What’s Your Reputation Worth?
A reputation is hard won and easily lost. Once lost, only the strong or the quick learners survive. And news travels fast these days so maybe it’s time to consider what you do to protect and enhance your company’s reputation and learn from the businesses who have faced these challenges themselves and lived to tell to the tale.
Social media gives unhappy customers a channel to vent their spleen with a reach and speed previously unimagined by disgruntled consumers of former times. This poses huge challenges to today’s companies who are guarding their reputations on all fronts.
Consider the publicity generated by one woman objecting to a Tesco employee referring to her as darling. That relatively minor incident was considered newsworthy by a host of national newspapers and television channels. The firefighting required to manage that situation brings to mind the damage limitation meetings headed up by Ian Fletcher, Head of Values in BBC’s sitcom W1A.
So, how much damage does this negative publicity cost? It seems that it is not an exact science. The calls to boycott Nestle on the grounds of aggressive marketing of breast milk substitutes in developing countries, ruthless draining of the aquifers it controls, mis labelling, price fixing, pollution and child labour have not stopped the company still being the world’s largest foodstuff company. It appears in Nestle’s case, its sheer size, wealth and market dominance can protect itself from any amount of mudslinging.
Other companies have adopted different methods to weather the storm of bad press. In 2015, the revelation that Volkswagen had cheated on emission tests did enormous damage to the company’s reputation as a manufacturer of reliable, trustworthy, high quality cars. Multiple lawsuits were filed not just by dealers and owners but also by regulators and states. The company found itself mired in a catastrophic situation, expensive both in financial terms and in terms of its brand.
However, according to the BBC, just two years after this incident, Volkswagen saw its pre-tax profits rise 44.3% as it overtook Toyota as the world’s largest carmaker. So, how did it pull off this miraculous comeback? It seems it learned its lesson — apologised, held its hands up and paid its dues. It also took the opportunity to restructure and rethink its priorities as the necessity for working at peak efficiency was generally acknowledged by all invested in the company’s comeback.
If your company is not on Nestle’s scale, one can assume that the arrows of bad publicity will certainly penetrate the walls of your reputation. So, if you want to survive, be transparent and honest, apologetic and learn from your mistakes. And don’t do a Ratner — it’s worth respecting your customers and their views. Your reputation may depend on it!