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Friday, November 21, 2008

Getting into Hot Water Once in a While Keeps You Clean

"I believe in getting into hot water; it keeps you clean."

-- G.K. Chesterton

Sometimes it's good for brands to get into trouble -- that is, for customers, and the public generally, to begin to question if a brand is what it says it is. In fact, I would argue that the more sudden and urgent the brand crisis, the better it is for the brand.

Whole Foods Market is a good example of a brand in crisis that has used its troubles as a wake-up call to shore up its reputation. When Whole Foods was forced to recall beef from its shelves in August in an E. coli outbreak, customers suddenly wondered whether its quality standards were really that much higher than other big-box grocers. It hasn't helped that food prices have been going up across the board and the economy is in a shambles. In many consumers' minds, Whole Foods had become "Whole Wallet."

Since the beef crisis, Whole Foods has been working hard to prove that it is different -- and not necessarily as expensive as everyone thinks. The retailer has blogged about the crisis, issued comparison shopping challenges, and reinforced its quality claims.

What if there hadn't been a brand crisis for Whole Foods? What if the retailer had simply continued to charge high prices, had gradually lost its quality distinction in its customers' minds, and little by little its growth slowed until, over a period of years, it began to lose market share?

Compared to this fate -- which has befallen too many brands to count -- a crisis that gets a company's management moving sounds pretty good, doesn't it?

I've managed my share of brand crises over the years, and with few exceptions, they've ended up being good for the companies involved.

As the Wall Street Journal's Jerry Seib opined today in reference to our current economic troubles and the opportunity they present for President-elect Obama:

The thing about a crisis -- and crisis doesn't seem too strong a word for the economic mess right now -- is that it creates a sense of urgency. Actions that once appeared optional suddenly seem essential. Moves that might have been made at a leisurely pace are desired instantly.

The same benefit is true for brands -- particularly at Fortune 1000 companies, where the bureaucracy levels can rival those of Congress.

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