Telstra’s same sex marriage backdown could see its brand value take a hit

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Telstra was named Australia’s most valuable brand only a few weeks ago by Brand Finance, the global experts on brand value.

But already the top slot is starting to look in jeopardy following a series of missteps by Australia’s biggest telco.

In the last couple of months Telstra experienced four network outages, forcing it to offer two free data Sundays.

Today, the scrutiny the company faces increased after The Australian detailed how Telstra was backing away from its support from same sex marriage, under the pressure of the Catholic church.

A Newspoll published in The Australian last year found 58% of Australians are in favour of changing legislation to allow same-sex couples to get married.

In the past few years, corporate Australia has thrown its support behind the issue and the LGBT community, from Qantas to ANZ, Medibank and Google.

And there’s a global spotlight on LGBT discrimination at the moment, and the battle between church and state, with US rocker Bruce Springsteen cancelling a performance in North Carolina in protest against the state’s new “religious freedom” law, which many consider an attempt to erase protections for LGBT people.

Telstra made good on its service outages with the compensation of its free data days. How it handles growing concern about its support for the LGBT community will be crucial, and any slip ups, such as declaring support for same sex marriage an “ideology”, which quickly amplify and impact on the company.

Business Insider reached out to Brand Finance to find out what factors are at play to push a brand up or down the rankings of its national report.

“What it comes down to is if an issue is momentary or if it’s persistent,” said Mark Crowe, managing director of Brand Finance, Australia .

“Obviously issues that continue to fester and gain limelight are more likely to have some impact on brand equity.”

In saying that he said one issue in particular is not going to have an effect on brand value, unless its cataclysmic.

He used the example of Volkswagen.

“In 2015 it was the 18th brand in world. Now, it’s the 57th brand in world. It experienced a 39% decrease in brand value,” he said.

“There’s no doubt the [emissions] scandal contributed significantly to that.”

According to Crowe, there are three contributing factors that decrease a brand’s value.

“The first is the quality in investment… the second is their brand equity, how reflects on a customer’s perception of a brand, and therefore how they consumer it.

“[Finally] the company’s financial performance, if their decreases it’s likely to impact the value of the company.”

Looking at Telstra’s difficult start to 2016, the telco will need to change momentum and perceptions in order to avoid becoming Australia’s Volkswagen.