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Managing reputations

It’s been described as the largest consumer crisis management story of our time, and Toyota’s woes are growing daily.

With more than eight million cars recalled, the car giant’s failure to stem the flow of negative press and quell consumer outrage has sent its stock into freefall and its cherished brand to the wall. What has turned out to be an extremely harsh lesson in crisis management, is a something every marketer should sit up and take note of.

Image and reputation in today’s world is something guarded with meticulous precision.

Right across the spectrum from managing personal profiles on social networking sites through to corporate communications and government relations, managing image and reputations has emerged as one of the most critical areas of marketing today.

It has helped to fuel the growth of many new public relations areas from reputation marketing to crisis management, media relations and government relations. It is also something the marketing and advertising industries are starting to take much more seriously.

A credible and well-respected reputation is something that is built up over time, but during these past weeks we have seen how quickly reputations – when managed poorly – can crumble.

Toyota, arguably the most protected brand in the automotive sector, has lost billions from its share price, suffered the scorn of the media and is now up against the US regulators over the recall of 14 Toyota lines and its Lexus brand.

So what lessons can be learnt from the car company’s image meltdown? One main argument is that Toyota and its top executives should have come clean right from the start, rather than defecting blame and responsibility. Toyota’s CEO took some two weeks to front the media and as a result has endured even more criticism.

“The response so far has not been in keeping with a brand of Toyota’s stature,” said Harlan Loeb, EVP of Edelman’s US Crisis & Issues Management practice.

“A public apology is a step in the right direction, but there’s been no follow-through, no substantial step that would give Toyota’s critical stakeholders – customers, dealers, vendors – evidence that Toyota is committed to a specific solution.”

Late last year IBM’s senior vice president of marketing & communications Jon Iwata spoke at length to explain the importance of reputation in an era where consumers are less forgiving and empowered with an increasing menu of communication tools like Twitter, Google Buzz, blogs, SMS and community forums.

Because of all changes to the external environment he argued there is a need to speak with one voice across advertising, sales promotion, events, websites, the media, analysts, bloggers and the like was critical.

“One day soon, every employee, every retiree, every customer, every business partner, every investor and every neighbour associated with every company will be able to share an opinion about that company with everyone in the world, based on firsthand experience,” he said.

“The only way we can be comfortable in that world is if every employee of the company is truly grounded in what their company values and stands for.”

What is clear in all of this is that the importance of reputation and authenticity for companies over the next decade will be critical to their success, Managing hypersensitive consumers will form the core of that strategy.

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