Lauded by his fans as a world leading investigative journalist and condemned by critics as ‘media-hating zealot’, it’s not hard to dig out articles from Nick Davies lamenting about the rise of PR. Speaking in 2007, he commented that there was a huge increase in journalists moving to the ‘dark side’ of PR. He…
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.
A bowl of sweets sparked political outrage this week on Twitter when Donald Trump Jr compared ‘poisoned’ Skittles with Syrian refugees.
The US Presidential hopeful’s son came up with a ‘bright’ analogy for immigration control and shared it with the digital world. He tweeted a photo of a bowl of Skittles with the words: “If I had a bowl of Skittles and I told you just three would kill you. Would you take a handful? That’s our Syria refugee problem”.
Wrigley, which owns the Skittles brand, was not impressed with the comparison and soon released the perfect response:
“Thanks for reaching out. Here is our response:
“Skittles are candy. Refugees are people. We don’t feel it’s an appropriate analogy. We will respectfully refrain from further commentary as anything we say could be misinterpreted as marketing”, said Michelle Green U.S Marketing Communications Manager.
The photographer of the most famous bowl of Skittles on the internet also came out, telling BBC that he was a refugee. He started his response by saying that Donald Trump Jr had committed copywright infringement.
“This was not done with my permission, I don’t support his politics and I would never take his money to use it,” UK resident David Kittos told the BBC.
On Skittles’ part, this is a great example of crisis management. Not only was it quick to respond, which is the golden rule when dealing with negative press, its response was sharp, to the point and with a human touch nonetheless.
The team behind the brand surely thought their reaction through very well, in a way to prevent it from being taken out of context and leaving very little room for reinterpretation.
At Acceleris we enjoy seeing companies that work hard on building a consumer-friendly brand and promoting their products creatively. I’m sure we all remember the ‘Feel the Rainbow’ campaign by Skittles. Sweet companies especially have to work twice as hard these days to deal with crises ranging from new sugar tax laws and health issues, to unwanted attention from the offspring of controversial candidates for the US Presidency.
If you’d like to ask our team of experts about how to promote and protect your brand in times of crises, give us a call on 0845 456 7251 and we’ll be happy to help.
The true value of business communications is well-known for being tough to measure, especially in the flinty eyes of accountants who expect to see a clear Return on Investment for their PR spend. But if the goal of your communications is to boost or protect reputation, how do you attach a financial figure to that?
Well, for UK-listed companies alone reputation is worth £1.7 trillion. That’s according to research by BDO LLP and the Quoted Companies Alliance. They spoke directly to businesses and asked them how much they thought their reputation was worth. Based on the impact on sales, share price and employee morale, it found small and mid-cap businesses attach 28 per cent of their value directly to reputation. This compares with the 2015 UK Reputation Dividend Report, which indicated that 30 per cent of the market value of the FTSE 100 is attributable to reputation.
When thinking about reputation meltdown and its impact on business value, a recent example that comes to mind is that of Volkswagen. The company lost about a third of its value (35 per cent) in just two days following what the media imaginatively called ‘dieselgate’. That’s approximately €25bn.
Of course the threat of large scale fines, costly vehicle recalls, private settlements and the shredding of trust and integrity all play a part in damaging the company’s worth. But a huge part is also the impact on VW’s future sales. One study says that for a company involved in fraud, the financial punishment imposed by the market (this means reduced future sales) is 7.5 times greater than the legal penalties they receive.
So, in answer to the initial question, can you put a price on reputation, I guess you can. Time to ask yourself what losing 28-35 per cent of your business would mean for you and your employees.
While you think on that, here are some tips for protecting that valuable reputation:
- Have a crisis management plan in place.
When the proverbial does hit the fan, having a plan already in place will help you minimise any impact. In fact, dealing with a crisis well can actually improve a business’ public standing. Try treating the situation as an opportunity. A crisis badly handled can severely damage the financial, operational as well as reputational viability of a business. A crisis well managed can actually enhance its reputation.
- Build and boost your reputation on a continuing basis.
Share good news stories and CSR initiatives so that people know the good work your business does. This may determine how people react when a crisis does hit your company. It will also help you develop strong relationships within the media that could become handy when you have not-so good news to share.
- Be first, fast and frank.
You can’t always prevent a crisis hitting. But you do have some control over how the media covers the story. Being the first to publically announce it, rather than an unhappy customer, journalist or whistle blower, can help you set the tone. Of course, you also need to be frank and honest. It won’t make a difference being the first to announce the news if you’re found to be dishonest later down the line.
For a final thought, and as our chief executive likes to say, reputation is hard-earned and quickly lost. Be sure to look after it.
Acceleris recently won the ‘Issues and Reputation Management’ trophy at the prestigious European Communications Excellence awards. It is the second time the agency has scooped the award, winning it last in December 2013.
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