The truth always comes out in the end. That is a universal fact, even though sometimes it takes a while for the end to come around and the truth to be known. In the meantime, what Lincoln said about fooling all of the people some of the time and so forth may be true, but sooner or later, the facts matter. In the case of business – any business – the truth and the facts mean the value of the product or service.
I am becoming more and more convinced that there is an inverse relationship between a commitment to lean and the advertising budget. There are those companies that provide a superior value proposition and don't have to spend much money to sell the high value products – and those that do the opposite. You can read all about those Type B companies – lousy value/lotta advertising in a Business Week article called The Great Trust Offensive. The article cites American Express, for instance, as a company with a growing trust issue they are addressing via a campaign to represent themselves as the business partner of the mom-and-pop-main-street-entrepreneur. People trust the local small business person, so American Express is going to ride their coattails. The problem is that American Express jacked up their rates and fees on good customers to cover their losses on bad deals, even though the Fed has slashed rates to just about 0%. Providing a service that is not worth the price charged, then launching an ad campaign to paint the situation as something else is not going to work in the long term because no lie can withstand the test of time.
"Trust is what drives profit margin and share price," says Larry Light, CEO of the Stamford (Conn.) brand consultancy Arcature. "It is what consumers are looking for and what they share with one another." I suppose that is true enough, but value is what creates trust – not spin. In fact spin destroys trust when the truth behind the spin comes out.
GM advertising spending this year will be in the $2 billion range – versus about $1.2 billion for Toyota. Kia/Hyundai is the fastest growing auto company and they will spend a third less than Toyota. It seems to me that the worse the deal offered to the customer, the more money has to be spent trying to dupe people into thinking otherwise.
Business does not need to be nearly as complicated as too many make it. Create a good product – sell it at a fair price – earn a profit. That formula has always worked and always will. Cutting every conceivable corner on the product by outsourcing it to some third world hole in the ground, or by hiring the cheapest people rather than the best, then spinning it into something it is not never works. It really is pretty simple.