For a brand, recovering its reputation after a crisis can be a complicated business. The speed with which it recovers depends on a number of factors, including: the brand's reputation before the crisis hit (did it have a lot of goodwill in the bank?); was the crisis preventable by the businesses; and if the business demonstrates that it has learned from the experience.
Johnson & Johnson -- Tylenol recall -- 1982
Back in 1982, Johnson & Johnson found itself in the center of a major crisis. Seven people died suddenly in and around Chicago. The only link between the deaths was that they had all taken a Tylenol pill a few hours before they died.
Once authorities tested the bottles, they discovered high levels of potassium cyanide in the pills. The eight bottles affected came from different factories and stores.
As well as issuing warning notices to distributors and medical professionals, Johnson & Johnson initiated a nationwide recall of Tylenol products (31 million bottles, costing the firm $125 million), set up a hotline, and inspected its factories to double check that the problem hadn't originated there.
Investigators concluded that the bottles must have been refilled with the cyanide pills and returned to store shelves by someone going store to store. Johnson & Johnson worked with the FBI , Chicago police, and the FDA to try and find the killer, offering a $100,000 reward. The crime remains unsolved.
When Johnson & Johnson put Tylenol back on sale, it was with tamper-proof packaging (and coupons for $2.50 off). People were understandably nervous about buying consumer products after the Tylenol case, and in 1983 Congress approved a bill that made malicious tampering of consumer products a federal offence.
Johnson & Johnson handled the crisis well. It moved quickly, cooperated with investigators, provided good information, and issued a full recall rather put other people at risk.
Perrier recall -- 1990
In 1990, Perrier, which had prided itself on its reputation for "natural purity," found itself fighting to keep that reputation as bottles of its water were found to contain a toxic substance: benzene.
Ironically, the impurity was discovered when North Carolina officials used the purity of Perrier water to assess the purity of state water supplies. The FDA quickly announced that it was testing Perrier water in other states, but a spokesperson said that of those samples tested, the benzene wasn't present at levels that indicated an immediate risk to consumers.
Groupe Perrier decided to recall 160 million bottles of Perrier within a week of the discovery, although it was thought that only 13 bottles were contaminated. The cause turned out to be human error, although two stories were circulating in the media -- in one, a bottling plant worker forgot to change a filter, while the other version says that a worker cleaned the production line with cleaner containing benzene.
Groupe Perrier held a press conference announcing the recall some days after the revelations. This is when the cause of the contamination changed from cleaning fluid to someone forgetting to change the filters in the Vergeze bottling plant, which prevented the naturally present benzene from being filtered out.
Although it did set up a 24-hour hotline in the U.K., local subsidiaries received little direction from the parent brand, and the public found it hard to get information. Trading in shares was suspended for several days and resumed at $41 lower than before the crisis. The Perrier brand was sold to Nestle in 1992. Today, Perrier is sold in 140 countries and sells around one billion bottles per year.
JetBlue delays -- 2007
JetBlue, the airline founded on customer centric values, found itself going against its own core values back in 2007. During a major snowstorm over the Valentine's Day period, JetBlue tried to continue operating as normal. It resulted in more than 1,000 passengers being held captive on nine planes that weren't allowed to take off. One plane was held on the tarmac for 11 hours. Thousands of passengers made their way to the airport, only to learn that their flights had been cancelled.
The CEO appeared on various prime time shows, including Letterman, and recorded a message for YouTube, apologizing for the mess and promising that it would learn from the debacle and become a "different company" as a result. It then initiated a flyer's bill of rights, which formalized JetBlue's responsibilities to its customers.
JetBlue has clearly learned from the storm of 2007. It now pre-cancels flights in advance of weather problems (just look at its response to the 2014 winter storms, where it pre-cancelled and provided comprehensive information and compensation to passengers).
Domino's food tampering scandal -- 2009
In 2009, a couple of Domino's Pizza employees filmed themselves doing unpleasant and unhygienic things with the food they were preparing at Domino's. They uploaded the footage to YouTube and it made headlines around the world (they worked at a branch in North Carolina, U.S.).
Things were made worse when the media reported that the company only knew about the video once a blogger alerted them to its existence -- by that time it had been viewed more than 1 million times. As well as issuing statements to the media, Domino's got its CEO on YouTube issuing a forceful statement. It then set up a twitter account -- @DPZinfo -- to answer questions. The media noted that it replied to inquiries in an informal and concerned way.
Now, Domino's has become a bit of a social media star. The info account redirects people to the official account, which has 605,000 followers. All Domino's Twitter accounts are known for their friendliness and customer service. Its YouTube account has 1.5 million views. The Domino's (U.S.) Facebook page has more than 9.7 million "likes." In short, Domino's has realized that social listening is vital, and, in the process, it has found a brilliant way to engage customers and make them want to order that pizza.
Shell pollution -- 1995
The Niger Delta crisis is something that the brand is still trying to recover from today. Yet Shell remains a successful oil company, despite the on-going issues.
In 1995, local tribal leaders called on Shell to clean up pollution that it caused in the Niger Delta. Oil had polluted the local water wells, causing a great strain on a people who were already struggling to survive. The tribal leaders demanded that Shell clean up the wells and share more of its profits with the local population.
Shell left the area in June, following a peaceful uprising, and allegations that it had colluded with the military in massacres and human rights abuses. When the government executed the main campaigner and several other people, without a word of protest from Shell, global protests erupted and the brands reputation disintegrated.
Shell's response was to try to limit the damage by offering money for schools, hospitals, and environmental efforts, and by making promises of inquiries. Within two years, it had changed its brand values to include, as The Guardian noted, the "values of honesty, integrity, respect for people, as well as professionalism, pride and openness, sustainable development and human rights." But it neither apologized, nor admitted any fault in the situation.
Today, Shell maintains its focus on human rights, but continues to take reputational hits. For example, Amnesty International recently accused Shell of making false claims about the environmental impact its operations had on the Niger Delta. It's clear that, while its business hasn't suffered, Shell is far from clear from the reputational damage caused by this crisis.
While some brands handle the initial crisis well and initiate new business practices to ensure similar instances do not happen again, others try to deny their role in the mess. The decision you have to make when a crisis hits is: long-term reputation or short-term profits? Every brand will need a bank of goodwill at some stage. Crises offer brands an excellent opportunity to live their values and do what's right by their customers and others whose lives are affected by the brand.
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