Several major brands found themselves in a reputation crisis in 2015, illustrating the value of proactive reputation management and the impact of a damaged reputation on a business.
Volkswagen inflicted significant damage on their brand in 2015. Earlier this year, press reports revealed that the car maker cheated diesel emissions tests, which made their vehicles look more energy efficient than they actually were. The company was fined $18 billion, saw its share value drop 20%, and had to recall 11 million cars.
This has generated months of negative press and social media activity, damaging Volkswagen’s online reputation. Igniyte’s managing director Caroline Skipsey was asked by Sky News how Volkswagen could restore trust in their brand. She argued that the firm needs to be completely honest with customers and shareholders to avoid harming their reputation further.
Volkswagen has initiated a transparent crisis management strategy, apologising profusely for cheating emissions tests and promising to engage in efforts to restore “public trust” in their brand. However the scandal shows no sign of slowing down as we head into 2016, and we still don’t know what long-term effect it will have on their online reputation.
Telecoms firm Talk Talk also faced a major brand reputation crisis this year. Igniyte’s director Simon Wadsworth wrote on his blog that the company was hacked earlier in 2015. This resulted in 221 million email addresses being compromised, and Talk Talk’s response only made things worse.
The company closed down their entire website and froze all social media activity. This caused their customers to panic, highlighting how bad things get when you don’t have a management strategy you can implement in the aftermath of a reputational crisis. This caused significant damage to Talk Talk’s reputation. Figures quoted by The Drum suggest that the company now has almost as many customer complaints as EE – both have far worse records than any other UK telecoms provider.
Subway was also confronted by a serious reputation crisis in 2015, when the company’s spokesperson, Jarred Fogle, pleaded guilty to child pornography charges. Subway’s reputation score fell from 77 to 71 on the latest survey from The Reputation Institute. Brad Hecht, the Institute’s chief research officer, was quoted by Nation’s Restaurant News saying that “by any definition, a five-point move in any direction is significant.” He also said that Subway’s “overall reputation has definitely been impacted by the Jared situation.”
Consumers strongly associated Fogle with Subway’s brand, because they used him to promote a healthy eating narrative. Hecht argued that “the problem is, they didn’t change the narrative” and that “what replaced it became price and a singular spokesperson.” So when Fogle’s reputation was ruined, Subway’s was dragged down with it. According to Hecht, Subway have handled the situation well; they’ve cut ties with Fogle and focused on developing a reputation for sustainability, to improve their brand’s image with consumers.
Volkswagen, Talk Talk and Subway responded in different ways when they were confronted by reputation crises, to varying degrees of success. However each crisis was caused by the respective companies own employees and could have been prevented, which is why you need to get proactive with reputation management.
Businesses are now looking to hire a reputation manager, if you assign reputational risk management to a single employee, you create accountability. A Business2Community article explained that this employee would be able to take on a number of tasks, including:
- Assessing your company’s reputation online.
- Measuring and monitoring your company’s reputation on a continual basis.
- Evaluating the reality of your business’ reputation.
- Identifying, and then closing, the gaps that exist between reality and reputation.
- Keeping track of your stakeholders’ beliefs and expectations.
Therefore if you hire a single reputation manager at your company, they can oversee staff operations. This allows them to safeguard and improve your business’ reputation both offline and online, because appointing one person to oversee reputation reduces the risk that human error poses to your brand.
Safeguard your brand’s image
Volkswagen, Talk Talk and Subway proved this year that the actions of your employees can damage your company’s reputation online. However if you hire a reputation manager, they can oversee employee conduct to safeguard your online reputation with your target consumers.