer of the product.

Posted by John O'Leary at June 24, 2007 8:41 AM

Luc and John...again, it is not the treatment of the employees that makes the issue for me. John, you know me well, and quite frankly I have as little regard for employees that have trouble working hard and even showing up for work everyday as I do for overpaid CEO's. My point is that business practices affect culture and climate, and that impacts performance at the front line. I want committed and passionate people assembling my overpriced vehicles...not people feeling like pawns in the big picture....And John, I can finally say as a Tiger fan...Boston Who??? :)

Posted by Mike Neiss at June 24, 2007 6:51 PM

It's not just in the battle for customers that this stuff is important. more and more it's a vital weapon in the battle for Talent. Today's new starters are way more savvy and informed about who you are, what you do and how you operate.

When I interview now I get questioned about the company values as well as performance and "what's in it for me?"

Posted by PaulH at June 25, 2007 2:13 AM

I think there's a lot of talk around this issue but that it has an effect only at the margins. For most people, I suspect that factors like price, convenience, perceived value, brand image etc will all hold sway. The periodic campaigns in the press about labour relations, use of child labour in off-shored production, fair trade schemes etc probably have a short-term impact but I doubt that they really affect mainstream long-term purchasing decisions.

Personally, I'll base my purchasing on perceived value and personal experience. So I never purchase from Virgin Group or General Motors / Vauxhall as they've both given me massive, massive problems in the past.

But that raises an interesting question: having lost business (for service or reputation) what can a company do to win me back?

Posted by Mark JF at June 25, 2007 3:19 AM

The mismatch between the way people are treated at top of the company and the bottom of the company is never a good thing.

Whether you feel it on an ethical level, it can't be a good way to motivate and align your frontline personnel - and I actively make my spending choices based on the attitude of front line staff (sales people, waiters etc.)

The best top executive team won't make me spend my money in a shop with poor staff. I can't tell you the technical benefits of much of the stuff I buy (mp3 player v iPod, Levis v Wrangler jeans etc.) I can tell you the way the staff in the shops make me feel about my purchases.

Posted by Alex Gee at June 25, 2007 4:28 AM

Definitely a touchpoint for me. I believe we can all make a difference if we put our money where our values are. I actively boycott Walmart at all costs; love Costco; prefer the local hardware store over Home Depot.

My favorite brand? Bar EZ Cattle Company in Baker City, Oregon where I purchase happy, quality beef directly from the rancher. They treat their livestock better than many corporations treat their employees.

Posted by Diane at June 25, 2007 12:49 PM

This is also a touchpoint with me. I avoid Walmart and go to a Meijers because Meijers is a union shop. I will not go into a Circuit City any more due to their labor policies. I won't buy any more Symantic products due to their drakonian licensing requirements. I strongly suspect that they really don't miss me very much, but at least it feels like I am doing something to make my wishes known.

Posted by Al at June 25, 2007 1:23 PM

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With all due respect to everyone posting here, there seems to be an issue with a lot of the comments that backs up what I think about this type of action being marginal. Here's my point: it's all very well boycotting Shop X because of their poor record on Issue 1. But do you actively check all shops for Issue 1 before deciding whether or not to shop there?

Posted by Mark JF at June 26, 2007 9:34 AM

I live in Minneapolis the home of Northwest Airlines. I try and avoid flying NWA whenever possible based on how they handled their bankruptcy by compensating the CEO $26 million after the rank and file employee had to take drastic pay cuts.

Is there no sense of right and wrong in our coporate board rooms?

Posted by Tucker at June 26, 2007 11:09 AM

OK, let's be controversial. What's the point in boycotting any organisation when, in all likelihood, the perpetrators of the outrage have long since moved on? Aren't you just taking it out on the innocents who are left? Wouldn't it be more appropriate to find out where the people who took the fateful decision are and boycott their new organisation?

Posted by Mark JF at June 26, 2007 2:58 PM

Mark...not about boycotting. Just trying to raise the issue that business practices affect purchasing. Heh, I still buy the best value for the dollar, but increasingly I have this nagging feeling that if I by Ford for instance, I am only encouraging Mr Mulally's type. But it is not at the top of my list..thanks for posting Mark where to get viagra in canada

Posted by Mike Neiss at June 26, 2007 5:23 PM

I know that an Eckerd Drug Store buyer made my clerk cry after he berated her on the phone (for mistakenly sending a package to buyer Mike "X" instead of buyer Mike "Y", an easy mixup).

I will never set foot in an Eckerd, and I tell everyone I know.

And after reading this post, I am glad I'm not driving a Ford.

Posted by Gayle at June 28, 2007 8:07 AM

I worked for Cummins Atlantic for about a year before they implemented Six Sigma into our branch and the company as a whole. Nearly every worker in the warehouse and in the office receiving any sort of benefits was laid off.

At this time, I was an intern, which would meant I would have a chance to make a more immediate impact in the company. However, our branch hired as many people as they fired in the next week or two, but hired them only as temps. Immediately, any person could see the effects of losing experience in an atmosphere that allows very few mistakes.

The company was reporting growth in all areas in which it operated, but felt the need to gain an extra margin on the bottom line. This influenced the way I viewed the management of the company and ultimately my decision to continue my tenure with Cummins Diesel. In my opinion, customers and employees alike want to trust a company before investing their business with them. I am younger and currently attend a university where our IMCO program pushes and stamps brand awareness and loyalty into our minds daily. I can't help but wonder what it really means to any organization in their efforts to retain clients and employees.

I think this touchpoint is vital for all parties.

Posted by James at June 28, 2007 12:29 PM