Apple clarity and communication keep brand at top

In 2010, Apple was confronted with a thorny problem. The redesign of its iPhone 4 had left some users complaining the device was dropping calls. Many blamed the redesigned antenna, a sliver of metal that wrapped round the rectangular device.

But Steve Jobs, Apple’s late co-founder and chief executive, refused to accept that the product was inferior. He said the issue was largely the result of users holding the phone improperly.

This month, Apple hit the headlines again when reports suggested its Watch did not work properly on tattooed arms.

Yet Apple has not suffered any lingering reputational fallout from a big product launch that did not go according to plan. According to Millward Brown’s Top 100 Most Valuable Brands ranking, 2015, the iPhone maker is the world’s most valuable brand.

Strikingly, it is not the only technology company with a winning reputation. Google, Microsoft and IBM round out the top four, while Tencent, the Chinese internet portal, Facebook and Alibaba, the ecommerce group, sit just outside the top 10. So, why are so many tech brands at the top of the table?

To answer that, it is useful to separate the companies into two camps: groups that have been around for a long time and are built on hardware and devices such as Apple, Microsoft and IBM; and newer internet businesses, such as Google, Facebook, Tencent and Alibaba. The enduring success of the former will inform how long the latter group are able to stay at the top.

For technology companies, says Rita Clifton, chairman of consultancy BrandCap, the “challenge has always been to stay up there, generating sustainable value in the long term, beyond today’s technology”.

To survive in a sector marked by rapid change and constant disruption, it is essential to adapt and evolve before customers become dissatisfied. She points to companies that have failed to do this — “think of Palm, BlackBerry and Nokia” — which quickly went from market leaders to also-rans.

“You need to build a brand that will thrive, stretch and be versatile,” says Ms Clifton. “The important distinction is whether they continue to behave like a category-bound tech company — in the case of Nokia, a handset company — or a well-functioning brand, that is focused around customers and how their lives are changing.”

Apple, Microsoft and IBM have all experienced highs and lows in reputation, only to recover again. But, as the survey suggests, the iPhone maker has been most successful in reestablishing itself at the top of the tree.

Ms Clifton suggests that the company’s clarity about its purpose and ability to communicate it to customers have marked it out.

“Apple has reflected all the qualities of what makes a great brand, irrespective of sector: clarity for what it stands for, coherence about how that shows up through everything it does, from distinctive products and services, to the stores and online experience, to its people who are great to deal with.”

For the internet-based technology companies, success has relied on becoming an essential part of customers’ everyday lives and figuring out how to monetise that relationship. Their business model is built on the so-called network effect, where a company looks to pull in as many users as possible by offering free access or content and selling advertising.

These are “winner take all” businesses, says Patrick Barwise, professor of management and marketing at London Business School, which makes it hard for customers to leave.

“If you are part of that customer’s life and you’re meeting a need in such a way that they don’t have to think about choosing you, the number one thing is to make sure they have no reason to go to somebody else,” he says.

If a service becomes a utility, it is much harder for a user to quit, Prof Barwise adds. That makes a company more pervasive, but it also means it is under a particular pressure to ensure it does not take that relationship for granted when it comes to sensitive issues such as handling of data and privacy.

It is easy for companies to focus on what delights customers, says Prof Barwise, but it is just as important to make sure one eye is kept on what they do not like before they choose to jump ship.

Microblogger: Twitter

Twitter is at the vanguard of new media, yet is not afraid to tap into more established methods to boost its brand profile, writes Murad Ahmed.

Take its approach to television. Twitter has created a vast team of executives whose job is to assist broadcasters from MTV in the US to the BBC in the UK.

The San Francisco-based company provides these TV groups with vital feedback — who is tweeting and what they are saying — as people watch a given show.

Simon Cowell from The X Factor USA says he has changed live shows week-to-week, based on information provided by Twitter.

In return, broadcasters provide Twitter with free publicity. Many programmes will display a Twitter hashtag, inviting viewers to tweet about what they are seeing.

Twitter says viewers get to be a part of a “global conversation”, making sure they are more engaged in what they are watching, as well as giving them a reason to update their Twitter feed.

Twitter also taps up pop stars, sportspeople and politicians. Company executives will meet celebrities personally, help set up their account, giving them a crash course in using the service and provide a direct line to Twitter HQ should they stumble.

Critics of this strategy say it can be baffling for non-Twitter users.

This is a problem, because Twitter is desperate to broaden its appeal beyond its 288m monthly users. Business analysts worry that it is not doing enough to increase its user growth rate, which Twitter reported in February was just 1.4 per cent quarter on quarter.

One of the reasons Twitter is suffering is the rise of internet trolls who use the service to direct abuse at public figures and private individuals.

In response, Twitter says it is rapidly expanding the team it has in place to respond to complaints.