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January 5, 2016

The top 10 reputation crises of 2015

Reputation continued to move higher on the marketing agenda for companies last year, but for a number of big brands, it wasn’t a high enough priority and they suffered disastrous consequences. I take a look at the top 10 reputation crises of 2015 and where these brands went wrong.

  1. Volkswagen

Volkswagen Crisis

German car manufacturer Volkswagen wins the title for perhaps the biggest reputation fail of 2015. In September, it was revealed that Volkswagen had cheated diesel-emissions tests to make their cars seem more environmentally-friendly than they actually are, meaning they had lied to customers, shareholders and staff.

Reaction: Chief Executive, Martin Winterkorn accepted responsibility upon his resignation shortly after the scandal, however denied having any knowledge of the cheating software being installed and in use. He later stated, “Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.” Volkswagen’s new Chief Executive, Mr Mueller has since promised to rebuild the trust lost through this scandal.

  1. TalkTalk

TalkTalk suffered an online hack which resulted in a serious data breach with 221 million email addresses being compromised. TalkTalk customers feared that personal details such as names, addresses and credit card/bank details were accessed by hackers, putting them at risk of personal and financial consequences. This scandal was said to have cost TalkTalk up to £35m.

Reaction: TalkTalk initially failed to notify their customers with a significant amount of information. This led to customers taking their complaints to social media, predominantly Twitter with almost 200,000 tweets on the topic within seven days. The scandal was also trending on Twitter for two days. The company began responding to as many customers individually as possible in order to keep their online presence and customer relationships intact whilst CEO Dido Harding released an apology/reassurance video via the @TalkTalk_UK Twitter account two days after the scandal broke.

  1. Subway

Jared FogleAugust 2015 saw Subway’s spokesperson Jared Fogle found guilty of sex crimes and handed more than fifteen years in prison.

Fogle was thrust into the spotlight when hired in 2000 by the global sandwich chain to share his incredible weight-loss story, to which he claimed was down to eating the chain’s sandwiches.

He quickly became a well-known spokesperson for the chain and well-known amongst the fast food industry, something that proved very damaging for Subway in the aftermath of the scandal.

Reaction: Within hours of the raid on Fogle’s house being announced, Subway had responded online with a statement reading; “Subway and Jared Fogle have agreed to suspend their relationship due to the current investigation. Jared is cooperating with authorities.”

  1. New York Stock Exchange

The New York Stock Exchange’s systems went down during trading day in July for at least three hours due to a technical glitch, causing major panic. At first, it was assumed a cyber-attack was to blame, raising questions over the automation of Wall Street and the seeming lack of a recovery system.

Reaction: Tom Farley, president of the NYSE was eager to inform the public that the problem was located and fixed and that there was no reason to suspect that the source of the issue was external. The panic caused however, highlighted the necessity for a disaster recovery plan and a strategy for reassuring the public as quickly as possible.

  1. SeaWorld

SeaWorldSeaWorld launched a campaign back in March 2015 called ‘Ask SeaWorld’ which completely backfired. The campaign invited the public to tweet questions to them about the company’s treatment of animals.

Following 2013’s popular documentary ‘Blackfish’ which appeared to show SeaWorld’s animals being treated badly, the spotlight has been firmly on the theme park, making it perhaps not such a good time for them to open themselves up to further criticism. The campaign led to mostly negative tweets about how badly the company treats its animals, further emphasising the negative attention they’ve already received.

Reaction: As the thousands of condescending, yet honest tweets came in to the @SeaWorld account in response to #AskSeaWorld, SeaWorld hit back, labelling thus members of the public challenging their ethics as online “trolls”. Although the company has seen a significant decline in profits since the release of Blackfish, this particular incident only added to their declining reputation and fuelled the negative opinions throughout the public.

  1. Airbnb

In October, Airbnb launched a campaign in San Francisco ahead of a vote on new regulations which could hamper the company’s business. Clearly unhappy about the amount in taxes the company would have to pay, Airbnb decided to plaster passive-aggressive tax-hating advertisements all around the city.

The ads seen on bus shelters and billboards were not well received by the public and led to one San Francisco citizen in particular putting the letting site in their place.

Reaction: Airbnb promptly apologised for any offence caused by the campaign and began to remove all offending billboards/posters. They stated; “It was the wrong tone and we apologise to anyone who was offended. These ads are being taken down immediately.”

  1. Urban Outfitters

Urban OutfittersIn February, popular clothing retailer Urban Outfitters came under fire for a product resembling the uniform gay prisoners in Nazi concentration camps were forced to wear. The Anti-Defamation League called upon the clothing company to stop selling the product immediately.

Reaction: There was no public response from Urban Outfitters, however the product was removed from sale shortly after the story broke. This is not the first time the retail company has come under fire, earlier in 2015 they responded to further insensitivity claims with regards to what appeared to be a blood stained ‘Kent State University’ jumper. They publicly apologised, claiming that the design was part of their collection.

  1. Starbucks

Starbucks launched a ‘Race Together’ campaign last year to get employees and customers talking about the sensitive and personal issue of race. Employees were encouraged to write #racetogether on the ever famous takeaway cups. The campaign backfired and actually led to criticism of being highly inappropriate, the #racetogether hashtag was quickly high-jacked on Twitter.

Reaction: Howard Schultz, Starbucks Corp Chief Executive maintained that their intentions were all well and that the coffee giant only wished to “[…] elevate national conversation.” Schultz stood his ground and went on to conduct talks and conferences surrounding the topic of race and racial discrimination.

  1. Chipotle Mexican Grill

With incidents of e-coli and 141 cases of norovirus contamination at Chipotle Mexican Grill, the company found itself in a crisis – with plummeting stock prices and stunted revenue growth. The Mexican Grill food company known for their use of fresh food faced backlash and feared for their future reputation.

Reaction: Whilst one CEO held the media responsible for over-reporting the case, co-CEO Steve Ells made a public apology and assured the public that after the implementations following the investigation were in place, Chipotle would “[…] be the safest place to eat.”

  1. Tinder

In November, Tinder CEO Sean Rad decided it would be a good idea to boast about his sexual exploits to the London Evening Standard. He was part of a disastrous interview, confusing the meaning of the word “sodomy” and generally making a painful article highly entertaining to read for all the wrong reasons.

Reaction: With Rad’s comments being published only the day before public trading began with Tinder’s parent company it was bad timing for the dating company. Tinder’s owners, Match Group responded with a statement outlining that Rad was in fact a co-creator and “[…]not a director or executive officer of the company and was not authorized to make statements on behalf of the company for purposes of the article.”

Preparing for a reputation crisis

Many of last year’s crises listed above may have been difficult for the companies to avoid, but with a clear, future-proof crisis communications strategy in place, the long-term damage caused to a company’s reputation can be significantly limited.

As well as preparing for if the worst happens, you can also take steps to limit the risk of a crisis happening in the first place with intelligent monitoring and by proactive management of the online conversation surrounding your company.

If you are facing an issue relating to company online reputation, please contact me on 0203 542 8689 or at simon@igniyte.co.uk for more details. All enquiries are dealt with in complete confidence.

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