Financial Data
Updated 29 Sep 2020

The cost of doing nothing

The recent Woolworths debacle demonstrates just how quickly things can go wrong when companies are slow to respond to negative publicity.

28 September 2012  Share  0 comments  Print

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The advent of social media means that consumers are in constant communication about people, products and events.

The success of websites like Hello Peter shows the power of public perception, and how important it is for companies to respond appropriately and timeously to negative publicity.

Every company is vulnerable to bad publicity, no matter how big or small the business.

Now, more than ever before, it is important for businesses to be involved and aware of the constant chatter, albeit online, via social media or in more traditional media such as radio or newspapers.

However, when people get angry, they frequently take to the web.

People trust other people’s opinion

The undeniable truth about consumers in the 21st century: they trust their peers. With each bad tweet or Facebook post comes thousands more.

Once started, if not handled correctly, one small complaint can soon escalate into a national debate – or, as in the case of Woolies, a call to boycott the business. That’s when it begins to have a lasting effect.

For this reason, it is important that businesses understand a media crisis when they see one. Furthermore, they need to know how to handle such a crisis.

It is always advisable for a company to have a crisis management plan in place ahead of time, rather than waiting until they need one.

Have a crisis management strategy

Your crisis communications plan should:

  • Identify steps to gather information about the situation: make sure you know the pertinent facts.
  • Appoint a crisis team: these individuals will be responsible for handling the crisis itself. 
  • Appoint a spokesperson: this person will typically serve as the point of contact between your crisis team and the media.
  • Identify your key audiences: your customers, employees, vendors, and the media .

The most important steps to take in a crisis are:

  • Act quickly to resolve the situation
  • Tell the truth
  • Be accessible to the press
  • Show confidence and compassion
  • Communicate changes in the situation as quickly as you can

Doing nothing can cause lasting harm

Failure to respond timeously can result in serious harm to stakeholders, losses for the organisation, or, in extreme cases, an end to its very existence.

Woolworths suffered a drop in share prices and its stores were definitely less frequented by customers, but the real damage will only be evident down the line when it releases its financial results for this year.

When the crisis is over

Once the initial crisis has passed, the company can’t afford to sit back and rest on its laurels, there is still work to be done.

  1. Any promises made during the crisis management phase need to be followed through on.
  2. Release regular updates on the recovery process. 
  3. And finally, learn from what has happened and amend your business plan accordingly.
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