Brands are more susceptible to catastrophe today than at any point in modern history.
“With the rise of social media and the 24/7 cycle of media today, news spreads faster than ever,” said Nick Bell, vice president of marketing communications for Cision. “In times of crisis, this quick dissemination of information can add fuel to the fire and amplify negative news in a matter of minutes.”
Company leaders used to worry about Mike Wallace, of “60 Minutes” fame, walking through their front doors with an allegation and a camera. “Now everyone walking into your building has a camera,” said Kelly O’Keefe, professor at the Virginia Commonwealth University (VCU) Brandcenter. “This makes businesses incredibly vulnerable.”
Couple that with all-time low levels of public trust in corporate and governmental institutions and you have a veritable recipe for brand disaster, added Dustin Longstreth, chief marketing and strategy officer at branding agency CBX.
Assessing The Damage
The failure to control organisational crises in the earliest stages can cost companies dearly—impacting value, revenue and long-term reputation. Yet many businesses fail to respond quickly enough to brand-damaging issues. More than a quarter (28%) of crises reported spread internationally within an hour, according to a worldwide survey of crisis communications professionals by law firm Freshfields Bruckhaus Deringer and more than two-thirds (69%) go global within a day. Yet the same survey found that companies require an average of 21 hours to issue any meaningful external communications in response to a crisis.
Brand damage originates in many shapes and sizes, such as controversial corporate decisions or statements, logistical problems or product safety issues. Then there are those that result from deliberate attacks, such as erroneous social media posts or other deceptive content.
“There is also a larger meta-category that pervades all the above—the betrayal of a brand promise,” said Thom Wyatt, managing director at global brand strategy and design firm Siegel+Gale. “This is when the crisis is in direct conflict with what the brand stands for and is, therefore, particularly harmful.”
But, by far, the more injurious incident of all is the one for which a marketing organisation has not prepared. “It’s a guaranteed way to add chaos to an already chaotic situation,” Bell said. “When forced to think on-the-fly during a brand catastrophe, the chances of having the entire company on the same page in terms of action items and response is slim, making the odds of clear and meaningful communication with the public virtually impossible.”
An effective brand catastrophe plan is developed long before a problem arises. Following are seven steps CMOs can take to build reputational resistance into their organisations.
1. Involve senior leaders early—and often: “Precrisis planning should include cross-functional leaders and strategists, representatives from marketing, public relations, sales, customer service, finance, operations and HR,” said Nina Brakel-Schutt, business development executive at digital asset management software maker Widen Enterprises.
Senior leaders also should decide who will serve as spokesperson in the event of a brand emergency “so they can own the narrative,” Siegel+Gale’s Wyatt said. (Hint: The CEO works best.) “The response must be clearly articulated and come directly from someone in authority to ensure credibility and accountability.”
2. Know your weaknesses: “Being able to identify your brand’s vulnerabilities makes it easier to assess your potential areas of risk and identify what’s preventable,” Cision’s Bell said. Due diligence will require that marketing leaders survey others, including customers, partners and industry observers, to accurately pinpoint corporate frailties.
“Being able to identify your brand’s vulnerabilities makes it easier to assess your potential areas of risk and identify what’s preventable.”
-Nick Bell, VP of Marketing Communications, Cision
3. Determine what constitutes a crisis: CMOs should gauge the business impact of hypothetical events to define what will be considered a true crisis versus an issue in order to co-ordinate responses and resources effectively. “An issue causes waves, but has no long-term impact on a brand,” said Bell, “whereas a crisis can permanently damage your brand and potentially lead to profit loss.”
Consider creating a top 10 list of potential crises your brand might face given the existing climate and update that list frequently as market conditions change.
4. Expect the unexpected: While a list of likely brand catastrophes is helpful, many crises come out of the clear blue. “We don’t necessarily know what a worst-case scenario even looks like,” CBX’s Longstreth said. The global economic climate moves so quickly that marketing leaders are best-served designing corporate cultures and systems that can weather reputational tempests.
Brands that establish trust over the long haul fare far better in times of crisis, VCU Brandcenter’s O’Keefe said. Toyota, for example, had built a reputation for reliability and was able to bounce back from massive recalls in 2009 and 2010.
“Brands and companies who operate every day under clearly defined and understood values, behaviours and purpose will be much better prepared in the face of extreme circumstances,” said Longstreth, who worked with Gold Medal Flour to define a brand purpose and corporate culture.
“When there was the slightest concern of E. coli from their mill in Kansas City, Gold Medal ordered a recall straight away and communicated openly and consistently with the public,” Longstreth recalled. “They knew that the financial cost of the recall was insignificant to the loss of trust from consumers. There was no hesitation because the strong sense of purpose and integrity was embedded in the DNA of their culture.”
5. Avoid “brand-made” disasters: Marketing leaders and experts preach the importance of creating a compelling brand narrative. But companies that can’t live up to the stories they tell customers can create their own brand catastrophes. It’s a new but damaging trend.
“Story is something that is very important and valuable for brands to cultivate in this day and age,” Longstreth said. “[But] all too often we see companies leverage a very compelling story for their brand only to falter when it is discovered that the reality of their business doesn’t match up.”
Added Brakel-Schutt of Widen Enterprises: “A brand crisis can be eliminated when an organisation knows who they are and what they stand for and works relentlessly to deliver what their audience wants and needs. Very little can sway consumer loyalty if an organisation consistently does the things they do best for the right group of people.”
“Very little can sway consumer loyalty if an organisation consistently does the things they do best for the right group of people.”
-Nina Brakel-Schutt, Business Development & Brand Strategist, Widen Enterprises
6. Create a rapid response plan: When the you-know-what hits the fan, there is no grace period. “In today’s digital age, there isn’t time to assess a crisis and investigate the problem at hand before communicating with the public,” Bell said. “The minute a crisis goes public is the minute people want answers.”
A rapid response plan with clear processes and responsibilities will help. Make sure company leaders are aware of potential threats you’ve prepared for and the steps they will be asked to take.
While communication with the media is an important part of the response, marketers should consider other important audiences, such as employees, corporate executives and board members, customers, vendors and partners, regulators, industry analysts, financial institutions and trade organisations. Know their communication preferences “so you know where to share your message when the time comes,” Bell said. “Additionally, actively monitor the conversations taking place among your audience members and in public conversation. Keeping a pulse on topics and sentiment can impact the language, tone and message you share in the midst of a crisis.”
7. Consider not just what you say, but how: “Companies must understand the power of their response; it’s not just the intent of what they’re saying, but how they say it,” Siegel+Gale’s Wyatt said. “Re-establishing trust is not simply a rational or logical issue—it requires an emotional response as well.”
Companies must deliver what’s expected in the wake of a crisis, but to truly be resilient they must go above and beyond the expected response. It’s almost better to overstate the problem than to understate it, VCU Brandcenter’s O’Keefe added. “That’s a demonstration of taking responsibility and taking the challenge seriously,” he said.
Effective crisis response is more about long-term strategy than short-term tactics. “The long-term work of building trusting relationships with customers, peers, employees and others means much more than the wording in a post-crisis press release,” said Will Bunnett, president of political marketing firm Clarify Agency. “No quick fix will help if there isn’t something there people think is worth fixing in the first place.”
Brand disaster preparedness is critical to resilience, but such plans should serve as guides, not checklists. “Once a catastrophe hits, be sure to assess your original plan and tweak as necessary before jumping into actions,” Cision’s Bell said. “While there’s no way to prepare for every scenario, when a plan is in place for various types of crises, chances are you’ll be able to pull bits and pieces from different response plans. If nothing else, preparing for a crisis in advance will identify the proper chain of command and communication.”
In the end, a well-handled brand crisis can even have an upside. “If you respond immediately and forcefully, you can actually end of with a stronger brand than you started with,” O’Keefe said. “Consumer love a brand that owns up to its challenges and commits itself to making things better.”