Volkswagen was hardly the first car manufacturer to find itself at the center of a PR disaster, when CEO Martin Winterkorn resigned in a storm of controversy last week. There was Toyota’s recall of 9 million cars in 2009, Ford’s recall of 19 million vehicles in 1996, and GM’s of some 30 million cars over the past five years. So how come Volkswagen’s recent announcement that it would recall 500,000 vehicles, after sharing incorrect emissions information with authorities, is likely to damage its brand more than those other recalls have affected its competitors? Because the brand has directly violated its own core brand values.
Think “cowboy,” and you’re likely to say Marlboro, “search,” and you’ll say Google. Think “safety,” and you’ll say Volvo. But what if Volvo had tampered with its safety mechanisms in order to secure better reviews?
From a branding perspective, anyway, not just Volkswagen but German industry itself stands for just two words: trust and engineering. If those fundamental values are tampered with, it’s like removing the load-bearing pillars from a skyscraper.
So what are the best steps for Volkswagen to take in order to minimize the brand damage it’s poised to attract over the next few months, if not years?
For any company that finds itself in Volkswagen’s position, it’s important to recognize the problem right away. Set up an independent investigation as well as a task force–of a maximum of four people–with a full mandate to act on behalf of the brand while the crisis unfolds. Being silent or slow to communicate with the outside world can do more harm to the brand than good.
The task force should be able to act without internal bureaucracy and, most importantly, quickly enough to keep up with the press and social media. Begin analyzing the search key words, articles, and social media discussions in order to gain an hour-by-hour understanding of what the public really thinks of you. Without it, your company won’t know which messages to focus on and which to stay away from.
In my own experience helping brands navigate social media and with the ways word of mouth spreads there, I’ve learned that the 1:9:90 rule indeed exists: One person (the seeder) influences another nine individuals (the incubators), who in turn influence the next 90 individuals (the public). Your goal is to initiate a dialogue with the nine.
Remember, there are always two sides to the same story. No matter how calculated Volkswagen’s alleged misdoings might seem at the moment (its engineers are said to have installed a device that cut down on emissions only during testing), it’s likely the company could add a more nuanced perspective to this narrative.
Get ahold of your friends, fans, and business contacts (including, in this case, the car dealerships), find out who’s running with the news, and then contact them all, one by one, to share your own perspective. In short, drum up an army of ambassadors. Arm them with the tools, talking points, and outreach ability so they can start a dialogue with the local community.
Forget about advertising–it’s a complete waste of money because no one will trust you anyway. Instead, overreact in favor of the consumer. The cost of doing so might be extraordinarily high, but Volkswagen, whose roots go back to 1937, simply can’t afford to think of a short-term revenue loss right now.
Ask yourself what the brand should offer each and every consumer–as compensation so generous that even Volkswagen’s rivals and detractors (especially the thousands of people writing heated posts online) will be compelled to say, “Admittedly, Volkswagen made a mistake, but they’re doing even more than they need to in order to make it right.”
If you go on the cheap, like Lufthansa’s initial compensation of 50,000 euros for each victim of the Germanwings flight 9525 crash, you’ll burn a negative impression into everyone’s mind right from the start. This approach even has roots in neuroscience: You want to establish a “somatic marker“–an emotional bookmark so dramatic that it won’t be forgotten.
What would you do if you were the competition? Needless to say, you’d see this as an opportunity. (In fact, when a brand crisis comes to light, it’s often because a competitor has taken steps to reveal it.) At this stage, your industry rivals will be poised to acquire your customers. If you don’t act fast, that can completely undermine your future revenue. So start a second task force with the sole purpose of stopping the bleeding. Think as the competition thinks.
While the short-term machine is in action to manage the outrage, go back to the drawing board and ask yourself what’s needed in order to recover your long-term reputation. Remember you’ve just lost your most essential brand value–trust–so anything and everything you say in the future will be questioned.
Who can you team up with in order to recover trust when you release your next product line? What features can you include that scream “trust”? What will your competitors do to fuel even more distrust among your customers? Things are no longer business as usual–every single product, advertisement, and strategy decision in your pipeline needs to be reevaluated in the light of “no trust.”
As gloomy as the days ahead look for Volkswagen right now, here’s some good news for the company: It will survive, just like the vast majority of companies over the past decade that witnessed a similar a crisis with their brands. We’ve all made mistakes, and while that’s not to say that what Volkswagen did is justifiable, this company that’s close to 80 years old still holds a ton of credibility. That brand equity will ultimately compensate for the scandal and even create enough empathy to win back consumers’ trust.
In fact, my guess is that 18 months from now, most people will have forgotten about the Volkswagen issue. Still, the PR crisis is a wake-up call for every company to prepare in case of a similar blunder. No matter how good you are or how trusted your brand is today, no one’s immune from a PR crisis forever.