Brand Value = Integrity, Transparency, and CSR

By John Luff, Founder of Sustainable Marketing,

www.Sustainablemarketing.co.uk and a founding member of the

World Lottery Association (WLA) Panel on Responsible Gaming

Mr. Luff is part of the WLA panel assembled by Mike Randall (formerly head of Corporate Communications for Atlantic Lottery Corp.  e-mail mike.randall@rogers.com) that is tasked with evaluating responsible gambling framework submissions from lottery operators from all around the world.  This panel includes 4 others who come from outside the lottery and gaming industry.  The hope is that this “best practices” approach to integrating the perspectives and methodologies employed in other fields and industries will augment the ones we are steeped in our own gaming industry.  The end result should be a WLA membership that excels in this space, that sets the highest standards to which all operators in the gaming industry will be held.   This is consistent with a theme that comes across in virtually all of my interviews with leaders everywhere.  That is that it is shrewd business strategy to be the ones to proactively raise the bar on yourself.  The paradoxical aspect to that concept is that the time to genuinely raise the bar on yourself, pushing to set for yourself a higher standard of performance to adhere to, is when you don’t have to do it, when you’re already ahead of your peers and competitors.  The reason is simple.  That’s when you are in the ideal position to put so much space between yourself and your competitors that they’ll never catch up.  Or, in the case of government sponsored gaming operators like lottery organizations, that the shapers of public policy will easily see how and why the public is best served by implementing expansion of gaming through their own “lottery” organizations.   CSR and sustainability in this context is much more about economic, political, and cultural considerations than environmental ones.

Please feel free to contact Mr. Luff or Mr. Randall for more information on the WLA Responsible Gaming Framework and certification procedures.  Over to you, Mr. Luff:

My focus is on building and retaining brand value.  We live in an age when universally distributed communications reveals our strengths and weaknesses in bold relief.  And it does that instantly.  Two implications of this ...  First, maintenance of a positive brand image is now an imperative.  Second, the marketing strategy that genuinely embraces the opportunity to grab a competitive advantage in this space will inevitably enjoy a big ROI on the investment to do that.  I say it is ‘inevitable’ because the information markets are becoming so good, so transparent, that it is only a matter of time before the ‘truth will out’, that your customers and constituents will be able to clearly see and evaluate who the best performers are. 

There are a lot of different definitions of CSR, so let me define what I mean by the term. For me CSR is: “The long term positive contribution your organisation makes to the societies it impacts directly and indirectly.” There are many more theoretical definitions of CSR available and if you are of an academic persuasion I commend you to them. I’m of a practical disposition and I find that this definition works for most of the organisations that I work with.

In previous incarnations I have been both Global Head of Brand and then Global Head of CSR for one of the world’s largest corporations. One of the most fascinating insights of this crossover was the misconceptions the CSR and brand/marketing tribes have of each other. The CSR specialists all too often see marketers as the embodiment of stretching what is ethical to the limits or at least making a living out of being economical with the truth. And many marketers regard those who specialise in CSR as over indulgently living in a fantasy world of ethical black and whites.

The reality is that this perceived bi polarisation is just that – perception. Any professional marketer knows that a brand not built on ethical marketing principles is living on borrowed time. That has always been the case but today communications are such that the borrowed time would be short indeed. The World Wide Web, satellite channels, SMS and the rest mean that geography is history and transparency in business happens at the speed of light. The growth of social networks means that word of mouth, i.e. getting information from those you trust or at least from those whose likes/dislikes , prejudices etc. you think you can predict, is a 24/7, global phenomenon and not something that applies to a small group of friends and colleagues. These changes in communications apply to all businesses but they are particularly true of the gaming sector where media and societal interest is intense.

This leads to a curious outcome.  Because of technological changes we have, in many curious ways, returned to the marketing ethics of an earlier age. In the tight-knit communities of pre industrial Europe of 400 to 500 years ago everyone engaging in commerce was known to everyone else. Everyone was consuming much the same products as their friends and neighbours. All traded in the same market places.  A result of this is that anyone identified as employing unethical trading or marketing practices would be very exposed, their actions known to all and the consequences very public. It was a small world. Something happening in the market place in the morning was known all over the city by the afternoon.  Well, the digitization of today’s communications has turned the entire world into this small village where everyone knows what’s going on immediately.  There’s no filters and no time delays.

Consider the ultimate brand promise - from the earliest Stock Exchanges – “My Word is my Bond”.  Break down that commitment and the consequences are instantly known to all in a closed, connected society. Similarly, think about the origins of ‘bankrupt’ (from the Italian for broken bench) where unethical dealing lead to the trader’s bench in the market place being broken and smashed. Trading ceased, with the guilty party being literally thrown out of the market place, his bench (“banco”) now firewood. This is not some act carried out in a backroom between lawyers and advisors. This is ritual exposure akin to breaking a court martialed soldier’s sword in front of the rest of the troops.

The web, satellite, social networks etc. now mean that we can publicly break the metaphorical benches of unethical individuals, teams, corporations or organisations in full view of the global society. Any organisation that breaks its ‘word’ or promise risks not the scrutiny of the burgers of a city or guild but every analyst, pressure group and consumer worldwide. Let alone the approbation of the professional guardians of ethics, the regulators.

These trends have especial relevance for those of us in the gaming sector.

In the world of CSR, the debate today is not just about the means of production (climate change etc). It’s also about the means of seduction, i.e. communication and marketing. It’s as much about how things are sold as about what things are sold. The morality of promoting potentially harmful products or techniques which (for example, seducing minors into buying), continues to provoke debate at the level of first principle basics. Quite right. But in my view practical self-interest is an even more potent driver of marketing in the direction of the ever more responsible and ethical. There will always be those who will be seduced into using tactical approaches that are ethically questionable. But global communications now mean that they do so in a market place where their actions are simultaneously under the microscope and spotlight of millions. And of course it is all about what you do rather than what you say. Stakeholders need to know that organisations will deliver for them. CSR without delivery is just words. An organisation’s brand is its promise. And in my experience the thing which all stakeholders, worldwide will forgive least is an unfulfilled or broken promise and in some cases dream. An organisation’s judgments can be called into question by anyone with access to communications infrastructure – that means anyone with a laptop and modem, not just investigative journalists.  And as any marketer will tell you, they will probably base their opinion more on emotional and common sense reactions more than on logical analysis.

A word at this point on sustainability. In every day English, ‘brand’ is often taken to refer exclusively to visual identity or logo and we marketers therefore have to remind everyone that brand is so much more than this. We know that it is your total promise, everything you communicate; consciously and unconsciously. So too, ‘sustainability’ is too often oversimplified and taken to refer exclusively to environmental sustainability. Sustainability also has economic and societal aspects. The most corporately irresponsible organisation is one that adopts a financially unsustainable approach or offers financially or socially unsustainable services to its customers. Until recently whenever I used to put forth this argument, it used to provoke quite a negative reaction from a certain type of CSR purist as being a distraction from the true faith of sustainability. But of late I get a lot less opposition re the need to put economic and social sustainability front and centre. The need for sustainable economic strategies is, for example, now front centre in the discussion of the role of sponsorship for the London 2012 Olympics. And if you still have any doubts re the front centre position of economic and social sustainability, corporate governance, transparency, integrity, accountability etc. etc., then you must be a member of an extremely isolated Amazonian tribe that has missed the developments in the Finance Sector post Leman Brothers.

So is CSR just getting all too embracing and complicated?

At one level, of course, it is - to rework a notion from Bill Clinton - “the environment stupid”. If we continue to trash the planet, the rest is conversation. My argument is that in the context of business, especially service driven businesses such as gaming, environmental sustainability is becoming the new Total Quality Management (TQM).  Those of us of a certain vintage will remember that back in the 1980’s it seemed impossible to go longer than an hour or so without TQM entering the conversation.  Every process, every product, every presentation, in fact everything had to be explicitly TQM. The show stopping accusation was “that’s not TQM!”. Today it would be counter productive indeed for an organisation to lead its brand proposition with the fact that it is a TQM organisation. Why? Because total quality is taken as read. It is assumed that an organisation is TQM. Promoting the fact would be as strange and counter-productive as putting up a sign in a retail bank which read “all our staff are honest”. Today, I believe, whilst we have a long way to go, it is increasingly assumed that environmental sustainability is part of business as normal. Therefore brands that lead on environmental achievements when stakeholders believe that the organisation’s economic/social sustainability credentials are questionable will be perceived as at best misguided and at worst deliberately deceptive. The big Banks’ carbon footprint reduction excellence will be of little interest when compared to their attention to the other long term impacts on the societies they touched. So too, I would argue with gaming. Of course everyone involved in the gaming sector should do what they can, indeed going beyond mere compliance, to save and improve the environment. So should we all. However, I think that the particular relevance of CSR to the gaming sector lies in identifying and promoting our sustainable economic and societal contribution. So how do we do this?

At about this point I often get asked for a neat definition of ethical marketing. I admit it, I don’t have a concise answer. At least, I don’t have an answer in the abstract. I have come to the conclusion that I can only answer this question in the practical particular and I do this by asking those who seek my advice to consider ethical, sustainable marketing in three contexts. For those who like models and visual aides, I find it helps to think of three, overlapping circles.  

(1)  is the issue under consideration legal and compliant with the relevant professional and other standards. This is an increasingly difficult task in a global economy but by definition cannot be avoided. (2) will what you doing make a long term, positive and value added contribution to the societies you impact , directly and indirectly, when viewed through the filters of your key stakeholders (e.g. customers, shareholders, regulators etc.). This sounds a touch Machiavellian and will upset CSR purists but it introduces a measurable or at least estimable dimension of value add to marketing ethics. And value add cannot just be measured in terms of profit up/costs down. The answers to the questions “does this make life better and does this make life easier” count too. In deed these, in my experience, tend to be the questions that dominate in all regulated industries.  Finally (3) does the issue impact the core values of your organisation? This only works of course when there is a clear statement of ‘The Way We Work’ or something similar in the organisation. Otherwise, everyone engaged in communicating is free to create their own interpretation of what they believe the organisation stands for and will/will not tolerate.  When an organisation is clear what it has to offer in each of these areas (circles) it can consider what it its priorities are, how these can best be communicated/marketed and with what tone of voice. In other words you can be clearer about your long term, positive contribution to the societies you potentially impact directly and indirectly (CSR in my definition).

Measuring a marketing activity against the three metrics of law/standards, value add and core values is of course nothing new. It happened in those pre industrial markets I referred to at the start of this article. Ethics is not a science and our judgements can be called into question by anyone with access to communications infrastructure. That applies to a motivated teenager with access to the web or my Mum watching TV as much as an Wall Street analyst or a campaigner concerned with the impact of inappropriate gambling.  In today’s environment the only sustainable marketing is ethical marketing and the unethical marketer is a very endangered species indeed.

Today how we perform against those metrics is almost instantaneously visible to the world. That means that neutral is not an option. We are all challenged, all the time to demonstrate our positive contribution to the societies we impact directly and indirectly. The days are gone when we could argue that the business of business is business and that climate change, modes of profit making, human rights etc are the province of government. Even if you happen to believe that business should stay out of these issues, your supporters, customers and other stakeholders do not. Nor can organisations that are so minded distract attention from activities they rather were not exposed or questioned by spending money on peripheral charitable activities. The audiences are too smart and sensitised. Good is not good enough today. Your core business strategy, not just some peripheral good causes that you support, has to be CSR-proof. Money spent on charity, volunteering or other good causes needs to be seen to be transparently linked to your core business. Otherwise it runs the risk of being perceived:

n      as an attempt at distraction

n      as self indulgent (in the way that so much sponsorship in the past was perceived as driven by the whim of the Chairman’s spouse)

n      or as amateurish.

It amazes me how many organisations, when I first encounter them, want to impress me with the number of good causes that they support. Never mind that this long list has little in common, that it lacks a common theme or any coherence. Even the best seem to forget that the maxim that ‘a shopping list is not a strategy’ applies as much to CSR as to any other area of business.

This last point is, I think, growing in relevance. We all know that when a brand loses trust it is deep trouble. But I would offer you another thought. I can’t prove this. I’ve have no research data. But it seems to me that particularly in the world of service industries, including gaming, stakeholders will forgive much with respect to CSR when times are good. To put it crudely (very crudely), they may regard the sector as populated with fat cats but at least they are competent fat cats generating wealth and entertainment. But what happens when times are not so good and those same folks are regarded as incompetent fat cats? I think in this scenario before we can be trusted we have to be seen as competent. Throwing money at a list of good causes without a transparent community engagement strategy will not increase a perception of competence or trust.

Now the good news. The issues discussed in this article still seem to have come as news to some folks in some sectors. But for those of us involved in the gaming sector, regulatory scrutiny, having to provide proof positive of our long term economic contribution, demonstrating responsible product development, ethical marketing etc., are not new topics. We are used to being accountable. In most cases unless we can stand up to tough –often hostile – analysis we lose the right to operate. So can we therefore relax and bask in some well earned glory. No, CSR is a 24/7/365 activity. And if I have one major criticism of the gaming sector it is that we are not loud and proud enough in our marketing re our CSR excellence. You will probably not be surprised to learn that my services have been called upon by the Finance industry recently. When I talk to the big Banks re where to look for best practice re CSR – especially with respect to economic and social sustainability – the sector I refer them to is the gaming sector. Those of us in the gaming sector have much to share with other sectors with respect to CSR based marketing. Of course, if we are seen to be willing to share in this way, we will do our brands no harm what so ever.

In conclusion, I  believe  the only sustainable marketing is visible, well communicated ethical marketing. Communicate, communicate – if you don’t stakeholders will assume that you have something to hide. And if you communicate or market with anything less than honesty – good luck.

Being corporately socially responsible is a desirable thing in and of its self.  But doing the right thing does not of itself build reputation, brand and therefore equity for shareholders or any other stakeholders. CSR needs to be built into marketing and brand:  CSR and the future of brand are one and the same. The essence of brand in the 21st century is sustainable marketing from a place of integrity.

So in my view, CSR and integrity in marketing is not optional. Especially when economic and social (as well as environmental) times are hard. But this is not the only strategic option. You can choose to ignore CSR but if you do, in the words of that wonderful song smith Warren Zevon, be prepared to “send lawyers, guns and money”. You might well need them.