This article is a cautionary tale for businesses everywhere, whether you're a startup or a huge multinational; not managing your brand is not an option.
I'd like to share with you the example of a manufacturer and retailer of tabletop miniature war games, which for the sake of anonymity (and not getting sued) we'll call Model Factory. Tabletop war-gaming is a niche pursuit, but it's also big business; Model Factory reported a pre-tax profit of over £6 million for the last half of 2014, and has over 300 stores worldwide. Impressive figures indeed, but the company has put itself on a high pedestal and, worryingly, has given its detractors all the rocks they need to topple the brand.
First some history. Model Factory was founded in the mid-1970s and has grown to be the worldwide market leader in its industry. It reached this enviable position by making the best products, and by organically developing a unique and authentic brand identity that engaged players, and encouraged a thriving culture of brand advocacy amongst its customer base. Intriguingly, in its 40 year history, Model Factory has never engaged in any advertising, and very little in the way of active marketing. No magazine ads, no event sponsorship, no TV, no web banners - nothing. The quality of the product, the vibrancy of the brand and the zealous word of mouth were so good that it simply never needed to advertise. Amazing, but true.
In the last 10 years or so though, cracks have begun to show. In many ways Model Factory has become a victim of its own success, and many see the company's flotation on the London Stock Exchange in 1994 as a turning point. While the quality of its products has remained high, the authenticity and sincerity of the brand have been badly eroded, as the founding generation of enthusiastic, basement-dwelling hobbyists has been gradually replaced with clinically-detached corporate suits. This has led to a growing disconnect between the brand and its customer base, and has dealt a hammer blow to Model Factory's once enviable brand community.
The new regime at Model Factory has committed two particularly block-headed errors of judgement. Firstly, they've become so intensely over-protective of their intellectually property that their customers no longer feel that the brand belongs to them - the sense of personal investment and community spirit is dwindling rapidly as a result. This is particularly ironic since most brands today struggle hard to achieve the exact opposite, and understand the value of a vocal, engaged, inclusive community. Model Factory had a vibrant culture of brand co-ownership long before such a thing was widely talked about by branding professionals, and threw it away just as the concept was become more relevant and better understood..
Secondly, and perhaps more significantly, the suits have allowed the company's historical stance on advertising and marketing to set a precedent for not reaching out to customers. Model Factory's flotation coincided almost exactly with the arrival of the internet in our homes. Even before Facebook and Twitter, the internet was a place where social networks were built and communities came together. From then until today, the Model Factory's community of players has been alive and well online.
The problem is that Model Factory has utterly failed to engage with this online community, even more so than offline (they allegedly don't conduct market research either). The community-oriented content of their website, while initially healthy, has disappeared in recent years - only a slick webstore remains. They briefly dabbled in social media by launching a lacklustre Facebook page but, finding themselves unable to engage fans in authentic conversation rather than talk at them about the latest products, the conversation around the brand quickly turned toxic. Model Factory's solution was to delete the page entirely. Their Twitter account hasn't been updated since February 2013.
For an international company, selling a popular product based on a strong IP that relies on a vibrant community of players for its success, this mismanagement of the brand is jaw-droppingly inept. And as anyone who knows anything about brand management implicitly understands, just because a company buries its head in the sand and decides not be a part of the conversation, it doesn't mean that the conversation isn't taking place.
Considering the absolute (some would say heavy-handed) manner in which Model Factory controls its IP, it's surprising that they've failed to exercise any control whatsoever over their brand narrative. Perhaps brand consultants and social media managers are more expensive than lawyers (yeah right!). Today, there are credible rumours circulating online that Model Factory's game systems are about to undergo an unprecedented shakeup, with significant repercussions for its heavily invested community of players. On community forums across the web, the tide of vitriol being targeted at Model Factory is astonishing, with customers threatening to quit buying from the company en masse and forever. Model Factory's response? Silence.
At this point, whether the rumours are true or not is irrelevant. Model Factory have put themselves in a position whereby they have no channels through which to communicate with their customers, and no means of controlling the narrative. There can be no damage limitation because they've failed to develop the tools and channels with which to do so. Even if the rumours turn out to be baseless, the sheer outrage and negativity surrounding the brand will live long in the hearts and minds of the community; the community that should be Model Factory's greatest asset, but which they've allowed to become a festering liability.
Brand management and PR issues aside, Model Factory is a great company, and it will probably weather the current storm. But if it continues to avoid grasping the nettle of community engagement, and fails to accept the 21st century reality of brand co-ownership, its days as a market leader may be numbered.
What do you think? Is Model Factory doomed? What would you do to turn things around? I'm looking forward to reading your comments.