It can be hard for a brand to recover its reputation after a crisis. The speed with which it recovers depends on:
- The brand’s reputation before the crisis. (Did it have a lot of goodwill stored up?)
- Whether the crisis was preventable.
- Whether the brand demonstrates it learned from the experience.
Here’s how 5 brands and others survived brutal reputation hits.
Johnson & Johnson’s Tylenol recall
In 1982, Johnson & Johnson was in the centre of a major crisis. Seven people around Chicago died. The link between the deaths was that all the victims took a Tylenol a few hours before.
Authorities tested the Tylenol bottles, and discovered high levels of potassium cyanide in the pills. The eight affected bottles came from different factories and stores.
Johnson & Johnson issued warnings to distributors and medical professionals, and set up a nationwide recall of Tylenol (31 million bottles, costing the firm $125 million). Johnson & Johnson also set up a hotline, and inspected its factories to be sure the problem hadn’t originated there.
Investigators concluded someone went store to store and filled the bottles with cyanide pills. Johnson & Johnson worked with the FBI, Chicago police and the Food and Drug Administration (FDA) to find the killer, offering a $100,000 reward. The crime remains unsolved.
When Tylenol went back on the shelves, it was with tamper-proof packaging and coupons for $2.50 off.
People were understandably nervous about buying consumer products after the Tylenol case, and in 1983 Congress approved a bill that made malicious tampering with consumer products a federal offence.
Johnson & Johnson handled the crisis well. It moved quickly, cooperated with investigators, provided good information and issued a full recall rather than put more people at risk.
In 1990, Perrier, which prided itself on its reputation for “natural purity,” fought to keep its reputation when a toxic substance, benzene, was found in its water.
North Carolina officials discovered the impurity when they used Perrier water to assess the purity of state water supplies. The FDA quickly announced it was testing Perrier in other states, but an FDA spokesperson said that, in the samples tested, benzene wasn’t present at levels that posed an immediate risk.
Perrier decided to recall 160 million bottles of water within a week of the discovery, although it believed only 13 bottles were contaminated.
The cause turned out to be human error. Two unsubstantiated stories circulated in the media. In one story, a bottling plant worker forgot to change a filter, while the other story said a worker cleaned the production line with a cleaner containing benzene.
Perrier held a press conference to announce the recall some days after the impurities were found. The true cause of contamination came out: Someone forgot to change the filters in the Vergeze bottling plant, which prevented the naturally present benzene from being filtered out of the water.
Although Perrier set up a 24-hour hotline in the United Kingdom, local subsidiaries received little direction from the parent brand, and it was hard for the public to get information. Trading in Perrier shares was suspended for several days, and resumed at a share price that was $41 lower than it was before the crisis.
Nestle bought Perrier in 1992. Today, Perrier is in 140 countries and sells around one billion bottles per year.
JetBlue, the airline founded on customer-centric values, went against those values in 2007. During a major snowstorm around Valentine’s Day, JetBlue tried to operate normally. This decision left more than 1,000 passengers stuck on nine planes that weren’t allowed to take off. One plane sat on the tarmac for 11 hours. Thousands of passengers made their way to the airport, only to learn their flights were cancelled.
JetBlue’s CEO appeared on various primetime shows (including “Letterman”), and recorded a message on YouTube apologising for the mess and promising JetBlue would learn from the debacle and become a “different company.” JetBlue wrote a flyer’s bill of rights, which formalised JetBlue’s responsibilities to its customers.
JetBlue learned from the crisis. It now cancels flights before bad weather strikes. (Look at its response to the 2014 winter storms. It cancelled flights early, and provided passengers with information and compensation).
Domino’s food tampering scandal
In 2009, two Domino’s Pizza employees in North Carolina filmed themselves doing unpleasant and unhygienic things with the food they were preparing. They uploaded the footage to YouTube, and it made headlines around the world.
The situation worsened when the media reported Domino’s knew about the video only because a blogger alerted them. By that time the video had more than 1 million views.
In addition to issuing statements to the media, the CEO of Domino’s issued a forceful statement on YouTube. Domino’s then set up a Twitter account to answer questions. The media noted Domino’s replied to inquiries in an informal and concerned way.
Domino’s has now become a social media star. Its informational Twitter account redirects people to its official account (605,000 followers), and all Domino’s Twitter accounts are known for their friendliness and customer service. The brand’s YouTube account has 1.5 million views, and its U.S. Facebook page has more than 9.7 million likes.
Domino’s realised social listening is vital, and found a brilliant way to engage customers.
Shell and the Niger Delta
Shell is still recovering from the Niger Delta crisis, yet the brand remains successful.
In 1995, local tribal leaders asked Shell to clean up the pollution it caused in the Niger Delta. Oil polluted local water wells, causing a great strain on people already struggling to survive. The tribal leaders demanded Shell clean up the wells and share more of its profits with the local population.
Shell left Nigeria in June 1995 following a peaceful uprising and allegations that it had colluded with the military in massacres and human rights abuses. When the government executed the main anti-government campaigner and several others without protest from Shell, global protests erupted, and Shell’s reputation plummeted.
Shell’s response was to offer money for schools, hospitals and the environment, and it promised to inquire into the situation. Within two years Shell changed its brand values to include, as The Guardian noted, the “values of honesty, integrity, respect for people, as well as professionalism, pride and openness, sustainable development and human rights.”
However, Shell didn’t apologise or admit any fault in the situation.
Today Shell attends to human rights, but continues to take reputational hits. For example, Amnesty International recently accused Shell of making false claims about the environmental effect of its operations on the Niger Delta. It’s clear that, while business is good for Shell, the brand still suffers from reputational damage.
While some brands handle crises well and initiate new business practices to ensure similar crises don’t happen again, others deny their role. When a crisis hits, you must decide between your long-term reputation and short-term profits. Every brand needs a bank of goodwill. Crises offer brands an excellent opportunity to live their values and do what’s right.