5 Companies Who Had Their Reputation Damaged and Bounced Back
Online reputation is one of the big trends of 2016. Companies have always spent money on trying to improve their reputations. To help you learn from the mistakes of the past, this article has compiled five historical examples of major companies that have seen huge PR setbacks, only to then bounce back.
Johnson & Johnson
The Tylenol poisoning incident happened in 1982. In Chicago, seven residents died when Extra-Strength Tylenol was laced with cyanide. This was outsider sabotage, but it caused immeasurable damage to the brand, and many marketers believed that it could well spell the end of the brand.
The company reacted quickly by recalling 31 million bottles of their product from stores across the nation. Not only that but they replaced the products on offer for free. By putting customers first, their share of this particular market managed to grow by 23%.
Online reputation becomes a bigger issue every time you grow, and so it came as no surprise when PepsiCo had to face one of the great challenges of its life. It happened in 1993 when a syringe was found in a can of Diet Pepsi in Washington state. This anomaly generated headlines, but it wasn’t until the same incident happened 50 more times across the nation that the media took notice.
In the beginning, both PepsiCo and the FDA believed that these reports weren’t true and they couldn’t have happened. After all, nobody had been hurt and nobody had entered the emergency room. Regardless of the truth of these rumors, customers were scared.
The brand continued to build their reputation by defending its record and producing a report, including video footage, on their canning process. This extra transparency was enough to convince customers that it was impossible to have tampered with a PepsiCo can by putting a syringe inside.
The falls experienced in their stock price recovered after a month.
A fairly recent story, JetBlue had to cancel 1,000 flights over a single working week back in 2007. This was due to an ice storm on the East Coast. The way CEO David Neelman handled the crisis, which was out of the hands of the company, was to be candid about the scenario. It would have been easy to refuse refunds and to take the money and run.
Instead, the company demonstrated a commitment to customer care by offering monetary compensation. Neelman also appeared on the nation’s biggest television shows in order to keep customers informed and apologize for any mistakes that the company had made.
BP Oil Spill
The underwater oil spill involving BP made the company the most hated in the US. It happened in 2010 at Deepwater Horizon. An underwater oil pipe burst, allowing millions of gallons of oil to flow into the sea. There were major environmental implications for the nearby coastline and the wildlife.
The side effects were incredible. In a short space of time, the CEO had quit, the firm had sold its assets, and it agreed a $20 billion compensation scheme for the victims of the spill. And BP stations throughout the country saw a huge decline in sales. Many people thought that the company would have to fold.
But by 2011, BP had managed to reverse the huge $6 billion loss it had posted. BP cleared $26 million in income. The company also acted to become more environmentally friendly. It has continually published its commitment to the environment on its website, so it can demonstrate to customers that it has learned from the disaster.
BP is by no means clear from danger. There are still many who don’t trust the company, but it’s steadily persuading customers to return.
The holiday season is always a favorite time of year for hackers. In 2013, it was Target that became the biggest victim. It had to admit to the general public that records for 40 million people, including debit card and credit card records had been lost. This major security breach cost the company $148 million, and the CEO of the company lost his job.
But Target reacted in the right way by making changes to the company and publishing them. It revamped its security and technology departments so as to reduce the chance of such a leak happening in the future. 1,800 stores around the country were changed so as to accept credit cards with more security features. It put Target on the same security levels as the banks.
By 2015, studies revealed that online sales had gone up by 40%, thus demonstrating that people are, once again, willing to trust this brand.
How would you bounce back from such a crisis?