Are You Prepared For A Business Reputation Crisis?

A business reputation crisis can have a negative impact on your sales and deter existing and prospective customers. It puts off your investors, shareholders, suppliers, and potential employees. And it impacts what your employees, friends, and community think about you.

Prevention is better than cure. We know the impact of reputational damage can do to businesses and brands. And you should always 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 impact your finances.

You might think it will never happen to you. Our experience says it could, and 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 increased by 29% since 2014.

In today’s online world, companies risk losing 22% of business when people find 1 negative article. This rises to a whopping 70% with 4 or more negatives. Damaging content has already cost the consumer market in the US a huge $537 billion in business. Customers are switching because they’re unhappy with the 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.  Each of these can affect your company in different ways, such as:

• It damages your reputation. News during a PR crisis can affect your reputation by appearing in search engines. Damaging stories can become a social media crisis can impact your page one and two search results in Google.

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

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

Remember when United Airlines dominated the headlines in 2017? A man was removed from an overbooked flight and 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 is 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 not prepared are more likely to make poor decisions that will have long-term effects. For example, your customers could see your business in a negative light if you 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. Include representatives from across your company and sites. It will help you assess any vulnerabilities.
2. Assess any weaknesses and address them.
   • Get your team to brainstorm and identify any potential weak points. 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 business and marketing strategy. It should address the following:
     • Internal and external stakeholders – who will handle 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 you can use for the media
4. Track your brand and set up alerts.
   • Real-time brand monitoring can help you to identify and address any criticism or negatives on social networks.
   • Google Alerts is useful for monitoring but can be combined with other online reputation management tools.
   • Don’t just monitor your brand, track mentions for your key executives too. A personal reputation crisis can have an impact on your company.

What to do if a crisis hits?  

Activate your crisis plan with your team. You should keep all stakeholders informed throughout the process and maintain regular contact.

Clear and concise communication will maintain the trust that your key stakeholders have in your company.

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.

Now is the best to think about using reputation management to repair any damage. If search results 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. We help restore a damaged company reputation.