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Shortly before Thanksgiving in 2009, I got a worried call from my dad, who lives outside Philly. "I saw something just now on TV," he said. "There's a big braking problem with Toyotas—you better get it checked right away." I owned a Prius. I loved my Prius. "Right, Dad, thanks. I'll check it out," is what I said. What I was thinking was: right, Dad, and don't believe everything you see on TV. Still, I gave the Web a cursory glance for something about Toyota braking problems, and found zip. Then my dad started sending me links. Apparently, the floor mat was causing the accelerator to stick, speeding Toyotas out of control.
Before the braking story broke, Toyota was at the top of its game. The company had been voted the world's most valued brand of vehicle, ahead of BMW, Porsche, and Mercedes. The year before, it had become the largest car manufacturer in the world, surpassing GM, which had held the title since the Great Depression. But as the story unfolded, the death count mounted. At least fifty-six people have died. Over 10 million cars have been recalled.
Toyota misled Congress and the public. It had known about the problem at least two years before it became public. Overnight, Toyota's reputation for reliability plunged. Kelley Blue Book decreased the resale value of recalled vehicles, reflecting a drop in consumer demand for Toyotas. After the problems were revealed, sales fell 16 percent in the first month alone. It will take an extraordinary effort for Toyota to regain the public's trust, a loss that will be reflected in its customer satisfaction ratings, technical safety ratings, and sales for years to come. Personally, I look at my Prius now with more trepidation than affection. My trust in Toyota has been called into question.
Especially since the recession began in 2007, mistrust has emerged as a latent vulnerability for many old brands. We know that bad things do happen in business. When they do, companies, unlike Toyota, must deal with them promptly and deftly. Today, pretty much anybody can say anything about a business.
Some people, whether on Twitter, Facebook, a blog, or some other media format, can be extremely influential. If they go negative on the business, especially if they have good reason to go negative, then how the business rebuilds trust is crucial. Here are some general rules:
1. Pay attention.
CondÃ© Nast used to have an ombudsman for a travel magazine it published. People knew that if they had a terrible experience with a hotel, airline, agency, or anyone in the hospitality business, they could seek assistance from the ombudsman. The ombudsman would publicly embarrass the company in the magazine and shame it into making good. Since everyone with an Internet connection can publicly broadcast reviews, the ombudsman is anyone now.
Successful businesses have people from marketing, customer support, and product development tapped into their customers' comments, suggestions, and complaints. These companies know that this pulse, this interaction, is the life force of their brands.
2. Act now.
By the time you figure out who said something negative and whether it was relevant to you, it's probably already spread on the Internet. There are probably ten other people who commented negatively; they've re-tweeted that sentiment, and in a flash it's gone. If you get to it late, and people perceive that your company is not paying attention, one person's comment could generate hundreds or thousands of negative messages.
3. Be boldly honest.
Companies still hire PR firms to spin the latest product recall or CEO gaff. But increasingly, if a company tries to conceal a mistake, or BS about why it happened, people's caca-meter goes to 11. In 1982, an unknown person or persons laced Tylenol capsules with potassium cyanide and placed them in supermarkets and drugstores in the Chicago area. Several people died, including a twelve-year-old girl. Rather than play down the incidents, Johnson & Johnson widely distributed warnings, recalled all Tylenol products (an estimated 31 million bottles worth $100 million), and warned people in nationally televised advertisements not to use its products. Product share dropped to 8 percent, but it rebounded in less than a year. Johnson & Johnson was widely praised for how it handled the incident, and the event affected the public relations industry's subsequent attitude toward leveling with the public. When bad things happen, companies should simply come clean immediately. They need to explain how the problem will be corrected. Honesty allows people to give companies another chance. Being straight with the public builds trust.
4. Don't panic, and keep perspective.
Acting quickly doesn't mean panicking. Individuals cannot be running around freaking out every time somebody says something negative about them. Companies are the same. Building trust involves knowing not only what criticisms are being leveled by customers but also who the speakers are, and how, or if, to respond. Almost every service, whether it's Target, Virgin, Yelp, Amazon, or Joie de Vivre Hotels, has reviews. Of a hundred reviews of a hotel or restaurant, most may be four stars, but some of the reviews will inevitably be negative. A few people say, "That food was inedible," or "The waiter was surly." It's true that a series of bad reviews on Yelp or Zagat can be deadly for a local restaurant. On the other hand, when consumers go to look at reviews, they are accustomed to seeing a range of ratings. And many people have learned to evaluate the evaluators. If the reviewer is a twentyone-year-old who apparently likes to stay up late and make a lot of noise, he may be disgruntled because a hotel's management told him to keep it down. Or the reviewers may be a seventy-year-old couple who wants quiet, and no late-night activity near their room.
5. Pay special attention to people in the network (aka your customers).
When people are members of Zipcar or a food co-op, they are inside a network. They've already bought into the vision of the service and are part of a community. If an issue arises, they will usually work to resolve it. They have something at stake and are biased toward mutual success. The stakes are also higher for the business. If a customer is mistreated and complains about it on Facebook, the company has not only lost a subscriber but potentially soured relationships and its brand with a broader base. Unfortunately, sometimes people in competitive businesses do pose as subscribers to complain about a rival company. The good news is that when a company acts fairly, it'll usually get another chance.