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According to marketing psychology speaker Johnson, how a company approaches communication about problems will depend on the business itself, as well as how serious the issue is.
"If it's a safety issue with the product, there are regulatory and liability concerns, and so almost certainly in these cases the company needs to come clean, do a recall, and formally apologize," he explained to Bored Panda via email.
"In less severe cases, when the product is merely faulty and not dangerous, it's still a best practice to take responsibility and apologize. The brand’s reputation is contingent on the quality of their products, and if they are consistently delivering a poor experience, this won’t be sustainable for the brand in the long term," Johnson said.
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"It will force the company into a position where it is competing based purely on price and on the advertising effectiveness, which is typically a losing proposition. All in all, the default should be to take ownership, repair the product, and to be transparent to the consumer."
Luckily for brands, consumers tend to be "surprisingly forgiving" when they're transparent about their failures. "Three things should be in place in order to pull this off," Johnson walked us through the process.
"First, the brand needs to have some degree of existing trust with their consumers. Secondly, the brand needs to be transparent and take ownership of its product’s failings. And lastly, they need to make the product genuinely better. When these three things are in place, consumers can be very forgiving which helps to restore the company’s reputation."
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According to the marketing psychology speaker, one of the best examples of this was done by Domino's Pizza, over a decade ago. It's a prime example of how honesty, when mixed with grit and creativity, can yield great results.
"In 2011, Domino’s Pizza did the unthinkable: They came out and said that they’re pizza is terrible. They listened to consumer complaints, ran focus groups, and all the signs pointed to the same conclusions. And Domino’s said: you know what, you’re right," Johnson shared with Bored Panda.
"They ran a campaign admitting that their pizza isn’t what it should be, that they’d be making changes, and that in the future, their pizza would be better. And they did. Fast forward thirteen years later, and Domino’s is a beloved brand, who’s pizza is adored by their customers. They leveraged their trust with their consumers, admitted fault, and made the right changes. And in the end, their business greatly improved."
You can find more of Johnson's insights and posts on his marketing and human nature blogs.
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Reputation is everything in the business world. If your customers know that they can trust you, they’ll stay loyal. Trust, however, is a pretty ephemeral thing. A lot of different factors contribute to it. For instance, you need to think about the quality of your product and services, how your employees treat your customers, as well as how ethically you do business.
To put it bluntly, putting products and services aside for a moment, customers value companies that have clear values, act in a moral way, and are transparent about what they do. Businesses are like people: those who are trustworthy and respectable become true leaders. Meanwhile, shady behavior and avoiding responsibility will get called out. Consumers and employees alike hate it when someone’s trying to pull the wool over their eyes.
When a company runs into trouble, the first instinct is (quite naturally) to focus on survival. If something unethical happens, many businesses try to avoid the issue and present a counter-narrative. Their goal is to protect their reputation and profits.
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However, this can backfire to a pretty big extent. If someone knows what really happened, they can blow the whistle and spill the beans for the whole world to know. When you get caught lying, it’s even worse.
In an ideal world, every business, boss, and middle manager would be open, honest, and transparent about any and all issues, both with their employees, as well as their customers. However, in reality, companies are constantly competing for people’s money and attention. So showing any signs of weakness, when your opponents probably won’t do the same, would be ludicrous.
It all comes down to the fundamental values upon which a company is built. Founders and managers who fully embrace transparency and empathy are going to tackle any issues that arise very differently than someone who always puts profit first… at any moral cost. Just to be clear, there's nothing wrong with being profitable. But it has to be balanced with ethics, a sense of purpose, and proper motivation for workers.
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Obviously, employees want to get a fair wage, have plenty of room for growth, and only ever deal with supportive bosses. That won’t always be the case. It becomes necessary to screen businesses for their work culture ahead of time before you’re in too deep. So before you think of applying for a position at some huge conglomerate, do some research. Read up on what their workplace culture is like, see if they’ve ever been embroiled in some deeply troubling scandals.
Forbes suggests checking whether a company’s online presence is “professional and legitimate.” That means looking at their website, how they respond to customer inquiries and criticism on social media, and what (former) employees have to say on job sites like Glassdoor and LinkedIn. It’s definitely a red flag if you spot examples of awful customer service.
If a business has tons of negative reviews online, something is probably amiss. However, just like you shouldn’t blindly trust any corpo PR dribble, you should take any reviews with a few grains of salt. Actually, scrap that, pass the whole salt shaker!
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It’s vital to filter which reviews give an accurate representation of reality and which ones are written by someone who is extremely disgruntled about e.g. being fired (perhaps for poor performance or other issues). A good rule of thumb is that the more emotional a review is, the more biased it is. The truth isn’t black and white, it’s often nuanced. Sure, any company might make some mistakes. But it doesn’t mean that these businesses fail in every single regard.
You won’t ever find a ‘perfect’ company, but you can come across businesses that admit to having made mistakes and then work to correct them. If you ever have any doubts, as a prospective worker or a potential customer, get in touch with the business and ask some questions about their culture and values.