Balancing Brand and Reputation in an Ever-Changing World07/16/19
— Colin Kaepernick (@Kaepernick7) September 3, 2018
With that nine-word tweet, sent on Labor Day afternoon in 2018, Nike and Colin Kaepernick kicked off a campaign that would draw attention, admiration, and sales from its intended target audience. It would also win fans and create enemies. It drew praise for being “on the right side of history” and criticism for being “on the wrong side of the American people.”
For these reasons, Nike—which also made revenue leaps in 2018 by bolstering its direct-to-consumer sales pipeline—was named Ad Age's 2018 Marketer of the Year.
Depending on who you asked, Nike was either a crusader for social justice or a corporation making a hero out of an unpatriotic agitator. Whichever is correct, Nike certainly was successful in refueling a conversation about the role brands should – or should not – play in tackling political and societal issues.
Brand v. Reputation
Nike’s decision to make NFL quarterback-turned-activist Kaepernick the face of its 30th anniversary of the “Just Do It” campaign illustrates the important difference between brand and reputation, write Jonathan Knowles and Thunderbird’s Richard Ettenson in Why Brand Trumps Reputation, published by MITSloan Management Review, Oct. 5, 2018.
“Nike’s decision to make NFL quarterback-turned-activist Kaepernick the face of its 30th anniversary of the “Just Do It” campaign illustrates the important difference between brand and reputation.” – Click to tweet
Richard Ettenson is professor and the Keickhefer Fellow of Global Marketing and Brand Strategy at the Thunderbird School of Global Management at Arizona State University. Jonathan Knowles is the CEO of Type 2 Consulting
In an earlier MITSloan article, Don't Confuse Reputation With Brand, Ettenson and Knowles said it’s easy to confuse the two concepts. Brand is about generating demand among customers. Reputation is about approval among stakeholders.
Simply put, they said:
- Brandis customer-centric. Brand focuses on what a product, service or company has promised to its customers and what that commitment means to them.
- Reputationis company-centric. Reputation focuses on the credibility and respect that an organization has among a broad set of constituencies, including employees, investors, regulators, journalists and local communities — as well as customers.
Aligning with Kaepernick is a customer-centric move that puts Nike’s company-centric reputation at risk. Ettenson and Knowles call Nike’s decision a bold business decision. “Most companies want to ‘have their cake and eat it too’ when it comes to brand and reputation.” They seek to create a distinctive brand positioning among consumers that does not rock the approval of all their stakeholders. But not Nike.
Risking Reputation – At Least in the Short Term
Kaepernick is not the only athlete attached to Nike’s 30thanniversary of the “Just Do It” campaign, but he’s certainly the most controversial.
In making a deliberate decision to partner with Kaepernick’s rebellious message in hopes of increasing the appeal of its brand (at least, among its younger, more progressive base) at the risk of alienating its more socially conservative customers and stakeholders, Nike recognized that the actions required to drive brand strength may sometimes come at the expense of reputation, write Knowles and Ettenson.
“In partnering with Kaepernick, Nike recognized that the actions required to drive brand strength may sometimes come at the expense of reputation.” – Click to tweet
“Nike made a bet,” they conclude, “that the near-term hit to its reputation would be outweighed by gains among consumers stimulated by the company’s commitment to a progressive stance with Kaepernick.”
That bet may have paid off quickly. Initial fears of a financial hit appeared to be overstated. After an early dip, online sales of Nike gear grew 31% in the 10 days following that first “Believe in something” tweet on Labor Day.
Nike Returns to Its Roots
This strategic choice has worked so far for Nike. As Knowles and Ettenson see it, “Nike is playing the long game to expand the appeal of its brand to a new generation of consumers across the globe who respect both athletic excellence and social purpose.”
Aligning with Kaepernick may be seen as a bold new business move, but Richard Edelman, president and CEO of Edelman, points out that the spirit of this campaign has roots in the founding ethos of Nike. Founder Phil Knight talked about the urge to make a difference in his 2016 memoir Shoe Dog:
“Like my friends I wanted to be successful. Unlike my friends I did not know what that meant … I had an aching sense that our time is short, shorter than we ever know, short as a morning run, and I wanted mine to be meaningful. And purposeful. And creative. And important. And above all different.”
Meaningful, purposeful, creative, important, and different – with a little dash of controversy.
As Edelman says, “With this latest iteration of the ‘Just Do It’ campaign, Nike has boldly returned to its founding philosophy.”
Lessons for the Long Term
According to Knowles and Ettenson, Nike’s strategy drives home important points for all brands to keep in mind. The rise of social media has driven many companies to make reputation the centerpiece of their communications, guarding what the public says about them. By doing so they have found their brands have suffered, becoming bland, or worse, irrelevant.
A positive reputation is great, but it will not win consumers to your brand. You need to present your target audience with a distinctive and compelling brand.
Not every company needs to be controversial or take risks as great as Nike has. But you do need to offer a distinct group of customers a compelling reason to buy your product.
Take a tip from Nike: Just Do It.