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Brand Crisis Management

  |  August 3, 2000   |  Comments

Last week Yahoo! got some negative publicity over its online auction site in France offering Nazi paraphernalia for sale, which is against French law. This was not a predictable crisis, even for the most experienced brand experts. But it ensnared the well-respected Yahoo! brand, which suddenly had to deal with a public relations nightmare. Martin explains how brand crisis-management programs can protect your brand from potential crises.

Last week Yahoo.com managed, yet again, to get its name mentioned in most media around the world. But this time, it wasn't positive news that brought public attention to the Yahoo brand.

The stimulus was from Yahoo in France where its online auction site included Nazi paraphernalia - Nazi medals, clothing, ephemera, and other artifacts - all available to the highest bidder. The crisis was over the French government's ban on racist representation in all media. The French authorities saw Yahoo's auction listings as an infringement of its jurisdictional authority.

This was not a predictable crisis, even for the most experienced brand experts. But it happened to ensnare the well-respected Yahoo brand, which had to suddenly deal with a problem fraught with negative associations.

Dot-coms haven't been around long enough to have gathered lots of crisis-management experience. But now, it seems, the honeymoon period is over. Everyday life has at last caught up with the Internet which recently seemed to offer its dot-com residents some measure of protection from critical analysis. But admiration for the online phenomenon has given way to realistic appraisal of dot-coms as business entities.

As my father always cautioned me, the higher you fly, the further you fall. And there's no doubt that dot-com brands have been flying high. But the glamour days seem to be over, and this puts new brands under a form of pressure they haven't had to deal with before. It's commonly known as "reality."

Established offline brands around the world have been in crisis situations hundreds of times before and, over time, they've developed crisis-management programs. A good example of this is the Australian biscuit brand Arnott's.

Some years ago, Arnott's, an icon of Australian identity as resonant for Australians as Vegemite, was faced with an extortion threat by a criminal who'd claimed to have poisoned some of the company's product. Experts advised Arnott's that such a threat was indeed capable of being carried out swiftly, the extortionist having given the company just three days to respond to his demands.

What would you do in Arnott's' shoes? Of course, the company was prepared for this unfortunate eventuality. It recalled all its biscuits, destroyed them, produced a new and totally different package design and, within days, was ready to relaunch the brand Australians had known for generations.

In the meantime, the PR department spun a story designed to appeal to the Australian consumer's sense of loyalty and, almost, patriotism: the danger of Australian companies being lost to overseas interests and the undesirability of a well-loved Australian company going under at the hands of international competition. The strategy worked well, garnered plenty of community sympathy and support, and prepared the way for Arnott's hugely successful relaunch.

Would your dot-com have been able to prepare all this in 72 hours?

Brand crisis-management programs predict possibilities and prepare for hypothetical eventualities. Just like regular fire drills, they set out step-by-step instructions for all players. Plans are developed over several years and tested to minimize the ill effects of crises should they occur. Or, let me say, when they occur. Because they do. The only unknown is when they are going to occur.

Crises will affect online brands, too. There's no more hype to hide behind any more. Consumers know just who you are and what you're doing. And they're as skeptical about online commerce as they are about offline commerce.

So, you'll have to think through every possible crisis; create detailed action plans to accompany each hypothetical scenario; and analyze management responsibilities and those of the advertising department, the customer support center and the investor relations team - everyone who's part of your business. Leave no stone unturned. And do it NOW. While you have time.

Crises don't disappear. They are managed with common sense. Are you prepared for your brand's worst nightmare?

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Martin Lindstrom

Martin Lindstrom is recognized as one of the world's primary on- and offline branding gurus by the Chartered Institute of Marketing. He is the author of several best-selling branding books including his latest, "BRAND sense: Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound," published by Free Press. BRANDsense.com details information about Lindstrom's "BRAND sense" and the BRAND sense Symposium, a branding conference running in 51 cities in 31 countries.

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