Monday, February 19, 2007

Where Is JetBlue's Brand Value of Yesterday?

JetBlue Airways’ highly publicized problems in recovering from last week’s snow storm raise a fundamental issue about the value of brands. JetBlue had built a strong image for being customer-friendly in an industry that is notoriously customer-hostile. Perhaps it will recover this image and perhaps its recovery will be helped by that reservoir of good will known as brand equity. But perhaps it won’t recover: if enough attention is focused on the recent problems, this will eventually become the dominant impression of JetBlue. And in that case, all the previous brand equity will have melted like, well, a snow flake.

The psychology of this is interesting. People tend to perceive what they expect, which means they reject contrary evidence (or, more precisely, ignore it). But if enough contrary news accumulates, it eventually overrides the old expectations and forces people to adopt new ones. Future information then is accepted or ignored in line with the new expectations, reinforcing them just as previous selective perceptions had reinforced the old ones. Of course, in JetBlue’s case, this is all magnified by the media, which will now look for and report on problems that it would previously have ignored. When this sort of switch happens, the old brand equity is lost.

But if brand equity can vanish overnight, does it make sense to treat brand marketing as a long-term investment? Frankly I’ve never been very comfortable with this treatment, simply because it’s so obvious that the public attention span is so short. In a world where many ads are ignored altogether and the impressions that do register are quickly overwhelmed by whatever is presented next, how much long-term impact can we really expect from advertising?

I think the answer is quite little, but definitely some. Analyses such as marketing mix models do find residual effects from brand advertising, although these are measured in months not decades. So it does make sense to amortize the cost of brand advertisements over a period beyond the campaign itself, although perhaps not a very long one.

Nor is this changed by the fact that a catastrophe can erase brand value overnight. A factory can burn down too, ending its future value. You wouldn’t refuse to treat it as an asset for that reason.

Incidentally, there is another moral to the JetBlue story: operational performance is more important than customer friendliness. It’s all part of the customer experience. I know you knew that—but other people occasionally need reminding.

No comments: