What Is a PR Crisis and How Can It Affect Your Business?
BusinessMarketing

What Is a PR Crisis and How Can It Affect Your Business?

By April 25, 2019 No Comments
11 min read
It’s a nightmare scenario that befalls even the most prestigious and well-meaning businesses: a PR crisis.
For some businesses, it’s just a bump in the road. For others, it’s the beginning of the end.
There is a fine line between low-profile customer service mishaps and a full-blown issue that affects your bottom line. If you’re wondering whether something is a PR crisis, ask yourself: Was this serious enough that it went beyond the PR or marketing team, and management and leadership needed to get involved? If so, it warrants the title.
Some leaders might still think that all press is good press. On the contrary, public relations crisis can damage your emerging brand, kill the trust you’ve built up with your existing customers, and hinder—sometimes permanently—any marketing and/or sales efforts you’ve made up to this point.
So how do you handle a business crisis—or better yet, get out ahead of one? Let’s review what a PR crisis is, how it’s affected other businesses, and how you can prevent a future crisis from affecting yours.

 

What is a PR crisis?

A PR crisis can take many different forms.
It could occur as a result of a mistake in some other area of the business, such as operations—failing to secure enough inventory to satisfy demand, for example.
Or, it might happen after your marketing arm threads into troubled waters—an insensitive Twitter reply to a customer complaint or an ad campaign that offends a certain population.
It might not even be directly related to your business or something your employees did, but rather a black mark on your industry or niche. Examples range from a disease outbreak that (unfairly or not) taints products from an entire region to a scandal that plagues a business with a name similar to yours.
Yes, even a case of mistaken identity can have long-lasting effects on your business.
And that last part is the most important: a PR crisis is any sort of bad publicity that affects your business’ ability to operate at peak capacity.
Chances are, if you run a quality business, you won’t have to deal with a PR crisis of considerable magnitude. That doesn’t mean you shouldn’t plan for the possibility of one, or understand the consequences of one hitting your business when you least expect it.

 

How can a PR crisis affect your business?

Businesses face PR crises all the time. In the past year alone, companies such as H&M, Southwest, and Facebook dealt with PR issues that threatened their sales, user base, and the trust of the people who bought from or used them.

For big corporations like these, a PR crisis isn’t fun, but it’s surmountable. They have tons of resources—in terms of money and expertise, often in the form of a third-party PR firm—to throw at a crisis until it subsides.
Other businesses often don’t have that luxury. The line between success and failure is already thin enough for most businesses that any major hit to their cash flow can be fatal.
To those on the outside, a PR crisis seems like it should be a temporary blip on the radar. But the effects can be as devastating as any natural disaster. A recent article published on Inc. detailed the various ways a business can suffer from being on the wrong end of a PR disaster—including lost sales, slowed sales, long-standing reputation issues that trail companies for years, and even closure as the result of subsequent bad reviews, scathing social media reactions, and depressed demand.

 

How have PR crises affected other businesses?

Let’s examine a few ways that a PR crisis actually played out for a real business, and how it affected them from then on.

Uber

In early 2017, Uber co-founder and CEO Travis Kalanick aided his own downfall and eventual resignation as head of the company when a camera caught him arguing with an Uber driver about pricing. Reports also surfaced that Kalanick knew of a culture of sexual harassment at the company and failed to address it. Throughout the rest of the year, the company endured scandal after scandal, from claims of employees having stolen self-driving car software to its controversial “Greyball” program.
At the end of this very bad year, Uber reported a $1.1 billion loss in Q4 2017. There was talk of how Uber could self-destruct, and its rivals, such as Lyft, gained reputational ground and market share.
It took Uber bringing on a new CEO, Dara Khosrowshahi and making some tough decisions about overseas business to bring the company back into the black in 2018. Uber is on surer footing today, but the year-long setback it suffered may continue to affect the company’s reputation for years to come.

 

Buffer

A few years ago, a security breach hit the social media management tool Buffer. The result was a social media management nightmare: Their customers’ Facebook feeds started spewing spam posts, compromising Buffer’s core value.
Who would blame customers for jumping ship from Buffer forever after such a meltdown? Years later, however, the story isn’t that Buffer self-destructed after this breach, but that their response was so outstanding that people actually applauded them afterward.
For starters, Buffer took to all of their channels and issued an apology, owning up to the mistake—not passing the buck on to anyone else, even the hackers. They also wrote a blog post explaining the situation, and updated it 10 times throughout the day to ensure users had the latest information.
Today, Buffer is still going strong, despite an early-life setback that could have destroyed the company for good.

 

Amy’s Baking Company

This is a unique case, as few businesses are featured on Gordon Ramsey’s “Kitchen Nightmares.” But as bad as Amy’s Baking Company’s appearance on that show was, it was how they handled the fallout that turned this into a true PR crisis.
After the episode aired, co-owner Amy Bouzaglo took to Facebook to defend the company. Her tactic: Type defensive rants in all caps, saying things like “I AM NOT STUPID ALL OF YOU ARE. YOU JUST DO NOT KNOW GOOD FOOD.” Later, they claimed that someone hacked their account.
As we’ll discuss below, good public relations doesn’t involve insulting your customers—or even your trolls—and then pretending it wasn’t your fault. A number of other poor decisions (including chasing someone with a knife outside the restaurant) followed, further compounding the original problem.
Within a couple of years, Amy’s Baking Company closed.

 

How to handle, avoid, and fix a PR crisis

Not every PR crisis affects each company in the same way. That’s because not every crisis is the same, and not every company has an appropriate response to that crisis. Amy’s Baking Company faced a unique crisis after their television appearance—but their response was equally disastrous.
With that in mind, here are six ways that your company should prepare for a PR crisis, as well as how to address one if (or when) it hits:

1. Create a written crisis plan

As Mike Tyson once said, “Everybody has plans until they get hit.” What will help your company stick to a plan once a PR crisis hits is having a written document outlining what to do.
Your crisis plan should outline the following:
–    Who are your crisis communication coordinators? These are the people who decide that you’re facing a PR emergency and that you need to execute the rest of your plan.
–     Where and how will those coordinators meet? In person? Online? In a Slack chat or Skype call?
–     Who will act as spokespeople? If the media contacts your company, a select group of people should field all inquiries.
–     Whose roles will be temporarily affected, and how? If a crisis is serious, you may need to inform the tech team that traffic to the website could increase, a responsibility that will take them off their current role. HR may need to take the time to train executives in how to talk to the media.
Once you have this plan in place, dealing with the fallout will be much easier than doing everything on an ad hoc basis.

2. Invest in social listening and monitoring tools

One way to preempt, plan for, or even avoid a PR crisis before it gets serious is to have social media monitoring tools in place that can alert you to rising sentiments among customers or industry experts.
Investing in a good social media monitoring platform is a good policy in general, as you can use it to respond to regular customer service issues or to capitalize on fun trends. You may also be able to contain a singular customer issue before it becomes a viral sensation.

3. React quickly—but not until you have the facts

As a PR crisis escalates, it’s critically important that your company react as quickly as possible to contain the problem as well as address increasing public and/or media scrutiny. Waiting days, or even hours, can compound the problem, presenting you as calloused or unfeeling.
On the other hand, a lack of information about what exactly is happening can doom a hurried PR response. Take the time to gather your intel and confer among your communications team before putting out your official statements.

4. Use every channel available

Any modern business will have a multitude of communication channels available — website, blog, a variety of social media platforms, etc. Use each of them to push out your responses and updates to your crisis until the issue has settled.
Here’s why: posting crisis updates to your Facebook and Twitter, but continuing to post and promote your business as usual on Instagram gives Instagram users the (rightful) excuse to jump all over you for appearing to ignore your crisis. You’ll also look as though you’re trying to have it both ways—addressing your crisis while maintaining business as usual. A PR crisis is not business as usual.

5. Show your humanity through heartfelt apology and ownership

One of the most consistent tactics we’ve seen across all successful PR crisis responses is when a company takes complete ownership of the issue.
Use Buffer, for example: they didn’t blame a singular employee, the hackers who breached their system, their customers for not being able to take a joke, and so on. They accepted the blame and expressed that acceptance via a real apology.
When you apologize and accept blame, you demonstrate the humanity behind your corporate veneer. People are much more willing to forgive humans than brands.

6. Engage in a long-term content marketing campaign

One of the long-term effects of a PR crisis is that it continues to haunt your Google search results, sometimes for years to come.
To combat these painful search results, you should create and continue a content marketing campaign—blogging, contributing articles to third-party sites under your name, finding ways to get the business featured in writeups by reporters and news organizations (for good reasons, not bad).
This is a good marketing strategy for businesses in general: You should do all of these things in order to improve your search ranking, boost your domain authority, and better your brand. It has the added benefit of working as an anecdote to unflattering writeups related to your crisis as well.
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In a perfect world, people and customers would judge your business solely on the merits of your products and services. Unfortunately, PR crises can strike at any moment, and they’re not always fair to the businesses that suffer them.
But as long as you recognize the power of the PR crisis, have a plan in place to address it, and execute that plan to the best of your ability, you’ll be ahead of the curve.
Eric Goldschein is a staff writer at Fundera, a marketplace for small business financial solutions such as business loans. He covers entrepreneurship, small business trends, finance, and marketing.

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