Starting a business is a big challenge, an important part of which is profiling your company and marketing: how do you present yourself to the outside world; how do you communicate? If this goes wrong, you run the risk of reputation damage: a negative image of your organization. This can then have a bad impact on sales.
Reputation damage is caused by improper communication. As a company you want to project a certain image and stick to it, but this can go wrong due to a lack of good communication.
A well-known and topical example is the HEMA. They would like to sell their company and therefore want to modernize and make themselves more attractive internationally. Consequence: the archetypal Dutch retail chain is slowly turning into an internationally oriented company. This causes angry customers who no longer feel comfortable with the store. It started in 2016 with stopping advertising about Easter, to accommodate other faiths. Then the big black Pete dilemma, where HEMA stopped putting black Pete on their items and recently: gender neutral clothing.
“Don’t put people in boxes”, is a frequently mentioned statement. HEMA expresses this in the labels of the children’s clothing that have changed from ‘boys’ and ‘girls’ to ‘kids’. Again, opinions are divided on this step. Is this a good move? Or will it take away your Dutch image and turn you into one of the many retail chains?
In today’s society a lot of communication is done through social media. As an entrepreneur you can hardly stay behind, many social media platforms offer an excellent opportunity to advertise and profile your business. However, social media also has a negative side. Dissatisfied customers can use social media to make their voices heard and thus create negative publicity and increase the negative exposure of an organization.
Abercrombie & Fitch
Another example of a company that has suffered reputational damage mainly due to the consequence of social media is Abercrombie & Fitch. In 2013, then-CEO Mike Jeffries made a number of controversial statements. Among other things, he said the following: “At every school, you have the cool and popular kids and then you have the not-so-cool kids. We focus on the cool kids. We’re targeting the attractive all-American kids with a great attitude and with lots of friends. A lot of people don’t belong to wear our clothes, the clothes are not for them. Are we exclusive? Absolutely!” This statement has been picked up by various media outlets and has also been much discussed on social media, causing Abercrombie & Fitch to take a big hit. In the year 2013, they lost 30% of their market share. This led to Mark Jefferies being deposed from his position as CEO and retiring not much later. After this, Abercrombie & Fitch has been doing a lot of damage repair. One of the ways they have done this is by listening more to what the customer wants and adjusting the brand’s profiling accordingly.
But what can you do to protect your (future) company against reputation damage?
The most important thing is to keep communications clear. Before you put out a message, check that it cannot be misconstrued.
Invest in managing different social media channels. Someone to watch what messages are going out about the company.
Agreements within the company about external communications. Make sure you have a clear policy and that everyone is aware of it. If you do find yourself in a situation where it is inevitable that the media will pick it up, make sure that you, as the manager, are the first to communicate about the situation. In this way you have control over the situation and you can immediately quell rumors.
This is why we as communication specialists are a crucial factor for a good reputation!