Innovation & Public Relations

Consumer-centric Pr: Change Lives, Change Your Bottom Line

We advocate two types of innovation PR. The first type has an eye to the future and is a long-term process of educating, building a reputation, and securing a relationship with the consumer. Ideally, long-term innovation PR brings consumer interest to a low simmer, ready for the next reveal. The second type of innovation PR is short term in nature: for example, the run-up to a product launch. This type is more intense but equally complex as the long-term type when it comes to delivering it in just the right quantity.

Let’s first understand the long-term PR strategies – building the consumer relationship for disruptive PR, reputation, and branding.

PR for innovation is no longer just communicating or delivering information to the audience. It’s also a process of incorporating consumer opinion into the ideation and validation stages. PR should represent valuable input to the innovation process. We use PayPal as an exemplar of this theory later in this article.

Fundamentally, successful innovation changes people’s lives. But for innovators to do that, they must understand the needs of their customers and what would make a difference to them. New approaches to the innovation process are linking feedback from consumers at the ideation stage, and the results are successful products.

PR that leverages digital channels such as social media, product review sites, and big data have the potential to create and gather input for innovation. PR is about conversing with consumers and building a mutually beneficial relationship.

Chesbrough introduced the idea of open innovation in his 2003 book “Open Innovation: The New Imperative for Creating and Profiting from Technology.” Chesbrough describes a shift that companies have made by transcending boundaries and reaching out to external parties to gather knowledge and expertise that is otherwise unavailable to innovators. Crowdsourcing, which provides access to myriad external sources, is a perfect example of this shift.  On the other hand, closed innovation, although it provides greater control over the process and intellectual property, relies on using processes, knowledge, and marketing from within a firm’s boundaries, which is extremely limiting and counter to creativity.

The mobility of individuals has increased as has the pace of communication and trade, including the movement of knowledge. Employee longevity at organizations is decreasing, but employee expertise is becoming broader as a result. Companies are looking outside of their own R&D facilities, hiring talent on a consultancy basis and building external partnerships with technology startups, suppliers, and competitors to capitalize on knowledge and facilitate innovation. Entrepreneurs and startups have easier access to funding, and spinoffs and licensing agreements are commonplace.

Consumers are part of that external world. By including them in the development of new products and technologies, the PR process becomes one of great value that can build a reputation for a company as a leader in the field, cementing a brand and invoking interest among consumers in innovation efforts through a feedback loop.

That feedback loop includes big data analysis. By accessing big data and capturing consumer sentiment, companies can gain insights into the world of their consumers and determine which products fit and which are peripheral. Big data analysis is market research on turbo boost. It can take innovative ventures in the right direction, which is imperative because barking up the wrong tree where R&D is concerned is a costly pursuit and not one that competitive companies entertain.

Crowdsourcing software, another boon of the digital age, takes market research to new levels in the realm of customer-company engagement. According to Mitch Solomon, president of Third Slide Research, using software such as Qmarkets, companies can generate new ideas based on real-time consumer feedback and engage in disruptive PR.

Reputation and Branding: the Slow Burn

Part of the feedback loop is leveraging partnerships so that innovation heads in the right direction – the back end of the feedback loop if you like. On the front end, it’s all about building and maintaining a brand relationship with consumers. This requires providing information and educating audiences on business directions and practices.

For example, consumers and employees are increasingly drawn to the idea of “making a difference” and prefer companies that help them achieve that. To this end, a company should place corporate social responsibility (CSR) and philanthropic activities front and center of PR channels such as the company website and social platforms. A study on the shipping industry by Youngran Shin and Vinh V. Thai showed that CSR influences the relationship between a firm and the consumer by increasing levels of satisfaction with a brand or company and increasing loyalty. Consumers want to do business with a firm that shares their values.

A company should also, then, provide information on its innovation pursuits. But there is a need for caution here to avoid what has been termed “innovation theater” – in other words, the use of clichés and embellished language or tech babble to convey innovation activities.

The recent trend in corporate accelerator programs, at least in some cases, is a symptom of innovation theater. J.P. Nicolls, bank innovation consulting expert, explains that companies sometimes use these initiatives to increase their PR bang for the buck, but whether the initiatives yield products that consumers value is questionable in many cases.

Although an audience is interested in advancements, the main reason is to determine if it can improve the bottom line in the case of companies or, in the case of individuals, their lives. News of random R&D findings are not going to attract or keep consumer attention.

“I think people start the accelerator. They get the announcement in TechCrunch and then they feel like they’ve done something, and they’ve actually done jack.”

– Anand Sanwal, CEO, CB Insights

Innovation Theater and Pr

Venture capital-funded startups are a result of converging factors, particularly technology advancements, globalization, and capital markets. Startups are also becoming prolific beyond technology centers such as Silicon Valley.

Startup accelerators support early stage, growth-driven companies through mentorship, education, and financing. They are often grouped with other early stage support and investing organizations such as incubators, seed-stage venture capitalists, or angel investors.

There have been many examples of successful accelerators. Boom Startup in Salt Lake City, Utah spurned SimpleCitizen, a platform where once-complex immigration processes, such as green card applications, have been made so much easier for users. The same accelerator created Ardusat, which teaches STEM educators how to run classroom experiments, and ProMD, which is a mobile app simplifying the discharge process for patients.

Visit the website of Boom and you will see open innovation and external knowledge-seeking through partnerships and sponsors front and center. The company highlights its “mentor-led” model and its network of partners on its opening page. These types of partnerships allow mutual PR efforts, increasing visibility for everyone involved.

However, these successful examples are real commitments to well-researched products that change business processes or people’s lives. They are not examples of innovation ventures for PR purposes only. Many companies are making the mistake of creating initiatives purely to improve their image, and some even fund them from the marketing budget.

“On the BrandZ Top 100 Most Valuable Global Brands list, brands that are perceived as innovative by consumers – which include Disney in 19th place and Pampers in the number 37 spot – grew nine times faster than those seen as less innovative”

— Sarah Homewood, Reporter, AdNews, 2016.

Innovation as a Brand Differentiator

While innovation theater is overkill, communicating innovation with a genuine purpose nets rewards. An Innovation Kernel study found that 90 percent of consumers say that innovation is important to their brand preference, and almost 70 percent of consumers are willing to pay on average 20 percent more for a brand they consider innovative.

Not surprisingly, innovation matters to consumers even more when it comes to tech products such as computers, mobile phones, gaming systems, TVs, and audio products. What is the right way, then, to differentiate a brand and convey the right message to the right audience? Put simply, according to Erik Roscam Abbing, author of  “Brand Driven Innovation,” branding for innovation is about “finding a match between who you are as a company and what your customer really values.”

Oreo’s Trending Vending Machine, introduced at SXSW Interactive in 2014, was a good example of branding for innovation. The machine customized and printed Oreos for attendees based on trending Twitter conversations and using 3D printer-type technology. The message customers took away from this effort: Oreo was interested in listening to and reacting to what consumers had to say.

1. Human-centered branding. Linking the development of new concepts to the lives and aspirations of customers and linking the marketing function with innovation.
2. Innovation strategy. Identifying how to deploy resources to develop new products and services that delight customers from the ideation stage to the point at which they can hold the final product in their hands.
3. Design strategy. Creating a brand for sustainable growth means that ideas must become tangible experiences with value.
4. Touch point orchestration. Each time a consumer encounters the brand, it is an opportunity to influence and strengthen the brand-customer relationship. These touch points include social media, advertising, website content, customer service, the payment process – essentially any exposure to any brand information.

“Today, a single tweet from the right Kardashian could be worth more than your entire advertising budget. Your consumers are looking up your business online, reading reviews, tweeting about products, and crowdsourcing their experience with your brand.”
— Ilya Pozin, Forbes Contributor, 2014

Building a Human-centered Brand

Connecting the Internal Organization with the Outside and Connecting the Marketing Function with the Innovation Function.

Source: InnovationManagement.se, n.d.

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Trust and Credibility

“and that’s probably going to be the most important thing that a young emerging disrupting company needs. They may not need mass and frequency, but they do need credibility.”

— Jeff Melton,  SVP, Global Technology & Platforms, MSL GROUP, 2015

For a brand to be strong, the consumer must deem the brand and the message it sends credible. Marketing agencies may succeed in company reach, impressions, and frequency, but it only takes one breach of trust to ruin a reputation.

The first article in this series, “Managing Expectations: The Consumer-Brand Relationship” explains the process of establishing trust over the long term, and this is a necessary read before contemplating product launch PR. Consumer trust is often destroyed when a company promises one thing but delivers another, because expectations are not met. PR in the run-up to a launch, therefore, must be managed carefully.

Building Momentum With the Right Message

The brand lens, described by Caryn Marooney, Head of Technology Communications for Facebook, can be helpful in developing a message or tag line for a product launch. It helps to put the product into context and find its essence.

Source: Caryn Marooney, First Round

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The message should be crafted well. For example, create a theme or tag line that will attract the attention of the target audience. When Salesforce began, it was more than just a CRM solution. Marc Benioff launched an “End of Software” campaign, which immediately caught the attention of anyone who was concerned with software. Software was causing problems at the time, so this campaign was relevant and timely. Salesforce changed the software industry with an attention-getting tag line.

Press releases are still a large component of PR launches, but there is a right way and a wrong way to craft a press release. It used to be the case that key words and backlinks would improve press release exposure. However, in 2013, Google made changes to search engine optimization webmaster guidelines, which meant that too many backlinks on a release would be subject to penalties by Google, creating the opposite effect.

Press outreach is an effective strategy for building interest leading up to the launch of a product, but calling, emailing, and using social media to reach out to reporters, journalists, and key industry analysts will garner greater coverage than a press release.

Journalist Marc Gurman describes how Apple’s launch strategy includes controlling every aspect of the message that the public receives. Apple’s keynote events are carefully orchestrated. Gurman states, “every single element of the presentation is specifically determined in advance, from nuances of the lighting, to how screens are positioned, to who sits where within the venue.” Even accommodating Apple employees are strategically placed in view of the camera, like a political event.

But even before those events, the company leaks strategic information. Senior PR members prepare special white booklets for the communications group during a lengthy meeting held one week prior to the main event. These books detail what will be discussed and announced during the event, who will present each part, and which Apple employees are responsible for what is set in stone. Recorded in painstaking detail are the product hands-on area organization and event attendees. Invites are sent out to VIP guests: certain Apple employees, reporters from Bloomberg News, The New York Times, Reuters, The Wall Street Journal, and a small group of favored bloggers.

While not all product launches require such extravagance and attention to detail, the more focus given to the amount of information going out (whether it is too much or too little) and how it is being delivered, the more accurately a product will be understood.

Metrics for Innovation: How Good Is Your Pr?

In both post-product launch and general PR campaigns, PR managers need to demonstrate the outcome of PR programs. But the value of PR is determined by its goals, which are different in every case. Is a company measuring sales, awareness of a new product, long-term reputational capital, or crisis management?

Useful metrics are increases in clicks, users, or sales, but companies are also shifting from revenue-driven strategies to customer value-driven strategies that are reflected in different KPIs, such as loyalty or recurring purchases. KPIs for each PR action should be specific and aimed at measuring the effect that was intended by the action.

Sentiment metrics, such as those provided by Hootsuite, for example, tell a company what their audience is saying about them on social media. Knowing the negatives and positives about a product or a brand in the eyes of the consumer is exactly what a company needs to improve the brand-consumer relationship. PR can either be corrective in the case of poor customer response or it can reinforce the positive.

UCB, a global biopharmaceutical company headquartered in Brussels, is an example of a company that is improving the patient experience using a patient-first approach. UCB’s “patient’s value” strategy involves training the workforce to adopt a mindset in which the patient is the primary concern. The company brings patients into employee training sessions so that employees can understand their needs and “walk in their shoes.” Employees develop a patient-centric mindset with associated products and services.

According to UCB, “we connect globally with patients and their families living with the physical and social burdens of severe disease. These connections give us new perspectives, drive our innovation, and offer hope for a new generation of therapies that will help to transform lives.” At UCB, in conjunction with KPIs that include customer satisfaction and positive patient-employee outcomes, a good portion of PR metrics come from earned media.

The Digital Measure of PR Effectiveness – Earned Media

Earned media, or unsolicited PR, are unavoidable in the digital age. For example, UCB is no more able to stop satisfied patients from posting their positive experiences real time on social media than Uber is able to stop the twitter feeds from disgusted consumers.

But advanced statistics and predictive analytics can put data to good use and assess the value of PR and the impact of a campaign for smarter decisions. A firm can measure, for example, what type of content visitors to the website are interested in, which can provide insights as to what potential customers like and dislike. It also allows for more targeted PR because what does not interest the audience can be nixed to reduce costs.

Ketchum Global Research & Analytics is a PR and branding consultancy group. Orin Puniello is responsible for the company’s predictive modeling. He explains that the firm’s approach is to collect paid, earned, shared, and owned channel data and, based on that, suggest ways for clients to optimize their efforts. In one case, Ketchum linked client communications for a healthcare company to patient volume and stock price.

By charting patient volume against earned media, the relationship between the two became clear: an increase in earned media impressions was met with an increase in patient volume, and a decrease in earned media impressions was met with a decrease in patient volume. Ketchum was also able to identify the PR channels that had the most impact on patient volume.

Source: Ketchum, 2017

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In some cases, direct business results may not be available or accessible, which makes life difficult for a compliance or marketing chief who needs to show the impact of a PR campaign. According to Ketchum, one option is to buy sales data from syndicated sources or to link PR communications to stock price. Stock prices are a good indicator of consumer sentiment, although this type of analysis is reflective of the short term only.

Source: Ketchum, 2017

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Effective PR operates through numerous trusted intermediaries to solidify trust, such as industry experts, social media commentary, and journalists. PR is a combination of building relationships outside the firm boundaries, gathering input at all stages of innovation for product/market fit, balancing the amount and content of information communicated to audiences, and managing word of mouth and social media contributions.

Crisis Management

“When your company suffers the biggest cybersecurity breach of all time, it’s inevitably going to suffer bad press. But when you don’t disclose the breach for two years you’re going to seriously damage users’ trust, and you just might shatter a multibillion-dollar acquisition deal.”

— Salvador Rodriguez, staff reporter, Inc, 2016

PR strategy is perhaps most crucial when it comes to managing crises. A crisis could be a flurry of complaints following a faulty batch of products or a devastating data breach that exposes customers’ personal data. Either one harms the brand and affects company performance.

Unfortunately, the digital age and advances in communication and social media have made crises and breach part and parcel of doing business, which is why cybersecurity is one of the fastest growing industry sectors. With that being the case, an important component of PR is to communicate efforts to protect a brand from threats and mitigate the ensuing reputational harm.

Holly Rollo, chief marketing officer and senior vice president of marketing at RSA Security, and Peter Tran, general manager and senior director at RSA, cite a study by the Ponemon Institute study that found that data breaches are among the top three incidents that impact brand reputation. Moreover, consumers often expect compensation after a security compromise. According to Rollo and Tran, the detrimental effects from a data breach can be mitigated if a communication strategy is immediately put into action.

Timing Is Everything

According to a survey conducted by the security firm Centrify, 30 percent of consumers who had been affected by a breach discontinued their relationship with the affected organization. And who can blame them? In some cases, companies have delayed notifying customers of a hack to avoid the consequences but, by protecting their own interests, they put those of their customers at risk. Any delay in informing the public increases the risk that the stolen data has already been sold on the black market.

Unfortunately, industry-wide standards for safety remain completely insufficient or simply nonexistent as more personal data become digitally accessible, giving companies wiggle room to manage crises poorly but legally.

Michael Rapoport and AnnaMaria Andriotis, contributors to the Wall Street Journal, reported that Equifax, the credit reporting agency, took six weeks to let its 143 million customers know that their private data were at risk. The optics were not good as high-level executives delayed telling the public while grabbing the opportunity to sell off $2 million of the company’s stock before it took a nosedive. The stock fell 18 percent within four days of the announcement.

Yahoo failed to report a data breach for over a year, and both Target and Neiman Marcus were hit with similar criticism for not going public about credit card data breaches until a third-party cybersecurity blog exposed the events and the retailers were forced to come forward.

But the facts show that a quick, transparent response to crises such as data breaches is the best way to restore brand reputation. According to Centrify.com, companies that responded to a breach and were quick to self-report the event saw their stock value recover after an average of seven days. In contrast, companies that delayed a response saw their stock price decline over a 90-day period, on average.

“BP wouldn’t wait a month to make a statement on an oil spill, because that period of silence creates a vacuum …[for] speculation and false accusations, which, when not refuted, would negative impact the brand and the public’s perception of the organization.”
— Fred Gharamani, Founder and CEO of JUST10, 2016

Breaking the News

Source:  Ponemon Institute, 2014

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The aftermath of a data breach is not the time to withhold information. When it comes to a breach, things can’t really get much worse unless a company attempts to manipulate the facts. It’s better to lay it all out there rather than hold back and deal with backlash and accusations of concealing information.

When a breach occurs, PR is responsible for managing expectations. It’s better for the customer to assume the worst-case scenario and then feel a sense of relief than it is to have the reality sugar-coated. Data from the Ponemon Institute confirm that customers want the truth, the whole truth, and nothing but the truth.

One way to frame the message strategically is to ask for customers’ help in combating the problem. For example, involve victims in investigations and ask them to provide useful information. This accomplishes two things: it maintains a positive relationship and shows proactive behavior on the part of the affected company.

While the strategy might not work for tech firms such as Google, which are already expected to be crackerjacks in tech warfare, it might work for non-tech firms who would garner some respect from consumers if their remedial efforts had been extensive but still failed.

But what would really make a difference to consumers is a sincere and honest apology. While just over 50 percent of respondents to the Ponemon survey said that nothing could dissuade them from discontinuing a relationship with a company that experienced a breach, over 40 percent said that a personal, sincere apology would make a difference.

Source: Ponemon Institute, 2014

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An effective apology is a fast one. And an apology does not necessarily mean that a company is accepting liability, it merely shows empathy and concern for those affected. So, given that a company’s reputation can be destroyed on social media in a matter of hours, there is no reason to hold back on this first step in damage control.

It’s important also to rally the troops and not just rely on PR customer messaging efforts in the event of a disaster. There should be transparency in three directions: the customer, the employees, and the regulators or authorities. Internally, the PR, HR, and legal teams need to collaborate and act fast, and they should all have had input when creating a disaster plan (more on this in the section, below).

For a good example of how to handle a data breach, look to eBay. eBay identified the breach early on and informed customers what was exposed and what steps they should take to protect themselves. eBay also informed customers what the company was doing to address the threat. The company’s reputation suffered minimal damage because the company was transparent, looked competent in its handling of the threat, and addressed the problem head on.

Communications Plan for Data Breaches

Rollo and Tran give guidelines for a strategic communication plan for disaster management. Such a plan should be created with the input of key stakeholders such as clients and customers, partners and suppliers, employees, social media, and the press.

Here are the bare bones of a disaster management communications plan that could also be applied to other crisis events based on the guidelines from Rollo and Tran.

1. Form a crisis communication team composed of those best equipped to handle it. Decide their roles and the real-time messaging to be released.
2. Have the security team conduct an impact assessment – an inventory of data assets and potential risks. Security solutions can identify a company’s vulnerabilities and, in some cases, eliminate them with early monitoring and detection.
3. Determine the company’s legal obligations in terms of disclosure and lay out the plan to fulfill them.
4. Pinpoint advocates that might support the cause in the event of a disaster. They might be the customer base, business partners, investors, influencers, or members of the media. Part of PR is building and maintaining supportive relationships with media partners. These partners can be an extension of an internal team in the event of a data breach when a company needs all the help it can get.
5. Identify spokespeople who can speak to the media and who will be well-received. They may not be a company’s usual spokesperson, and different spokespeople might be required for different audiences. The head of engineering might be best received by an IT audience while the CMO might be the best person to engage the media.
6. Decide what to disclose when a breach happens, but transparency is the best policy. The facts of a breach unfold over time, and there are few good reasons, if any, not to be open about what is known as soon as it is known. The important thing is to communicate the steps that are being taken to protect and help customers and minimize the fall out.
7. Following a breach, provide updates on what is being done to improve security. Revisit your plan often. Keep spokespeople well-informed and ready to go.

Managing Social Media Amidst Crises

Developing a communications plan for a breach is doable but anticipating ensuing social media or word-of-mouth crises are perhaps more challenging. The contexts are so broad, it is impossible to anticipate all of the scenarios that might occur.

In the case of the Target breach in 2013, the MSL Group analyzed the subsequent social media chatter. They monitored the aftermath of the Target breach using a tool called NUVI, which churned out real-time data: who was tweeting, what they were tweeting, which channels had the most influence, the trending sentiments of the chatter, and the most shared links.

Source:  MSL Group, 2014

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This analysis proved that monitoring and managing social media is a long-term, constant process if brand reputation is to withstand crises. All media, old and new, are affected by crises, but breaking news influencers are still traditional media outlets who use new media as communication channels. With such expert snipers as opponents, there’s no way around the need to have an ongoing PR effort to defend against social media attacks.

Disaster management, then, is proactive PR developed with collaboration from internal and external allies. The wise company will “own” the data breach from the very moment it becomes aware of it. Companies that stand a chance of saving their reputation inform the customers who are impacted and educate and guide them through the process of mitigating further losses.

Successful companies are transparent about what they know, when they know it, and the steps they are taking to rectify the situation. Crisis management is a war on many fronts, but it can be won if the propaganda is true and credible.