Consumers are safer with brands than governments

In this guest posting, Kogan’s David Shafer argues that Qantas’ handling of its air emergencies demonstrates the importance of brand value in ensuring consumer safety

Anybody who is interested in the power of a brand should take note of what Qantas has done this past few days.

On 4 November, immediately after the troubled A380 aircraft successfully landed, Qantas announced that, “in accordance with its commitment to the highest safety standards, it has suspended scheduled A380 takeoffs”. CEO Alan Joyce suspended the flights until such time as Qantas are “completely confident that Qantas safety requirements have been met”, and underscored, “We’re not going to take any risks with passenger safety.”

Consumers are safer with brands than governments    David Shafer kogan

This is despite the immediate financial loss that Qantas suffered  while it found stranded passengers hotel accommodation, and organised replacement aircraft.

Those who believe that corporations can’t be trusted must be at least a little puzzled by Qantas. Isn’t the selfishness of the free market supposed to cause corporations to cut costs, and jeopardise our safety? Don’t we need Government regulators and watchdogs to keep the bastards honest?

I don’t think so.

Adam Smith famously wrote that, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest.”

Similarly, a company like Qantas has every incentive – every selfish incentive – to ensure the safety and security of their passengers. A company’s most valuable asset is its reputation. This is particularly the case in a market where consumers are highly attuned to safety and security matters.

Like many other companies, Qantas has invested millions and worked for years, or decades, to earn a strong reputation. The hint of any tarnish to the brand could be fatal to the future of the business. Competitors are always looming to exploit this type of vulnerability, so Qantas simply cannot afford to risk its reputation by reducing its safety standards to save costs in the short term. Qantas’ desire for profit – long term profit – provides the greatest motivation to be meticulous in protecting its reputation for safety.

What, by contrast, motivates a Government official or bureaucrat?

Compare Qantas’ response to its safety threats to the response of the Commonwealth Government to the safety concerns raised by the Pink Batt insulation scheme.

Rather than immediately responding to safety concerns by halting the program, the then Environment Minister reportedly ignored repeated expert warnings that the scheme was flawed at every stage of the unfolding disaster. As we now know, this willful blindness of our trusted politicians ultimately resulted in four deaths. Of course, the Government has no profit motive and no investment to protect – they are supposed to act for the ‘common good’, but they conveniently failed to act when lives were at risk.

The key difference between a businessman and a bureaucrat is that when a businessman makes a mistake, he is the one who suffers the loss, whereas when a bureaucrat makes a mistake, it is the public that suffers the consequences.

Unlike governments, private companies cannot force you to buy their products – you are free to seek a safer, more reliable, alternative. While politicians come and go, the only way for a company to achieve success over the long term is through honesty and integrity.

Ignoring danger signs, deceiving customers or taking short cuts to make a quick buck simply is not a winning business strategy. Qantas has set a fine example of what it takes to maintain a quality brand.

Source: Consumers are safer with brands than governments

I came across this interesting article on mUmBRELAA, a very interesting site on everything under Australia’s media & marketing umbrella. I strongly suggest you visit it to see the comments and debates on this story.


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Louai Alasfahani

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