During a crisis, a business or enterprise needs to communicate appropriately to recover, reduce or prevent the loss. Single inappropriate communication can lead to a big loss that can be financial as well as related to the reputation of the company.
The more a company has an established reputation, the more challenging it becomes to handle crisis-like situations. There are so many success and failure stories when we look into some recent crisis communication examples. Even top-notch companies failed many times in managing crisis communication in sensitive moments. Experienced business leaders and teams know the proper way. They communicate with the stakeholders to prevent a significant loss or recover from something already happening.
A stakeholder can be anyone who opposes a company during crisis communication. From investors to media, and from customers to global netizens, they can be from any class or category. It makes it necessary to adopt the skill of managing a crisis. Here we are with some popular crisis management examples that are worth studying.
What is Crisis Communication?
Crisis communication is self-explanatory as it is a way to communicate during a crisis (mostly in businesses). However, the purpose of this communication is the major thing to understand. Communication that comes from the victim entity should have a positive impact on the stakeholders.
When an incident causes harm to the reputation of an organization, it needs to be addressed in a proper manner. Having no pre-planning for crisis communication can make things worse. With a mismanaged crisis, a company can lose all its customers and brand reputation, and sometimes investors and shareholders start turning back.
Types of Crisis:
There are several crises, and they all have to be managed differently. Because a crisis creates a very sensitive situation, companies need to be aware of their communication. Following are the major five types of crisis:
A technological crisis occurs when a technical error within the company’s infrastructure causes harm and impacts its customer and investors in one way or another.
It is when someone designated for a higher position in a reputed organization gets involved in a controversy. This crisis can cause harm that goes from personal to the organizational level.
This crisis is related to the monetary loss occurring to a company by any means. It could occur due to a major investment agreement withdrawal, drop in shares, fall back in product sales, etc.
This crisis is directly related to an organization’s reputation, and it could ultimately result in financial loss. In such cases, the company is blamed for inappropriately taking over-advantage of customers.
A natural calamity can also damage an organization’s reputation as well as assets. Natural disasters are difficult to resist as nobody has control over them. But proper communication can help a company overcome a negative reputation after a crisis and loss.
Crisis communication is not only a core part of public relations but also a crucial aspect of business administration. Addressing the opposing party is not that easy when a company’s authority, credibility, and integrity are questioned. Now you know what crisis communication is, let’s understand its importance with some crisis communication examples.
Crisis Communication Examples:
There are dozens of crisis communication examples, and one can learn different lessons from them. Brands like Amazon and even aerospace companies like Boeing faced a crisis. Some of these brands successfully managed the problem, while some failed at it and bore monetary and brand value costs.
Domino’s faced a significant setback of reputational harm in 2009. A video went viral in which Domino’s employees were seen preparing food orders in an unclean way. An employee was sneezing over the food order, as clearly noticed in the video. After that, all the netizens started questioning the hygiene level of Domino’s branches and their kitchens.
Domino’s tackled the crisis successfully and recovered from the damage caused to the brand’s reputation. You can see today how Domino’s is becoming more popular and expanding all over the world. Domino’s did this with the help of transparency and apologized. After the video went viral, the higher management took it seriously and came in front and presented the accurate information transparently. Domino’s that time, the US President apologized in a Youtube video and assured that the necessary actions were taken.
Facebook’s privacy breach scandal is one of the company’s most popular and most lose-causing crises ever. In 2018, media and regulators found that Facebook sold the private data of around 87 million users to a UK-based agency. That data was later used in the United State’s Presidential elections. After the founding of Facebook, Mark Zuckerburg had to face legal cases and presented in front of various regulators in the US.
How Zuckerburg Tackled?
Zuckerburg and the management of Facebook eventually failed to tackle this crisis. Consequently, Facebook had to pay more than a $100 billion fine to different authorities. Also, Facebook user’s lost faith which impacted a significant drop in the company’s revenue. The biggest mistake of Facebook was that the crisis wasn’t addressed at the initial stage.
Kentucky Fried Chicken or KFC, the giant chicken QSR chain, faced a crisis in 2018 in the form of no chicken in 700 franchises. It happened because of the change in supply chain companies. After that, people started making fun of KFC in an ironic way. Netizens started throwing critique jokes on KFC.
KFC came to the forefront and answered all the customers’ questions. Those questions were full of humor, and KFC replied with a double dose of humor. It turned a sensitive moment into a fun moment, and ultimately KFC retained its credibility.
One of the biggest eCommerce companies, Amazon, has also gone through similar situations. In 2019, Amazon’s employees started opposing the company and blamed it for abusive and poor employee policies. It was all during the 2019 Amazon Prime Day Sale Festival. It impacted the company’s reputation as well as its revenue. Amazon again faced a crisis in 2021 when its warehouse in Edwardsville, Illinois, was damaged by a tornado. Six people died in this incident. The eCommerce giant was criticized once again.
Amazon faced even more criticism when it hadn’t replied to the questions being raised online. There was a complete lack of crisis communication shown in Amazon’s policies. It is considered one of the unsuccessful crisis management examples.
Pepsi faced a crisis when its customers started finding awful things in the cans. The incident is from 1993, when more than 50 people found syringes, screws, bolts, etc., in Pepsi’s can. People started losing faith in the Pepsi brand, and a crisis was initiated.
Pepsi took the criticism seriously and tried to follow the best public relations practices. The brand defended itself by stating itself innocent. To be transparent, Pepsi showed the whole Pepsi soft drink preparation process through videos. In the end, the truth came out that someone in the local stores was putting such things in the cans. It proved that Pepsi was not a defaulter, and the brand retained its reputation. Pepsi’s crisis communication case study is one of the best successful examples of crisis communication.
Virgin group successfully handled a major crisis in 2014. A space tourism craft was being tested above the Mojave desert in California. This Virgin Galactic test flight crashed at that time. In this accident, one of the two pilots died, and the other was majorly injured. Due to the presence of mind and importance of humanity and public relations management skill, Sir Richard Branson took it on his own shoulders. He visited the site and showed grief for the victim. The crisis was therefore managed with his intelligence and early response.
7. JP Morgan Chase & Co.:
One of the biggest multinational investment banks, JPMorgan Chase & Co., has also faced a crisis in the past. The crisis communication case study happened in 2012 when a trader in the Bank’s operational risk management team developed fundamentally wrong investment strategies. It caused more than a $6 billion loss to JP Morgan Chase & Co. This is not the only loss; apart from this, the Bank was charged a fine of up to $1 billion by different regulatory authorities. The stock market loss was also a part of this crisis.
8. Burger King:
The biggest burger QSR chain Burger King was just about to face monetary or reputational loss in 2019. However, the patience that Burger King had at that time and the trust it showed in the Judiciary were exemplary. In 2019, a person who claimed to be vegan challenged and opposed Burger King’s “Impossible Burger.” According to Burger King, it was a meatless burger. But the man claimed that the meatless patties were cooked on the same grills used for meat patties. Burger King didn’t entertain it much and waited for the court’s decision. The decision came in Burger King’s favor, and after that, Burger King responded to it.
If you want to see the worst crisis communication examples, then Boeing’s case is the crisis communication case study that you are searching for. At the end of 2018 and the beginning of 2019, within six months, two of Boeing’s airplanes crashed, one in Indonesia and another in Ethiopia. More than 300 people died in both accidents. Firstly, Boeing made a big mistake and, without consent, stated that the crash resulted from the pilot’s experience. However, later, authorities found that it was a technical software glitch in the flights. Boeing paid $2.5 billion as a fine, dozens of its orders were canceled, regulators put a hold on its airplanes, and the stock market crash was also seen.
It becomes more challenging to go ahead without a proper crisis communication plan. Businesses of all nature need crisis management systems. Crisis communication is the core part of this management and can help in many ways. No company knows when a crisis will hit it. So it is crucial to be prepared for any future harm.