Trust and reputation are fragile. As Warren Buffett says, “it takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” PR disasters can damage a brand’s reputation beyond repair, whether they’re inside or outside of the business’ control.

What is a PR disaster?

A PR disaster or crisis is an event that has the potential to negatively affect your brand reputation. It can cause significant harm to employees, clients or other stakeholders.

These events can be beyond a company’s control, or – more often than not – they can be predicted and mitigated or prevented with proactive measures before the crisis unfolds.

When a crisis happens, despite any proactive measures, reactive measures are also often needed – this is known as crisis management.

Below, we unpick three notable PR crises, exploring the key takeaways to protect brand reputation.         

1. Nike

The event:

In 1996, social media activists, academics and journalists rallied together in an anti-Nike campaign, after images were released showed children sewing Nike footballs and running shoes.

Crisis management:

Ultimately, Nike needed to take responsibility for its factory conditions, meaning change along the supply chain was ultimately what was needed to resolve the crisis.

A new labour practice department was set up, along with a series of changes and set minimum standards to monitor suppliers’ labour practices.

Nike now has a mission statement on forced labour. Minimum standards have also been set, including a ban on forced labour and a working week that does not exceed 48 hours.

Crisis management analysis:

Denying responsibility for its suppliers’ factory conditions was bad for Nike’s PR because, in the 1990s, there was undeniable evidence of poor working conditions, for example children working in sweatshops.

However, Nike’s introduction of an internal labour practice department demonstrates how it was taking steps to audit its supply chain and ensure it operates with ethical suppliers. Prioritising ethical practice over profits enabled consumers to feel reassured that they are not buying products manufactured by underage children.

2. Alton Towers

The event:

Alton Towers (owned by Merlin Entertainment) was hit by its biggest PR crisis in 2015, when two carriages collided on the rollercoaster ‘The Smiler’. 16 people were injured and five had serious injuries with two girls needing leg amputations. This incident unsurprisingly gained mass media scrutiny, as well as a widely covered court case.

Merlin pleaded guilty to breaching the health and safety laws, and it was criminally convicted as a result. The company paid out a £5 million health and safety offence fine, as well as compensation to the victims.

Crisis management:

On top of hundreds of millions of pounds in costs, CEO, Nick Varney, accepted full responsibility for the tragic event and issued a public apology. He remained calm and empathetic during high-pressure news interviews and was praised by many for his response.

The event was described as a wakeup call for the theme park to put further risk assessment measures in place.

Crisis management analysis:

Merlin’s crisis communication is a good example of how to avoid a long-term disaster – while footfall decreased 25% immediately after the crash, it has now reached pre-crisis levels. The ‘wakeup call’ for Merlin allowed it to review its current risk assessment to essentially provide a better and safer experience for its customers.

An image of someone handing someone a life raft

3. E.ON

The event:

Maintaining a good reputation and brand image amidst the soaring price of energy bills is a current challenge for energy companies. E.ON recently suffered a PR crisis after it responded to customer complaints about energy bills by sending pairs of socks in the post to many of their customers in the UK – a move that was poorly decided and ultimately patronising.

Crisis management:

E.ON was backed into a corner following this crisis and made the wise decision to issue an apology to its customers. E.ON is now publicly urging the government to invest, so struggling households can live in cheaper homes. It has also published a white paper, which mentions how cutting carbon emissions can lead to cheaper energy bills.

This change of approach seems to have avoided further damage, with no evidence that the socks in the post led to customers changing their energy provider.

Crisis management analysis:

What we have learned from this crisis is that a business needs to directly address complaints and provide solutions that relate to the complaints. In E.ON’s case, sending socks in the post was not a solution to the complaints of rising energy bills. Instead, E.ON should have addressed how it was taking measures to ensure cheaper bills in the future.

Want to know more about how crisis management could help your business?

Learn more about crisis management or book your free communications review here.  

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