Are You Prepared For A Business Reputation Crisis?

A business reputation crisis hits your sales and growth, deterring existing and prospective customers. It puts off your investors, shareholders, stakeholders, banks, suppliers, and potential employees. And it impacts what your employees, friends and community think about you.

Prevention is better than cure, trust us, we know all too well the devastating impact of reputational damage to businesses, brands and individuals. And it pays to be prepared.

A crisis is an event, or series of events, that threatens an organization’s existence. It can disrupt business operations, damage your reputation and negatively impact your finances.

You might think it will never happen to you. Our experience says it could, and probably will, at some point.

• 46% of the companies we surveyed in 2018 are being damaged by or are worried about negative content online – that’s gone up by a staggering 29% since 2014.

It’s because in today’s online world, companies risk losing 22% of business  when people find just 1 negative article online. This rises to a whopping 70% with 4 or more negatives. Damaging content has already cost the US consumer market a huge $537 billion in business – with customers switching because they’re unhappy with a company. 

How can a business reputation crisis affect your company?

There are many different types of business reputation crises, from product recalls and stolen data to bad reviews and even an improperly timed tweet, leading to a social media crisis.  Each of these can affect your company in different ways, such as:

1. It damages your reputation. News during a PR crisis can affect your reputation by appearing in search engines. Damaging stories can appear in the media and online and will impact your page one and two search results in Google.

Negative stories will hit that positive reputation that you’ve spent years building.

1. It leads to lost revenue. Negative changes to your online reputation impact your bottom line.

If your positive page one search results drop down in the search results, your website traffic suffers. Remember when United Airlines dominated the headlines in 2017 when a man was removed from an overbooked flight. The airline took a 2.5% stock hit after that crisis. The full estimated loss is around $700 million.  

What is business reputation crisis management? 

There are two types of crisis management- reactive and proactive. Reactive takes a ‘firefighting’ approach, waiting for a crisis to happen and then dealing with it. Whereas proactive is the planning that organizations take to overcome any potential issues.

It can be tempting to put off planning your crisis communications when things are going well but businesses that are unprepared are more likely to make poor decisions that can have long-term effects.  For example, your business could be seen in a negative light if you’re quick to respond without all the facts.

Which is why it pays to be smart, planning ahead to handle a crisis should you need it. The three stages of crisis management are before, during and after the event.

How to prepare for a business crisis before one happens

Before an issue arises, you can put your crisis plan in place. Take the time to identify and train key internal stakeholders and draft your response plan. This should form part of your online management strategy so that you can take back control.

1. Bring together a crisis management team.

Your CEO should lead this, with senior executives, heads of department and your head of public relations. Remember to include representatives from all your departments (and regions if you operate across different sites). It will help you assess any vulnerabilities.

2. Assess any weaknesses and address them directly

Get your team to brainstorm to identify any potential weak points and create a  comprehensive list of anything that could cause your business harm. By doing this you can address and fix any problems before they become a crisis.

3. Draft a crisis management plan

You should draft a crisis management plan as part of your company’s online reputation strategy and business and marketing strategy. Make sure it’s customized to your business. It should address the following:

• Internal and external stakeholders, who is responsible for what.
• Identify who the spokesperson for each communication channel is (including social media sites).
• The chain of command for decision-making.
• Contingency plans.
• Holding statements (in draft form) that can be used for the media.

4. Monitor your brand and set up alerts.

Brand monitoring can help you to quickly identify and address any criticism or negatives on social networks. Google Alerts is useful for keeping up to date with online mentions but can be combined with other online reputation management tools. Don’t just monitor your brand, monitor mentions for your key executives too, as a personal reputation crisis can have an impact on your company.

What to do during a crisis 

Activate your crisis plan with your team. You should keep all stakeholders informed throughout the process and maintain regular contact. Clear and concise crisis communication will maintain the trust that your customers, external stakeholders and investors have in your company’s reputation.

How do you recover after a business reputation crisis? 

When you’re in the thick of a crisis, it’s difficult to think about anything else. But there is always the recovery period, and it’s best to think about using online reputation management to repair the damage. If your search results are turning negative, which don’t show your company in a positive light, this will help you strengthen your online presence.

Igniyte helps companies to protect against, prepare for and tackle a business reputation crisis – restoring damaged reputations online.