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BFS Capital Blog

Business Reputation Management: Wins and Fails

May 28, 2013

Regardless of the size or type of business you have, it’s critical to take charge of your business’s reputation and actively manage it (and if you don’t, you should check out our blog post on how to manage your business reputation here). The alternative is letting customers and others do it for you, letting the chips fall where they may. In this day and age, no business owner can afford to turn a blind eye to online chatter or shrug off negative reviews.

With regular online monitoring and a commitment to respond to negative comments, small businesses can have a powerful and personal impact on disgruntled or disappointed customers before negative comments have had time to influence the scores of customers who may be checking you out on Yelp or Google + Local. Take for example an owner of a cupcake shop and delivery service who is self-described as “obsessive” when it comes to monitoring online reviews. When she recently read that some cupcakes had been dry, she jumped into action. She adjusted the recipe, baked new cupcakes and had them delivered. The customer who originally wrote the negative review was delighted and is now a loyal fan.

What would you have done? It’s tempting to dismiss a disappointed customer as just a cost of doing business: One customer thought the cupcakes were dry / taste is subjective / oh well, you can’t please everyone all the time. But this business owner knew better: Nothing short of total responsiveness will fly in today’s world.

From small businesses to huge enterprises, companies score successes like this one, as well as failures, all the time in managing their reputations. Big-company efforts are obviously more visible—in fact, you have to look no further than current news to see some striking examples. Each one has some really interesting lessons and insights to teach, even for small businesses.

Here are a few you may recognize:

Domino’s Pizza

After some Domino’s employees were fired in 2009 after a disgusting video of the workers performing unsanitary acts while on the job went viral, the Domino’s brand took a serious hit. Did the pizza giant really have legions of unhappy commenters online? It’s very possible. But Domino’s said it did and used this as the basis for introducing new and improved products.  Most agree there was some risk in the approach, but past and future customers bought the fact that Dominos was listening and responding to the voice of the customer. This was a big win—a boost, actually—for Domino’s. Sales rose, and many online commenters not only liked the product changes but also applauded the company’s willingness to publicly acknowledge and improve a substandard product.

Abercrombie & Fitch

Here’s a good one. Recent comments (and others resurrected from 2006) by A&F CEO Mike Jeffries essentially defined target customers as only the “cool kids.” The brand doesn’t have XL or XXL sizes, because, as Jeffries said in so many words, A&F doesn’t want fat people wearing its clothes or even seen in the stores!  Online, the outrage was immediate and predictable, and Jeffries’ subsequent attempts at damage control have come across as false and boiler plate.

At first glance, this looks like another tone-deaf CEO. Or is this just the latest in a series of self-generated “controversies” that have actually worked for A&F in the past? Will this hurt the brand? Many think not, because A&F’s target audiences see themselves as the cool kids and share Jeffries’ views on exclusivity.

H&M and other retailers of “cheap chic”

Once the world absorbed the shock and horror of the unspeakable tragedy in a Bangladesh clothing factory just weeks ago, attention turned to the companies that rely on workers in Bangladesh and other impoverished countries to churn out cheap fashion. Online pressure and petitions mounted, demanding that companies like H&M, Target and the Gap agree to support and contribute to factory safety standards and working conditions.

Interestingly, massive Swedish retailer H&M had no relationship to this factory, but because of its size and influence, it became the number 1 target of safety advocates and reformers. After some resistance, H&M finally signed a legally-binding safety accord but continues to insist that public pressure was absolutely not a factor. Many are skeptical. And although a number of brands from around the globe also signed the accord, some important American brands, like Macy’s, Wal-Mart, Target, and JCPenney, refused and say they’re working on safety concerns “individually.” Skeptics dismiss this as empty PR-speak. Are these brands headed for a reputation management fail? Only time will tell.

Carnival Cruise Lines

If ever a company needed reputation management, it would be Carnival Cruises. In recent months and over the last couple of years, the cruise line has seen disaster after disaster. First, a series of human errors and misjudgments caused the captain of one of its Italian ships to wreck, killing a number of passengers. From there, it’s been passengers stranded in horrible conditions on a disabled ship to multiple mechanical failures causing varying degrees of disruption and inconvenience. In each case, the “restitution” to passengers seemed lame and “too little too late.” Despite the difficulty in suing cruise lines, scores of passengers are still taking legal action. Most curious, perhaps, are the repeated, tepid responses of the company’s CEO. Observers see this as a textbook case of a reputation management fail—and not only that, a failure to even try to leverage the opportunity attempt to turn these negative situations into successes. And now with last weekend’s fire onboard Royal Caribbean’s Grandeur Of The Seas, it seems the whole cruise line industry is under public scrutiny. From a case study perspective, I’m very interested to see how this all plays out.

These examples only scratch the surface. There’s no shortage of situations to learn from, from how Martha Stewart salvaged (and maybe even improved?) her reputation to how NBC continues to bungle its. Reputation-challenged Philip Morris has taken huge measures over the years to boost its reputation, including changing its name and spending billions on “community outreach.” And, let’s not forget the social media trainwreck that is Amy’s Baking Company that has been unfolding these past few weeks.

Public perception can make or break a business. Disgruntled customers and business missteps happen, but how a company responds is a true testament to its character. By taking the steps necessary to manage your business reputation, you can show your company in a positive light. Alternatively, failure to properly conduct damage control could ultimately aid in your business’ demise.

Image courtesy of Tina Phillips /