HBR: How To Handle A Social Corporate Scandal
Harvard Business Review

When it was discovered that VW had been manipulating emission tests for their diesel cars it was no surprise that customers were upset. Many of them had bought the vehicles based on the information available about fuel efficiency and emissions. Suddenly it seemed that none of the data could be trusted.

The VW brand was immediately impacted and customers vented much of their furore on social networks. This created an opportunity to analyse how a brand stuck in the middle of a corporate scandal is perceived and how they can recover. New research published in the Harvard Business Review used over 100,000 tweets about VW to explore how customers reacted and how the perception of VW as a brand was affected.

The interesting thing is that angry customers cannot just be reduced to a mob acting in a single way. Each customer had their own grievance with VW and so a complex array of comments and issues were shared and created.

The first important observation in the HBR research is that most social comments are driven by mainstream media. If the media reported a new development on the VW story then this would drive a high level of comment and sharing of the story. So the social buzz during a scandal is largely driven by the mainstream media analysis of the problem.

When the researchers drilled into what customers were saying then found that it changed over time. Initially one of the most popular words associated with VW was “cheat” and yet once the scandal had been public for a week, this word was hardly ever mentioned. The comment had moved on to more specific vehicles. This was probably because the initial reaction was about VW the brand letting down their customers, with later comment focused more on the few models that were affected – customers talking about the actual problem rather than a more general perception of VW cheating their customers.

The researchers also found that the topics of conversation changed over time. Initially the online conversations on VW focused on the crisis itself and the scope of the crisis. However this soon moved on to who might be responsible and why the regulatory agencies are not doing a better job.

The big takeaway from the analysis of social network conversations after the VW scandal is that any company caught in a similar situation needs to focus as soon as possible on their recovery strategy. This allows the conversation to shift quickly to where the company will move in future rather than dwelling endlessly on the scandal itself.

The HBR research demonstrates that managing corporate scandals today is more difficult today than in the previous communications environment where today’s news is tomorrow’s fish-wrapper. When your customers are all connected to each other you need to pay attention to what they are saying and offer a road map away from the scandal as soon as possible.

What do think of this customer power over brands mired in scandal? Leave a comment here or get in touch via my LinkedIn.

Photo by Chuddlesworth licensed under Creative Commons.

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