Few events are likely to have more devastating effects on a company — or even the industry it represents — than being exposed for deliberately misleading customers about the safety of its products.
The sunscreen industry may be forced to crawl out of a ditch due to this sort of deception. Last month, a San Diego law firm filed suit against the biggest providers of sun protection products — including Coppertone, Hawaiian Tropic, Banana Boat, Neutrogena and Bullfrog — alleging that their waterproof sunblocks widely advertised as providing all-day protection simply, well, don’t.
Whether the allegations are true or not remains to be seen — as does any impact the litigation may have on these firms’ financials. Even if the claims are not true, though, they have introduced an element of uncertainty.
Now, fairly or not, Coppertone et al must work to win back the trust of their customers — at least, the ones who worry about skin cancer. It won’t be easy. It can, though, be done.
Rebounding from the Worst
Indeed, companies and public institutions have rebounded from worse catastrophes by taking what comes down to common sense actions: Don’t make excuses. Say you are sorry. Show you are sorry. Take responsibility for any damage or harm. Don’t listen — too much at least — to your lawyers when you craft your communications.
“It will take a long-term commitment on the part of the company, but it can be done,” Don Peppers, co-founder of Peppers & Rogers Group and co-author of Return on Customer: Creating Maximum Value From Your Scarcest Resource, told CRM Buyer.
He points to Citigroup’s experiences in Japan in 2004, when the firm was ordered to shut down operations for a year after it was found that it was, in effect, bilking high net worth customers. Some of the details reported in the press were particularly infuriating, such as managers selling second grade art as investment quality, Peppers said.
When those accusations became public, they did not sit well with Japanese consumers, to say the least. However, over the course of two years, Peppers continued, the company has rehabilitated its brand in the country to a large extent through a careful PR campaign designed to show it had changed its ways.
You don’t have to err on the scale of Citigroup, though, to damage trust with your customers.
“There are many ways that you can lose your customer’s trust,” H. David Hennessey, faculty director and professor of Marketing and International Business at Babson College, told CRM Buyer. “For example, you [said] the shipment of jackets would arrive on Wednesday, but they will not arrive until Monday, so the retailer loses four to five days of sales.”
The company should resist the temptation to explain the circumstances and leave it at that, he said. “While this may make you feel better, it usually does not make the customer feel better. In fact — in most cases, the customer will feel you are making excuses,” he said.
The Gold Standard
“It is critical to empathize with the customer and rectify their problem as quickly as humanly possible,” he said. “The customer needs the jackets now. Maybe you can find another retailer with excess jackets and have your salesperson pick them up and deliver them to the store today.”
In other words, be proactive in solving the problem — even if you are not at fault. Hennessey points to an extreme example of such a scenario that actually took place: Johnson & Johnson’s reaction when its Tylenol containers were tampered with in the 1980s resulting in several deaths. Its response has become the gold standard for crisis communications.
“J&J immediately withdrew all their product from the shelves, costing millions of dollars,” Hennessey said, and “then produced tamper-proof containers for all their products.” Sales of the product dropped initially after what happened, but some six to 12 months later they were at higher levels than before the incident.
“Doing the right thing immediately in the best interest of the customer is always the right thing to do,” Hennessey said.
Because Johnson & Johnson reacted the way it did, it did not have to cope with a secondary crisis — an outcry over its response to the initial situation, said Suzanne Bates, president and CEO of Bates Communications. “This is where a lot of companies go wrong. There is a real danger that at the beginning of a crisis, they don’t proactively address the situation — they just don’t communicate at all,” she told CRM Buyer.
“The first thing they tend to do is talk to lawyers who tell them to wait and say nothing. So they go dark, and during that period a secondary crisis develops because they are seen as not being candid or not caring, or [not] even interested in the issue.”
Getting a response out immediately — even if it just says “we are studying the issue right now and take this very seriously” — is essential, she said. “Yes, you have to consider liability, but there is more at stake than just liability.”
Accusations that strike an emotional chord with consumers can severely damage the reputation and sales of a company’s products or services — even if the claims are not true, said Petri R.J. Darby, president of DarbyDarnit. “Companies under attack must respond swiftly and on many levels to protect the organization’s good name,” he told CRM Buyer. “Even if they choose to battle the claims in court, they must recognize that in many situations, winning in the court of public opinion is just as important — sometimes more — than winning in the courtroom.”
A Costly Endeavor
Even if a situation doesn’t wind up in court, it is going to cost, warns Dennis S. Reina, author of Trust & Betrayal in the Workplace and co-founder of the Reina Trust Building Institute.
“To regain trust with a customer, you have to give back what was perceived to be taken away,” he said. That could mean a refund or access to medical care if a product caused that level of damage.
Free credit monitoring — which is what many companies will typically offer if they have been careless with their customers’ personal information — is another possibility. Bill Getch, president of Professional Services PR, compared the response of such companies — ChoicePoint, Ameritrade and LexisNexis — and found there are certain steps they must take in order to rebuild trust.
“Companies like ChoicePoint get in trouble when they take things out of sequence and start to try to fix reputations before they’ve defined and contained a problem,” he told CRM Buyer. “That’s when people smell the spin machine and get really upset.”
Step one: The company must recognize there is a problem. This includes contacting authorities, contacting affected parties, hiring investigative or forensic experts, and informing the public.
The next step is to contain — or rather, define — the parameters of the problem, he said.
The final step is actually resolving the problem, Getch said. “No one is going to hear the ‘trust’ message until you’ve done steps 1 and 2.”
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