OPINION7 July 2022

Calm in a crisis: protecting brand reputation

FMCG Opinion Trends

Consumers have become more vocal about their expectations from brands, meaning businesses need to take care when making decisions, as Sensu Insight’s Steve Leigh explains.

Person rating company service out of five stars

The war in Ukraine is the number one topic of discussion across the globe, with world leaders, governments and global corporations all expected to respond and act in a responsible and ethical manner.

This expectation imposed by consumers means organisations must react swiftly and effectively to preserve business reputation. Businesses that fail to respond quickly enough, or not to the satisfaction of the public, will face reputational damage.

The actions of global brands McDonald’s and Coca-Cola in response to the ongoing conflict in Ukraine are testament to how business reputation can be preserved and improved by a quick response. Our recent research demonstrated this, with McDonalds and Coca-Cola receiving positive reputational impact scores (+592 and +390 respectively in our index) from the public following their quick decision to fully suspend all operations in Russia.

The businesses with the lowest approval ratings were either considered too slow to react, too closely associated with the Russian state or (in the public’s view) had put business need ahead of humanitarian concern. For example, Shell received a negative impact score (-238 ) due to media reports it was attempting to work round its self-imposed restrictions.

So, how should businesses respond to world crises to preserve reputation?

Be swift and decisive
Ultimately, taking swift and decisive action at the right time in the news cycle had a greater impact than the decisions companies made. Ensuring that the response time is short boosts the chance of positive recognition from both the media and the public. This is evidenced by Mastercard, which suspended operations in Russia on 5th March and consequently received a high impact score (+424.3 ) for its swift response.

Our research found brands that failed to act quickly and decisively were accused of following by example, as they were slow to put out their own statements in comparison to others.

Communicate clearly
Nestle’s response to the Ukraine crisis is an example of the importance of clearly communicating the reasons behind business decisions. Nestle decided not to suspend activities in Russia completely, instead it continued the trade of essential products like infant food and hospital supplies, whilst halting imports of non-essential brands such as Nesquik and Kit-Kat.

By taking this approach Nestle might have been expected to receive a negative public response. However, effective communication and a clear value-led stance meant it received a positive impact score (+137 ), with 30% of those aware of its association with Russia reporting an improved perception of the company.

The clear statement on its website has meant that public approval has increased significantly, as customers respect the decision to take into consideration the needs of Russian civilians without engaging the wider Russian economy.

Listen to stakeholders
Ensuring that all stakeholders agree on a company-wide response is key to maintaining satisfaction and brand reputation. Understanding the expectations placed on the brand by consumers and business partners will make decision-making easier, as the business will be able to respond effectively to what is expected of it.

Taking swift and decisive action when confronted with a crisis, communicated effectively and taking into consideration all stakeholders, is the best way to preserve and even improve brand reputation. This not only makes the stance of the brand clear, but it also presents the response itself as genuine and well-motivated.

Steve Leigh is managing director at Sensu Insight