Gen Xers Reputation as Slouchers Not True

At Weber Shandwick, we just issued a report on Generation X (Gen Xers) and their concerns about retirement. This is a segment of the population that is far too overlooked.  Their reputation needs management. Why is it that they are so neglected by the media and many Fortune 500 companies?  An audit we did of leading U.S. financial company websites found that only half segmented their messaging by generation, and those that did focused mainly on the favored Boomers and Millennials. None focused on Gen X.  Even more startling to us was that the oldest Gen Xers are turning 50 in 2015. Their AARP notices are probably in the mail now.

What do we know about them? The Gen Xers' formative years were shaped by Madonna, John Hughes films and the presidencies of Ronald Reagan through Bill Clinton. This group, ranging from their late 30s to late 40s, were initially characterized as the “slacker” and “grunge” generation, yet went on to shape the dot-com and Web 2.0 eras, unleashing their far-reaching entrepreneurial talents. As a result of skyrocketing divorce rates among their Boomer parents, Gen Xers are known for their focus on family, striving for work-life balance and career-postponement in favor of stay-at-home, sustainable lifestyles. 

Unfortunately for them, the Great Recession marred the Gen X experience. Not only did Gen Xers face difficulty in securing jobs upon graduation in the early ‘90s, subsequent economic downturns contributed to an unstable financial footing for this market segment. In fact, according to the Pew Charitable Trusts, Gen X took the largest hit in our most recent recession, losing nearly half (45%) of their wealth totals, an average of about $33,000, in just four years. Impacted by a slump in stocks, bonds and property values, the damage to Gen X portfolios exceeded all other age groups by at least five percentage points, Bloomberg recently reported. For these reasons, the Gen Xers in our study reported being intensely worried about how their retirement plans will intersect with their healthcare needs in the future. As one Gen Xer said: “Staying healthy — I think about this all the time. It’s a constant concern. If something happens to me, I have a few savings accounts to assist my children, but I worry about doing the right thing for my health and seek out help where I can to address my concerns.”

As a market opportunity, Gen Xers are often overlooked for several reasons: they are sandwiched between two very different and attention-grabbing generations (Boomers and Millennials), have a relatively short generational span (approximately 16 years vs. roughly 20 years for other generations), and represent a smaller share of the population (65 million, vs. 77 million Boomers and 83 million Millennials). Given the financial security that this generation will require to sustain itself during its retirement, Gen Xers present an opportunity that financial services companies should not overlook. Our research found that this “middle child” cohort has financial issues and communications needs that are unique to their experiences and their place in history, and deserve a closer look.

Reputation-wise, this generation needs help figuring out what makes them distinctive. Looking at the Pew research in the chart below shows how their own perceptions of what makes them unique is already claimed by their cohorts – technological-savviness, intelligent and hard working.

Despite their hard work, our research found them to be happy amidst all the chaos and anything but slackers. You might want to call them the heads-down generation. Clearly, they need to be spoken to in language that resonates with their hopes and dreams and calms their fears. Although this is a generation whose reputation was closely tied to being slouchers and couch potatoes, the media and those companies seeking their business might want to pick up on their first-hand experience with being prepared for financial volatility.

[I posted this on LinkedIn today as well.]

Interesting Reputation Sidebars

Just a few bullets that caught my eye over the past few weeks on the topic of reputation.

  • In a wickedly well-written and snarky article in The Economist on CEOs living in glass houses (no kidding), especially in this new social world, a few things stood out. First, a mention about research among Wharton researchers that found that the most emailed articles among 7,000 articles from The New York Times over a three month period had to do with topics that evoked fear, anger and anxiety. As the author said, perfect click bait for “evil CEOs.”
  • From that same article mentioned above, a fascinating stat which I am saving for my folder on Why Crises Are Bad News? is this one: “The stock market is more sensitive to reputational disasters than ever before. In the two weeks after the 1989 Exxon Valdez oil spill in Prince William Sound, in Alaska, Exxon’s shares dropped 3.9% but quickly rebounded. In the two months after the Gulf of Mexico spill in 2010 BP’s shares fell by half (and have still to recover fully).”
  • The Hay Group, who conducts the World’s Most Admired Companies (WMAC) Survey for Fortune every year, reports that internal and external reputation management is the most significant factor in consistently enabling the WMACs to outperform their peers. And to add in another good proof point, 75% of these most admired companies worldwide regularly communicate the importance of their company’s reputation to their workforce.  
  • Also from the Hay Group article, a statement which surprised me. They say that the world’s most admired companies now have “much greater control over their reputations” compared to five years ago. I think that this is a perception that could be easily debated and I’ve be in several of them lately.  On one hand, companies might feel that they have less reputation-control due to the rise of the Internet, NGOs and the never ending media-frenzy but you could also say that with disintermediation, companies now have more tools in their arsenal to bypass the media to get their messages out and to listen early on to stakeholders before the conversation turns viral and damaging. A great topic for a debate. I might save it for a panel discussion.

Hope to add more to my collection of interesting reputation nuggets in due time.


Cybersecurity reputational risk

Just recently heard that our first US homeland security chief Tom Ridge is helping to launch an insurance product that specializes in corporate cyber security policies. In the article, I read that the global economy has lost more than $400 billion annually due to these cyber breaches that seem to be coming at us like a tsunami. Moreover, only one in four companies, if that much, have some form of cyber attack coverage.

I also learned awhile back when we did our Employees Rising survey on how employees were using social media to champion and possibly sabotage their companies, that one of the reasons that companies have chosen to train their work forces about being responsible social citizens was to caution them about how cyber hacking often occurs. And that is from employees themselves who can be unintentionally loose with passwords, clicking on errant links or not understanding well enough the safeguards of protecting confidential documents. Again, another reason for formal social media training at work and recognizing the importance of internal employee communications. 

Cyber breaches are clearly hurting the reputations of companies that find their customer data let loose online from hacking. This has become a major reputational issue and one that companies have to get smart about or they will be joining the ever growing long list of the largest data breaches. Plus the background stories in the media often reveal that companies and their leaders had some forewarning or were lax about privacy controls which only makes matters worse. Need I even add that CEOs have lost their jobs over cyber breaches! This is becoming a reputational issue of epic proportions.

Company behind the Brand

The Company behind the Brand. There has been a great deal of interest in the concept of the parent or master brand and its relationship to its product brands over the past few years. The research we did recently on this topic put a stake in the ground by declaring that the two are interdependent and the parent brand was no longer the stepchild of the product brand. A recent article in Hindu BusinessLine asked the question of how companies would know if they were over-investing in the corporate brand at the expense of the product brand. The author Rajeev Batra, professor of Marketing at the Stephen M Ross School of Business at the University of Michigan, says there are six situations where it makes sense to invest more in the parent than the product brand and four situations when it makes less sense.

Makes Sense to Invest in the Corporate Brand

1. When it comes to cross-selling -- it makes sense if you want the consumer to buy another one of your products and the parent brand provides assurance that it is a wise choice. Using a P&G example, the author says: "The logic is that if the average US household which currently buys five P&G products can be induced to buying a sixth by virtue of it being a P&G product, it will lead to a 16 per cent increase in sales."

2. When it comes to high risk -- your consumer might not know who you are and they wonder if they are taking a risk by selecting your product or service? The parent brand acts as a guarantee that they they are in good hands by selecting your product. High risk selections might occur when selecting an airline, a bank, pharmaceutical or medical procedure. 

3. When it comes to social issues -- your company wants to attract a segment of customers who already care about particular social issues such as sustainability, obesity, etc. and you want to guarantee that your parent brand is having a decided impact on society and the environment. What your company says and does about social issues matters increasingly today in product consideration.

4. When it comes to brand extensions -- if your company wants to introduce a new product or extend the products it already has, the parent company can make that happen more easily by adding its reputational luster to the extension.

5. When it comes to having a positive rub-off -- the halo from the parent brand can often work magic on a product brand.  Consumers who see a corporate brand as standing for high quality, integrity and transparency make the leap in their heads that the products are made with the same attention to intangibles.

6. When it comes to reputation overall -- having a good reputation can help a company recover faster after a crisis or mishap. Investing in a company's good name now has tangible benefits, especially when you might need it tomorrow.

Batra also lists four situations where it might not make sense to spend your dollars on the corporate brand at the expense of the product brand.

Makes Less Sense to Invest in the Corporate Brand

1. When it comes to appealing to many diverse consumer segments that sometimes clash or conflict with each other. As he says, this is the House of Brands concept where each product brand might do better standing alone. For example, If a company's product brand appeals to less healthy eating behavior for teens and another company product appeals to an organic ingredients offering, it might not make sense to overinvest in the corporate brand. Let's just say it is hard to imagine Disney having a high risk theme park in addition to its parent-friendly ones and trying to position the Disney brand well under those circumstances.

2. When the corporate brand image is too broad and diffuse that it is not distinctive enough. We have all seen examples of companies that communicate empty and meaningless promises. The intense focus on innovation in recent years where many companies are calling themselves the most innovative ones in the world has baffled me.

3. When the meaning given to the parent brand is not relevant to the consumers it is trying to capture. Yes, sometimes companies miss the mark.

4.. When the corporate brand positioning is not believable and invites skepticism. This is the example we are all familiar with when a company says one thing (i.e., societal- or environmentally-wise) and behaves to the contrary. Do I dare say BP.

The four examples Batra gives as to why investing in the corporate brand might not be an efficient use of resources are quite valid.  However, my belief is that if investment in the corporate brand is done right, it nearly always pays off and can actually provide the necessary filter for leaders to make better decisions about what products should be invested in or what acquisitions to make. There is no reason why companies should not be able to identify their relevance to all customers, even if their products vary. Narrowing down that corporate positioning to its core essence is what companies are supposed to do to build enduring reputations that last. Understanding what your company stands for is more critical than ever and the corporate brand reputation should serve for something all encompassing that guides customers and inspires employees. Research is important in helping deter companies from marching off in the wrong direction.  In a world where the Internet is at everyone's finger tips and word of mouth is all around us, it makes perfect sense to build the corporate brand so that it is infused with meaning that matters to all its brands. 


Facing up to reputation imperfections

Ain't it the truth. Mark Borkowski writes on his blog

"We need to get used to the fact that these days there is no fixed mark on reputation.  Along with the Buzzfeed generation comes the hint that the old media traditions fail, with short form memes feeding the wires, and less emphasis on the elongated and researched story.  Brands and individuals must become comfortable with their imperfections and vulnerabilities because we have a crowd and a ‘can know anything’ psyche, where reputations are savaged in an instant and often with no grounding in reality.  The emotion of the crowd gathers momentum and careers along gathering falsehoods before the accused has even woken up to the storm."

It is very hard for companies to accept their imperfections. Transparency is one thing. Hanging out the dirty laundry is another. We are all going to have to develop thick skins and get better bleach.