Born by the Café Javas (CJ) saga, incidents of negative publicity are widely prevalent in the marketplace. These range from safety concerns emerging from internal quality controls mistakes, or ill-motivated consumer complaints intended to taint the image of a company and cause revenue loss.
Negative publicity of a brand is synonymous with revenue loss. Companies that have faced the wrath of negative publicity have suffered a major decline in sales and market share.
But some of these companies regain momentum in no time, and maintain their market share. Their competitiveness remains unmatched, which reverses the assumption that negative publicity affects brand credibility.
For a business to reach a point of having a negative publicity-resistant product despite internal quality control errors that threaten lives, you must have a thick skin to sail through a crisis.
Several companies have been hard hit by negative publicity but remain strong. Local restaurant, CJ is the latest to face the wrath when a customer claimed to have been served a milkshake with a rat last month.
A viral video on social media hit the sensitive part of the business. Fortunately, the public sympathised with CJ, rubbishing the customer’s claims as intended to extort money or cause revenue losses.
A source who preferred anonymity at CJ told Daily Monitor that they were shocked to see such a video.
“Our sales were neither affected,” he said.
Although there are no available records for the aforesaid assertion, negative publicity regardless of the magnitude is bad for business.
Fortunately, the 16-year old restaurant got public support which perhaps signals that no major losses occurred to the business.
Elsewhere, Samsung has bounced back from major public relations disasters.
According to Thunderfoot, digital marketing, and creative agency, in 2016, Samsung’s Galaxy Note seven smartphones were catching fire and exploding due to a battery malfunction. Sales were down by 15 per cent. The model was recalled as it posed a severe threat to consumers.
In such incidents, consumers normally retaliate by shunning the company product/s. Like nothing ever happened, Samsung subsequently surged stock values after delivering an improved product (Galaxy Note eight) with one of the highest operating profits in the world.
In 2015, Environmental Protection Agency (EPA) charged Volkswagen with cheating on emissions tests. Using illegal software that could detect when vehicles were being monitored and subsequently adjusting their performance to meet regulatory standards, the German automaker was slapped with billions of dollars in fines, and declining sales around the world as a result.
The company promised to compensate customers for damages, fix affected vehicles, or buy them back entirely, bringing the business back to normal.
Over the years, Century Bottling Company, the makers of Coca-Cola soda has been attacked over their product; Coke Zero which is likened to other health issues, including increased risk of heart disease.
With strategic planning and a commitment to improvement, it is possible to bounce back from the edge and build a strong unbreakable brand. Wondering how this is possible?
In the case of CJ, the anonymous source shared, “The support from the public demonstrated customer loyalty which we have over time.”
This depicts that strong customer loyalty can be achieved through honesty and good values and offering quality.
“For instance, if you promise to offer pizza with chicken flavour, it should be the case without any compromise,” he said, adding that their pricing vis-à-vis what they offered has hugely contributed to building a loyal clientele.
Honesty in business is inseparable from values. They are the essence of the company’s identity, principles, beliefs, or philosophy of values. Core values educate clients and potential customers about what the company is about.
Entrepreneurship coach of Ability Explored, Mr Ronald Mayanja Omugalanda says, businesses build brands by creating a culture. In so doing, they are building a relationship with customers which keeps customers coming back regardless of the negative publicity.
Just like values, research is an integral part of building a strong brand. This is something companies, hard hit by negative publicity invest in heavily to either improve quality of the affected product or introduce a better item.
“Businesses should know what they want to achieve hence specialise. Specialisation calls for investment in research and benchmarking with the best in the market,” Mr Mayanja says.
Spending either on brand protection, or brand building is not something that companies should compromise. For instance, in trying to damage control, Volkswagen incurred $6.4b 9 (approximately Shs22t) in costs to compensate customers for damages that revived their market share.
Mr Mayanja adds that where damage control is impossible, the companies invent new products and promote them, a trick Samsung borrowed in 2016.
Painful but viable is owning up on your mistake in case of an internal quality control issue rejuvenates consumer confidence.
This is what many victims of negative publicity have done which has enhanced public trust in their brands. No wonder, they fall and get back up immediately.
“Some businesses own up, by giving responses to the crises. They keep doing what is right no matter the public opinion. They keep advertising to lure more people to get to know about their brands,” Mr Mayanja notes.
While owning up, it is important to have an internal complaints mechanism that works by addressing the issues instead of stifling them.
Dysfunctional complaints mechanisms
According to Mr Henry Richard Kimera, a consumer activist with Consumer Centre, even with genuine consumer complaints, companies invest a lot in covering up through paying off people in complaints bureaus.
“Both government and private sector (companies) have complaints mechanisms. For instance, Police have compliants reference element that is supposed to receive and resolve complaints.
Uganda National Bureau of Standards remains a key player government agency in handling consumer complaints for manufactured producs as Kampala Capital City Authority checks hygiene of resturants in Kampala.
The unfortunate part, Mr Kimera says, is that the respective agencies and private entities do not implement.
“Consumer concerns are not addressed conclusively or take long to be resolved. This is why consumers ended up not reporting and resorting to using other means,” he said.
The primary factor behind unresolved consumer complaints according to Mr Kimera is connivance where companies financially facilitate the complaints bureaus for their interests.