Brand Scandal: What’s Your Response to Controversy?

The recent horsemeat crisis may be producing some of the most amusing jokes of the last few months, but the implication for brands on losing consumer trust is certainly no laughing matter.

This latest consumer scare is less about the ingredients themselves and more to do with the level of trust we place in the hands of our food providers. With reputations built upon customer’s trusting the information provided, it begs the question, can brands built on trust withstand this level of breach in customer confidence?

©Tesco

The horsemeat scandal may be affecting the food industry but it is a wake up call to all brands. In the case of the horsemeat crisis many of the brands under fire were not intentionally misleading their customers.

The food industry has become so highly concentrated and globalised in recent decades, and supply chains have become so long that there is an increase in the points at which the integrity of the chain can break.

This is not to say that the brands were void of responsibility. With an industry based on the traceability of the product, the promise of transparency and accountability lies with the parent brand.

Few businesses are in complete control of all elements in their supply chains. Out sourcing is common, and indeed necessary, in most industries. Companies can rarely control all elements affecting the reputation of their brand and this makes it is increasingly important for brand’s to have a response strategy in place, incase a crisis hits.

The real indication of a brand’s ability to bounce back and rebuild consumer trust lies in their response to the scandal.

Top 3 Tips to Mitigate Brand Crises

1. Crisis Reaction

Recovery from a scandal begins with a phase of greater accountability from the brand. Apologizing to your customers and acknowledging you have let them down is an important step in rebuilding the trust lost.

In the wake of the horsemeat scandal Tesco released an apology in all major national newspapers as well as online. Included in the full apology was the following:

‘We have immediately withdrawn from sale all products from the supplier in question, from all our stores and online. If you have any of these products at home, you can take them back to any of our stores at any time and get a full refund. You will not need a receipt and you can just bring back the packaging. We and our supplier have let you down and we apologise.’

2. Internal communication

It is not just customers who are affected by a break in trust following a scandal. Employees have a sense of ownership of the brand they represent. They are often the very people who feel the greatest sense of betrayal when something goes wrong.

Communicating with staff during a time of crisis is critical to brand survival. Employees are often customer facing and the main communication channel between the brand and angered customers.

Employees who have an understanding of the brand’s position, who have been kept informed of the actions been taken by the brand to react to the scandal are best poised to alleviate customer concerns and reinstate trust. Employees who believe in the integrity of the brand, and their commitment to doing the right thing can help to rebuild a brand to a position of strength.

Before Lance Armstrong’s public confession of guilt for doping offenses he met with staff at Livestrong, the charity he helped found, and apologized for letting the staff down and putting the Livestrong brand at risk. He said he would try to restore the foundation’s reputation, and urged the group to continue fighting for the charity’s mission of helping cancer patients and their families.

©Livestrong

Tesco have a website dedicated specifically to internal communication with their staff. As part of their crisis management the brand has kept their employees well informed as to the companies actions regarding the horsemeat scandal and how they are responding to customers in a piece called “What we found, What we are doing”.

3. Taking Action

An apology is meaningless unless swift, visible action is taken to right the wrong and acknowledge customer concerns.

In 1990 Perrier water voluntarily withdrew its product worldwide, some 160 million bottles, after an isolated incident in a plant in North Carolina found traces of Benzene, a carcinogen, in several bottles.

©Perrier

Despite the incident being identified as a mistake in the filtering procedure and effecting only a small number of bottles, the brand’s worldwide response was instrumental in alleviating consumer concern and maintaining trust. Thirteen years later and the brand’s reputation has emerged stronger than ever.

Kevin Clash was the voice and puppeteer behind Sesame Street’s Elmo; a character deemed to be responsible for a significant portion of the company’s profits from merchandise and affiliate products. With over 23 years in the job, Clash was seen to be instrumental behind Elmo’s success. It was believed that Elmo’s mannerisms were a projection of Clash’s sensibilities and that it would be impossible to have one with out the other.

When allegation of Clash’s past sexual relations with minors emerged Clash was forced to resign in order to preserve the brand. The potential concern of parents was seen as a greater risk to the brand than the loss of Clash.

Safeguarding your brand from crisis starts by being proactive and doing your due diligence when it comes to managing suppliers, hiring employees, and choosing brand representatives.

Surviving a crisis is about accountability, transparency and positive action.

• Is your brand strong enough to stage a comeback if crisis hits?

• Do you have a robust and well thought out brand crisis management plan?