A TCI Book Review

Crisis Marketing - When Bad Things Happen to Good Companies

Joe Marconi
NTC Business Books, American Marketing Association, 1997, ISBN 0-8442-3237-8

This book is about what a company should do when facing a public relations crisis - be it an oil spill, a product recall, exposure of wrongdoing by a highly placed executive, a product that has become socially unacceptable to a large sector of the population, or some other headline story that throws the company in a bad light. The author defines a list of do's and don'ts that make fundamental sense for a company in such a situation. He also equates crisis marketing with crisis management.

"Crisis marketing - crisis management - like the on-going management of the business itself should be based on honesty, integrity, and on being a good corporate citizen. It is not based on a systematic plan to deceive the public." (p. 218)

However, before a company faces such a crisis, Marconi advises it to concentrate on building up a reservoir of goodwill that can be draw upon in bad times. This essentially consists of undertaking a variety of initiatives that will generate positive public attitudes towards the company and build trust. These sorts of initiatives include sponsorships of various community initiatives, involvement in charitable activities, placement of 'advertorials' that explain openly and honestly the company's position on potentially controversial issues, etc. (Even if there is never a crisis, this will probably be an astute marketing move.) The premiere example of this that Marconi uses is McDonald's, which has built up such a huge fund of trust through public service initiatives that when the occasional accusation does appear - like the company using worms in burgers or supporting the Church of Satan (both actual incidents) - the public response is to dismiss it as being beyond credibility.

Once actually in a crisis situation, though, Marconi offers the following advice to companies:

"Prepare a situation analysis. Determine what might need to be added or changed relative to your original marketing plan.
Select a single spokesperson, someone who understands the art and science of effective communication, to provide information and answer questions for your side.
Don't exceed credibility. Be honest.
Go public with your problem before someone else does. Be honest.
Acknowledge what you're doing about it. Ramifications of crisis are increased when the subject compounds the problem by lying or trying to minimize its importance.
Anticipate the worst-case scenario and plan for it, if only as a contingency. The motto "be prepared" is no less a good strategy for the marketer.
Advertise your position through letters, paid ads, press releases, newsletters, and the availability of a speaker.
Control your crisis by taking a leadership position in public. Be first with the statement; don't wait to be asked or for your critics to shape the story.
Donąt let your spokesperson upstage your message. Attempting to buy an outsider's credibility is a risky and misguided strategy.
Create and draw from a reservoir of goodwill. Be well positioned before the crisis.
Accept the counsel of professionals. Look for objectivity to be certain you haven't overlooked any possible strategies.
Be willing to put your message in writing as a way of reinforcing your integrity. And be honest." (pp. 45,46)

The first of these points he stresses throughout the book - which is to place the company or industry under fire within a broader context - that is, to talk about its economic role (jobs created, other businesses supported, customers who depend on its products, etc.). This will help present both sides of an issue, and will show the company or industry within the context of the positive contributions that it makes to the economy and to society overall.

Elsewhere in the book (pages 154 to 157) he summarizes these principles in seven rules:

Rule 1: Get your comment out first and fast.
Rule 2: Show concern.
Rule 3: Pledge cooperation.
Rule 4: Take responsibility.
Rule 5: Tell what you're doing about the problem.
Rule 6: Discuss the crisis in a larger context.
Rule 7: If you're wrong, apologize.

The book contains several examples of companies and industries that have found themselves in 'crisis management' mode. These include:

the person, product and brand named Donald Trump (an example of not building a base of trust and goodwill that will help carry one over the bad times)
contrasts between two oil companies: Mobil (a company that builds a tremendous amount of goodwill through activities such as sponsorships of various cultural activities and the placement of advertorials) and Exxon (a company that did just about everything wrong in the Valdez oil spill disaster) - Marconi goes through an interesting exercise in the book where he shows how Exxon violated every one of the seven rules articulated above
the fur industry, which is under fire for cruel and unethical treatment of animals
the tobacco industry, which is under fire for cruel and unethical treatment of humans
the masterful response of Johnson & Johnson to the Tylenol incident
Pepsi's positive response to the 'syringes in pop cans' scare (which, as it turned out, was entirely unfounded)
Volvo's sloppy response to the leaked news that some of its ads were faked (a Volvo car used in a live product demonstration of strength and resilience was in fact reinforced, and the cars that it was being compared to in the demo were weakened - this fact was leaked out to the media, to the great embarrassment of the company)
the highly-respected brokerage firm of E.F. Hutton's disastrous response when it got caught engaging in the very illegal practice of cheque-kiting (where uncleared cheques are shifted from one account to another for the purpose of showing big balances against which cheques are written before the funds are actually available)

Crisis Marketing is a very useful book, full of good advice and examples, and is the kind of thing that every company - whether currently in a crisis situation or not - should be aware of.

THE TCI MANAGEMENT CONSULTANTS RATING: * * *

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