A business’ marketing team is its public face. That team is responsible for how their company or client is perceived by the world, whether that be potential customers or other businesses, and knows that perception can make or break a company.
The marketing arm of a business doesn’t just handle sales. It deals with client communication, B2B communication, rapport building, branding, and advertising. At every phase of this process, a company has to think about how they’re conducting their business, and who they choose to associate with. Today more than ever, companies are expected to maintain an ethical practice, and face repercussions when they choose not to.
In the food and apparel industries particularly, ethics has become increasingly important in recent years. Mammoth companies like H&M have come under fire for the way workers were treated in their overseas factories in Bangladesh, and the plight of migrant workers in the U.S. agriculture industry has sparked activism and investigative reports for years.
We’ve identified five marketing risks faced in today’s business world, all of which we’ll define and go over in further detail:
- Brand Perception and Value
- Event Branding
- Inadequate Marketing Strategy
1. Brand Perception and Value
This category is probably the one we’re all most familiar with. A brand’s public perception can and does drastically affect its value. A brand’s perception is at risk when an adverse event, or an adverse series of events, occurs and isn’t appropriately managed. In our earlier example of H&M’s warehouses, the clothing retailer still carries a bad reputation for being emblematic of ‘fast fashion’ and its exploitation of workers, despite the company taking steps to correct its practices.
This sort of risk doesn’t always come in the form of a major humanitarian disaster. Sometimes it can be as simple as a negative customer review that goes viral, spreading quickly and forcing a company to step in and address it. It could be a negative post on Twitter or Facebook by an employee of a company that throws a pall over the brand’s entire image.
In 2017, for example, Pepsi caught flak from the public after airing a commercial in which model Kendall Jenner left her job as a model to join a fake protest, making peace by opening a can of soda for a police officer. The protest didn’t appear to be about anything at all, and the soft drink company was accused of trivializing issues disadvantaged people face.
Affiliate relationships can go a long way toward a company’s success. Pairing with a larger company than your own and using their distribution channels, or one that’s aligned with your interests whom you can promote as well, can be a very good thing. This becomes a risk, however, if your company cannot maintain good relationships with its affiliates or becomes affiliated with an unethical brand.
When YouTube personality Logan Paul published a video that went too far last year, the platform swiftly demonetized his account, and Paul wasn’t the only one to come under fire for what they posted on the site. Their behavior made headlines in part because of bad-some would say reprehensible-behavior, and partly because their accounts had millions of subscribers; they were considered “partners” in YouTube’s platform. That affiliation posed a serious risk for YouTube, and the public watched very closely how these scandals were handled.
3. Event Branding
A lesser marketing risk than the previous two we listed, inconsistent or incorrect branding on public displays set out at major events can still be problematic. Lots of eyes and ears are available at major events whose interests could be caught, and those people could be converted into customers down the line. It’s a marketing team’s job to make sure their brand is represented properly at venues like these.
If there are typos in your promotional material, you aren’t letting people know where to find you on social, or you’ve got nothing for the curious to take home with them, chances are they aren’t going to remember you.
False, misleading, or inaccurate advertising claims can land a company in a lot of hot water. When a company misleads consumers such that they rely on their claims to the point of being harmed, that’s a massive moral and ethical problem.
Take Uber, for example. Last year the company posted misleading advertisements about how much money drivers could make working for Uber. The ride sharing app was forced to pay millions in fines after the Federal trade Commission (FTC) brought claims against them, finding that Uber had falsely stated higher wages than drivers could actually make.
As the marketing arm of a business, it’s your responsibility to make sure no misleading or unethical advertising practices are used. Once public trust is lost and a brand’s reputation damaged, that trust is very difficult to regain.
5. Inadequate Marketing Strategy
A big part of marketing strategy is collecting information on your potential customers, so you can market to their needs. If you aren’t collecting data from the right places, aren’t bringing in enough of it, or aren’t using it the right way, it will come back to bite you in the form of low conversion rates or potential fines.
With privacy and anti-spam legislation laws coming into effect, it’s critical for marketing teams to be conscientious of their email marketing practices. Laws such as CASL and GDPR protect email recipients from being solicited by vendors and requires users to consent to their data being captured and used by the vendor in question. Hefty fines have already been doled out to those not being compliant!
Every robust marketing strategy has an aspect of digital advertisement. Placing your ads, the right way takes proper marketing and sales alignment. If you’re trying to sell something to a particular age group, it’s best to distribute your marketing efforts where they “live” online. For Millennials and Gen Z, that might be Twitter, YouTube, or Instagram. For the Boomer generation, that could be Facebook and television spots.
Not only should you be marketing to your target demographics on their level, in their language, but you should be tracking what works and what doesn’t. Monitor your engagement, your conversions, your sales, and repeat customers to determine where the most successful marketing efforts were, and how to replicate them. Find out what need your product fills, and make sure your marketing efforts communicate that effectively. Failure to do this could mean closing up shop because you couldn’t reach enough new people.
Putting Marketing Risk Management To Work
Resolver’s Risk Management Software helps risk managers and owners easily manage their risks and controls.