ADOTAS – Last month I met with a network of crisis communications and public relations professionals to discuss the topic of online brand reputation management. This network provides expert counsel and services to clients in areas ranging from crisis communications and strategic planning to public relations and public policy.
In preparing my presentation, I discovered the work done by this group parallels a lot of the same type of work WebMetro provides clients as part of online brand reputation management services. In short, we both:
- Evaluate threats and crisis situations
- Provide intervention and counseling services
- Provide services for short-term flare-ups
- Implement long-term strategies
Although we address situations from different communications mediums (e.g. TV, radio, investor relations vs. search engines, blogs, forums), the goal is the same — shape the public message.
During our meeting we discussed many online brand reputation management topics. We started with defining the role of online brand reputation management and how it how it performs two strategic tasks.
First, we discussed how it should be integrated into existing marketing, advertising and public relations campaigns to support a brand’s existing major corporate initiatives such as:
- Increasing sales revenue
- Acquiring additional market share
- Launching new products or services
- Promoting or championing a new idea or solution
- Increasing customer retention
Second, these positive placements can simultaneously be employed to protect the brand in the event of FUBAR (fouled up beyond all repair). Yes, FUBAR happens and it happens usually at the most inopportune time.
For example the owners of a company divorce and this impacts the valuation of the sports franchise (i.e. Los Angeles Dodgers). Cars suddenly accelerate faster than home prices in Los Angeles resulting in decreases in sales and revenue (i.e. Toyota). Public companies restate earnings due to accounting errors which reduces the market price of the company stock. Financial companies reward employees with outrageous employee bonuses in a market of severe economic downturn and high unemployment (i.e. Goldman Sachs).
These companies lose public trust. Of course, you can always have trouble with your golf game resulting in losing millions of dollars in major sponsorships.
Next we discussed the famous quote from Ben Franklin — “An ounce of prevention is worth a pound of cure” — as it relates to online brand reputation management. I shared with the group how situations are much less traumatic for the corporation and significantly less expensive when online brand reputation management is integrated into an existing public relations campaign.
Nonetheless corporations are run by people and people make errors in judgment, some more egregious than others. Unfortunately, corporations are in the public eye and since we live in a world of user-generated content, brands are getting attacked. Once attacked, unfortunately it can be a nightmare to diffuse the situation.
Unlike crisis management situations in the past, where sentiment changes overtime, the internet and search engines digitally document these events forever. For example, today if you enter the keyword “chappaquiddick” into Google, you will be immediately reminded of the traumatic events that occurred in 1969 — some 40 years ago and way before the Internet was born. We see Wikipedia entries, FBI documentation, images and numerous news stories accounting the events of that evening.
Some 40 years later, enter “Eliot Spitzer” into Google and we find similar event documentation of the prostitution scandal that disgraced the reputation of this former politician. Thanks to modern technology we have the entire event chronicled with video.
These are clearly individual stories but corporations have their issues as well. Most recently BP is reeling from a disastrous oil spill now unfolding in the Gulf of Mexico. Unfortunately containment efforts so far have largely failed.
The impact of this disaster is uncertain on many levels. There are huge environmental issues at stake as the oil has now spread close to major wetlands in the United States. There are economic issues for Louisiana businesses (i.e. fishing, shrimping and tourism) that rely on the Gulf Coast for their livelihood. Of course, there is also the economic issue of the cost of the cleanup for BP.
If the event couldn’t be worse for BP, allegations are now appearing regarding issues of budget cuts that may have contributed to the disaster. The blogosphere has taken hold of this issue and the rants and accusations are beginning to unfold.
Clearly this brand reputation management issue has resulted in an extremely volatile and reduced stock price and thereby valuation for BP.
Brand reputation management issues have many significant effects at corporate levels. Here are other examples:
- Lower sales and revenue (e.g., violence in Mexico is leading to a significant reduction in vacation travel more than the H1N1 virus outbreak of 2008).
- Decreased stock price/valuation/market share (e.g. ethical fiascoes at AIG, Enron).
- Reduced customer retention (e.g., Microsoft Vista compatibility issues, JetBlue forcing customers to sit on a tarmac for hours, Dell off-shoring customer service).
- Increased customer acquisition costs (e.g. Toyota).
These issues have serious financial repercussions at the corporate level and can be documented in public entities. Unfortunately others are much more difficult to quantify but often have similar effects on the corporation.
In many corporations, key personnel leave the organization for stable competitors. During a crisis company morale typically nosedives leading to significantly reduced office productivity, higher rates of employee illness and stress. When reduced morale drags on or does not turn around, it results in higher turnover of rank and file employees.
History has shown us the need to integrate online brand management into our marketing, advertising and public relations campaigns. Whether you work for a major corporation such as IBM or McDonald’s or a small to mid-sized business, we are stewards of our associated businesses. If we want our businesses to succeed tomorrow, we need to plan for that rainy day today with online brand reputation management.