Thursday 20 January 2011

Brand Damage By Others

One of the risks that businesses often fail to take into account is the damage that can be done to their reputation or brand by the acts or omissions of others. Reputation/brand are often what make customers choose one supplier over the other and you need to make sure that you don’t forget this vital marketing tool.

In a previous article, I showed how a business can damage its brand by its own acts/omissions. These can be controlled. The acts/omissions of others, however, are a trickier issue as you don’t have as much control over them (or do you?).

Here’s a story of a friend of mine. Tom (let’s call him) recently switched to a new gas supplier as they offered a lower price than his current one. The new supplier was a “household name” and their promotional literature painted a rosy picture of “quality service” and “reliability”. Tom’s gas is stored in a tank on his property and has to be refilled by a tanker truck. Tom pays by direct debit and never misses a payment.

He ordered a delivery of gas in mid-December 2010, and was told that his new supplier couldn’t give him a delivery date. The UK was suffering at the time from unseasonably heavy snow and cold weather and the resulting dangerous driving conditions prevented delivery trucks from reaching outlying areas. They were having to prioritise and it was felt at the time that Tom’s gas levels were still sufficiently high not to constitute an “emergency”.

Over the following weeks (which included the Christmas and New Year holidays), Tom called his supplier regularly to update them. The weather improved, but then it turned out that his supplier got their gas from a third party and that this third party was rationing the supplier!

Situation: Tom’s supplier’s reputation was now being damaged by another party who couldn’t supply gas in sufficient quantities. Tom wasn’t the only one in this position. As his gas levels sank lower and lower, he began to worry for his young family as they needed gas for heating and cooking. In his eyes, his supplier wasn’t performing. When he pointed out that he considered this a breach of his Supply Agreement, he was referred to a clause in the small print which any half-competent lawyer would have had thrown out.

He asked to speak to a senior manager and was told that this was not possible.

Lesson: if you rely on someone else to enable you to deliver a product or service, you need to understand what could go wrong for them, how it could impact you and what you need to do to limit reputational damage. Tom’s supplier hadn’t assessed this properly and therefore hadn’t developed an Action Plan for when things went wrong. The weather in the UK turns colder in winter and therefore demand for gas for heating will rise. Physical conditions may prevent safe delivery of the product/service, but that’s no excuse for not having a well thought-out and communicated plan.

Your customer service staff will be critical – there’s no point in them hiding behind technicalities, “policy” or “other parties” – this is not what customers want to hear! As far as they’re concerned, they deal with you and it’s up to you to ensure delivery. They want empathy and action, not platitudes.

So what do you do?

First: assess what could go wrong with the supplier (you may need to understand how they work).

Next: ask what is the worst impact that this could have on your ability to perform?

Third: develop a plan to deal with this. It may involve having an alternative supplier, prioritising which customers you will supply, special training for staff to handle unhappy customers, additional insurance cover, maintaining a “buffer stock”, agreeing with your supplier a plan for restoring “normal” service as soon as possible and so on.

Fourth: have a plan to deal with any resulting negative publicity. The internet is a powerful tool and with Facebook, Twitter and various consumer complaints sites, it’s all-too easy for people to damage your reputation beyond recovery. Northern Ireland Water failed to do this when 40,000 customers lost their supplies due to pipes bursting in during the cold winter weather in 2010.

Finally: when the crisis is over, thank all those who helped you – your staff, other suppliers, customers who were particularly patient or understanding and so on. “Thank You” costs nothing to say, but will buy you masses of goodwill!

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