Whether it is Toyota with safety recalls or Apple with the iPhone3 antenna, the value of an organization's brand and reputation can shift in an instant. With the ever-expanding use of technology and electronic media, years of hard work at brand development can be lost in a blink of an eye, making reputation management ever more of a challenge for the most talented of marketers.
If you do not have a grasp on your organization's reputation and an action plan for potential crises, the chances are that you will be caught off guard and the negative impact on your firm's performance and bottom line could be enormous.
The CMOs and marketing teams that will be successful in this environment will have the answers to a few strategic and a few practical questions. First, the strategic:
- What is your firm's reputation worth in the marketplace?
- What drives the value of your reputation equity – and what type of crisis would destroy value?
- How are your reputation investments measured and monitored?
- How is your reputation equity sustained and built?
- If a crisis occurs, how is your firm's reputation protected and enhanced?
- Is reputation management part of your firm's overall strategy to build value?
The questions above will help you determine the strategic nature of your investment and who needs to be involved. Whether you are a Fortune 500 firm or any company confronting the issue of reputation management – your risk plan should involve members of your board and executive team. If you don't have a plan – get one! Figuring out the answers to the questions above takes too long to tackle during a crisis – so it is important to answer them in advance.
Secondly, on the practical side, the marketer needs to have answers to any questions that slow down response time. The research shows that the effectiveness of a company's response is most impacted by the speed of that response. So in times of crisis there is a genuine need for speed.. I was shocked to see that of the firms we studied, their long-term course of winning or losing was decided within days, and that these long-term trends lasted for years.
Whether it is in the news media or in the course of your daily business dealings, we are constantly reminded that the magnitude, scope and complexity of risk are rising. For the savvy and visionary business leaders, risk and opportunity go hand-in-hand. Marketers ready to meet these challenges will not only survive; research shows they can grow and prosper. Those firms that emerge from crisis with a winning profile are put on a path to accelerated growth.
I plan on sharing the profiles of responses that appear to “win” and those that “lose” in a future blog. Send me an email if you would like to have a copy of the study.