If you're a small business, a bad reputation can ring like a death knell.
Get one too many negative reviews on popular review sites like Angie’s List and chances are your small business will begin to feel the hit on the bottom line. Are there too many news articles out there about your company’s legal battle with a former CEO? Have you been accused of creating a hostile work environment for women? Are you just really, really bad at customer service? The ripple effect of this negativity extends not only to customers, but also to potential investors, business partners, suppliers and even employees. These stakeholders – who are critical to your business - may choose never to initiate a relationship with you.
So how do you change what they say about you?
Be (A Bit) Shocking
In the 1990s, automaker Hyundai’s reputation was in the pits. The Korean manufacturer had entered the US market in 1986 with a compact car named the Hyundai Excel, boasting a sticker price of a mere $4,995, half the price of a Ford Taurus. Sales were brisk: the Hyundai Excel set a record for first-year import sales in the U.S. by selling more than 168,000 cars. However, soon after the launch, the Hyundai Excel began to earn a reputation for being cheaply made: the seats frayed quickly, there were reports of badly rusted underbodies and window cranks jammed. Hyundai franchises began to walk away from the automaker and sales plunged. It soon became clear that unless Hyundai turned around its reputation, a forced exit from the lucrative U.S. market was on the horizon.
To change the existing narrative — that Hyundai cars were cheaply made — the company did something shocking in 1998. It made headlines by offering buyers a then unheard-of “10-year, 100,000 mile” power train warranty across its entire lineup. How could Hyundai possibly support a ten-year, no-deductible, no-cost extended warranty given its history of manufacturing defects? Hyundai U.S. CEO John Krafcik called it a “bet-the-company move.” Hyundai shocked the public by offering something that seemed almost too good to be true. Instead of talking about quality, consumers started talking about warranty coverage.
The gambit worked: in 1999, Hyundai sold 82 percent more cars than in the prior year. By 2010, that figure had leapt to more than 530,000 cars for 4.6 percent of the U.S. market. In 2012, Hyundai sold over 700,000 cars in the United States, surpassing longtime players such as Dodge, Jeep, and Volkswagen.
Of course, a new warranty by itself didn’t rescue Hyundai; management made plenty of other smart decisions ranging from quality control to design to pricing. But the very public discussion of the new warranty was necessary to repair the brand’s reputation and shift the discussion from its greatest weakness to its biggest strength.
Frame the Debate Before It Starts
When Facebook started building the first phase of its data center in Prineville, Oregon, it realized it might face an image challenge. The first phase of the Prineville project alone was zoned to draw up to 15 megawatts of power— more than the entire consumption of the island nation of Togo. In the era of climate change and carbon awareness, building a massive power-using data center in Oregon – a bastion of environmentalism – seemed like a publicity disaster waiting to happen.
Facebook decided to be proactive and frame the conversation before it started. Instead of focusing on the total energy consumed by the facility, Facebook’s public relations team focused attention on how efficiently that energy was being used— and repeatedly publicized its “power usage effectiveness” metrics. Facebook also made sure to include at least one stunning fact: the center has no air conditioner. While most data centers feature large commercial air conditioners, Facebook’s data center uses a mist system to cool ambient air flowing through the data center— much like a swamp chiller. Facebook was able to focus attention – and conversation – on a metric where it excelled.
Focus on Your Strengths
Both Hyundai and Facebook used an age-old competitive technique: change and control the conversation by focusing attention on your strengths.
Consider Costco and Walmart. There is little doubt that Walmart has a reputation as the low-price leader for everyday purchases. But Costco has successfully held its own against its lower-priced competitor by refusing to play the same game. Costco is quick to emphasize that its workers are paid better and receive better benefits. By shifting the conversation away from pricing to values, and positioning itself as promoting a living wage and building a stronger community, Costco has historically shaped the conversation around its strengths.
Prices and wages are hardly the only options available to flaunt your business. Businesses might frame the conversation around cheap versus healthy food, biggest selection versus locally owned, and countless other topics – low prices versus a living wage; cheap versus healthy. The smart businesses are the ones who refocus the conversation to emphasize elements that also align with their narratives.
What are the best examples you’ve seen of companies or personalities taking charge of the conversation?
