The recent United Airlines wrongdoing of dragging out a seated passenger to accommodate airline employees should serve as a warning that a PR crisis can be very costly. Per industry reports, on the day of the passenger-removal controversy, the shares of the $21-billion company fell as much as 6.3 percent in premarket trading, dropping by $1.4 billion (or P70 billion). The financial loss does not include the severe damage to United’s reputation and the erosion of public confidence in it. The backlash refuses to die down at this writing.
United is not alone. Other companies have been through costly PR blunders. The sinking of the Deepwater Horizon platform of British Petroleum (BP) on April 20, 2010, resulted in probably the worst oil spill ever to hit the United States, and the most costly, too. It killed 11 persons and stained more than 1,300 miles of the Gulf of Mexico’s coastline with 3 million barrels of oil. BP said the pretax cost of the 2010 explosion totaled $61.6 billion.
Simply put, a crisis is a bad thing that happens to a good company, which stimulates extensive news media coverage. United’s was not a premeditated homicidal act but a procedural mistake committed on the spur of the moment, while the sinking of the Deepwater Horizon platform was pure accident. Both events would have been quickly forgiven by the stakeholders if statements by spokespersons came quickly, transparently, and with an emphatic apology. The response after the crisis occurs is most crucial and should offer support to those affected by the misstep. Public relations plays a vital role in the crisis response by helping develop messages to be sent to various publics. The initial response should be quickly made—in the first hour after the crisis hits, because people want accurate information about what happened and how that event might affect them.
An individual or company wrongdoing does not become a crisis until it is played up by the media and a large segment of the public becomes aware of it. But before we become complacent, we should remember that in the digital age, every person with an iPhone is a reporter, interconnected with millions of other reporters worldwide. It is impossible to hide from citizen journalists, and there’s a 99-percent chance that social and mainstream media will hype your story into a full-blown crisis.
The response of United’s CEO Oscar Muñoz was a lukewarm mea culpa, which was later countered by his internal email that defended the employees and called the yanked-out passenger disruptive and belligerent. BP’s CEO Tony Howard did not immediately apologize for the accident; instead, he arrogantly said, “I want my life back.”
The first step in crisis prevention is to build an infrastructure of goodwill to protect the firm during bad times. Every company must consciously manage its reputation by projecting a deep sense of corporate social responsibility. It takes years to build a good reputation, but it takes only a few minutes to lose that reputation. Some 75 percent of a firm’s stock value is derived from its reputation. The reason some companies are prone to crisis is that they do not devote any time worrying about their reputation until they are faced with a crisis.
No one is immune from making mistakes. No matter how careful, we are bound to make a mistake somewhere, sometime. When that happens, we should consciously adopt the “3As” formula for dealing with mistakes: acknowledge, apologize, address.
A client emailed me recently and said we had failed to inform them about negative publicity concerning their services that was published last Easter Sunday. We were on vacation and we did fail to monitor media reports. Sensing that the client was hurt, I quickly emailed: “Hello, sir, I acknowledge our delay in advising you of the negative publicity; I deeply apologize for our shortcoming and I take full responsibility; we are taking steps to make sure this will not happen again.” He promptly replied: “Thank you. Next time, even just a copy of the news link sent to me with an FYI will suffice. Cheers.”
Charlie Agatep (firstname.lastname@example.org) is chair and CEO of Grupo Agatep.
Objective: To launch the rebranding of real estate developer Landco through an AVP that aimed to share to the public the company’s newer and fresher tone and highlight Landco’s leadership role in the local real-estate industry.
Execution: The agency conceptualized and produced an AVP with Landco’s new logo and revealed it at Landco’s rebrand launch event where stakeholders and employees enjoyed an all-white party at the Sofitel Philippine Plaza Manila.
The AVP showcased Landco’s legacy and the best of all its properties have to offer but in a newer, fresher, and younger vibe.
Agency came up with a storyboard that showcased everything that Landco has to offer. To further build on this new tone, the video was accentuated with snippets that showed the advantage of living in a Landco property.
Results: The AVP was well received during the launch event and was also consequently shown during their pocket trade and sales events/activities. Feedback received from Landco employees and stakeholders were overwhelmingly positive. They said that the video succeeded in exciting them about their company’s rebranding. Through the AVP, we were also able to achieve the goal of modernizing and updating the image of Landco to the public (as supported by feedback received from Landco guests who attended the event as well as from prospective buyers who saw the AVP through the succeeding activities)
The entire Landco rebranding efforts received a total of 215,373.4 in ad value and 1,758,362.8 in PR value.
Objective: PHINMA Corporation, a Filipino conglomerate marks 60 years of making lives better. To celebrate this feat, the company held a string of events that aimed to honor and engage the members of PHINMA’s community, its partners, and key influencers with the purpose of underlining PHINMA’s resolve to continue uplifting the lives of the Filipino community for years to come. This was all done to creating awareness for this significant milestone for the company.
Execution: This anniversary celebrations were held and implemented across various channels:
The agency supported the year-long celebration of PHINMA by creating relevant news releases and through conducting media outreach. Aside from this, several ads and creative materials were designed by the agency. Some of the most notable contributions by the agency are the following:
As of April 10, 2017, the success of the marketing campaign was able to earn a total of 3,222,314.68 in ad values and 23,794,284.25 in PR value for the entire PHINMA 60th anniversary. The kick-off celebration, “PHINMA Reaches Out” even earned a Gold Anvil Award at the recent awarding ceremony for this year.
Most Filipinos have long been loyal to Philusa Corporation products without them knowing that they are all from one company. To address this irregularity, Grupo Agatep was tasked to conceptualize a PR campaign that would make consumers associate the different Philusa products with the corporate brand, thereby reinforcing the company as a maker of high quality and trusted household brands.
The agency created My Philusa Home, a simulated, interactive, movable and roving installation to promote recall and awareness of the various brands under Philusa.
To reach more people, we brought the My Philusa Home activation to public places such as plazas and malls nationwide during well-attended festivals. The activation went to:
The roving My Philusa Home activation was designed to look like a typical Filipino home. Light materials were used to ensure ease in transporting the installation from one province to another. As the fiesta-goers visit the home, they also get to see Philusa products in rooms where they are most commonly stored and used.
The My Philusa Home installation featured:
Aside from this impressive, realistic showcase, Philusa also treated visitors to a medical mission by RHEA Generics, which is in line with the generic medicine provider’s mission to aid in the government’s universal health care program. RHEA Generics extended free blood pressure check-ups and medical consultations to thousands of patients.
Philusa also strategically partnered with Radio Music Network (RMN), enabling each activation to be broadcasted live through RMN’s local radio stations. This ensured foot traffic and good attendance. RMN also provided local DJs who hosted the events and entertained the public.
The My Philusa Home Tour achieved its goal of reaching consumers in major festivals all over the Philippines. It was displayed in seven festivals in seven different provinces from February to October 2016.
My Philusa Home campaign generated publicity in traditional and online media amounting to Php27.9M worth of media values.
Testimonials from fiesta-goers prove that the activation had succeeded in its goal of reaching Filipinos in various parts of the country and strongly associate the Philusa brand with its wide range of products.