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What is reputation? 1. The beliefs or opinions that are generally held about someone or something 2. A widespread belief that someone or something has a particular habit or characteristic
Personal Reputation What do I do for a living? How am I likely to behave in a given scenario? Will I be friendly or hostile to an approach? What are my opinionsand values? Should I be interacted with? Should I be given a particular task? Should I be recommended? Is a relationship worth maintaining?
But why do organisationscare about their reputation?
Net Promoter – Bain & Co Q: “How likely are you to recommend this brand to your friends and family?” NPS = % Advocates - % Detractors (0 – 10 scale; 0 – 6 Detractors; 7 – 8 Neutral; 9 – 10 Advocates) Reputation (NPS) Long-term Profitability & Growth
US Airline Industry: 2001 High Net Promoter scores translate into long-term revenue growth for those firms with a focus on maintaining and growing their reputation Source: Satmetrixand Dr. Fred Reichheld
The Financial Value of Reputation In Asia Pacific, executives surveyed claimed that corporate reputation represented 63% of their firms market value. Source: KRC Research / Weber Shandwick 2009, n=950 company executives across 11 countries
The Financial Value of Reputation The Dave Carroll ‘United Breaks Guitars’ incident was estimated by the UK Times to have cost United shareholders US$180,000,000 http://www.timesonline.co.uk/tol/comment/columnists/chris_ayres/article6722407.ece
Financial repercussions of developing a bad reputation Beijing-Shanghai High-Speed Railway US$5bn IPO delayed due to public fury and bold media criticism of the Railway Ministry following the Wenzhou tragedy. In addition:
China Railway Group dropped plans to raise RMB6.2bn via a share placement due to uncertainty around regulatory approval
China South Locomotive and Rolling Stock Corp delayed shareholder vote on US$1.7bn fund-raising plan partly due to backlash from accident
Why does good reputation translate into increased competitive advantage? Investorsare more likely to recommend stock… …employeesare more likely to recommend the organization as a good place to work… And customersare more likely to remain loyal and recommend products and services to friends and family.
In addition… Organisations with a bad reputation are less likely to be given the benefit of the doubt when a crisis does break… …and are more likely to be scrutinised by legislators andgovernments
More evidence… Source: Hay Group, 2011 A 2011 Hay Group report demonstrated that the ‘World’s Most Admired Companies’ outperformed the S&P 500 average over 1, 3, 5 and 10 year time frames.
Corporate Reputation – “Front of Mind”for global executives Economist Intelligence Unit, 2005 “Reputation: Risk of Risks”
And it’s getting worse… 31% of global business leaders expect some form of reputation damaging incident to affect their brand within the next 2 years Source: KRC Research / Weber Shandwick 2009, n=950 company executives across 11 countries
Why the Internet has made reputation management more difficult
Why is this happening more often and with such global scale to once invincible brands?
Well, one main reason is that the Internetshowed up…
Social Networking Services Blog Platforms Video Platforms Live Streaming RSS Search Engines Internet technologies provide would-be influencers (both advocates and detractors) a ready-made online audience
In our digital world we need to redefine our perception of influencers. They are still people who can change the opinions of their audience about something, either positively or negatively... …and often they still work for the government, a newspaper or a TV station.
But they are also David Liu, Weber Shandwick’sChina GM who has a blog with 16m page views per month… …another example, Kevin “Too Fat” Smith, actor/director who enjoys giving airlines bad publicity …in Japan, they are not even human! Gachipin, a children’s TV character is the most followed “person” on Twitter. And in some cases they are your employees dragging your brand’s reputation into the gutter…
And this new set of influencers don’t play by the same rules… Press Bloggers
Which means that media are having to behave more and more like bloggers now to be first to a story…
Implications for Brands / Organisations Organisations used to have considerable discretion over when, how and where they would issue a statement to the media as well as what they told employees, investors and customers… …now unhappy customers, disgruntled employees and disappointed investors wait for no-one
And there’s a lot of them… Over 1/2 of Asia Pacific’s Internet users are in China but still only 1/3 of the population is online
But there’s going to be even more in China very soon… “Globally smartphone shipments have surpassed PC for the first time, in Q4 2010 much earlier than predicted by Morgan Stanley” Source: IDC
GuoMeimei posted pictures of her lavish lifestyle on Weibo whilst claiming to be a senior employee of the Red Cross Society of China
Created an incident that would never have occurred prior to the information revolution.
An enraged online audience failed to be placated by statements from the Red Cross that Meimei had no association with the organization and continued to dig for more and more scandal, which they duly found and which fueled the continuing online firestorm.
Red Cross collection boxes have been tranformed into waste-paper bins, collecting rubbishinstead of money!
The new Information Brokers Unencumbered by rules, policies, regulations, processes and policies the new information brokers… …are always going to be more nimble than any brand using traditional communications techniques.
More Implications for Brands and Organisations Brands and organisations have to adapt to becoming not just transmitters of information… …but also responders to information
Proliferation of Information Sources Information sources in our hyper-connected world are many, varied and can simultaneously combine to overwhelm individuals and organisations and induce panic
Case Study – SARS crisis “An infodemic is not the rapid spread of simple news via the media, nor is it simply the rumour mill on steroids. Rather, as with SARS, it is a complex phenomenon caused by the interaction of mainstream media, specialist media and internet sites; and ‘informal media’, phone calls, text messages, e-mail, fax and pagers all transmitting some combination of fact, rumour, interpretation and propaganda. It can rendered more difficult to understand by multiple languages, cultures and attitudes toward the free and open flow of information.” David Rothkopf, CEO GartnenRothkopf
Why was the economic impact so bad given the relatively low mortality rate of the virus? “(i) The almost costless and rapid transmission of information due to the development of modern media and communication technologies, and (ii) The lack of sufficient medical information on SARS” Source: Asian Development Bank
Another example When a mobile text message claiming a Fukushima radiation cloud was headed for China and advised taking iodised-salt would protect people there were mob scenes at supermarkets as people cleared shelves of bags of salt!
Managing the rumour mill Rumourcan take on the power of truth in our hyper-connected world Brands and organisations need to be prepared to communicate the ‘truth’ of a situation as a way of mitigating rumour, innuendo and factually incorrect reporting. Organisations have to think like publishers and increasingly, brands are making use of ‘myth-buster’ sites online and on social networks that help to tell their side of the story
8 practical tips to prepare your organisation for an online crisis
Crisis Preparation Establish client crisis team and interview key internal stakeholders 1.
PR, Legal, Web, Marketing and Key Executives should all be considered as members of the client crisis team
Establish historical and future issues and crisis topics
Understand previous responses, plans and learnings
Ensure web / social media teams are included in interviews
Crisis Preparation Review corporate policies and procedures including social mediapolicy 2.
Establish existing response processes and decide on their appropriateness
Ensure social media policy and social platform “house rules” are included in review and republished if necessary
Not every crisis can be predicted and a mechanism for rapid review and amendment of policies needs to be established
Crisis Preparation Identify potential issue scenarios and develop escalation system 3.
Research industry and competitor historic crises / research and add to stakeholder interviews insights
Determine potential upcoming threats based on known plans
Brainstorm as many unknown potential threats as possible and ensure you include online-only, online-to-offline and offline-to-online scenarios
Develop a threat grading and escalation system for both traditional and social media and have teams assigned to respond for both media
Crisis Preparation Formulate responses to potential issues and key messages 4.
Craft key messages and talking points for traditional PR
In addition write sample blog posts, wall posts and tweets
Ensure a rapid digital video production method is in place for video responses
Statements that work for newspapers will not work online and vice versa – craft responses by channel with different tones and styles
Crisis Preparation Monitor offline and online conversations and identify advocates & detractors 5.
Create an early warning system: track both traditional and online coverage and conversations for pre-identified and brand / industry related issues
Include top-line analysis in the form of charts and trends
Identify influencers, both those who are positive and negative toward the brand in both media. Revise and refine monitoring to ensure full coverage of key influencers
Crisis Preparation Audit digital assets and prepare additional response assets as necessary 6.
Identify existing digital / social platforms and properties and ensure a method to respond online exists so the organisation is not caught flat-footed
Ensure video assets are available for key scenarios and a rapid production capability exists for unforeseen issues
Pre-prepare ‘myth-buster’ and ‘dark sites’ that can be quickly activated and pushed live for particularly damaging crisis scenarios
Ensure you have content syndication capabilities in place for rapid information dissemination (RSS, wire services, social platforms, presentation and document hosting platforms)
Create #hashtags for Twitter and Weibo to allow people to easily follow the brand’s communications
Crisis Preparation Engage supporters and build up credentials 7.
Once influencers are identified, begin outreach to them to build up relationships that can be used in the future
Work on building up industry awards and nominations that can be referred back to during times of crisis (e.g. ‘best places to work’, ‘most admired’ etc)
Promote these CSR efforts ahead of time, particularly with key advocates and detractors
Crisis Preparation Simulate crises using Firebell and traditional techniques 8.
Perform crisis simulation and training on potential crisis scenarios in traditional and social media environments using Firebell, Weber Shandwick’s social media simulation software
Put company spokespeople through hostile media training
Make sure your team is drilled on the processes for both online and offline crisis response by repeating these processes on a frequent basis to ensure key teams are adequately prepared to respond in the event of crisis
Crisis Simulation Journalist calls and tweets phone interview live
Crisis Preparation Summary Establish client crisis team and interview key internal stakeholders 1. 2. Review corporate policies and procedures including social media policy Identify potential issue scenarios and develop escalation system 3. Formulate responses to potential issues and key messages 4. Monitor online conversations and identify online advocates & detractors 5. 6. Audit digital assets and prepare additional response assets as necessary Engage supporters and build up credentials 7. Simulate crises using Firebell and traditional techniques 8.
6 practical tips for dealing with an online crisis
Crisis Response Define the situation and appropriate response / action 1.
Except for very public crises (plane crashes, consumer product issues) or where the crisis relates to the medium itself (twitter gaffe, negative video) social media should be used as a reactive rather than proactive channel
For social media crises, a response in social media is the recommended response
Crisis Response Review policies for appropriateness to specific crisis 2.
Occasionally a crisis will occur that cannot be predicted
The procedure for swift policy amendments needs to be put into action in these situations
Crisis Response Activate influencers, launch dark sites and publish / distribute key messages 3.
Activate ‘dark sites’ and distribute key messages to key influencers
Publish key messages on brand’s online and social media platforms
Correct erroneous / misinformation on social using myth-buster sites and corporate social presences
Crisis Response Source: KRC Research / Weber Shandwick 2009, n=950 company executives across 11 countries
Crisis Response Continuous and in-depth monitoring to gauge opinion and understand when crisis is abating 4.
Additional international resources should be applied and frequency should be increased to hourly to provide round-the-clock monitoring
Volume and sentiment will demonstrate whether the crisis is still in full-flood or whether it is abating and how the brand’s response is faring with the audience
Additional influencers will appear without warning – a rapid outreach to influencers is often called for
Crisis Response Increase response reach through paid media and search 5.
Search engines amplify both positive and negative stories and by buying paid search keywords (e.g. “oil spill”) you can get your organisation’s message out to a wider audience
Other social networks allow buying of targeted ad space (e.g. Twitter, Facebook, Weibo, RenRen) that can also help increase your message’s reach
Crisis Response Implement post-crisis audit and rebuilding plan 6.
Perform a post-crisis analysis to help determine best practice moving forward
Continue your programme of social media monitoring to ensure you are able to spot any flare-ups or new crises hitting in good time
Continue your influencer engagement programme – reach out to your advocates and keep them informed on your organisations continued efforts
Make sure your employees are informed on what the organisation will be doing to learn from the crisis and how they helped to drive the conclusion
Crisis Response Summary Define the situation and appropriate response / action 1. 2. Review policies for appropriateness to specific crisis 3. Activate influencers, launch dark sites and publish / distribute key messages Continuous and in-depth monitoring to gauge opinion and understand when crisis is abating 4. Increase response reach through paid media and search 5. 6. Implement post-crisis audit and rebuilding plan