9 1/2 Ways

In the 11th century, the Holy Roman emperor Henry IV journeyed to Canossa to beg Pope Gregory VII for forgiveness for his transgressions. The emperor stood barefoot in the snow, dressed as a penitent, for three days before he was granted absolution. Today, the companies requiring brand forgiveness represent a depressing litany. WorldCom. Parmalat. Enron. Capital One. Martha Stewart. Corporate misdeeds hurt not only the companies but all businesses. In a recent Golin/Harris poll, 53 percent of the respondents said they would definitely or probably stop doing business with companies they doubted. If your business experiences a fall from grace, no matter the severity, here are the best ways to regain your customers' lost trust and loyalty.

1. Be accountable. The first corporate reaction is often denial, or a refusal to comment. This tactic has danger written all over it, as evidenced by a Hill & Knowlton Inc./Opinion Research Corporation survey, which found that 62 percent of the respondents believe a company is covering up if it issues a "no comment." Another common reaction is to point the finger. Who can forget Ford and Firestone blaming each other for the SUV rollovers? Instead of working together to save lives, they drove their brands to new lows.

2. Provide all the facts. The political truism "it's not the crime; it's the cover-up" also applies to brand difficulties. One reason the United States Postal Service averted a crisis of confidence after the anthrax scare was that it continually provided information to postmasters, media and customers. It even sent safe mailing tips to every U.S. household and held a "summit" with major customers.

3. Apologize sincerely. Customers are more willing to forgive mistakes if the mistakes are followed by an apology. Merrill Lynch placed full-page ads in The New York Times and The Wall Street Journal to beg forgiveness for conflicts of interest. A Microsoft senior vice president apologized for the swastikas included in Office 2003.

4. Consider restitution. Gary Winnick, former chairman of Global Crossing, pledged $25 million to a company retirement fund after his company collapsed. Putnam is assisting investors affected by its unethical trading. And Firestone eventually funded a $5 million campaign about tire safety.

5. Think beyond the bottom line. When complaints about iPod's battery life emerged, Apple told customers to buy a new iPod. When two disgruntled customers spray painted the words "iPod's unreplaceable battery lasts only 18 months" throughout Manhattan and posted on the Internet a recording of an Apple customer support representative reciting the corporate line, Apple responded by creating a battery-replacement plan.

6. Ask for help. The best ideas for restoring brand trust often come from customers and other constituencies. "This approach not only provides you with the data you need to move forward, but also sows the seeds of goodwill with your customers," says Jennifer Berkley of Insight Advantage, a marketing consultancy based in San Jose, Calif.

7. Turn to credible outsiders. The Japanese dairy company Snow Brand faced a severe financial and brand crisis after bacteria-ridden milk sickened 14,000 people. To salvage its credibility, it linked its marketing and product development with rival Nestle. By working with such a highly reputable company, Snow Brand was, in effect, wiping the slate clean.

8. Certify your behavior. After meeting quality standards set by the International Organization for Standardization, British Telecom (BT) thought, "Why not certify ethics and behavior as well?" BT then developed scorecards and standards addressing such issues as human rights, business integrity, diversity and sustainability. BT says the scorecard has not only helped measure progress toward its goals but also saved money.

9. Take personal responsibility. Former Arthur Andersen CEO Harvey Kapnick worried about the impact of consulting fees on auditing independence. When his proposal to spin off the auditing business was rejected by other partners, he resigned. Today, Arthur Andersen is no more, submerged by its willingness to give Enron clean bills of health while receiving fat contracts.

1/2. Bolster your brand and corporate governance. No brand has been built with a moral shortcut. Don't ever be like Henry IV, who came back years later to depose the pope who had given him redemption.

Nick Wreden, MA, MS, is a customer loyalty expert and the author of FusionBranding: How to Forge Your Brand for the Future. Contact Nick at nick@fusionbrand.com. http://www.fusionbrand.com.


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