Crisis Management in Marketing

No company is immune to crises. From social media gaffes to cybersecurity breaches, brands can end up going viral for all the wrong reasons. In an era when nearly everyone carries a phone equipped with a video recorder, one employee's honest mistake can turn into a full-fledged crisis within hours. For marketing professionals, mastering crisis management is as important as designing effective ad campaigns.

This article will explore crisis management in marketing, including strategies for maintaining brand reputation.

Handling marketing crises includes planning strategies to respond effectively to unexpected events that threaten your company’s reputation. By developing a strategic approach before a crisis occurs, businesses can maintain trust and stability with their customers, stakeholders, and the public during difficult times.¹

Effective crisis management can mitigate negative impacts on a brand's image and customer loyalty. When managed poorly, crises can lead to lasting damage that erodes consumer trust and overall business performance. If a crisis is handled adeptly, however, a company can improve its reputation by demonstrating its commitment to its values, including responsiveness, transparency, and responsibility.¹

Marketing crises include legal issues, ethical missteps, faulty products, data breaches, and many other problems. Businesses need tailored response strategies for the specific challenges presented by each type of crisis. A brand's response to a crisis often shapes public perception more significantly than the crisis itself does.¹

The best way to handle a crisis is to set up proactive strategies that can prevent or mitigate its impact. A crisis management plan is a comprehensive guide that outlines how a company will respond to various crisis scenarios, such as a foodborne illness or a culturally insensitive social media post. This plan includes detailed steps for action, key personnel roles, and resource allocation, so the company can react swiftly and effectively.²

The first step in proactive preparation involves identifying potential crisis triggers. By analyzing past industry crises, understanding current market dynamics, and recognizing vulnerabilities within the company's operations or products, businesses can develop specific strategies to help them avoid these triggers or reduce their impact if they occur.²

While the natural tendency may be to hunker down and stay silent during a crisis, establishing clear communication protocols should be a top priority. These protocols cover how information will be communicated to employees and externally to customers, stakeholders, and the media. Clear, transparent, timely communication can help manage public perception and maintain trust. All communication should be consistent, accurate, and aligned with the company’s values. Inconsistent or inaccurate messaging can make the situation worse.²

When a crisis hits, businesses need to act quickly. This is when the time spent preparing crisis management strategies in marketing will pay off. Thanks to the steps defined in the crisis management plan, the crisis management team can take immediate action. This team will assess the situation, identify the scope of the crisis, and begin implementing the predetermined response strategies.³

A transparent response will help strengthen the company’s credibility and the public’s trust in it. Transparency in communication reassures stakeholders and the public that you’re handling the crisis responsibly and are committed to resolving any negative impacts of it.³ Openly acknowledge the issue, take responsibility where appropriate, and clearly outline the steps the company is taking to address the situation.

Communications need to reach all relevant audiences during a crisis. Marketing teams can use a mix of traditional and digital media platforms to make sure the company’s message reaches its intended audience. Social media can be particularly helpful and effective in publishing real-time updates and engaging directly with customers. Press releases and official statements may be more appropriate for formal announcements.³

When the immediate effects of a crisis have been contained, the crisis management team can turn to reputation recovery and damage control. They’ll focus on assessing the harm done, rebuilding trust, and implementing long-term strategies to rehabilitate the brand. They’ll thoroughly assess the extent of reputation damage by gathering feedback from stakeholders, monitoring media coverage, and analyzing customer sentiment to understand the full impact of the crisis on the brand’s image.⁴

Rebuilding trust with stakeholders will require continued transparent communication about the steps the company is taking to prevent similar problems in the future. Apologies, if appropriate, should be sincere and accompanied by tangible actions that demonstrate the company's commitment to making amends. Direct engagement with customers, investors, and partners, to listen to their concerns and recommendations, will also help rebuild confidence in the brand.⁴

Long-term strategies for brand rehabilitation may include overhauling internal policies, strengthening quality controls, or initiating corporate social responsibility programs that reinforce the brand’s values. They may also include training staff in crisis prevention and management to prepare for future challenges. A strategic marketing campaign that highlights improvements, new initiatives, and positive stories can help shift public perception. This will help solidify the brand's commitment to improving and, therefore, gradually restore its reputation.⁴

After a racial bias incident in April 2018, Starbucks provided a strong example of effective crisis management. Two Black men were arrested at a Starbucks in Philadelphia on charges of trespassing. They had been waiting for a business meeting and had not made a purchase, but the store manager called the police. The event was captured on video and quickly went viral, sparking widespread outrage and accusations of racial profiling.⁵

Starbucks' response to this crisis followed best practices to mitigate the damage and start the process of rebuilding trust:⁵

• Immediate apology and acknowledgment: Starbucks' CEO at the time, Kevin Johnson, promptly issued a public apology to the two men involved, admitting that the situation had been handled poorly and was not representative of the company's values
• Employee training: Starbucks closed all of its stores for a day of racial-bias training for over 175,000 employees across all its U.S. stores
• Policy changes: Starbucks reviewed and revised its policies, particularly those regarding the use of store spaces, including bathrooms. They made it clear that any customer could use Starbucks’ facilities, including sitting in cafes or using restrooms, without making a purchase, thereby addressing the specific issue that led to the arrest
• Community leader involvement: The company engaged with community leaders and experts in racial bias to ensure that the training was effective and that future company policies were informed by diverse perspectives
• Transparency and ongoing commitment: Starbucks remained transparent throughout the process, openly discussing the steps being taken with the public

In the Online MS in Marketing program from the Leavey School of Business at Santa Clara University, crisis management is part of the comprehensive curriculum . You’ll expand your network while learning from industry experts with strong ties to innovative companies in nearby Silicon Valley. Enjoy the flexibility of an entirely online program that allows you to study on your own schedule, from anywhere with an internet connection.

Gain the expertise and qualifications that will help you make a difference in your industry. Start today by scheduling a call with one of our admissions outreach advisors.