How PR Crises Impact Brand Reputation

According to a new study from Clutch.co, how companies immediately respond to PR crises has a lasting impact on their brand reputation.

Using United Airlines, Pepsi, and Uber as examples, Clutch surveyed 500 consumers to measure their willingness to purchase products or services from United, Pepsi, and Uber before, immediately after, and seven months after each brand experienced a severe PR crisis.

With seven months having passed since each brand underwent a public fallout, researchers asked the question, ‘Does time heal all wounds? Or, do certain events and their ensuing message cause permanent damage to a brand?’

As it turns out, companies that undergo a severe PR crisis are able to recover depending on the response rate of their PR teams.

For United Airlines, consumers lost a sense of trust and safety with the airline immediately after witnessing the violent removal of a passenger from a flight. Consumers’ willingness to purchase a United Airlines flight dropped from 68 percent to 42 percent.

Seven months later, United Airlines has recovered its consumer following slightly, with 52 percent of consumers saying they’ve “moved on” from the crisis. However, 30 percent of consumers still say they distrust United’s brand and will no longer buy United flights.

According to the survey, United Airlines has not fully redeemed its reputation because their PR response rate was slow and the company’s apology was considered insincere by consumers.

Pepsi, on the other hand, executed an immediate PR strategy in response to the negative reaction consumers had to their commercial featuring Kendall Jenner. Pepsi quickly removed the advertisement, apologized right away, and owned responsibility for the marketing mistake.

As a result, consumers’ willingness to buy Pepsi products only dropped from 56 percent to 55 percent, and the 1 percent loss was fully redeemed 7 months later.

Because Uber is a young company limited to specific regions of the country, Uber has not had enough time to build a broad consumer base. When the company is then featured negatively in the press on multiple occasions, Uber cannot rely on its consumer following to support its brand in crisis mode.

The survey found that immediately after witnessing Uber in the news for various allegations of fraud and sexual assault, consumers’ willingness to purchase rides with Uber dropped from 60 percent to 47 percent.

Seven months later, 50 percent of consumers now say they are willing to ride with Uber having “moved on” from the negative news stories. Thirty-six percent of consumers, however, say they are still unwilling to invest in Uber because they’ve never used Uber before and the negative press dissuades them from changing their purchasing behavior in way that would support the brand.

In the end, brand reputation is incredibly important for a company’s ability to succeed. To build long-term brand reputation, short-term PR strategies must be ready to be implemented at all times. Tim Collins, former SVP of Experiential Marketing at Wells Fargo, explains:

“Your long-term PR strategy hopefully builds the brand reputation that you can take to the bank when your company has a shorter-term PR issue.” – Tim Collins, Principal at Grisdale Advisors

To have consumers trust in your brand is a vital element of a successful business. Make sure your company maintains this trust by having a PR team ready and available in the event of a true PR crisis.

To read the full report, please visit: https://clutch.co/pr-firms/resources/how-pr-crises-impact-brand-reputation


Jenna Seter is a Business Analyst & Content Marketer at Clutch Co. in Washington D.C. Follow her on Twitter @jennaseter.

Posted in [Blog].

Join the Discussion