Reputation Management in a Modern World

“Glass, china and reputation are easily cracked and never well mended.”
– Benjamin Franklin, “Poor Richard’s Almanack”

Long gone are the days where figureheads of corporations remain in the shadows. Now, news outlets and the public are putting the spotlight on these bigwigs, often exposing their misdeeds in the process.

Best Buy is a recent example of this. Two weeks ago, the CEO of the consumer electronics giant, Brian Dunn, resigned after the company opened an investigation into his “personal conduct.” There was speculation that he misused company assets to contribute to an alleged relationship with a female subordinate.

Another high-profile case involves University of Arkansas head football coach Bobby Petrino, who was recently fired from his multi-million dollar gig for violating a morals clause. The crime? He had a secret affair with a recruiting coordinator for the Arkansas football team.

These examples highlight two important lessons related to reputation management and the media. First, political leaders are no longer the only ones to have their personal lives catapulted to the front page; no one is safe from the scrutinizing eyes of the customers or shareholders. In fact, everything from financial records to emails to cell phone text messages can sometimes be fair game to the press thanks to the Freedom of Information Act.

Good reputation management involves being aware of the fact that nefarious activities in your personal life can easily cross-pollinate to news outlets and spread like a virus. It takes just one blow to your credibility to dismantle the years of hard work building that reputation.

Secondly, we learn how personal reputation is not the only concern in these scenarios. As shown from the Dunn and Petrino issues, organizations believe their image is tied to that of their employees. This is nothing new, as noted by Cees B.M. van Riel and Charles J. Fombrun in their 2007 publication, “Essentials of Corporate Communications.” They termed the phrase “media mania” to refer to this trend of how companies and their top executives now perform in the media spotlight. The book also states that chief executive officers in particular act as spiritual and emotional symbols of the organization, so it is especially important that these figures adhere to the same values and ethics of the companies they represent.

In this day and age, technology has allowed media outlets to report and deliver news instantly, which means they are quick to pounce on breaking scandals in politics, corporations and even football fields. Organizations have certainly taken notice and become more critical with media monitoring and reputation management, showcasing how they may react to threats by removing scandal-plagued employees from payroll, like what Best Buy and the University of Arkansas did to their offenders.

It also helps if the immoral acts weren’t committed in the first place, either.

Carl’s Jr. and Hardee’s know how to spice-up their brand image

With so much advertisement constantly being produced, it can be difficult to target a specific demographic and receive the response your advertisements look for – difficult, that is, for everyone except Carl’s Jr. and Hardee’s.

Known for their racy ad campaigns featuring young female pop-culture icons, Carl’s Jr. and Hardee’s once again proved that they know who their target audience is, and they know how to capture their attention.

In the most recent Carl’s Jr. and Hardee’s campaign, Sports Illustrated model Kate Upton appears in a classic drive-thru setting, eating a spicy Southwestern Patty Melt. The ad features Upton reacting provocatively to the “hot” sandwich, prompting many ad viewers to feel the heat.

Considering that the fast-food chain ads are targeting men ages 18-34, it’s no surprise that the campaign generated a lot of internet buzz. In fact, the campaign has been so popular that Carl’s Jr. and Hardee’s have enjoyed more than 120,000 new Facebook fans, a 104 percent increase in website visits and more than 5,000 Upton-and brand-related Tweets since the campaign launched.

The success of the campaign is an excellent example of how knowing your target audience and establishing your brand can propel any company into superstardom. What Carl’s Jr. and Hardee’s have accomplished is the difficult task of successfully targeting a very specific audience in such a well-developed way that a small portion of the population generates the most social and website traffic.

Without an understanding of their target audience, the amount of success Carl’s Jr. and Hardee’s have received as a result of the campaign would be impossible. Establishing a brand and staying true to that brand also factors in to the success of the campaign. The inclusion of young pop-culture females in their advertisements has become a staple in the Carl’s Jr. and Hardee’s brand, and it is created quite a buzz.

Starbucks Beetle Juice has Vegans Seeing Red

The world’s largest coffeehouse chain has the vegan community in an uproar…over Strawberry Frappuccinos®.

It was recently discovered that Starbucks has been using ground-up beetles for the coloring of this tasty treat. As disgusting as that sounds, the Cochineal Beetle is actually a very common, government-approved food coloring used in familiar foods, such as Yoplait Yogurts and Kellogg’s Pop-Tarts. It is also used to make more than 300 bright red lipsticks.

With the vegan community frothing over what was thought to be a veg-friendly drink, Starbucks now has an unexpected PR crisis on its hands. ThisDishIsVegetarian.com, among other websites, is buzzing about the beetle juice and announced to their readers not to drink it anymore. They are not trying to cause trouble; they just want to alert members.

Starbucks made the switch to using beetles in January to help get rid of artificial ingredients in their food and drinks. The coffee giant maintains it was simply trying to do the right thing. Nutrition experts say it was the right idea, but the wrong execution.

Starbucks’ good intentions have left them with a completely unintended public relations problem.

Groupon: Accounting principles up to 50 percent off

Ok, so maybe the headline of this is tad unfair and technically incorrect. However, there is no denying that Groupon’s reputation has stung in recent days because the popular Chicago-based online coupon company overstated its financial position in its first quarter as a public company.

The Wall Street Journal reported that Groupon’s auditors discovered that the coupon company suffered a “material weakness in its internal controls” and did not set aside enough money for customer refunds.  The size of this oops-worthy mistake was more than $14 million, the newspaper reported.

For companies that are trying to polish their accounting numbers to make them look as good as possible, there is a deep downside – bad PR that travels quickly. Reputations are hard to earn and quickly lost.

The numbers might have frustrated Google’s investors if the company had recorded their financials right the first time; however, it would also not be shown in a negative light at the front page of the leading financial newspaper.

Groupon should leave the deep discounting to specials. Deep discounting on accounting practices will lead to negative publicity that will last longer than the daily deal.

Google moves offline to reach more people

Even the world’s largest search engine needs a little marketing help sometimes.  Despite its previous reluctance to use a traditional integrated marketing plan, Google reportedly spent $213 million in 2011 to advertise its services in the U.S—and the expenses are growing.

Google is often referred to as the shining example for companies that believe they can do all of their marketing online. While the majority of the advertisements ran by Google are still online, the multi-billion dollar company infiltrated the television market in a big way to promote Google+. Google spent $12 million on just one ad that featured characters from The Muppets singing Queen’s “Under Pressure.”

Even the king of online marketing is conceding when it comes to traditional marketing tactics. While Google may dominate in the search engine realm of technology, companies such as Apple generally have the upper hand in other technological departments. This realization may have led Google to reconsider its unwillingness to seek promotional help via more traditional advertising routes.

What Google’s transition into traditional marketing proves is that a company is never too big or too well-known to benefit from an integrated marketing plan. When a company makes the decision to run advertisements or hire a PR firm, it is making an investment in its future. The millions of dollars spent on Google’s advertisements is a nod to the marketing industry as a whole. The bottom line is simple: no matter how much a company is worth, there is simply no substitute for a complete marketing strategy.