Brands in Crisis: 5 Questions With Interbrand CEO Jez Frampton

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It seems that, with each new day, there’s a new brand in hot water for a statement, service issue or product failure. No doubt a symptom of our always-on and hyper-connected world, there’s nowhere for brands to hide once they’ve made a mistake. Paola Norambuena, Chief Content Officer at Interbrand, sat down with Interbrand Global CEO Jez Frampton to discuss how brands can face a crisis moment head-on.

While your first instinct may be towards letting things blow over, preparation and fast, decisive action are key for weathering a crisis. Learn the importance of a strong brand for shoring up for a crisis moment, and why it’s crucial to step back and look at the big picture, even when everyone in your organization is focused solely on what went wrong.

Paola HeadshotPaola Norambuena (left): What kind of asset can your brand be in times of crisis? Do people forgive brands they care about faster, or is your brand’s performance in a crisis a combination of existing brand strength and how it handles the situation in the moment?

 

Jez HeadshotJez Frampton (right): In times of crisis, your brand is actually a protective measure. When we provide valuations for brands, one of the ways we look at brand strength is as a risk reduction mechanism. Brand strength—customer loyalty, competitive strength, long-term earnings capability—shows how your brand is able to resist a situation where people perceive another product or service to be better, or retain confidence in your brand in times of crisis.

When thinking about customers’ relationship to your brand, I think there’s a very big clue that we can take from interpersonal relationships. If you’re going to seek forgiveness, the first thing you need to do is admit that you were wrong. By recognizing the issue, people are more prepared to listen to what you say next when you admit what went wrong, acknowledge the problem, and lay out in broad terms what you’re going to do about it. This is vital—and the sooner you address the channels making the most noise (most often social media), the better.

PN: There are lots of things brands can do to be prepared, but crises can be incredibly unpredictable. With that in mind, how can a brand best prepare for crisis?

JF: It’s the responsibility of boards of companies to identify and mitigate risk through governance. Whenever something goes wrong, we’re very focused on dealing with that immediate issue. One of the things I would advise leaders to do is to train themselves to stand back and take the wider view.

The way customers see you is the way you need to look at yourselves. Stand back and look at the whole situation, not just that this individual product has failed. This is about your company reputation—your brand.

Our mechanism, brand strength, helps you look at the nature of your loyalty and the long term income this generates for your brand. Once you have a strong grasp on the value of your brand, there are some quantitative measures you can take immediately to see how a crisis will affect it.

PN: We’ve talked a lot about preparation, but if a brand in trouble came to you and asked “What should we not do?” what would you say?

JF: The most important thing is: Don’t do nothing. Doing nothing is not a response or a strategy. Due to the speed of communications, the longer you wait, the worse things can get. However, this doesn’t mean you should jump in and say anything. Be prepared, have prepared strategies in place. Don’t just rush in front of the cameras, understand the perspective not just from the board and the executive suite, but what people think about it and how they view it from the outside. Make sure you’re using the right kind of language and making it clear that you’re listening—a great way of showing that you’ve listened is using some of their language back to them. Stand back from the immediate issue at hand to make it clear this will never happen again.

It’s easy to fall into the trap of just worrying about one product or event when really this issue raises a question mark over your whole portfolio. Put the crisis into the context of the business and its long-term plans—then you can use your brand to say that this is something outside the way we normally do business and see our role in the world, and we will fix this because it’s totally out of character. It’s a very simple way to turn an individual response to a crisis into a larger brand message.

PN: What should the brand team focus on while a crisis is going on, and how does Interbrand help in a crisis?

JF: Their role is to make sure the board and the CEO understand what the issue is from a brand perspective. Our brand is the means by which we maintain loyalty with our customers and our staff, and therefore this issue has longer-term ramifications. Even if you’re selling gas from a pump, 15 to 20 percent of the reason people choose you is for your brand. If you’re selling cars to put that gas into, 70 to 80 percent of the decision is down to the brand. If your brand is not looked after properly, the long-term effect can be significant. Your brand team needs to remind people in your organization of these long term effects, but can also help in the short term by crafting the right messaging and communicating clearly with partners.

Interbrand’s role fits into this space as well. Many companies already work with agencies known for crisis managment—they’re who you call first—but we fit in as a swift second call. After talking to someone about the immediate issue, we can talk about the longer implications for your brand and business growth.

PN: What can a brand learn in a crisis and how can they use that to help the brand grow?

JF: There’s lots of evidence that, when customers have a problem and you resolve it well, their loyalty goes up significantly. You can have a relationship with a customer where nothing ever goes wrong, but if you have a problem and resolve it, their loyalty level will be even higher.

Corporate purpose is increasingly important, and a crisis is an opportunity to say “This is what we’re actually all about.” We all understand that what’s behind most products—cars, mobile phones, even a salad we order for lunch—is extremely complicated. People can accept and understand when mistakes happen happen. What they can’t accept is when there’s no apology, no clear path forward, and no admission that something wasn’t right.

A crisis is an opportunity to say something positive and reinforce what you’re about as a company, and make your brand even more attractive.

This article first appeared in www.brandchannel.com

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