A contributing factor of customer loyalty involves how a company responds to crisis situations, a Crisp report found. With the proliferation of social media, news of a crisis can spread quickly, impacting consumer perceptions and company reputations. Companies must adequately prepare themselves for how to handle difficult brand situations, or else risk losing customers and esteem, the report found.
Crisp’s 2019 Crisis Impact Report, released on Thursday, surveyed 2,000 consumers in the US and UK to determine how brand crises affect consumers. More than half (53%) of respondents said they expect brands to respond to a crisis within an hour, indicating the importance of rapid response from brands.
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Responding quickly can be difficult though, as news travels faster than ever via social media. Consumers are more likely to share news of a brand’s crisis on social media (40%) than they are face-to-face (29%), the report found. Nearly half of respondents across age groups (47%) cited social media as the preferred channel for receiving a response from a brand about a crisis.
The influence of social media on brands shouldn’t be surprising, as social media use has experienced steady growth over the past decade, according to Pew Research’s 2019 Social Media Fact Sheet. Today, 72% of the US public uses some form of social media, and the majority of Americans visit sites like Facebook (74%), Snapchat (61%), and Instagram (62%) daily.
With how often Americans use social media, it’s no wonder the platforms are essential for companies’ public relations. “Social media plays a critical role in a brand’s reputation,” said Bryony Wardell, director of communications and marketing at the University of South Carolina. “It gives brands the opportunity to shape their identity and the way consumers perceive them on a daily basis, but what makes it unique–compared to websites or other traditional media–is that consumers can interact directly with the brand. Engagement is the powerful differentiator.”
However, social media is a double-edged sword, the report said. While social media can spread positive sentiments about a company, it is also a medium for bad press.
Major companies don’t have much room for mistakes, especially with social media placing them front and center in the public eye. Any organization, and individual, is bound to experience a crisis or mistake. Consumers consider popular company crises to include the mistreatment of workers (64%), ethical misconduct (59%), CEO misconduct, and the mistreatment of customers (58%), the report found.
When organizations undergo these crises, those affected—the customers—expect some sort of public response, and fast. Some 34% of consumers expect a response on social media to a crisis within 30 minutes of the news, the report found.
“In a crisis, powerful platforms can work for or against a brand, depending on its ability to respond strategically,” Wardell said. “Social media moves at an exponentially faster pace in a crisis, which poses a big challenge to communicators who need to take time to confirm facts and craft messages before disseminating them. Respond too quickly, and you might get your facts wrong, making things worse, but wait too late and the crisis could snowball. Speed, accuracy, and context are competing priorities in a crisis.”
And, a brand’s response is a large determinant of customer loyalty, with 90% of consumers saying they are more likely to shop with a brand that responds well to crises. If companies really want to stay in the good graces of consumers, the response should come from the CEO: 59% of consumers want brand responses to a crisis to come directly from the top, the report found.
“Consumers want to see brands take steps toward sincerity,” said Nicole Greene, senior director and analyst at Gartner for Marketing. “[People] look more favorably upon brands and executives who make apologies.”
The biggest mistakes brands can make in addressing a crisis included not accepting responsibility for the crisis (28%), not acknowledging the crisis (20%), failing to offer a solution to prevent similar issues (15%), and not responding fast enough (13%), the report found.
If an organization handles a crisis poorly, more than half (55%) of respondents said they warn family and friends about the company, unfollow the company on social media (37%), or post something critical about the brand (25%), the report noted.
United Airlines Flight 3411 is an apt example of a brand crisis gone wrong on social media. In 2017, a man was forcibly dragged off the United flight by airline employees. The man was left bloody and bruised, reported CBS News, and a video of the incident went viral online. United sparked outrage with customers, when United CEO Oscar Munoz waited a day to respond to the event, and simply said, “I apologize for having to re-accommodate these customers,” including the individual aggressively removed.
How companies should respond
While bad news might spread fast, responses to a crisis can too, Wardell said. “On the upside, social media gives brands the ability to monitor for and respond quickly to a crisis situation,” he said. “They can dispel rumors in a public and transparent way, and they can control the message directly versus having to wait for reporters to pick up their side of the story.”
As noted in the report, “bad actors have weaponized social media. Brands have the power to take it back.” The report recommended brands put a plan in place by brainstorming crisis scenarios, preparing for the worst, and drafting responses.
The report outlined an example of an organization that used social media to mitigate an operational crisis. In 2018, a logistical error resulted in a massive chicken shortage in many KFC UK locations, forcing many stores to close. In response, KFC ran a clever advertisement, with a picture of a KFC bucket that had the brand’s letters rearranged to spell “FCK.” Under the photo, the company simply put “We’re Sorry.” The stunt went viral on Twitter, winning back their fans’ hearts, the report said. Some 32% of report respondents said they had a positive recollection of how KFC handled the crisis.
“A lot of it is being agile, knowing where your brand stands on relevant issues, and developing guardrails for how you’re going to speak to it. Then, understanding consumer expectations of how your brand should behave on social media,” Greene said. “So that, when these moments arise, you’re ready to respond in a way that puts you in the conversation. It’s important for brands to actually be involved when consumers expect them to be, not just after they’ve had the time to prepare for it. They need to pre-prepare.”
Any organizations can pre-prepare and prepare, regardless of size or budget, Wardell said. By actively listening to their audiences, companies can learn what their consumers expect from them and attempt to deliver that during a crisis, he said.
Greene built upon this idea when she said, “It’s really understanding what your key target audience wants and expects out of you, by making sure you’re delivering that based on your brand values, and who you are as an organization.”
With 66% of respondents saying they are unlikely to shop with a brand that responds poorly to a crisis, according to the report, brands must think ahead and have a crisis mitigation plan in place.
All disaster management plans will be different, but a general best practice for organizations is to have clear communications plan in place, reported Mary Shacklett in 5 best practices for disaster management. In the event of a brand crisis, employees should know exactly what their responsibilities are, who they are directed to, where they should go, and what the end goal is for recovery, she wrote.