As we all know, it’s when and how you say sorry that matters, not pretending that nothing's wrong.
When it comes to crisis management for businesses, it is often the timing of the first apology that usually causes more problems (and cost) for a brand, than the original issue.
If you have to apologise, do it immediately; make it sincere; and make it across every platform you think your customers most often use. This gives you more control over any breaking news throughout the crisis.
Two bites of the Apple
Even a so called "consumer-friendly" company may try to bluff their way through a crisis.
With the iPhone4 connection issues, Steve Jobs tried to blame the cack-handiness of left handed consumers. After a few weeks and numerous brush offs, Apple admitted that it was a design fault and were forced to produce a (free) plastic cover that solved the problem as way of making amends - but consumers were shocked by his and his Company's response.
Sony PlayStation
When hackers penetrated the 77 million accounts of PlayStation users, they accessed databases containing names, addresses, dates of birth, passwords and credit card information.
After a 26 day gap, Sony apologised to its consumers, with a range of free welcome back packages including identity protection to try and restore trust.
A sincere “mea culpa” video from Sony executive Kazuo Hirai was not sufficient to stop a slew of law suits from consumers, which may well come to cost the company $Bns.
In a business built around consumer trust, analysts believe Sony face a long, uphill task to fully regain their confidence.
Citigroup
In May this year, Citigroup was hacked into by data thieves and over 200,000 account Ids were compromised.
It took Citigroup over a month to contact customers about the theft after it was leaked to the public. Citigroup’s response was to admit nothing to “protect our customers”.
This time delay has been viewed as a gross violation of trust. Serious and potentially damaging lawsuits seem inevitable.
Domino foods
In North Carolina in 2009, viral videos of employees snorting, sneezing and breaking wind on Domino’s edibles, which were then eaten by unsuspecting customers, appeared on YouTube courtesy of the offending employees themselves (doh!) and led to their dismissal and subsequent prosecution.
After 48 hours Domino President, Patrick Doyle, issued a video apology telling people it was a hoax and ensuring all establishments had been thoroughly audited and the offenders were being prosecuted.
The 48 hour delay in apologising was enough for the video receiving over 1 Million YouTube views before it was removed, enough for a dramatic nosedive in customer confidence.
The incident spelled doom for the North Carolina franchise as customers shied away from its store.
Brand Reputation vs Consumer Worry
The takeaway (Domino’s included) is that even if you are a massive brand, unhappy customers can seriously damage your brand reputation and pocket.
Some brands are better able to resist consumer pressure (Apple, Facebook) while others are in such competitive environments that even the slightest negative feedback causes palpitations at Board level.
For major companies, their reputation is everything.
- Boneheaded companies try and pretend nothing’s wrong.
- Arrogant companies believe they can keep it under wraps until (usually) it explodes in their faces (thank Twitter!)
- Enlightened companies admit there’s a problem straight up and jump through hoops to bring their customers along with them - almost always enhancing their brand reputation in the process.
Consumers aren’t stupid. If they buy your products they want to be kept informed. so trust them and take control of the news that reaches them.
Source: Jennifer Munroe, Brands forced to apologise. iMedia Connection 29th June 2011