Your brand reputation and the corporate culture has the potential to minimize the impact of a crisis
A brand that is worth its reputation can play out well for corporations undergoing a crisis, and prove to be the difference between retaining, and losing customer loyalty. Positive brand reputation is one of the most valuable assets that corporations intensively invest in. Corporations spend fortunes building brands, and put together good public relations around them so they remain favorable, and ahead of competition.
Let us have a perspective on this view by turning back the hands of time to four years back, when the world top brand, Apple, announced the introduction of iOS 6, an operating system with an Apple self-designed mapping system (a move that would see Apple detach its reliance on Google maps).
In June 2012, Apple announced that the new mapping system will provide ground breaking real time traffic experience, and a turn-by-turn navigation function. The innovation received a warm and outpouring support by car makers including Toyota, Mercedes, Honda, Audi and BMW.
Apple eventually released its iOS 6 on its iPhone and iPod in September 2012, allowing users with older devices to upgrade to the new system, whilst new gadgets were pre-loaded with the new map. The Apple map, however, turned out malfunctioning. It misplaced landmarks, miscalculated distances, named features incorrectly, and made some features nonexistent, escalating the issue into a crisis. With over 2 million purchases of iPhone 5 within 24 hours of launch, the map malfunction was an instant crisis with potential to dent Apple’s 'midas touch' reputation. In a specific case, the Australian police advised motorist against using it, describing it as life threatening because a motorist was misdirected into a national park, whilst others drove themselves into potential accidents.
Apple received criticism from both the media and consumers. The Dutch satellite navigation company TomTom, which was responsible for the map data distanced itself, placing the crisis focus on Apple. The crisis also took a toll on Apple, as stock hit a slump of more than 20% to $US547.06 in November 2012 from above $US700 in September 2012.
Realising the level of damage the brand reputation would suffer (and apart from the vice president leaving the corporation), the Chief Executive Officer, Tim Cook made a public apology (even though other options were plausible), and admitted they had fallen short on their promise. Further, Apple offered its users adjusting information on alternative maps, with a promise to improve on their product. The apology alone had the potential to moderate the crisis as stakeholders associated the action with Apple’s acceptance of responsibility. The apology was given on the back of the investment that Apple had already made on its brand reputation. Not only did the apology reduce the impact of the crisis on Apple and its consumers, but it also gave assurance for continued innovation and quality of its products. Apple's persistence on its history on quality and innovative products (as the salient message in its communication), also influenced the direction of discussion, generating sympathy and inducing user’s continued appreciation and identification with the brand. Further, by offering information on alternative maps, Apple helped to reduce psychological, physically, emotionally, and financially stress on users. Apple positioned itself as a caring and listening brand as reputation threats increased.
Apart from redirecting its map users to competitors as a recovery strategy, Apple invested in developing a map application with Google, underlining the importance of building rapport within an industry, and their commitment to a promise. Apple’s reputation played out well for the brand as, despite the crisis, consumers were sure the brand would eventually deliver a quality map product, and they did by December 2012. The iPhone 5 launch hype and the media focus on the launch generated before the crisis also played out well for the brand as the map was just one problem on a quality product with other functions working.
Taking into consideration the reputation of the company, it is compelling to suggest that investing in quality of brands, and achieving successes with the brand reputation cannot just win you loyal customers, but also protect you by retaining your customer base and your brand’s public reputation when a crisis occurs. Apple reputation of providing world-class products continue to create a market reputation in which its products are seen favorably as before.
Crises involving well reputed organisations may have less negative impact than for the lesser reputed organisations. What is your brand or corporate reputation?