A PR crisis impacts the reputation of a brand. How the brand responds also determines the impact of the crisis.
Crisis can be of many types, but what is common is that it poses a threat to the positive reputation of a brand.
Crisis PR insulates a brand from negative consequences. A crisis can lead to a loss in market share, lawsuits, and financial loss.
The line between success and failure
The line between success and failure is so thin for most businesses that any PR crisis can be fatal.
How companies recover from a PR crisis will depend on the response rate of their PR teams.
Each business should have a crisis management plan that should be updated annually.
This will make a crisis surmountable. The plan should identify potential risks and define communication guidelines.
The crisis management plan should address the 5 W’s
a) Who will be the spokesperson of the organization
b) What will their message be
c) When will they speak to the public
d) Why would they speak
e) Where would they address the public
The crisis management team should be properly trained and some key messages should be pre-drafted.
With the pandemic upon us, some companies had to adopt tough measures so that they stay afloat.
This might have led them to suffer reputational damage. No business should ignore the cost of reputational damage, as it would affect stock price and cut down on market capitalization.
It might also impact employee retention as the company might find it difficult to recruit new talent. This means that every business should prioritize managing reputational risk effectively.
The PR Crisis of United Airlines
In 2017, a passenger of United Airlines was filmed being removed from his seat and dragged down an aircraft’s aisle as the aircraft was overbooked.
The video of the incident went viral on social media and the CEO’s apology became a trending topic on Twitter as it seemed unfeeling.
Yet another apology was issued a day later but it did little to quell the anger of the audience.
After the PR crisis, the readiness of customers to buy flight tickets from United went down from 68 % before the crisis, to 42 % after it.
‘Six months after the crisis, 30 percent of the customers stated that they would still not purchase tickets from the airlines as they felt that the airlines did not feel safe anymore.
The company struggled to contain the fallout for quite some time. The day after the video was released, their stock fell by about 4%.
The lesson learned from this PR disaster is that the company should have exhibited compassion and tried to make things right.
This could have been an opportunity to show that they cared, instead they made the crisis worse. Airlines do overbook, expecting customers to cancel.
This painful customer experience did not go down well with the audience. This was preventable. No one should have boarded the flight if it was overbooked.
Ronn Torossian is the Founder & Chairman of 5W Public Relations, one of the largest independently-owned PR firms in the United States.
With over 20 years of experience crafting and executing powerful narratives, Torossian is one of America’s most prolific and well-respected Public Relations professionals.