It’s not uncommon for a company or organization to face bad news that temporarily hurts its reputation. But not all reputation-harming news is the same degree of bad.
Consider Volkswagen. The media revealed that a group of employees manipulated on-board software to falsify emissions results for 11 million diesel cars. Yeah, that’s about as bad as it gets.
Can the brand withstand this crisis?
Yes it can, but only with a thoughtful brand strategy focused on honesty, communication, action and long-term health. Let’s break it down.
Accountability first and foremost
For any company rocked by scandal, there must be first be visibility and accountability – and that’s going to hurt. At Volkwagen, the otherwise well-regarded CEO resigned. The recently named President of VW North America quit. More details about the extent of the wrongdoing kept surfacing. VW sent letters to all customers admitting wrong-doing. Dealerships were stuck with inventory they’re not allowed to sell. And the company was hit with a downgraded credit rating.
Penalize those responsible so consumers know you take it seriously
All the above actions are necessary before rebuilding the business and its brand. The company must communicate frequently with the public, especially to customers. In cases like this, it’s imperative the company show it is and will hold people accountable. That typically comes in two waves.
- Remove representative leadership to show how seriously the company is dealing with this.
- Find and deal with the employees who actually committed the crime.
Show customers the company is on their side
Customers will likely expect some form of compensation and assurance to keep them loyal to the brand. A full resolution for something on the scale of the Volkswagen scandal can take months, if not years. But showing progress, early on, is important for recovery of brand reputation.
The good news for VW is that they are the type of company or brand people want to see fail. Brand studies show consumers have had great admiration for the Volkswagen brand for decades.
Respond quickly – communicate early and often
Consumers typically have short memories about brand crises. There are always new distractions. So the faster a company gets through accountability for the issues, the punishments, and the compensations, the sooner investors and consumers will move on. Anything short of completing those three phases means the brand suffers.
Companies in crisis must concentrate on continual action over words. Or at least follow statements quickly, with action to support the promises. Even for legacy brands like VW, handling a crisis effectively will help to restore their reputation over time, and bring customers back.