Perhaps it’s inevitable. At some stage, a brand is going to do something to upset customers and prospects. That’s the price companies pay for trading in an era of greater and greater transparency. The key question is: when something does go wrong, will your brand be forgiven?
I don’t think there’s a single answer – because it comes down to what brands are asking forgiveness for. Different actions I would suggest have different impacts on reputation and on the predilection of consumers to move on. One thing is obvious. The brands that are most likely to recover, and to restore relationships more quickly, are those that have a robust “goodwill bank” from which to draw.
Here are 10 situations in which brands might need to ask for forgiveness, and my thoughts on their likelihood of succeeding:
1. Scandal – Headlines come and go. Scandals are often fueled by reveals from a media source. For example, Amazon found itself in the headlines when the New York Times published an article about the company’s culture. I don’t think that particular case was well handled by Amazon, but generally this is standard crisis management fare for adept PR teams.
2. Outrage – A company or a spokesperson says or does something that is deemed an insult. The recent controversy over Gap’s advertising is a case in point. Again, these situations are usually fully survivable if brands react quickly, sensitively and genuinely.
3. Cruelty – In some cases, business practices that used to be deemed acceptable are no longer so. The difficulty that SeaWorld faced after the release of the Blackfish documentary was that the entire basis of their business was suddenly under fire. Ongoing protests and falling visitor numbers saw the company announce a change in direction in 2015. Will they be forgiven – and by that I mean, believed? We’ll have to wait and see. The fallout from a change in attitudes is not confined to the entertainment sector either. Across the food industry, practices such as mass livestock production (pigs and chickens in particular) are under significant pressure to change as consumers resist endorsing practices that they increasingly see as inhumane. Until now, much of the industries’ defense has been price-based. My gut feel is that this will not be enough.
4. Injustice – When a brand is seen to put profits ahead of corporate responsibility or to knowingly exploit people or groups for its own gain, deeper changes are required. Often, the issues here are systemic, meaning that brands intent on winning back customers must be able to show how they have recognized the problem, identified the injustices and taken active steps to stop them and prevent them reoccurring. Involving a third party, such as an NGO, to monitor and report is one way that brands can reassure consumers that they have seen, and are acting on, the errors of their ways. Because the path back from these situations is longer, the critical success factor is regular updating on what is being done and the differences being achieved. Accreditation to a known quality mark such as FairTrade is another tactic in proving that changes have been made.
5. Arrogance – Contrition is a vital characteristic when a brand is seen to have erred. Where a brand has acted in a high-handed way, the best way back is to lose the attitude and apologize. Again, generally this is standard crisis management fare for adept PR teams. Providing the apology is genuine and a change in attitude is visible, such misjudgements can usually be corrected.
6. Dishonesty – This can be very damaging indeed, particularly if the behavior is shown to have taken place over a significant period of time, involved a lot of people and has been encouraged, even rewarded, within the culture. The VW scandal over emissions has, in my opinion, done long-lasting damage to the VW brand. The German car manufacturer has suffered a major loss in trust that cannot be quickly fixed because the issue itself strikes at the very heart of VW’s appeal – its reliability as an automaker. This, as they say, is going to take a while.
7. Extravagance – Perhaps the sectors with the greatest sensitivity around wasted money are the not-for-profit sector and government. We could debate whether donors are at all reasonable in their wish for “all” their money to go to the charity of their choice, but the fact remains that organizations need to be particularly vigilant around public perceptions of spending because the loss of faith in their ability to make a difference can be dramatic. The critical accountabilities are that organizations that ask for public funds show the impact they are having and how that money is being put to good use. Accusations of extravagance are difficult to recover from because there are so many other options in the philanthropic space and because of confirmation bias (people believe this happens too much anyway). Another long way back.
8. Corruption – From FIFA to the Panama Papers, accusations of corruption inevitably involve multiple parties being seen to act together in ways that benefit them at the expense of others. Such wide-reaching revelations often drag in still more parties that find themselves under scrutiny simply through association. Coke and McDonald’s for example both recognized fairly quickly that the FIFA investigation was something they needed to step away from. Forgiveness in such a multi-tiered situation is inevitably multi-tiered in itself. Those who are directly implicated in what has occurred, or under whose watch the corruption took place, are unlikely to have much wiggle-room. Those that are further away, such as sponsors, are much more able to withdraw support and to achieve the necessary distance to escape being tarnished.
9. Contamination – These situations are difficult because it’s not always easy to find the cause and yet the impacts are palpable and public. Chipotle, once the darling of the fast-food industry, now finds itself needing to work hard to re-secure trust and loyalty after a series of pathogen-related outbreaks. An isolated situation would have been containable, but the repeated incidents and the inability of the company to be seen to rein in contamination over a number of months means that Chipotle is suffering a distinct fall-off in sales and investor confidence. The road back is going to be hard – more so, because of the intensity of competition and because the intricacies of traceability mean this is not going to be a quick fix. In 1982, Johnson & Johnson faced an even more scary contamination threat when their pain-killing medicine Tylenol was laced with cyanide. Johnson & Johnson issued an immediate recall, then introduced triple-seal tamper resistant packaging along with new pricing to successfully rebuild consumer trust.
10. Negligence – taking ownership of a situation is critical, particularly when that situation is seen to have been preventable. BP has probably failed to convince many that it is not yet worthy of forgiveness over its handling of the deep-water rig blow-out in the Gulf of Mexico. As Frederick Allen observed in a 2012 article, “although the company finally fired [chief executive Tony] Hayward, paid restitution, enhanced its drilling standards, and sponsored several feel-good TV commercials, it has failed to regain the trust it supposedly covets. Why? Because the public still holds the view that BP is dealing with the Gulf disaster’s fallout not because it wants to but because it has to.” He concludes, “To restore trust, BP’s leaders must take shareholder value out of their reputation equation and think singlemindedly about reputation alone. Until they do that, BP will never rebuild its image.” It’s important here too to draw a distinction between what might gain a brand forgiveness legally (pay-outs and settlements) versus what it takes to win public forgiveness (a change of heart). Very different things. Sadly, too many corporates in my mind focus on the first because that’s where they see the risk. Maybe so, but the larger and longer fall-out often resides with the second.
Finally, and by way of contrast, there are some brands that don’t want to be forgiven for their actions or their attitudes. These so-called “hostile brands” include marques such as Harley Davidson, Red Bull, MINI-Cooper, Marmite, Hollister, Lululemon and Benetton. Their take-us-or-leave-us approach is all about polarization based on a strong worldview and defiance in the face of criticism. Their stance may generate some scandal or outrage, for which they characteristically refuse to apologize, but it’s also unlikely to push their actions over into less forgivable territories. Even brands that believe they have nothing to apologize for still have no-go zones that they, wisely, choose not to transgress.
Written by Mark Di Somma at Branding Strategy Insider