Biz Tips: What is More Important: Reputation or Sales?

Biz Tips: What is More Important: Reputation or Sales?


What is More Important: Reputation or Sales?

I have come across this question very often when I was doing direct marketing (Email or SMS) for big or medium brands (actually even some small brands think they have a big name in their industry so let’s add them here too), because they viewed it often as spam.

Usually the answer (from the point of view of some old-fashion management personnel) is that reputation of the brand/company is more important because the brand is that drives sales.

When you hear this, you could ask: ”Then why do you advertise in the first place if it’s the brand that brings sales and not the marketing?” And then they do only inefficient brand marketing, when the direct marketing (and other online marketing) is what actually drives most of the sales. But let’s not get into this now, as that is not our topic here.

So the industry dinosaurs think that reputation is more important, but is it really? Obviously the good brand reputation does ad some sales, not all of them, but based on the brand recognition it can be quite a lot for some companies (even over half of all sales). But if you chose to desist from marketing campaign just because it may hurt your reputation, will your good, non-wrecked reputation compensate those sales even in long term? Because successful marketing campaign always bring sales, so it’s cash in your registry or bank account. It is something physical that you will count in your financial statement, there’s no denying of it. Of course there are no 100% accurate research results on how will potential bad reputation harm your (future) sales, since it’s almost impossible to measure. So it all comes down to the experience and knowledge of a person in charge and his ability to determine causation.

So let’s discuss what potential spam message would do a known brand. Imagine you receive clear spam message from Coca-Cola or Apple. What is your reaction? Will you instantly hate the company with all your guts, just because they sent you an ad you did not want to see? I bet no. If you liked the company before and bought their products, you will continue to do so. Of course if you hated the company, you might find this as a good reason to bash them, but then again, you might intentionally look for a mistake from them, to criticize them.

But if you are neutral or positive to the company a little message will not hurt your feelings, because it’s not that serious of an issues. It not like they are killing baby whales, poisoning our food or polluting our planet. Oh, wait! They are doing that! Almost every big company does that, and still they think we care more about receiving spam than of destruction of our environment! Do they really think we are that stupid? That we care about spam, but not about the real serious stuff? Unfortunately some people are like that, but luckily not many.

There is a strategy to divert people’s attention from big issues and direct them into minor issues, so that they will not know or have time to concentrate on the big bad things you are doing.

So if the company can do a real bad things and not worry about how it will impact their reputation, but then worry about small meaningless stuff and be totally scared about it. Its not really about what you do. It’s about how you lie to consumers and try to alter their worldview. If they succeeded with poisoning our planet and getting away with it, they would have succeeded with sending spam and making us believe it’s a good thing. They just don’t want it. There is a strategy to divert people’s attention from big issues and direct them into minor issues, so that they will not know or have time to concentrate on the big bad things you are doing. This strategy has been used by governments and religions for centuries, and naturally the companies also adopted this strategy for their benefit.

But what our main questions? Does spam wreck the reputation of a brand and what is more important in the end: reputation or sales?

Spam does not wreck the reputation of the company. I have written a good post about spamming the past. The thing is that many managers are also brainwashed by this diverting strategy I explained above, so they really think it’s an important issues when it’s really not. And therefore make a false conclusion about stopping a marketing campaign because it might harm their reputation.

And Reputation vs. Sales? Clearly sales always wins, and the companies have proven it themselves many times. First of all, if you have no sales but very good reputation your company is dead, end of story. And on the other hand lot of giant companies have terrible reputation, because today people are aware of what they do to us. Just look at McDonald’s. Who doesn’t hate them? And who doesn’t eat there? It’s the same people. They eat there, even when they know it’s unhealthy. This doesn’t stop companies to have huge amount of profit.

The question is even not correct in some way, because there is hardly any scenario in which choosing sales will harm your reputation. See reputation of a multi-billion dollar companies are so stable that it’s almost impossible to demolish it. No matter what you do your reputation will still live. Of course it can be destroyed by serving terrible customer experience, but since these companies got to the top they know how to reign their clients. Even if the company does something bad or illegal (like Volkswagen emissions scandal) they will just blame an individuals within the company and after some loss of stock value they are still strong. Or do you think people will actually stop buying VW because if that? Of course not, it’s a great reasonably priced car, and it will remain the same way no matter if they violated some unfair government regulation.

That is the sole purpose of a brand: to have an association with a need.

The main reason is because it’s not about what kind of reputation you have, it’s about that you have it in the first place. You are known, therefore when consumers thing a products, they think of you. That is the sole purpose of a brand: to have an association with a need. Many people who hate the policy a company still use their services, just because their service/product is better, cheaper, more easily available than competitors product or they are just used to it. There are not so many people of strong principles that they will rather suffer, but not support the company who doesn’t share their values. These hippies and greens make only about 1% of total consumer base, so their not gonna knock over any company, no matter how much noise they make.

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