Crisis management often is not a priority for companies in their normal business operations, which is a big mistake. Unfortunately, the importance of a crisis plan for many only grasps when the problem lands on their head. This mistake is a point of danger for an organization as a negative brand publicity weights much more than a positive one, decreasing brand equity.
Negative news travel much faster and capture people's attention stronger than positive ones. They are also perceived as diagnostic of the brand as people establish a causal effect and more likely to believe that there is a problem than not. Therefore, wrong crisis management negatively influences consumers' judgment and purchase decisions, because, for most of the businesses, switching costs are pretty low.
How to prepare for and handle a crisis? First of all, we have to understand the different types of crises and the level of their importance to the company:
Crises may be internally and externally caused. We will now look at four possible causes of the crisis, from low- to high- importance for the brand:
External cause unrelated to the core of the brand business is the least problematic one. It means that the problem occurred from something other than organizational decisions and usually do not require the firm to get involved, or easily manageable. An example of such could be a scandal of the brand of the same product/service category for the reason unrelated to your company’s positioning.
Internal cause unrelated to the core of the brand business is less problematic and solvable. With internal causes, a company has more control over how to handle the occurred situation.
External cause related to the core of the brand business is more problematic but still solvable as it was not created by the brand itself. For example, a scandal involving a brand endorser is solvable by breaking the contract.
Internal cause related to the core of the brand is most problematic and difficult to solve, and usually is jeopardizing consumer trust. It is absolutely your responsibility, and you have to be very cautious when thinking of a response plan. Examples of such problems are manufacturing, mistreating customers, financial corruption.
All of these types of crises can also be divided by sudden (cobra) or slow-burning (python). No matter what kind of abovementioned issues a company comes across, in order to better prepare for a response when such occur, crisis simulations have to take place regularly, with different scenarios considered.
Stages of crisis management
1.Detection
Set up systems that help anticipate crises. A good strategy would be looking at competitors.
2.Crisis prevention
Ensure that you comply with your corporate social responsibility. Facilitate two-way communication with key stakeholders, find out what they think of your brand, carefully listen to what they are saying and always think about how can you improve their experience.
This stage also involves crisis preparation. A template of crisis communication plan has to be developed beforehand, most likely in good times of your business. You have to be prepared in advance because when the crisis comes, it is highly important to respond quickly. Otherwise, people will not take your response seriously, no matter how well you handle the problem. In order to prepare efficiently, establish systems for fast communication, key audiences, messages, stakeholders, and possibly even a crisis team. Timothy Coombs, a famous crisis management expert, suggests that if in doubt, assume the worst.
3.Containment
A developed crisis communication plan most likely will serve you as a guide as every crisis is different and cannot be fully prepared for. However, a crisis plan will help you to respond quickly while developing a plan particular for the current situation.
Position your crisis as a one-off. You should assure your stakeholders that it won’t happen again.
A message has to convey a strategy of your organization to the crisis. Depending on the type of crisis, it should be either apologetic, defensive, or explanatory. It is important to inform your stakeholders about the actions that you are taking to handle the crisis and prevent it in the future. The more information you give them, the more likely you will be able to restore your brand successfully.
