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Branding Lessons from Volkswagen’s Emission Test Fiasco

Your brand is your key to building and maintaining your customer base. Keeping your brand’s promises consistently keeps people loyal to your brand. A single mistake can instantly break that trust, which may cost years to get back.

This is why the recent allegation of Volkswagen using software for cheating diesel engine emissions test results is such a big deal.

What happened during the 2015 Volkswagen scandal?

Why the Volkswagen Scandal was Such a Big Deal
Why the Volkswagen scandal was such a big deal.

According to reports, the US Environmental Protection Agency discovered that the automaker had installed a program to adjust engine performance when the cars were subjected to carbon emission tests. This led people to believe that Volkswagen’s diesel engines were compliant with environmental standards, meaning they were supposedly cleaner.

As if this wasn’t enough, reports also say similar models shipped to European and Asian countries could also be affected by this software as well. The total number of affected vehicles could reach at least 11 million.

CEO Martin Winterkorn has already apologized for his company’s apparent violation of environmental safety standards, and is set to step down. While we have yet to hear news about a product recall, it’s safe to say that the public’s trust in Volkswagen has dropped significantly. Even then, there are also lessons we can learn about safeguarding your brand during trying times:

1. Do a Product Recall

Volkswagen should do a product recall 2015
Don’t let defective products stay in the market, or your brand’s reputation could tank further.

If anyone finds something wrong with your product, do a recall as soon as you can. Auto manufacturers like GM and Honda have also done recalls over defective parts when problems have been reported. This shows that you’re not willing to risk the public over the mistakes you made. You also give the impression that you act swiftly to correct your mistakes.

2. Issue an Apology

Volkswagen issued a public apology about the 2015 emission tests
Own up to your company’s mistakes. Never run away from them.

Owning up to your mistake is a crucial part of the brand recovery process. If you don’t share your side of the issue, the media will just keep reporting complaints from people and accidents caused by defective products This can be seen in the public apology done by Winterkorn. While it’s true that the public is still angry with Volkswagen, at least they humbly admitted their mistake and didn’t point fingers.

3. Keep the Public Posted

Volkswagen should keep the public informed about the 2015 issue
Once you’ve acknowledged the problem, keep taking steps to solve the problem, while keeping the public informed at the same time.

Maintaining a presence and updating your customers is another crucial lesson here. It goes without saying that you need to improve your product and fix what was broken. But as you do this, always remember to keep the public informed about the steps you’re taking.

As of this writing, Volkswagen has yet to take action over the affected cars. Expect that a costly recall will come up, though. While billions of dollars and euros might be spent to fix this problem, the people will be watching the company’s every move. It’s best for them to avoid taking wrong turns at this juncture.

The Bottomline

Volkswagen has a lot to learn from its emission test scandal
Volkswagen has a lot to learn from its public scandal, but the company can still recover with a lot of hard work.

The hardest part about your brand is that you will, at some point, have to own up to your mistakes. When this happens, it’s important to be quick in recalling any affected products. Don’t forget to share your side of the story and what you plan to do about the situation. This will help minimize the damage done by bad publicity and show that you‘re doing something to address the problem.

As for the Volkswagen fiasco, the company’s going to need a lot more than an apology to get their brand back on the right track.

References

DeBord, Matthew. “VW’s Cheating on Emissions Tests Goes to the Heart of Its US Business.” Business Insider. September 21, 2015. Accessed September 23, 2015. www.businessinsider.com
Thomas, Chad. “VW Chief Winterkorn Steps Down After Emissions Scandal.” Bloomberg.com. September 23, 2015. Accessed September 24, 2015. www.bloomberg.com
Thompson, Mark, and Ivana Kottasova. “Volkswagen Scandal Widens: $7.3 Billion Cost, 11 Million Cars.” CNNMoney. September 22, 2015. Accessed September 23, 2015. www.money.cnn.com

Does Your New Business Idea Have Potential?

So, you finally have the next billion dollar business idea.

You might think that this sets you off for greater things, but the real challenge is only about to start. There are plans to make and perfect as well as investors to impress.

You have a long road ahead of you.

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Before anything else, you need to make sure that your business idea has potential. After that, it will be much easier to convince others to consider your plans and take you up on your offer. As the old saying goes, “ideas are a dime a dozen.” It doesn’t really matter that you have this unique new idea that no one else has come up with before. The test is in how well you execute the tasks ahead of you.

For that, you need to develop the idea you have. What makes some ideas succeed, and others fail?

Diffusion of Innovations

In 1962, a sociologist named Everett Rodgers sought to answer these questions. He conducted a research project to learn more about how and why certain ideas spread. He gathered data from hundreds of case studies and published his findings in “Diffusion of Innovations“.

In his book, Rodgers was able to explore the different factors that influence how we decide which ideas are worthy of acceptance or rejection. These factors were examined by professor and author David Burkus in the context of business.

Now we’ll give our own take on the topic and see how you can gauge the potential of your own pitch deck.

Relative advantage

Relative advantage deals with how well your business idea and pitch deck compares to what is currently available on the market. The product or service you’re planning to launch should be seen by others as an improvement on the current standards of your industry.

This often happens when you’re presenting your product or service’s advantage in your pitch. Highlight how you stand out from the competition by stepping away from your slides and presenting a live demo. The concrete and visual evidence will convince your prospects of your skills.

Give them the statistics on how well you’ve performed in the past, or how in depth you’ve done your research, but before you reveal your own features, always start with the unique benefits only you can offer.

By tapping into this characteristic, you’ll be able to win people over with tangible proof, as well as a good track record over the competition.

Familiarity

Of course, your business idea will need more than an innovative edge to succeed. People also gravitate towards ideas that are familiar and relatable. If they can use past ideas and experiences to understand what you’re proposing, they will be more likely to accept and adopt to it.

Most of us prefer to try out things that have some semblance to what we’re already familiar with. Always keep in mind that even as you push boundaries, you also have to create an emotional connection with the target audience.

Check out the current trends that resonate with people’s preferences and incorporate these into your pitch. Share a personal story or experience that’s directly related to what you’re going to talk about.

The sense of familiarity before introducing the big reveal to your audience eases them in before surprising them out of nowhere.

Simple and easy to understand

Another factor to consider is the complexity of your business idea. It shouldn’t be too difficult to understand for others to adapt to it quickly. In other words, it shouldn’t be complex at all. It should be simple and straight to the point and this is where a pitch deck specialist can help.

The people you’re hoping to convince should be able to understand the logic behind it.The technical details might be complex, but it should still remain fundamentally easy to understand. An idea that’s too difficult to grasp can end up intimidating your potential audience.

You might have too much raw data at hand, but not all of it should go into your slides. Take only the most important data, and present it in a visually appealing manner. For this purpose, graphs, charts, and other visual representations can come in handy.

The details that you leave out can be further expounded on in your speech itself.

Able to test and verify

Related to the previous point, the next thing to consider is how effortlessly others can interact with and test out your new business idea. The more accessible your concept is for verification, the more individuals can familiarize themselves with it.

Once that happens, the likelihood of their accepting it grows. A quick example of this is how musicians allow audiences to stream their music for free on sites like Spotify or SoundCloud. Through these sites, their audience can see if they like their new material and then commit to buying the full-length album.

Get plenty of positive testimonials for your brand to put on your slides. It’s especially helpful if you can get the help of famous influencers, or better yet, brand advocates who are genuinely interested in your business, and who would be willing to advertise you to their followers.

Put your name out in the market with the help of other people, and build your network before, during, and after your presentation.

Can be observed and shared 

Finally, it will also help that your business idea can yield noticeable results that others can share and talk about. Rodgers calls this quality “observability.”

If your idea is open to observation, the easier it is to find and reach out to a wider audience. In other words, the more visible your new product becomes introduced to a mass audience.

In the article by David Burkus, he gives Banksy as an example. He wrote, “One of the reasons for Banksy’s success is the observability of his work. Many artists challenge social conventions in unique, seemingly playful ways, but Banksy’s work is highly public and easily shareable. It isn’t just stuck behind the glass in a single gallery or museum.

Don’t fail your prospects with empty promises. Part of your presentation is the assurance of quality. Show them that your ideas will have large returns from their investments. During your pitch, give instances when your product or service delivered well.

Does your new business idea have the potential to succeed? It definitely will if you improve on the finer points by using these criteria. Polish your message using these pointers and get started on creating a pitch deck that will wow investors.

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References:

Burkus, David. “The 5 Common Characteristics of Ideas That Spread.” 99u. 2013. Accessed January 30, 2015.
The Art of Graphs and Charts.” SlideGenius, Inc. April 21, 2014. Accessed January 30, 2015.
Why Storytelling Is an Effective Presentation Technique.” SlideGenius, Inc. September 8, 2014. Accessed January 30, 2015.

 

Featured Image: Joey Gannon via Flickr

What Great Ideas Have in Common

A big idea is only the first step to achieving success in the world of business. The real challenge lies in convincing others to consider your plans and take you up on your offer. In other words, “ideas are a dime a dozen.” If you really want to make a difference, what matters is your execution.

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How do you plan to take your idea to the next level?

In 1962, sociologist Everett Rodgers conducted a large-scale research on how and why certain ideas spread. The results, published in a book called Diffusion of Innovations, were gathered from hundreds of case studies showing why some ideas are successful while others fail and fall into obscurity. In particular, Rodgers outlined particular factors that influence people’s decision to accept or reject ideas. If you want to see your big idea turn into a success story, ponder on these five important questions:

1.) Does your idea have relative advantage?

How does your idea compare to what is currently available in today’s market? To have relative advantage, your new product should be perceived as a step above existing standards. Think of how the iPhone completely changed how we use smartphones in 2007. In the same way, the idea you’re introducing should also push beyond the boundaries.

2.) Does it evoke a sense of familiarity?

Apart from innovation, people are also looking for ideas they can easily relate to. They’re wondering if they can use past ideas and experiences to understand your proposal.

Psychologists have long determined people tend to prefer things that are already familiar with them. Even as you push the boundaries, you also have to consider what the target audiences have become accustomed to.

3.) How simple is your new idea?

Another factor that comes into play is simplicity. To achieve success, a new idea should be easy to understand. The people you’re hoping to convince should easily make out the logic and system behind. They should also be able to tell how it would benefit their lives. An idea that’s too complex can be intimidating, and therefore harder to sell.

4.) Can your target audience easily try it out?

Something else you should consider is how effortless the target audience can interact with the new concept or product that you’re introducing. Will they be able to try it out easily?  The more individuals can test the new idea, the more likely they’ll adopt to it. As an example, think of how most musicians publish their music on YouTube for free. The video sharing platform allows users to trial their material. If the viewers happen to like what they hear, they can opt to buy the entire album. In other words, the more people can try out your idea, the more certain they’ll feel about committing to it.

5.) Can they easily observe and share it with others?

Another factor that helps an idea succeed is its observability or the noticeable results that come from trying out an idea. The more users are able to observe your product or concept, the more noticeable it becomes. This will increase the likelihood that people will share your idea to others, introducing it to a wider audience. Set your idea up in avenues that are popular and highly visible.

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Featured Image: Adam Troman via Flickr