Brand problems will always happen, according to Ernan Roman, president of ERDM Corp. But owning up to them and taking immediate responsibility is what can save companies in the long run and ensure brand loyalty.
Just ask Richard Nixon.
Roman told Loyalty360 that Volkswagen brand sales kept falling in March as the carmaker struggles to overcome its diesel emissions scandal.
IKEA, which has had problems recently with dressers that tip over, has tackled the thorny issue head on. In one of the largest U.S. Consumer Product Safety Commission recalls involving more than 29 Million IKEA products, the company is now attempting to lead the charge in consumer safety.
What’s more, Roman noted that U.S. IKEA President Lars Petersson took to the airwaves to alert consumers about the issues, saying: “You may have heard about the recall of IKEA MALM and other chests of drawers models … At IKEA, we want to help create a better life for our customers. Part of that is helping our customers create a safe home for their families.”
The company has created a campaign called, “Secure It,” to educate consumers about tip over accidents.
“And while this is not exactly an apology, IKEA is acknowledging the issue and offering help to consumers,” Roman said. “It has received the backing of The American Academy of Pediatrics, Consumers Union, Consumer Federation of America, Kids In Danger, The National Center for Health Research, Public Citizen, and Shane’s Foundation.”
For brands that endure any length of time, it’s likely that some type of issue will occur that needs to be addressed immediately to retain customers. Roman offered the following keys on Brand Problem Resolution:
Findings from our VoC Research indicate that consumers want immediate and honest resolution to negative experiences. Brands need to own the problem and define actions to correct the error.
Additionally, our VoC research indicates that there needs to be a change in company culture and thinking; from “how does this benefit us?” to “how does this benefit the customer?” If brands portray themselves as defensive or dishonest on hot-button issues, consumers will develop distrust towards the brand.
In the report, “How to Save Brand after Crises?” it was noted: “After a brand crisis, how the firm responds eventually determines the extent to which the brand can be saved … consumers have the right to determine whether to forgive the brand or not … individuals … are more likely to trust the transgressor following an apology.”
What’s more, the study noted, customers become angrier if a company does not acknowledge its responsibility in an apology letter.
Brand crises have enormous immediate and far-reaching implications. Rapid acknowledgement and a sincere, human apology are the determining factors as to whether consumers will ultimately forgive and continue the brand relationship or not.