You’d be hard pressed to find a single consumer who hasn’t had an experience with a product, service or brand that didn’t live up to expectations. In fact, this has become so commonplace, there’s a new term that has been created to describe it...
Macquarie Dictionary’s word of the year for 2024: "Enshittification" - the gradual deterioration of a service or product.
Each time a company delivers less than it’s promised, it destroys the value of its brand. The rollcall of brand destroyers is extensive and includes airlines, supermarkets, banks, plane makers and hospitality chains! All of us have had similar experiences - it’s not only the relationship with individual customers that can damage a company’s brand.
An example late last year occurred when a chocolate factory’s industrial wastewater discharge effectively took a sewerage treatment facility offline, leading to the temporary closure of Hobart beaches during summer – just in time for Christmas!
As master negotiators, the impact on our relationship with customers, employees and suppliers is considered in every transaction we negotiate.
When we teach negotiation skills, we explain the importance of building relationships; we talk about it as the elephant in the room. It’s of vital importance in mutual-gain negotiations. The elephant is there, but nobody really says (aloud) that the ongoing relationship between the parties is a separate negotiating issue.
The word relationship captures the notion that while the legal contract is between two companies, the negotiating parties are people and as we all know, people have a strong preference for negotiating with people they know and like!!!
Each negotiation should be seen as contributing to a productive relationship between the parties and over time the sum total of all these actions create brand value.
We can also understand a brand as a symbol, design or concept that uniquely captures the DNA or the essence of an organisation. The brand also represents the values of the company and the promises it makes to customers.
The phrase ‘lowest prices guaranteed’ immediately identifies a company and its promise. While relationships are built transaction by transaction, brand is built relationship by relationship
How does this explain the recent widespread destruction of brand capital in Australia and overseas?
Two possible explanations are: the Covid lockdowns and the subsequent rapid rise of inflation.
The pandemic required desperate actions to ensure survival without regard to brand and relationships, while inflation led to degradation of quality and service over a wide range of consumer goods in order to maintain margins in the face of substantial cost increases.
As 2025 progresses, many companies need to have brand repair as a core objective in their negotiations with all stakeholders. This needs to be more than a broad motherhood statement, it means that negotiators at the table need to be empowered to prioritise longer term brand protection/repair over shorter term profit and transactional wins.
Happy negotiating!