After a crisis – getting your brand back on track
In this world of 24-hour news cycles and always-on social media, there are two kinds of companies – those that have experienced a crisis, and those that will. We are human, mistakes will be made, statements will be misconstrued, things happen. Be prepared.
We are all familiar with high profile brands in meltdown, be it Tiger Woods or Ryan Lochte for example. Sponsorships evaporate, fan bases dissipate and the rehabilitation of their brand can be slow, if at all. For companies, the ramifications can be worse – plummeting shareholder value, costly product recalls, class action lawsuits and most significantly, loss of customer base.
We know what immediate steps a company should take in the event of a crisis – identify what is fact, what is fiction; communicate transparently to all stakeholders; address the source of the crisis; and provide a solution to those impacted (be it reimbursement for a product or service failure or compensation).
But what happens when the initial crisis is under control? How do companies go about regaining their customers trust and rehabilitating their image in the long term?
It may be harder than you think.
Take for example Chipotle. In 2015 the company experienced an E.coli and norovirus outbreak in multiple restaurants over the course of several months. Customer sales immediately plummeted. Since then the company has proactively touted its actions to implement industry leading food safety and food handling practices as a means of luring concerned customers back to the chain.
Despite these efforts, seven month’s post the last outbreak Chipotle’s comparable restaurant sales fell 23.6% in the second fiscal quarter, the third straight decline.
A recent article compared the Chipotle fall-out to a similar outbreak at Jack in the Box between 1992 – 1993 where more than 500 people became infected after eating hamburgers from the chain. Four people died. By contrast, Chipotle’s E.coli outbreak impacted significantly fewer people, with no fatalities. Yet, despite this, sales at Jack in the Box fell by only 22.2%% at the height of the crisis and quickly recovered.
The article points the finger squarely at social media, for good reason. We now have a platform where opinion is regularly touted as fact, and outrage (faux or genuine) can spread like wildfire. And it is true the rapid spread of information makes the ability to rehabilitate a damaged brand significantly more challenging.
But I would argue that there is more than social media to blame for the company’s current predicament. Chipotle suffered several outbreaks back to back over a course of months – the fact that the company was unable to resolve the issue swiftly and the steps they took to re-instill confidence in the handling of food and hygiene throughout their branches were insufficient – ultimately undermined consumer faith in the brand. It appeared that Chipotle could not control the crisis – as a result, customers just did not, and still don’t feel safe eating their product.
Ultimately, it appeared that Chipotle could not control the crisis. As a result, customers just did not, and still don’t feel safe eating their product.
Additionally, the risk of ill-health is probably one of the most deterring factors for would-be customers, however much they like the food. If a restaurant chain is tarnished with the label ‘unsafe’, there are numerous others to choose from. Why take the risk?
It has been almost 25 years since the Jack in the Box outbreak and in today’s age of choice, regaining customers is harder than ever.
Next week, we will discuss the steps a company can take in the current climate to proactively rehabilitate their brand post-crisis.