The Limits of Loyalty - BP’s Oil Spill

Posted on | May 3, 2010 |

By Robert Passikoff
BP has spent years positioning itself as a friend of the environment, an energy company that goes “beyond petroleum,” a company that pledged to find cleaner ways to produce fossil fuels.

They’re the company with the environmentally friendly green and yellow sunburst logo. That logo has stood along American highways as an avatar for being the greenest of the gasoline bands. BP’s brand and engagement strength has made them #1 on the Brand Keys’ Customer Engagement LoyaltyIndex for a number of years.

Besides the coming-back and coming-back of traditional loyalty boilerplate, research shows that loyal customers are six times more likely to give companies the benefit of the doubt in tough circumstances. After all, BP managed to survive past accidents, including a Texas refinery blast and Alaska pipeline spill.

But that paradigm along with BP’s image (estimated to be worth billions of dollars) is being sullied beyond loyalty’s limits.

The deadly oil rig explosion on April 21st, the company’s inability to contain the massive who-knows-how-many-barrels-of-oil-per-day spill in the Gulf of Mexico, and an expanding oil slick is beginning to reach marshlands and wildlife along the coasts of Louisiana and Mississippi, is producing not only pollution but the biggest oil company public relations challenge since the 1989 Exxon Valdez tanker disaster.

BP is spearheading the cleanup, but the environmental effects notwithstanding, it may be too little too late. An update of our Customer Loyalty Engagement Index shows that BP has fallen from 1st place to last, with current brand rankings looking like this:

1. Texaco
2. Sunoco
3. Chevron
4. Mobil
5. Exxon
6. Shell
7. BP

And as loyalty assessments correlate very highly with positive consumer behavior and sales, it should come as no surprise that BP’s stock market value has declined by roughly $25 billion since the accident.

Experts say BP’s response so far has been superior to Exxon’s treatment of the Valdez crash–hardly a high water mark. And we remind you, as our metrics show time and time again, experts do not a brand make. That power remains where it has always been: with consumers. And, as far as contemporary consumers are concerned, today “reputation” is your brand position minus what you’ve been caught doing.
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Robert Passikoff is founder of Brand Keys Inc. (New York), a brand and customer loyalty consultancy.