Communicating your way out of crisis

Crisis communication seems to be the hero of today’s times in salvaging the face of the brand and has now assumed heightened importance

e4m by Priyanka Mehra and Rahul Dubey
Updated: Jan 11, 2012 7:34 AM
Communicating your way out of crisis

Crisis communication seems to be the hero of today’s times in salvaging the face of the brand and has now assumed heightened importance, with the recent incidents of Airtel and BlackBerry.

Bharti Airtel
When Bharti Airtel, one of the country’s largest telecom providers by subscriber base, faced a network outage of its services due to a fire in its central point of presence located at Malad in Mumbai, it affected not only individual consumers but corporates as well, including a few leading banks, media companies and Central and Western Railways. The fire incident resulted in delay in emails, voice and data services over and above intranet and connectivity issues. With a subscriber base of reportedly around 3.7 million subscribers in Mumbai and 9.2 million customers in Maharashtra, Airtel made an active use of social media and gave Twitter updates on work in progress to restore the network to its subscribers. This was supported by statements issued to the media and ongoing communication in the form of an advertisement to its customers reassuring them that their network was up and running.

Where the brand fell short was in action, despite the statements and the advertisements, the network was not completely up and running leading to quite a few disgruntled consumers. In a day and age where communication is vital, no individual or corporate can afford a lapse. However, all in all the outage does not seem to have led to extreme condemnation from customers, this can be attributed to receiving communication in different forms, from the company as opposed to an indifferent service provider, another factor could be the fact that a large number of consumers were away for Christmas and new year.

Research in Motion
In a similar case, on October 11 2011, users of Canadian mobile handset manufacturer BlackBerry experienced a three-day disconnection due to its centralised server failure. With agitated users worldwide, the company understood the need for damage control and crisis management. It posted a video apology to all users. Micheal Lazaridis, Founder of Research in Motion or RIM, the BIS server for Europe, the Middle East and Africa, apologised for the outage that was experienced for 3 days in these areas. Although no clear reason was given for the problem Lazaridis alluded to system instability being the cause. This instability could be the result of congestion or just a glitch. Blackberry has promised that they are working on the issue. However, many believe that the crisis that had attracted global attention was poorly managed.

The apology message came two days after the server reported failed. Initially, it appeared as if the mobile company did not respond in a timely manner. Constant media reports worsened the situation. On this issue, Lazaridis promised that BlackBerry was doing everything in its power to sort this out. “We’re seeing steady improvements,” he said. The second blow came when The Wall Street Journal reported that Microsoft and Nokia “in recent months flirted with the idea of making a joint bid” for RIM. The rumour of BlackBerry buyout added fuel to fire. The very next day Reuters reported that had briefly considered acquiring RIM last summer.

RIM’s stock reached 12.9 per cent above the previous day’s closing price. This sent positive signals to RIM as many heaved a sigh of relief that it will salvage some of the company’s lost share value by paying a premium price. Low sales figures and identity crisis of BlackBerry’s Tablet- Playbook also spelled trouble for the company. Tech experts said that RIM went against its USP to create a non-enterprise tablet. The Indian division of RIM recently slashed the Playbook tablet price by 50 per cent. With agitated users as well as disappointed investors globally, BlackBerry slowly disseminated information to its consumers about the measures the company was undertaking. There was, however, little plan in place to respond to media reports.

Lessons in crisis management
Some big Indian and global brands like Cadbury, Nokia, Coca Cola and ICICI taught the industry a few communication lessons in crisis management. As Tejal Daftary Director of Criss Cross Communications says “Whenever any company faces crisis, especially in sectors such as telecom, it is best to highlight the problem, explain the steps undertaken by the company to resolve the problem and keep the audience informed on regular basis by way of single communication.” Supported by Risk Management expert of a leading global bank which has a strong presence in India, “Today, nothing escapes the media and the end customer can decide the fate of any large organisation. In this competitive market, the customer always has an alternate option and timely communication can help swing the match in ones favour. Lack of it, can spell doom for the largest of corporates. Corporates must realise that when the customer suffers, they will pay the ultimate price for their negligence.” While some learn, some continue to remain tight-lipped when a crisis approaches. However, the order of the day seems to be ‘Communicate when in crisis’, this can either make or break your much loved and reputed brand or take it to a new level altogether.

According to Veena Gidwani, CEO, Madison Public Relations, “All businesses are susceptible to crisis, which happen unannounced, most often resulting from factors totally beyond their control. Some crisis like the Nokia Battery failure, the recent fire at the Airtel Malad Technical Centre, have an impact on the day-to-day functioning of millions of people. The credibility and reputation of organisations is heavily influenced by the perception of their responses to key stakeholders during crisis situations. The organisation and communication involved in responding to a crisis pro-actively and promptly is often a big challenge in businesses. In a crisis situation stakeholders need to be assured that the organization is keeping their interests uppermost and doing everything in its control to overcome the situation with minimal damage.”

It is advisable for every corporate in the manufacturing or services businesses, to put in place a crisis management plan to handle all possible types of crisis that the business could face and have a separate team to execute it. This helps the organisation communicate in a quick, credible and effective way with media and other stakeholders affected by the crisis. If handled well, it does not have any negative impact on the reputation or equity of the company or brand, but in fact makes it emerge stronger.

Some Case Studies:
On January 31, 2010, Toyota launched a major PR campaign to promote the safety and reliability of its vehicles after the Japan-based manufacturer was forced to recall millions of cars after problems with braking, floor mats and acceleration pedals in its vehicles. It effectively used print and television media for public apologies, explanations, and press releases. Toyota went into the crisis management mode to salvage the situation, and announced a fix for the accelerator problem.

Coca Cola
Coca-Cola India a brand synonymous with Open Happiness today, faced a mammoth crisis after a CSE report stated the product contained pesticides which can cause cancer, damage to the nervous and reproductive systems, birth defects, and severe disruption of the immune system. Sales of the product went down by around 30 per cent within two weeks of this incidence. The brand’s a toll free number, Coca-Cola India eKO Management System, CEO Sanjiv Gupta’s open and updated communication supported by rigorous pr campaigns helped get over this catastrophe. Consistent PR campaigns played a huge role in the brand regaining trust and credibility of consumers. Over 50 per cent of its market value was attributed to the brand image and heavy public measures.

In October 2008, shares of ICICI Bank plunged 20 per cent in a single day leading to a widespread perception that the bank is facing a liquidity crisis. Quick to tweak its communications strategy, ICICI Bank launched its ‘Power of Belief’ campaign in December 2008 through its web site and other media platforms. Later, the new image of the bank was reinforced in February 2009. It issued a release extolling the ‘virtues’ of belief and presented a list of initiatives which included ‘Read to Lead’ education projects from school students.

Nokia India, which controlled a strong 67 per cent share in the Indian handset market in 2006, recalled 46 million BL-5C batteries of Nokia manufactured by Matsushita between 2005 and 2006. Nokia issued a warning over its BL-5C batteries across the world, stating that these batteries may get overheated while charging. It then started a damage control campaign using mediums like advertisement, SMS and an online helpdesk. It also roped in its dealers to manage the crisis by communication with consumers on ground.

On October 16, 2003, the Maharashtra Food and Drugs Authority (FDA) seized the chocolate stock at Cadbury’s manufacturing plant in Pune after two chocolate bars of Dairy Milk were found infested with worms in Mumbai. Cadbury took its advertising off the air. It was quick to launch a project aimed at educating retailers. It started an intense PR approach to update the media on the measures it was taking at the manufacturing and storage levels. The company informed media about import of new machineries and change in packaging of its Dairy Milk bars. It also roped in Bollywood actor Amitabh Bachchan to reassure the consumers of the brand with trust messages.

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