The Volkswagen emissions scandal is arguably the biggest corporate news story of the year so far. Since it broke, vehicle recalls have been arranged, the public has made its opinions known and the company’s CEO, Martin Winterkorn, has resigned, pleading with customers to keep believing in the brand as it strives to rebuild shattered trust. As VW continues to respond to the crisis, we've been thinking about what marketers can learn from business scandals in terms of how brands should go about rebuilding their image and restoring customer relationships.
Take McDonalds as an example of another big corporation that found itself in deep scandal when the documentary Super Size Me came out in the early 2000s. Since the day it aired, the conglomerate has had to completely re-think its brand positioning, marketing strategy and the way it operates. The controversy McDonalds had to face after the film was released not only proved difficult to handle, but also kick-started the healthy eating trend and changed the entire business model for the food giant. The corporation was forced to cut sugar content and alter other ingredients (e.g. start using higher quality cuts of meat and free-range chickens), famously change store colours to green, pour budget into huge advertising campaigns and increase transparency by inviting media to enter production plants. The company also banned its own ‘super size’ policy amidst the media frenzy.
Using McDonalds as a case in point, it is clear to see that even in the face of seemingly devastating defamation of everything a brand stands for, they can survive. A universal truth, and one that VW will be grateful for when it looks back on this scandal, is that it takes much longer to build brand trust than to destroy it. This is where VW's nearly 80 year heritage works in its favour. They have a very strong relationship with their customers that is steeped in tradition, history and long held brand beliefs. Whilst the recent scandal will have called these beliefs into question in the eyes of the consumer, it will not have completely destroyed them. Now is the perfect time for the brand to speak honestly to its customers, apologising and making the most of the sense of loyalty that comes naturally with being such an established, historically poignant brand. Most scandals will be forgotten once the dust has settled. Human psychology dictates that we want to see the best in people and brands that we have believed in - we all want to forgive our friends.
The prognosis for VW, therefore, looks less gloomy than one might initially think. At the time of crisis, there is nothing more to be done than to hold your hands up and communicate transparently, comprehensively and with total honesty. People hate to feel that they are being lied to and that they can't trust a brand they have invested money and emotion in over the years. The resignation of VW’s CEO is the first positive step towards rebuilding trust - someone has taken ownership of the 'wrong' and the brand can start to work towards being 'right' again in the eyes of the consumer.
Like McDonalds, this will mean confronting the issue head on and making tangible changes to how VW communicates going forward. The key point here for marketers in times of scandal is the importance of projecting themselves into the minds of their consumers who are, after all, just people. People don't want to think badly of people or brands they have loved. They may be hurt, but their natural inclination is to want to salvage the relationship that they are already invested in. And in the same way, working on a relationship with your customers is just like working on a personal relationship: when the history is there and has been built up over the years, there is a good chance to make it work even when there has been a breach of trust. Honesty and open communication going forward is the only way to rebuild trust. This is not to say that VW's objectionable and unethical behaviour won't leave a lasting dent in its overall public image. But the brand stands a good chance of maintaining the loyalty of its customer base once the scandal has blown over if it totally commits to an honest approach going forward.
The whole issue also reaffirms to marketers the importance of building a strong brand image in the first instance even if crises are yet to befall you. Whilst building a strong brand identity that permeates through your organisation takes time and effort, it pays in times of trouble. A sturdy brand identity, particularly one routed in history, can fortify the organisation and provide the foundations that make recovery from public disgrace more likely.
By Thomas Brown, Director of Strategy and Marketing at CIM (The Chartered Institute of Marketing)