In the afternoon heat of 27 July, a sweltering Soho shut down; shops were closed, Oxford Circus tube station closed, people were sent home and the gaudy Piccadilly Circus signs were no more. This was not an accident or a national emergency, but a deliberate power-down by EDF Energy, which struggled to cope with the demand for electricity in the heatwave during the summer. Companies were urged to switch off air conditioning units and power-down in offices, costing businesses hundreds – if not thousands – of pounds in lost earnings.
Having spent £25 million on a recent rebrand, the consequences of this ‘crisis’ could have been fatal for EDF – which owns the distribution network in central London – so how did it manage to keep its brand afloat, rather than taking a duckdive down into the murky waters of brand destruction? Most importantly, what can others learn from its experience?
Patrick Barrow, MD of the Public Relations Consultants Association (PRCA), comments, “Although I find it bizarre that EDF Energy did not anticipate a surge in power during the heatwave, the way they handled it was good: they were seen to be accessible and reasonable. [Its director of communications] was always on the radio and TV and he said and did the right things; he apologised, explained the circumstances and was seen to be accessible and reasonable.”
Meanwhile, a similar situation has arisen for Airbus, it seems, as its announcement of the delay of the Superjet Airbus A380 (the biggest aircraft built to date) rollout came weeks before its very public launch at the Farnborough International Airshow on 17 July.
While a couple of aircraft have been delivered, those to be received in October will now not be ready until April 2007.
The owning consortium did not help its own cause by fighting under the hawk eye of the media, with all parties blaming another for the delays. Airbus was unfortunately unavailable for comment on the situation, which could have long-term repercussions for the company, which has been so vocal in publicising the largest (or maybe the most delayed) superjet ever built.
Brand damage
These PR disasters can prove extremely damaging to a business even if – like many B2B organisations – it does not have much of a public profile. However, to what extent does the handling of a difficult business situation affect the brand? If the brand is a representation of an organisation’s reputation, a promise and a message to customers and clients alike, it should therefore be essential that it is refreshed after such an occurrence.
As director of communications at EDF Energy, Gareth Wynn is better placed than most to comment on this situation. “Damage to a brand depends on the way a situation is handled. If you have strong brand equity and people recognise the positive attributes of it in a difficult situation handled well, then damage can be short-lived and not severe. But if you don’t do the right thing it can do significant damage as it will be recognised for its failure.”
Drew Nicholson, MD of integrated agency DNX, says there is the potential for longer term repercussions. “There has to be some element of negative association for a brand in the direct aftermath of a situation. But it comes down to the question of whether the problem was a one-off or whether it is endemic. If the EDF situation is a one-off, then it has a much better chance of getting back on track. Airbus has a bigger problem with the structure of the company. The logical consequence is that there will continue to be problems and so more bad press will follow.”
Nicholson continues, citing a B2C example in the form of the recent Salmonella scare at the Cadbury’s chocolate factory. He points out that brand loyalty can help to overcome a crisis such as this, although only if the situation is a one-off. If this Salmonella scare is a one-time occurrence for Cadbury’s, consumers are likely to forgive it, as the company is a long-standing household name. However, endemic problems will definitively lead to brand scepticism and eventual mistrust and disengagement.
Nothing but the truth
If a brand is to ride out the storm of criticism – and simultaneously retain brand trust – it seems that one of the most important factors is telling the truth. It is not only being seen to be telling the truth to the media in order to avoid bad press, but it is essential that the image of a company in a public situation reflects the brand promise.
Barrow of the PRCA uses the example of Thames Water on the back of the hosepipe bans this year. “Thames Water imposed a hosepipe ban while most of the water wastage was from their bad piping networks and it was reported that they were even using steam cleaners in their offices,” he says.
The water company can be seen to be sending out an untrustworthy marketing message as its campaigns were encouraging consumers to save money, whilst it was reportedly well known that the company itself was wasting water through bad piping. This was quite damaging as it led to significant brand disengagement. The company was fined by regulator Ofwat and was then further penalised for environmental damage.
Wynn of EDF, concurs with the need for truth. “If a brand is open and honest it shouldn’t in the short-term undermine its integrity in the long-run. It comes back to the basic principles of what the point of marketing and PR is: it’s about making promises to customers about what you really are; if you do not live up to it, you’ll soon be found out. No amount of marketing or PR can undo this. You need to position yourself on the basis of what you are providing to ensure that is not too different from what people will find when they scratch the surface.”
Nicholson of DNX, reiterates, “Telling the truth is what it all comes down to, rather than putting spin on it. Spin always gets found out in the end.”
He cites the example of the launch of Talk Talk, the broadband package from The Carphone Warehouse. The company was inundated with requests for the service and, consequently, its customer service levels dropped significantly. Instead of using a false marketing promise, MD Charles Dunstone publicly recruited more staff.
“In my view he’s hiring 1000 staff to fix the problem. This is good because he’s not just going ahead with some marketing that promotes its customer service. This would be false as it’s evident that they’re not great at customer service at the moment.” Nicholson continues, “If they fix the problem, they can then claim that they are the best company for customer service, for example. They have averted a much bigger problem. Therefore, it seems to me that if they do marketing on the back of the problem they have fixed, they can rightly claim that they are providing a better service.”
Handling charge
While total disaster can sometimes be avoided through minimising spin, telling the truth and fixing problems before turning to marketing to paper over the cracks, what is the best way to handle a crisis when the inevitable does occur? In some cases, having the knowledge and understanding in place well before a crisis is even forecast, can greatly minimise brand damage.
Be prepared. Preparation is key for handling crises, as Wynn of EDF comments, “In this circumstance the key is to have a well-documented plan so that everyone knows what they’ve got to do; everyone knows who is going to talk to the media, who’s in charge of the emergency committee and who is clearly responsible for an overall emergency: you have to practice this as well.” He continues, “In our case [EDF] we have a properly documented contingency plan where various people in an organisation make decisions on the development of the situation. In this case we activated it and the roles in the plan were identified, so it was easy to manage the situation from the communications plan and I even had a technical update, so I could prepare a public statement and then go out and deliver it.”
Gary Allden, head of corporate marketing at HP, recognises the need for a plan, but places emphasis on its renewal. “It is critical for any large business to have a crisis and issues plan in place and also a management team in place if a crisis should occur. It is also important to view it regularly, if not every six months. You should regularly test the process, and flush out any problems in the processes.”
Take charge of the situation. In times of crisis it is often the PR department which provides a public image of an organisation. However, should other departments become involved, what are their roles and when do the marketing department take their cue?
Barrow of the PRCA, comments, “It shouldn’t be the sole onus of the PR department and a crisis needs the collusion of other departments, although PR should be leading it. The PR representative may often have to deal with what the world thinks of the company and he/she has to think of what the internal thought is. If, for example, you have a call centre, you have to be aware that they need to pick up what you’re saying. You have to make sure you get the line right with the PR department if you have call centre staff answering calls.”
Ray Jones, head of communications at the Chartered Institute of Marketing (CIM), sees integration as key, “Crisis will result in damage to a brand, which is clearly a concern of the marketing department. While the specialist PR professional will be experienced in the complexities of liaison with the media and reputation management, the marketing department – which will have the most detailed understanding of the value of the brand – must work in tandem with their colleagues in PR to ensure that a brand value is protected. In times of crisis, no department should work in isolation – although PR has the leading role.”
Be proactive. It seems that reactivity is a bad choice for handling a PR disaster, as Wynn of EDF says, “Proactivity is important, because if you wait for the media to come to you, then you are on the back foot and are less likely to get your point across. If you take our experience, if we can get the information to customers early on then they are less likely to swamp our call centres and become frustrated.”
He continues to say that EDF’s proactivity also involved notifying other key stakeholder groups to which customers could turn for information – such as the Greater London Authority (GLA), local MPs and the energy minister – to ensure that information was available from all avenues of contact with the public.
Be open and honest with the media. Press briefings can be a great way to get your information to reach the people who need it and quickly. However, they come in different forms and are not always totally advisable.
How should press briefings be handled? “Carefully!” as Barrow of the PRCA comments. “It is a rare set of circumstances in which you would set up a press briefing, it would have to be a really serious case, such as an air disaster. Holding briefings for the sake and illusion of doing something will undermine you when you do have something to say. The answer is: make damn sure you are playing the game at your pace.”
However, Wynn at EDF sees a distinction between traditional press briefings and methods of transferring information through the correct channels.
“There is a distinction between a press briefing where people are gathered in a room and contacting individuals. The press briefing has a place if something has happened in the past and is not getting worse or changing, as you may be in the right situation to put the message to lots of different people at one time.”
He continues, “However, more often we find that issues/events are developing and ongoing, so it is better to have tailored updates to media outlets as they work with different deadlines and have a tailored audience.”
He concludes, “Individual discussions with [information] outlets is the most important point.”
Disaster master
‘PR disasters’ can therefore not always be avoided, but when and if they do occur, the way they are handled can significantly affect brand promise: whether in a negative or positive manner.
Truth, it seems, in such crises is essential if customers/clients are not to lose faith in a brand, which can quickly lose credibility if it does not tally with the actions of an organisation on the event of a serious business problem.
Planning is key in situations such as the EDF power-down: knowing your staff and who is responsible for what actions can avoid a media frenzy when it becomes evident that headless chickens are running around trying to pick up the pieces of a business in crisis.
It seems that the disaster zone can sometimes be steered round and organisations can emerge smiling, or at least relieved, with brand values intact if the disaster is handled effectively and honestly.
How to handle a crisis
It seems that marketing can perform virtual CPR for a damaged brand; however, as Nicholson at DNX comments, this will only work if the initial problem is sorted out. “You will need to fix the root cause of the problem if you can. If you don’t fix the problem then people will see through the flim-flam marketing; just papering over the cracks is not a recipe for something that is going to last very long.” He uses the example of ValuJet, which – after a fatal air disaster over the Florida everglades in 1996 – rebranded as AirTran. The perception was that the company had simply changed its name as if to ‘cover-up’ who they were or had previously been. Within four hours of the newly rebranded website being launched, hackers had broken into the system, defaced the content with sarcastic references to the air disaster, and reopened the still sore wound that was its previous fall from grace. There seems to be consensus that brand resuscitation can only occur if the problem that caused the crisis in the first place is fixed. The way crises are handled also has a bearing. Jones of the CIM, comments, “A crisis that is well handled and demonstrates that a company is acting responsibly will be quickly forgotten and can even enhance a reputation. Conversely, if that crisis is badly managed, or not told in full, then the damage can be irreparable.”
