The corporate deceit perpetrated by Volkswagen AG, cheating on EPA requirements for diesel emissions by means of defeat device, has created a cascade of consequences. They fall like ever larger dominoes throughout the economic world, reported relentlessly by every issue in the last week of the Wall Street Journal. The first domino to fall was first VW’s market share, then the diesel market altogether, then the platinum market, and now the money markets connected to VW Finance.
But the most irrecoverable damage is the most intangible; it’s the damage I felt while walking my dog last Saturday morning.
Normally for this walk, especially on cool fall mornings, I don my black wool VW logo cap. But this morning, I actually felt ashamed. What would someone think if they saw me wearing it? What about my VW logo running shirt? (Perhaps it’s good that I run at night, in the cover of darkness.) And what about our sweet 2014 VW CC R-line, night blue with two-tone leather interior? That too, though it’s not a diesel, seemed to be tarnished now. I’ve even toyed with asking VW Credit for an early lease termination—seriously. What’s going on here?
It’s simple: corporate brain damage leads to customer brand damage. Lying to millions of customers about key features and benefits you stake your reputation on (and I cannot think of a clearer definition of brain damage than that) has far deeper ramifications than recalls and market losses. The very dint of deceit shadows every extension of the brand; after all, if they lied about their biggest claim, what else have they lied about? Here’s a company whose brand is rooted in the “people’s car,” and the people have been betrayed. Can you imagine what it’s like to work for VW’s PR team right now? There are no fine turns of phrase that can heal a hemorrhaging reputation.
I can’t speak for the markets, and I’m not predicting any trend in VW’s brand equity. All I can tell you is how one loyal VW customer feels now. I have owned or leased seven German cars in the last 15 years, five of them from VW. Somehow all that Fahrvergnügen (driving pleasure) has turned into Fahrverleugnen (repudiation of driving). And I’m not the only die-hard VW fan who’s wondering whether his next car will come from Wolfsburg. Judging from the firestorm raging against VW in social media right now, I’d say my reaction was muted.
The moral for all of us trying to promote our brand is so obvious that it almost seems condescending to articulate it. No one’s brand is so big, so valuable, that mistrust can’t topple it, or at least make it tumble. So whatever you do, stick to the straight stuff. Make your promise and your performance match. Say what you do, and do what you say. That’s the definition of integrity.
And if you’ve got your integrity, you’ve got the indispensable ingredient for brand strength.