It can take years of hard work to build a company’s reputation to a level where consumers have a high degree of trust, yet all this can crumble in an instant when a crisis hits. The proliferation of social media has only served to exacerbate this issue, as allegations, often unfounded, can spread like wildfire across the internet and galvanise large numbers of people into taking action. Likewise, the business model of some modern companies leaves them more susceptible to serious and lasting damage of this kind, as often all it takes for patrons to disassociate themselves with a company is a few taps to delete an app.
Uber and Trump
In recent weeks, Uber, which has weathered previous scandals on working conditions and safety, has found itself a victim of this trend thanks to its links to the Trump administration and its response to recent protests at JFK Airport about the new President. The issue stems from Uber CEO Travis Kalanick’s position on Trump’s business advisory group (a position he has since vacated during the writing of this blog!) and the company’s failure to join a New York taxi drivers strike at JFK Airport in response to the President’s executive order barring citizens of certain Muslim countries from entering the United States. Indeed, the company appeared to actively seek to profit from the strike by cancelling its surge pricing strategy and promoting this on social media (thereby advertising a cheaper than expected service).
However, the issue is deeper than it appears on the surface. Uber was criticised for not turning off surge pricing during the terrorist attack in Sydney in 2014 and thus profiteering from tragedy. Since this incident, Uber has rightly taken to turning off surge pricing in such instances and may initially have innocently perceived this strike as another situation in which to do so. Clearly, the right course of action, according to the protestors, would have been to join the strike and stop services at the airport completely. Though this is simple in hindsight, at the time it may not have been so. This coupled with Uber’s decentralised employment strategy (where drivers are self-employed) might have meant it was not possible to implement a strike at short notice.
Regardless, the damage had been done and #DeleteUber began to trend as more and more people joined the campaign, often only absorbing second or third-hand accounts which did not quite tell the whole story. Meanwhile, downloads of Uber’s major domestic rival, Lyft, soared as customers flocked to sign up. Lyft’s response was to announce it planned to donate $1m to the American Civil Liberties Union, further piling pressure on Uber and exacerbating the reputational damage.
This highlights the power of social media – the speed with which a large number of people can jump on an idea with little ability to make an informed decision. The volatility social media posts can have on the real world is also evident from Trump’s own tweets, with barbs aimed at companies wiping millions off their market value.
Starbucks and ‘Fake News’
One of the main issues with social media is that often a claim has gone viral before it has been properly substantiated, acting like uncontrollable wildfire – if it gathers enough momentum in its early stages any efforts to contain it are futile. For instance, Starbucks found itself in trouble as #BoycottStarbucks trended across the US over the weekend in reaction to its CEO’s pledge to hire 10,000 refugees over the next five years. Putting aside for a second the sad implication for what this means about the attitudes of many towards refugees, it is also horribly ill informed. The issue stemmed from the feeling that Starbucks was actively helping refugees at the expense of military veterans – but failed to take into account that the coffee chain actually does have a plan in place to hire 10,000 former soldiers by the end of next year anyway. This is a textbook example of a systemic failure of social media, popularised recently in the suddenly noticed (despite having been around for years) phenomenon ‘fake news’ – many people simply will believe anything they read.
So what can companies do to combat this?
Businesses have to focus on building up a positive reputation when times are good. No brand is strong enough to completely withstand a major scandal, though these are relatively few and far between. Social media amplifies smaller issues and can turn them into a matter of national debate – though often without lasting effects. Still, maintaining a positive reputation in the eyes of key stakeholders is a key element of any business and serious effort and resource must go into this.
A recent exchange on Argos’ twitter feed showcases how getting the right tone of voice for a company can lead to good PR.
Companies shouldn’t be afraid to use humour or have a personality online – often it makes customers feel much warmer about the business and more likely to view it positively. Sharing regular good news stories, actively engaging with customers online and undertaking Corporate Social Responsibility (CSR) initiatives will all work to endear companies to their customers who are more likely to give the benefit of the doubt if a negative issue does arise. If an online crisis does hit, it could be the difference between survival and devastation.