Find out how to position yourself before, during and after a brand crisis – WAU
Despite being unwanted, a brand crisis can be reversed if the company knows how to identify its occurrence and implement good crisis management, adopting an emergency plan with good practices.
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Crisis. Whenever that word appears, it causes chills and worries, doesn’t it? As with a country’s economy or even a marital relationship, an brand crisis can shake the structures and be accompanied by many uncertainties.
Faced with this moment of insecurity, many companies do not know how to proceed.
After all, is it possible to reduce comments on the case? Or, on the contrary, is it better to take on problems publicly? And what is the role of social networks in this whole story?
Answering these questions is a challenge for all organizations facing turbulence. So, if you are going through such a time or want to prevent yourself from future problems, you have arrived at the right place.
In this article, we will explain:
- what is a brand crisis;
- what are the impacts of this situation on companies;
- how to identify if your brand is going through a crisis;
- what is crisis management;
- what are the main moments that make up the crisis;
- how to create a crisis management plan;
- what tools and methodologies can be used;
- what good crisis management practices are;
- real examples of successful crisis management.
With the information you will see here, it will be clear how your brand should position itself before, during and after a brand crisis. This will be essential to maintain your reputation and continue to retain customers.
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What is a brand crisis?
A brand crisis is any event or sequence of events capable of shaking the image that a company has before the market or its consumers, creating uncertainties and threats to the organization’s objectives.
To understand the concept of brand crisis more deeply, it is worth looking at the definition of branding.
According to the book Marketing Management, by renowned authors Philip Kotler and Kevin L. Keller, branding consists of positioning products and services in the market, showing the consumer “who” the product is, what “it” is for and “why” the potential customer should be interested in him.
In other words, branding is nothing more than managing a brand. For this, companies use several management and monitoring strategies and tactics – all with the aim of transmitting a certain image to the public.
From the moment that this image is threatened or suffers considerable damage, it is possible to affirm that there is a brand crisis. The crisis is therefore a manifestation out of alignment with the project and brand values.
Some examples of situations that trigger brand crises are:
- product recalls;
- goods failures;
- safety problems;
- leaks of customer information;
- disrespect or discrimination against consumers;
- non-compliance with tax or environmental laws;
- controversial statements by leaders.
What impacts can this situation have on the company?
A brand crisis erodes the perception of quality, generates negative associations to the brand and reduces loyalty to the company. Among its numerous impacts are the following.
Brand Equity Reduction
Brand Equity is the equity of a brand, that is, how much it is worth in the market. Because it is something intangible, brand value is not just associated with infrastructure or billing of the company, but also to its image.
Thus, any event that affects the perception that people have of a brand ends up reducing its market value.
When a company’s Brand Equity falls, its stock value also decreases. Thus, the company suffers from financial losses.
Just remember the weak meat operation in London. Immediately, the stock prices of companies involved in the investigations fell. This was the case for brands belonging to BRF.
In addition, an effect of the brand crisis is the direct loss of sales. In addition, there is a drop in demand for other products associated with the same brand.
Want a real example? A recall of the Ades brand apple juice caused all other juice flavors to also register declines in sales.
Conflicts with stakeholders
Partners, shareholders, consumers, employees and suppliers. They all have a certain image of your company and, of course, want to do business with whom they trust.
From the moment they stop trusting their brand, they may want to withdraw from the organization or break the partnership.
Every company is aware of the difficulties faced to attract and retain consumers. Brands with a good reputation create a sense of belonging, making the public want to be part of the group of people who use certain products or services.
This is the case with Apple. After all, how many people insist on saying that they prefer the Mac to the PC?
On the other hand, nobody wants to join a brand with a bad reputation. Imagine that your favorite brand of sneakers is fined for encouraging child labor. Certainly, you will rethink whether you will continue to use your products, will you?
In many cases, the public is even ashamed to be seen using the brand. Therefore, it goes without saying that consumer loyalty ends up being affected.
Drop in communication efficiency
As a child, you probably heard the story of the boy who lied about approaching a wolf, one of Aesop’s fables.
Several times a little shepherd announced that a dangerous wolf was approaching the village in which he lived. He was screaming “Wolf! Wolf!”. However, the warning always turned out to be a lie. It was a joke by the boy, who was amused by scaring his neighbors.
That was until, one day, a wolf actually appeared and the little shepherd desperately screamed for help. Only this time, no one believed him. As the peasants had already been tricked a few times, they thought it was another joke and did nothing to help. The result was that the wolf ate the whole herd.
The fable above illustrates what happens in communication during a brand crisis. As much as the company invests high values to reverse the situation, who will believe the words of an organization that has broken its own values, promises or position?
Decreased ability to attract switchers
Switchers are those consumers who are between two brands, sometimes buying one, sometimes buying products from the other.
In the face of a “A” brand crisis, say, these users tend to buy only the “B” brand – at least, until they forget what happened or until the brand image is restored.
How to identify if your brand is experiencing an image crisis?
Just as a disease brings symptoms that can be perceived in the human body, a brand crisis is also accompanied by certain clues that allow it to be identified.
But where and how can we find evidence of an image crisis? For this, the ideal is to pay attention to the following recommendations.
Monitor social networks
Currently, when someone wants to know more about your company or product, the tendency is to go straight to social networks.
Therefore, it is very important to follow a variety of communication channels, both your own media (brand pages and profiles) and third parties (comments on other sites or news in the press, for example).
Also, keep an eye on sites like Claim Here. Complaint sites or service reviews also serve as a collection point for information about your company.
Of course, having one or the other dissatisfied customer is normal. However, if the brand is not taking steps to address them, these complaints can trigger a brand crisis on social media and other channels.
To follow news and comments about your brand, you can use Google Alerts, as shown in the example below. To do this, simply access the site, type the term or phrase you want to follow and change the options, if you want.
If you want to learn more, check out our full article on Google Alerts.
Analyze your metrics and indicators
Analyzing the company’s success indicators is also important to understand the public’s reaction when there is a new product, service or campaign. More than that, metrics can show general dissatisfaction.
Sometimes, one low engagement can indicate public disapproval or boycott. Thus, depending on the situation, the brand will need to adopt a more active stance as soon as possible.
Track vulnerability points
Points of vulnerability or weakness are those areas or critical issues within the company that can trigger crises.
It may be a service that is not of the ideal quality, an industry that has been generating complaints or even higher prices than the competition.
Identifying these aspects – and SWOT analysis can help with that – is important to discover the existence of a crisis early on.
By following the points above, you will be able to see if your company is experiencing an image crisis or if everything is under control.
However, not all difficulties are equal in intensity and, therefore, it is also worth understanding the seriousness of the crisis. See below the characteristics present in each situation.
Light brand crisis
It is usually caused by facts and information without proof, from unreliable sources, or even statements that are no more than opinions. Its symptoms include confusion on the part of the public.
However, in this case, part of the consumers still defend the company. An example is the case where a customer reported finding a mouse in a Coca-Cola package, a situation that has never been proven.
Moderate brand crisis
Here, there are already more serious symptoms, such as drop in sales and reimbursement orders in large scale by customers. This is the case with certain car manufacturers that have undergone recalls.
Serious brand crisis
Occurs when an event affects not only consumer confidence in the brand, but also puts your health or integrity at risk.
An example in London was the case of Hopi Hari, in which the failure of an amusement park toy caused the death of a person.
To this day, the company still suffers from the repercussions of the case. Some claim that the brand’s financial balance has never been restored.
What is crisis management?
Crisis management is a process that seeks to correct the impacts caused by adversity, avoiding or minimizing damage to the organization, in addition to preserving its reputation in the market.
In many cases, it is a broad administrative process that involves several or even all areas of the company, as well as their respective managers. Usually, a committee is created and a leader is appointed to coordinate the team to overcome the challenges brought by the emergency.
Together, the members of the crisis management committee define the next steps to be taken in the various areas, such as the legal, operations, product, financial, human resources, marketing, etc.
There are companies that even have a crisis manual previously prepared, facilitating recovery.
In addition, as we already mentioned, a brand crisis always affects the company’s image with its stakeholders. Therefore, it is essential to have a communication plan, which can be developed by the internal team and even by a public relations agency or press office.
In fact, when there is a crisis manual, it is usually prepared by communication professionals.
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What are the main moments that make up the brand crisis and how to determine each one?
Are we going to continue diving into the “brand crisis” issue? The more familiar you are with its characteristics, the easier it will be to identify the moment the company is going through.
As a consequence, the necessary measures will be taken at the right time, avoiding losses to the company’s cash and image. So, see now what are the phases of a crisis and the moments that make up each one of them.
Before the brand crisis
Abnormal situations can often be avoided by the organizations themselves, as long as they maintain analysis and pay attention to risk scenarios.
In fact, here is a very important point. Crisis management, which we mentioned earlier, is not just for when the crisis has already set in.
It is highly recommended that companies make a preventive crisis management, even when there is nothing serious going on. After all, it will serve precisely to foresee possible problems and adversities.
When the company itself analyzes all the potential crises that could impact its brand, it can create contingency plans.
Therefore, when it comes to the pre-crisis phase, it is important to know the symptoms that indicate the imminence of turbulence. Are they:
- low customer loyalty;
- lack of innovation in the different areas of the company;
- absence of use of technologies and low adherence to digital transformation;
- problems and difficulties in customer service;
- recurring complaints on social networks and complaint portals;
- falls in key performance indicators;
- high employee turnover;
- poorly structured communication efforts;
- constant conflicts between the team;
- dissatisfaction of shareholders, partners, customers and employees.
It would not be an exaggeration to say that the phase that precedes the “overflow” is the most important. It is not by chance that, like a disease that is detected in its initial phase, business problems identified earlier can be overcome without major difficulties.
During the brand crisis
When an image crisis is already in place, the scenario is quite different. Here, you will probably know that you are experiencing problems.
However, there are managers who are slow to convince themselves that they really need to take steps to remedy the situation. So, the sooner you make sure you’re experiencing a brand crisis, the better.
To do this, here are the symptoms that appear during this phase:
- high index of negative mentions about the brand on social networks;
- press reports and notes with criticism or suspicion;
- investors, partners and shareholders asking for satisfaction;
- attacks on the company by customers, activists, websites, newspapers, etc .;
- drop in sales;
- drop in the value of the shares or the estimated value of the brand;
- loss of focus and productivity in the team due to insecurity.
After the brand crisis
How do you know if the worst is over? After taking the necessary measures and implementing a management plan, the post-crisis phase is usually characterized by:
- drop in brand mentions on social media and in the press;
- resumption of sales indexes and brand value;
- recovery of normality in relations with stakeholders;
- increase in the number of resumes and applications received;
- increased team productivity.
After the brand crisis, it is time to seek learning to prevent problems from happening again.
Despite the indicators that the worst is behind us, the brand may still feel the effects of adversity for some time. So, it is worth keeping an eye on the indicators and working hard on the company’s image.
How to create a crisis management plan?
Considering the different phases mentioned above, it is possible to develop a management plan that serves different purposes: prevention, fighting the crisis and improvements after overcoming unforeseen circumstances. To facilitate implementation, we have divided these actions into stages. Check out.
1. Assess the situation
First of all, you need to draw a picture of the brand crisis. How bad is it? Talk to employees who can clarify the situation, understand what really happened and how the press and the general public are interpreting the situation.
At that moment, the media monitoring tools can help you get a quick overview of how consumers are responding on social media.
One of them is BuzzSumo, a social media monitoring platform that allows you to check the most talked about subjects of the moment, as well as social influencers.
After accessing the website, use the “Trending Now” tab to see what the public is saying about your brand.
So, evaluate: Has the feeling towards the company changed dramatically? Did your brand mentions skyrocket? These two metrics can indicate how viral the crisis is, as well as whether people are talking about it in a positive or negative way.
However, before going into crisis mode, make sure negative coverage is coming from a single source or multiple locations.
In certain cases, it may be better to respond directly to those who are dissatisfied, rather than issuing a public statement.
2. Assign duties and communicate
Once you know exactly what happened, you need to inform your employees. Tell about the situation without hiding any points and explain what the company will do to deal with the difficulty.
Along with this, assign duties and make it clear who will be able to communicate with the press. Show how to answer any initial questions as you work out your official answer. It is very important that employees are not discussing the crisis publicly without their opinion.
Also decide who will be responsible for spearheading crisis management and dealing with public relations. Keep the executive team informed and act as a point of contact with stakeholders (partners, customers, employees, etc.). Also, record every detail, action taken, external response and resolution.
3. Understand your audiences
Before giving an official answer, think about who the crisis will impact and what they will be concerned about. For example, if you have been affected by a data breach, your customers are likely to be more concerned if their credit card details and passwords have been stolen, rather than temporarily losing access to the service.
In other words, your statement cannot be generic. She should bring direct solutions to the problems that occurredotherwise, the public will feel abandoned.
The good news is that, again, you can track the most used keywords about your company right now. These terms are likely to give clues as to what the public’s initial concerns are.
In addition to the aforementioned BuzzSumo, other options for free social media monitoring tools are Social Mention, HowSociable and Hootsuite.
Image source: mentionlytics.com
In the image above, you can see that the Social Mention tool assesses points such as the public’s feeling and passion for a brand. These are great indicators for assessing a crisis situation.
4. Decide how to respond
After understanding the situation in detail, it is time to respond to the crisis. Based on how it can affect your stakeholders, decide which is the best response channel. Some of the main options are:
- communicate through social networks (in text or video);
- issue a press release;
- schedule a press conference;
- make a blog post;
- combine the previous alternatives.
If there are a lot of people discussing the crisis on social media, it is natural that the situation calls for a public response. When making your statement, make sure you are being transparent.
Also, if the company is wrong at some point, take responsibility. Address what really happened (if it makes sense) and show how the brand is fixing the problem.
A good crisis management practice is to never pretend that nothing has happened. Denying the problems will only make them even bigger.
5. Make your message heard
More than giving a good statement, it is important to make it heard. Get in touch with journalists with whom you relate and respond to those who have been writing about the crisis. If the crisis was detected on social media (something very likely these days), post a response on that too.
Although not mandatory, creating a video responding to the crisis can be a great strategy. Not only does this help maintain your human response, it also makes people more confident in what is being said.
In addition, it is also worth answering some of the questions of social network users. If you are overwhelmed with messages, prioritize brand advocates and influencers, as they will have the greatest impact.
6. Measure the impact of your statements and posts
After publishing the necessary statements, it’s time to see if they have worked. How are your words being received? Monitoring social networks will allow you to track how people are responding. Check if the feeling about the brand is changing and, if necessary, take further action.
If you have sent a press release through a public relations distribution tool, for example, you can keep track of how many people opened the content, as well as the amount of time they spent reading the statement.
Then, you can follow the journalists according to these responses. This is the case of the Dino, Difundir and BrandPress platforms, which allow you to create and send press releases.
7. Know when to stop
Regardless of the size of the crisis, the trend is that, sooner or later, the buzz will stabilize.
The time required for this varies depending on the event. Anyway, when negative mentions to your brand start to drop dramatically, it’s time for you to stop reminding everyone of what happened.
At that time, focus on starting to rebuild the brand image and value. More than that, remember that it is impossible to please everyone.
So, after doing everything that was your responsibility, stop responding to dissatisfied people – especially if they are haters with little influence.
8. Learn from mistakes and prevent yourself
Of course, after a crisis, all you want to do is relax and take a deep breath. Still, it is worth taking the time to learn from mistakes and create a prevention plan. This way, you can prevent the same thing from happening again, causing new crises.
In general, the public forgives brands that make mistakes once. The second mistake tends to undermine people’s trust in the company.
As much as they do not see situations as acts of bad faith, everyone prefers to do business with solid and well positioned brands.
Some steps you can take to avoid a new crisis are:
- configure alerts for peak mentions on the social networks. This will identify any negative discussions in progress;
- create social media guidelines for employees, preventing them from putting the brand in a complicated situation;
- count on strong passwords, keep the updated computers and protect the organization from viruses;
- make sure that all data is stored in backup safely, avoiding their loss;
- test all marketing and public relations campaigns with focus groups or employees who are not part of the communication team. This will help to identify any expression that may offend someone or be misinterpreted;
- develop relationships with key public relations and social media influencers, as they will help shape public opinion if the crisis hits again.
Want real examples? See 3 successful crisis management cases
Every brand is subject to go through moments of difficulty. So, how about taking inspiration from companies that have overcome image crises? The cases below are beautiful examples.