Insignia Talks

…about the power of communication to create, manage and protect reputations

Claire’s, the accessories and jewellery retailer, has found itself cast in the classic role of corporate Goliath, supposedly trampling over a much smaller rival following allegations that it copied the product of an independent designer.

It’s an impression unlikely to win friends and one which the company would wish to shake off.  Its crisis communication approach has been to keep its head down, presumably in the hope that the storm will pass.

This is not always the wrong strategy: sometimes ignoring online, or indeed any criticism, can be the best approach to avoid turning a minor skirmish into a major crisis.  The key though is not to make these decisions on the fly, but to invest time beforehand so that the right strategy can be quickly adopted in the event of an issue.

That means conducting regular reputational risk assessments to identify what could go wrong and then scenario planning against the most likely or most damaging risks.  This allows businesses to identify triggers for communication and calibrate their response appropriately.

In Claire’s case, the trigger could have been when online comment reached a pre-agreed level or when certain influential stakeholders joined the debate.  Realistic social media simulations can help to further rehearse decision-making and ensure the communication team is fully geared up to respond to an online crisis.

This issue also flags up the need for thorough online media monitoring. We don’t know what mechanisms Claire’s had in place to monitor social media conversations.  What we do know is that being aware of what is being said about you as soon as it is said, is the first and essential step in being able to respond quickly to criticism.

Claire’s extremely guarded response to the issue seems unlikely to be in the best interests of its reputation.  By absenting itself from the online discussions, it allows others to make assertions, shape the discussion and influence how Claire’s is seen.

The current policy of non-communication and alleged removal of Tweets and Facebook posts only serves to reinforce negative images of Claire’s as an aloof and controlling corporation.

Communicating more pro-actively – whether to stand behind its design and explain its approach to working with small designers, or to apologise and announce actions it will take to address the situation – would help to position the organisation more empathetically and in control of its own destiny.

Jonathan Hemus

www.insigniacomms.com

When a  TV documentary team goes undercover to expose malpractice in your sector, important decisions need to be made about your issues management strategy.

So it was fascinating to observe how Viagogo and Seatwave adopted entirely different reputation protection strategies when Channel 4′s Dispatches looked into the “the great ticket scandal”.  Using secret cameras, reporters posed as employees of both businesses to investigate how peer to peer ticket exchanges operate.  Among the allegations were claims that many tickets are advertised by brokers rather than the general public and that ticket exchanges make money by buying from official sources then re-selling at a higher price.

So how did, Viagogo and Seatwave respond to the reputational challenge provided by the programme?

• Viagogo: bury the programme then bury your head

Viagogo, sought a high court injunction to prevent broadcast of the programme “to prevent customer information being made public”.  Whilst the injunction was initially secured, it was subsequently overturned by Channel 4.  The result: pre-broadcast press coverage which guaranteed greater attention on the programme than would otherwise have been the case. Legal action to suppress publication or broadcast of a story about your business is a legitimate tactic: but it is a last resort and a risky crisis management tactic (as Ryan Giggs would probably agree).

During the programme itself, Viagogo was silent, with no interviewee provided and there appears to be no statement or other information about the Dispatches programme in the media section of its website.

• Seatwave: put your case through your own channels

Seatwave also failed to provide a spokeseperson for the programme (though both companies offered a written statement).  Instead, it used its own social media channels – Tweets and a company blog penned by company founder Joe Cohen – to put its side of the story.  Mr Cohen tweeted throughout the programme and uploaded three blog postings during the course of two days explaining the Seatwave position.

By taking a pro-active approach, Seatwave ensured that Dispatches’ allegations did not pass unchallenged and also showed itself as a business prepared to address tough questions and stand behind its reputation.

Whatever you think of the business practices of Viagogo and Seatwave, it seems to me that Seatwave’s policy of engagement in adversity is the right one.  As one of the respondents to Joe Cohen’s blog said: “Thank you for the transparency in what you’ve posted here, it puts a much better impression of your company than certain other parties discussed in the documentary”.

Jonathan Hemus

www.insigniacomms.com

A series of YouTube videos by an American Airlines employee have added to the issues management challenges of a company already facing an uncertain business future.

The humorous videos by a flight attendant parody the firm’s management and reveal the content of an internal memo sent to staff.  A discussion is developing on ragan.com as to the appropriateness of American Airlines response to the issue and whether it has the right to “censor” its employees.

Crisis management is always more challenging when an issue is internally generated rather than caused by an external event.  To reduce the likelihood of such an incident and therefore minimise reputational harm, a strategy of prevention must be prioritised.  The critical first step in this is the introduction and internal communication of a social media policy.  Although many businesses already have such a policy in place, a significant minority do not.

Whilst a policy cannot entirely prevent an internally generated social media crisis, it does ensure that expectations are clear so that staff understand the ground rules for their use of social media.  Take a look at this site for examples of social media policies from some of the world’s biggest organisations.   American Airlines may well be taking an urgent look at it right now.

Jonathan Hemus

www.insigniacomms.com

When LA Fitness threatened to enforce its contract with a heavily pregnant woman who had fallen on hard times, it may have had the letter of the law on its side.  But once the story became public, it was found guilty in the court of public opinion.

LA Fitness is just the latest business to find out that protecting reputation means doing the right thing in the eyes of the outside world, not simply complying with regulations or the law.

Ten years ago, LA Fitness’s dispute with a customer over whether her gym contract could be enforced would have been a private customer service issue in which the company held the balance of power.  Today it requires crisis management skills, is conducted in public and public opinion has far greater influence.

This transparency needs to be understood by businesses and factored into their behaviour, decision-making and communication. The imperative to act in a way that matches the  expectations of external stakeholders is largely driven by the power of social media.  In the old days, customer complaints could be dealt with in private and media criticism dismissed as tomorrow’s fish and chip paper.  Today, because of Twitter, Tripadvisor, Google et al, customer service – and crisis management – has become a spectator sport.  Worse, the spectators actually influence the game.  Whether businesses like it or not, this is the reality.

This transparency has raised the bar in terms of ethical and acceptable corporate behaviour – it’s much harder to do bad things and simply get away with it (which, of course, is a good thing).  It also means that the need for thorough crisis  management planning is more pressing than ever: reputational risk assessment, social media monitoring, scenario planning and realistic social media simulations should all form part of this.  A slow or inappropriate response to a crisis will be punished with damage to reputation.

LA Fitness appeared to be forced into a u-turn, and  this never looks good.  Ultimately, the key for businesses is to control the crisis rather than let the crisis control them.  Being able to perceive a crisis from the outside in and acting quickly and appropriately when company behaviour clashes with public expectations is essential to preserve corporate reputation.

Jonathan Hemus

www.insigniacomms.com

Blackberry looks set to once again prove the crisis communication adage that it’s not really the crisis which damages reputation, it’s the way in which you respond to it.

On this basis, Blackberry is set to suffer major harm to its reputation (and its business fortunes)  based on a tight-lipped approach to communication and a failure to use social media to communicate its response to the current problems.  Gordon MacMillan’s blog posting on The Wall sums it up perfectly for me – it’s well worth a read: I’ll simply say that I endorse every word and would also add the following.

Swift crisis communication

Any organisation which wants to protect its  reputation in a crisis must be geared up to communicate quickly and expansively in the event of an incident.  For most organisations that must include social media: it’s where the crisis plays out, it’s where customers go to seek information and vent their spleen, it’s where the media turns for information.  And it’s where businesses can quickly exert influence over the communication agenda, and listen and respond to the concerns of its stakeholders.

Social media in crisis communication

In today’s online world, I would contend that even an organisation without a consumer face should have the ability to utilise social media in the event of a crisis.  But if you’re a consumer brand (which Blackberry has chosen to become) you certainly should have this capability.  Moreover, if you’re a  consumer brand in the telecoms space whose devices facilitate communication by social media, I find it truly staggering that you would ignore these channels when your reputation is on the line.

Not only does it go against the guiding principles of effective crisis communication, but it also calls into question whether the Blackberry brand really is at the heart of social media (and therefore the consumer landscape), or not.

Crisis management training

Organisations at the leading edge of  reputation protection have already integrated social media into their crisis communication planning and are running realistic crisis exercises with social media as a core element.  All businesses need to embrace this approach – and quickly – or else risk being overwhelmed by the kind of crisis communication challenge currently facing Blackberry.

Update: 15.20 13 October

Blackberry has now begun the social media fightback with a YouTube video apology from CEO Mike Laziridis in which he admits “we’ve let you down” and commits to more pro-active communication.  Its content, tone and messages are spot on.  But at least 48 hours too late.

Jonathan Hemus

www.insigniacomms.com

When the BBC’s Panorama programme apparently showed Primark’s use of child labour in Bangalore, the retailer’s reputation took a serious hit.  With the recent BBC Trust report concluding that footage of boys checking stitching on Primark products was “more likely than not” “not genuine”, it is now the BBC whose reputation is under the microscope.  Indeed this is especially challenging for the BBC whose brand is associated with trust, integrity and high editorial standards.  As we have seen in previous incidents, when a crisis strikes at the heart of an organisation’s brand essence, it has the power to do more damage than would otherwise be the case.

Primark meanwhile has taken the opportunity to seize the communication agenda and lead the post-report debate (in contrast to the policy of non-engagement advocated by a recent Economist article).  Central to this is its microsite “Primark and Panorama; the true story” .  It includes:

• YouTube footage created in a reportage style which seeks to reveal the alleged falsehoods in Panorama’s original programme
• a detailed statement in response to the BBC Trust’s ruling (and a link to the full report)
• a timeline of events
• an ethical trade factsheet
• the opportunity for people to post comments to the site
• a “contact us” section for bloggers, the media, NGOs and other interested parties

The site serves as a template for other businesses wanting to pro-actively manage issues, rather than simply react to them.  Primark clearly made a decision to treat the publication of the report as an opportunity to surround stakeholders with materials and messages supportive of its position.  Using an online platform to host these materials and messages means that anyone interested in the Primark perspective can use it as a “one stop shop”.  Note also how Primark has made good use of search engine marketing to guarantee prominence for its point of view: search for “primark panorama” with Google and at the top of page one is a sponsored link to the microsite.  Without this core resource, Primark would still have been represented in the post-report discussion, but in a less prominent way.

I applaud Primark for the way in which it has exerted control of the communication agenda, but would also sound a word of warning to other businesses before replicating its response in totality.  In communication there are grey areas between influencing, spinning and manipulating. By failing to allow comments to be posted to its YouTube footage and by claiming that the BBC Trust had found that the footage was “fabricated” when the actual ruling fell short of stating this, Primark could be accused of over-stepping the mark. 

It’s also worth noting that the company’s robust and strident response carries an element of risk as it means that any future transgressions will be an even bigger story than would otherwise be the case.  With this in mind, Primark needs to plan both operationally and reputationally for the fact that it is a highly visible media target.

Finally, I would observe that an organisation’s crisis communication response needs to be in keeping with its usual tone of voice.  That’s why Ryanair can be bullish in response to a problem whereas Virgin Atlantic would tend to be more empathetic.  The way in which Primark has communicated following the Panorama programme mirrors its positioning as a down to earth, straight forward brand, underlining the fact that for crisis communication to be truly effective, it must be authentic.

Jonathan Hemus

www.insigniacomms.com

Communication professionals like myself have long fought to establish PR as the equal of advertising.  This has led to countless debates about effectiveness, return on investment and evaluation.

Now that the battle is won (I think), have we actually shot ourselves in the foot? I ask this question as a result of talking to a regional newspaper editor recently.  His view is that PR people have so comprehensively won the argument, that when the economy contracted, businesses were confident that advertising budgets could be slashed and PR relied upon instead.

So far so good for the PR profession.  But the effect is that the very publications, TV and radio stations that PR people are trying to  reach are being starved of advertising revenue and forced to cut their frequency, pagination…or go out of business altogether.

The ultimate scenario could  be thousands of PR professionals hugely skilled in reputation management and businesses totally convinced of the power of PR…but nowhere for their stories to appear.  Of course, there are new and direct channels available, in particular online reputation management, and these are undoubtedly powerful means of commmunicating a corporate reputation.

But perhaps we do need to be a little wary of pushing the PR message to the extreme: we might be better served in the long term by suggesting to colleagues and clients that they spend a little more on advertising.  I can’t believe I just wrote that.

Jonathan Hemus

www.insigniacommms.com

A recent article in the Economist reported that the best response to inaccurate online rumours was to ignore them, and instead communicate a barrage of good news.  This, the article contends, is the best form of issues management.

I only half agree.

Certainly, building a positive perception based on a strong and compelling corporate narrative should be the priority for any business which values its reputation.  Brands such as Virgin, Apple and Tesco have consistently communicated their vision and values to their stakeholders. 

As a consequence, stakeholders have a very clear understanding of who they are, what they do and what they stand for.  Crucially, their experience of products and services reinforce the messages they have received (where the experience fails to live up to the words, a business creates a transitory image, rather than a substantial reputation).

But where I disagree with the article is in the suggestion that untruths should always be left uncorrected.  Unchecked rumour, gossip and innuendo can become accepted as fact and cause significant damage to corporate reputation.

Here are three steps to define an appropriate response to an inaccurate allegation:

1)    Be aware that the allegation exists

Effective online reputation management depends upon knowing that there is a possible problem: many organisations have been unable to regain control of a situation simply because they became aware of it too late.  Ensure that you have thorough on and off line monitoring in place so that you can spot an issue before it becomes a crisis.

2)    Evaluate its potential influence and impact

Deciding which allegations to respond to and which to ignore requires you to assess the influence of its originator.  A lone blogger is probably worth leaving alone; it would be foolish to ignore criticism from the BBC’s Robert Peston.  Knowing beforehand the online influencers who really affect your stakeholders means that you can make well-informed judgements. 

Assessing the potential damage of the allegation will also help to determine your response.  Mild criticism of a product is part of day to day business life; allegations of endemic corruption call for pro-active crisis communication.

3)    Calibrate your response accordingly

Sometimes, a policy of non-engagement is indeed the right decision: a high profile response may create the oxygen of publicity that a scurrilous allegation requires.  On other occasions, a professional and straight forward response within the forum in which the comment appeared will help to balance the debate. 

If that’s insufficient, a statement to the media and reassuring messages via your own communication channels (websites, blogs and Twitter feeds for example) may be the best way to get your perspective across, without directly engaging with your misguided critic. 

In extreme and rare circumstances, legal action may be necessary to remove a clear untruth.  Be aware though that action of this kind often leads to exactly the kind of widespread publicity that you were seeking to avoid and trigger a much bigger dose of crisis management than the original allegation ever could.

There are no hard and fast rules for dealing with inaccurate criticism, despite what the Economist article suggests.  Judgement will always be required to do the best thing to protect the value inherent in your corporate reputation.

Jonathan Hemus

www.insigniacomms.com  

As Christmas draws ever closer and Santa receives letters (and now emails) from expectant children, the UK’s most famous toy store, Hamleys, finds itself in issues management mode.

Its decision to promote the store with events featuring live reindeer and penguins has resulted in negative press coverage and its reputation under online attack.  There are learnings in this issue for any organisation that wants to protect its reputation:

1)      The importance of reputational risk assessments

A reputational risk assessment should underpin an organisation’s overall crisis management plan.  But it is also enormously valuable when applied to any major announcement.  Identifying potential downsides and making plans to manage them reduces the potential for an unexpected crisis.

2)      Beware behaviour that conflicts with the essence of the brand

Behaviour that seems to run contrary with what people understand or associate with a brand is often the most damaging to reputation.  A key part of the Hamleys brand is about bringing magic, happiness and joy into children’s lives.  Any insinuation that it is engaged in heartless or even cruel activity towards animals presents a very unhelpful contrast.

3)      Listen to what is being said about you

Criticism of Hamleys’ plans was growing on Twitter last week.  One of them said “Hamleys: are you reading these tweets?  If so, please change your mind about using live animals”.  Make sure that you are indeed monitoring what is being said about you on and offline.  It gives you an insight into how stakeholders are feeling and provides an early warning of potential problems, rather than being plunged into crisis management when the issue explodes.

4)      Engage in discussion

When Hamleys added a statement to its Facebook page explaining its position, scores of critical comments were posted in response.  If you decide to use your Facebook page for crisis communication and leave it open for feedback, play a part in the subsequent discussion so that the page is not entirely dominated by critical comments.

5)      Reputation management goes beyond meeting legal requirements

A key element of Hamleys response to this issue is that its use of animals is entirely legal and that they will be cared for in the appropriate way.  Effective reputation management means going beyond what is required by law or regulations, and behaving in a way that meets your stakeholders’ expectations.  Doing so will reduce the likelihood of having to manage a crisis and will certainly be in the best interests of your long term reputation.

The issue facing Hamleys once again reinforces the increased vulnerability of organisations to online campaigns.  Issues can turn into crises much quicker and spread much further fuelled by social media.  Recognising this and acting accordingly, is essential for reputation protection.

Jonathan Hemus

www.insigniacomms.com

A recent survey in PR Week revealed that only 7% of business leaders believe that social media has the most impact on business reputation, compared with 63% for TV and 24% for print media.  This echoes a quote from Rolls Royce’s director of communications, Peter Morgan, who was quoted earlier this year in Corporate Communications magazine as saying:

“I was communications director at BT for five and a half years. I’ve been communications director at Rolls-Royce for about six months. I don’t think there is a single example where social media has impacted directly on the reputation or share price of either of these significant organisations”

Rolls Royce has been criticised for its stand-offish approach to crisis communication in dealing with the Qantas A380 incident, and BP was seen to be slow in mobilising social media for reputation protection in the aftermath of the Gulf oil spill.

 So, is social media really relevant to the reputation of a business to business organisation or a big corporate?  Or is it the preserve of consumer-facing brands?

In my view, social media is indeed less important to B2B and corporate bodies than it is to consumer brands.  If you’re marketing products and services to the general public, I can’t really think of one good reason why you wouldn’t make use of a tremendously powerful way of building relationships, promoting products and securing customer feedback.

It’s a bit different if you run a logistics company, sell cement or provide IT outsourcing services.  Nevertheless there are benefits, and here are just four:

• building relationships with existing stakeholders in new ways (customers and clients of B2B organisations use social media too!)
• securing online profile for the business (every LinkedIn page, every Twitter account and every Facebook page will provide added visibility via a Google search)
• positioning an established business in a more contemporary way (though do be sure to communicate in a way which is authentic and feels comfortable  for the business – there’s nothing worse than “Dad-dancing!)
• getting news out quickly and directly to your stakeholders

It’s the fourth benefit that holds most interest for me as a crisis communication specialist.  Being able to communicate quickly in the event of an incident has always been important, and social media provides the perfect platform for doing this.  Having an online communication hub (usually a a blog or darksite) is an essential part of crisis communication these days.  And this blog should link to social media resources including YouTube and Flickr, and be promoted by Twitter. 

So, as a minimum, I believe that corporates and B2B organisations should have social media monitoring in place to act as an early warning system, and a social media infrastructure that can be made live in the event of a crisis.  This offers significant advantages over managing a crisis without any social media capability at all.

But this approach alone does present challenges.  Without a history of engaging in social media, the organisation will not only lack relationships and credibility in this space, it will also be culturally unprepared to communicate via social media.  The learning curve that is normally completed during “business as usual” will instead be encountered during the management of a crisis.

So, what should corporates and B2B organisations do?  I suggest that the business should ask itself five questions:

• culturally, are we inherently a communicative organisation?
• are we prepared to make a sustained and long term commitment to social media?
• are we prepared to put the right resource behind social media?
• do we understand the risk/reward equation and are we comfortable with it?
• are we clear on the business rationale for engaging with social media and the benefits for reputation management and/or protection?

Five ticks mean that we’re ready to commit to the pro-active use of social media in our reputation management strategy.  Less than this, and it’s probably best to put in place the online crisis communication infrastructure, but leave pro-active engagement until the organisation is ready to embrace it. 

It’s not surprising that consumer brands are leading the way when it comes to enagaging with social media, and no B2B  organisation should  feel forced to participate unless it is ready to do so.   Nevertheless, I suspect that more and more corporates will embrace social media as its power to manage and protect reputation becomes ever clearer.

Jonathan Hemus

www.insigniacomms.com