Volkswagen has spent decades building a reputation of producing vehicles of reliability, affordability and, oh the irony, an environmental conscience.
This reputation, following the government emissions test scandal has been left in tatters, as was made abundantly clear after the company’s shares dropped by 23%, a six year low, following the release of their real carbon data.
The new CEO therefore has a huge job ahead of him. After such a fall from grace there is little but doubt surrounding the chances Volkswagen has of turning such a monumental set-back into any form of come-back. Will Volkswagen ever be trusted again? Could certain favoured excuses actually bail them out of this crisis?
Excuse: This was so unlike me
— Bloomberg Business (@business) September 29, 2015
What it says : Brand Loyalty & Trust are Key
Lord Browne, no stranger to major corporation crises having been CEO of BP during the Texas refinery explosion of 2005, has suggested that Volkswagen’s previously sound reputation should stand for a lot when trying to regain trust from its customers. Browne theorised (in Connect – his book that investigates how companies should deal with crises) that brands stand a better chance of surviving if, prior to their indiscretion, they hold a high level of trust and engagement with their customers. For example, he recalls how Johnson and Johnson recovered in 1982 when they were found to be responsible for several deaths after Tylenol, its market leading painkiller, had been tampered with. While Browne notes how quick the company was to deal with the crisis, he suggests they were mostly able to regain consumer confidence because they already had an established ‘reservoir of trust’ pre-crisis.
He insists that the public engages with brands as if they were human beings, “If we trust someone and believe them to be of good character, we are likely to forgive them when they make a mistake.” As a result Brown has suggested when talking to the BBC Business Editor, Kamal Ahmed, Volkswagen stands a chance at regaining a solid reputation, predicting “VW’s reputation for affordable quality stand[ing] it in good stead’ as well as ‘the speed with which it has apologised and promised to put things right.”
Excuse: I’m so sorry it’s all my fault
What it says: Accepting Culpability Helps Credability
Recognising fault and assuming full blame immediately is key in crisis communications. Only in June this year Takata, producers of faulty airbags linked to hundreds of injuries and eight deaths, was criticised for failing to immediately apologise publicly for their lack of care and the ensuing deaths. Apple, on the other hand, highlights just how positive quick action can be. After Taylor Swift’s boycott of Apple’s streaming services due to their announced refusal to pay artists during the service’s three month trial period, they acted immediately to deflect criticisms. They reversed the policy, publicised it on social media and profusely apologised for it in one hit. The story stopped there. Clearly a quick and humble reaction works. And there is every chance Volkswagen might do the same as Michael Horn (VW America president) was fast to confess “We’ve totally screwed up” while Martin Winterkorn (now former group chief executive) admitted VW had “broken the trust of our customers and the public.” Their openness, full acceptance of blame, and profound apology came swiftly and sincerely, hopefully helping VW’s chances of reputation recovery in the future.
Excuse: It only happened once!
— The Telegraph (@Telegraph) September 25, 2015
What it says : Problem is not Authenticity
This part is tricky. While an apology is clearly necessary, it is by no means enough to make amends so if Volkswagen is able to regain brand integrity at all, it certainly isn’t going to be a quick fix.
Soon to face criminal investigations, there is the risk of further deceptions emerging as well as just how many individuals are complicit. Thus, with legal action pending, there’s little way for the company to draw a line under the saga and move on. Why? Because the legal argument is likely to continue for years and years, casting up reputational problems at different ‘flare’ points as the litigation progresses and is reported in the press. This negative stuff will be continue into the long-term and needs to be dealt with even if the company turns the corner. They need to develop a crisis plan. Part of this is taking advantage of now and establish whether this was a purely isolated incident. It is only natural to assume that if a company has been caught out lying about one thing it is merely a matter of time before they are exposed as doing so again. If they have been dishonest in any other facet of the company then they should prepare for exposure and the ensuing onslaught immediately. That not being the case, then this is their opportunity to be fully transparent about all their internal processes and release a comprehensive report showing them to be clear of any other wrong-doings.
Of course, it’s only going to work if it’s actually true…
Excuse: How can I make this up to you?
What it says: Volkswagen’s Customers Come First
One tactic that Volkswagen can adopt in an attempt to repair reputational damages is to highlight just how much it has learnt from this trauma. Emphasising VW’s humanity and thus natural propensity to be fallible may allow consumers to identify with this fault and persuade them to forgive – providing they show themselves as remorseful and willing to make amends. VW has seemingly embarked upon such a campaign already. In a statement they announced “We at Volkswagen will do everything that must be done in order to re-establish the trust that so many people have placed in us, and we will do everything necessary in order to reverse the damage this has caused.” It would be advised that this comprise of investing heavily into technologies that allowing for greener vehicles in the future. Spending sufficient company profit on such a cause will show that they will never again allow corporate greed to impede upon social responsibility.
While time is the greatest healer, it seems as if Volkswagen’s wounds are going to take a significant amount of licking to stand a chance of being fighting fit again. They have a considerable upward struggle to contend with. However, based on their sound reputation before and slick crisis management response so far, there is still hope for Volkswagen.
by Francesca Heartfield, Media & Strategic Communications Intern
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