This post comes my friends at SocialMonsters.org There are some good lessons for HR in this post.
Last year, Samsung’s reputation was going down in flames, as reports of its Galaxy Note7 suddenly catching fire sabotaged a launch that was meant to give the company momentum going into the holiday sales season.
The crisis devastated the company’s revenue for the second half of 2016, and industry watchers feared Samsung might not survive the multi-billion dollar loss and blow to its reputation. Furthermore, positive consumer impressions of the company plunged from 38 percent in June 2016 to 23 percent by Black Friday.
But Samsung took proactive steps to rebuild its reputation and ride out the storm. By April 2017, positive consumer impressions of Samsung had climbed back to 33 percent, setting the stage for record-breaking sales of the Galaxy S8 that same month. Now, with the Galaxy Note8 getting rave reviews, Samsung’s future is once again looking bright.
Truthfully, Samsung’s survival is a case study worth examining, particularly for companies needing to confront rumors that may be damaging their reputation. Here are three strategies you can emulate to rebuild your company’s reputation after being stymied by negative rumors or bad PR.
1. Address the Issue Head On
When your company receives negative publicity, it’s tempting to ignore it in the hopes it will eventually run its course. However, as Samsung executives can likely attest, it’s better to confront the issue head on and take full responsibility, especially if you’re the party at fault. Samsung recognized it had a serious problem early on and took steps to correct it.
In particular, Samsung initially attempted to solve the problem by recalling defective devices and issuing replacements. Unfortunately, some of the replacements began exhibiting the same problem, and the electronics provider was forced to discontinue the Note7 entirely and offer exchanges to customers. While this failure cost Samsung an immediate $10 billion hit, the loss was deemed worth the cost of saving Samsung’s reputation.
Eventually, Samsung conducted an internal investigation and was able to trace the problem to design flaws in batteries sourced from two separate suppliers. When Samsung announced this in January 2017, executives also explained the company was switching its battery sourcing to a different supplier and implementing a new, more rigorous safety testing process.
By taking these steps to address the issue head on, Samsung was able to get back on track in time for the successful launch of the Galaxy S8. The smartphone manufacturer is even using the launch of its Note8 to recover lost customers by offering a discount to previous Note7 owners.
2. Set the Record Straight
In Samsung’s case, it bore responsibility for the Note7’s defects. However, in other cases, a company may need to defend itself against a series of false rumors. When someone spreads misinformation about your company, it’s important to set the record straight by maintaining the facts to avoid negative public relations.
Oftentimes, this requires holding press conferences and participating in TV and print media interviews, as well as publishing press releases on your website and through social media. Other times, it may require resorting to legal recourse.
One recent example is a high-profile defamation lawsuit brought by Beef Products, Inc. against ABC News over a report in which the network claimed BPI’s products were “pink slime”. BPI, in an effort to defend its products as “lean, finely-textured beef,” sued the network for $5.7 billion.
The case was ultimately settled out of court, the terms of which weren’t ever publicly disclosed. But financial disclosures indicated The Walt Disney Co., ABC’s parent company, paid $177 million to BPI, with additional money paid by Disney’s insurer. BPI’s attorney said the settlement exceeded the publicly-reported $177 million figure.
3. Rebrand with a Positive Theme
Correcting false rumors is a step in the right direction, but to undo the damage caused by falsehoods, it’s also necessary to change the narrative about your company and emphasize a more positive tone. One company that has done this effectively is Amway.
The prominent multi-level marketing company generates revenue through the sale of high-quality health, beauty and home care products by its independent business owners. Unfortunately, other nefarious companies have adopted a similar multi-level marketing sales model to defraud consumers through alleged “pyramid schemes,” where no real entrepreneurial activity takes place. As such, Amway’s reputation has, to a certain degree, become unfairly tarnished by these companies’ tactics.
To set itself apart from these unscrupulous companies, Amway has used its website and social media pages to educate consumers about the true nature of its business model and how it benefits entrepreneurs. As part of this effort, the company launched its Amway Education training system, which includes 80 virtual courses for its distributors to learn the skills needed for entrepreneurial success.
The series teaches skills that include how to start a business, how to sell products and how to become an effective leader. Through this training series, Amway is demonstrating how it provides real value to its distributors and creates a positive impact on their lives.