Storyboard18 | How to fix the brand crisis of consumer internet companies

Edtech, fintech and foodtech, especially, brands are increasingly facing backlash that can erode brand value and adversely affect consumer perception. So what’s the crisis plan?

Last Updated: Nov 26, 2021, 17:43 IST4 min

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Reputation management, customer experience or rating, crisis management to repair or fix customer trust problem, credit score or satisfaction concept, businessman fix broken rating star with bandage.

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From Paytm being trolled for its underwhelming stock market debut to Zomato being cornered for spending huge money on ads featuring big Bollywood stars (Hrithik Roshan and Katrina Kaif), instead of ensuring “fair pay” to its delivery staff, an increasing number of consumer internet companies are facing brand crises due to various reasons. Being pulled up for everything from their negative impact on society to hurting religious sentiments, has become the order of the day, with digital platforms opening up the window for candid feedback and easy access to companies and their leaders. Such incidents—happening with increasing frequency in edtech, fintech, and foodtech—can have a serious impact on a company's brand value and consumer perception. Branding and marketing experts believe that the broader reason for an increase in 'crisis' situations is because of social media platforms aiding people to take their grievances and concerns to a lot of people in a short period. This wasn't possible in the pre-internet days when the crisis largely stemmed only from mainstream media's reporting of the brand (that started from media identifying aggrieved customers, or an adverse point of view among some people). Create social media presence of foundersKarthik Srinivasan, a communications strategy consultant believes that brands are not individuals to have perspectives or points of view. But brand owners can have perspectives and offer them as part of the conversation, he says. To some extent, Zomato does this consistently well, and founder and CEO Deepinder Goyal is a good example of such engagement, even with a negative topic. “Increase the presence of brand leaders and management teams on social media channels. Work on helping them create perceptions for themselves through adept use of social media. For example, Anand Mahindra's use of Twitter not only helps him but also Mahindra, the company,” he adds. Srinivasan further notes that this helps immensely during a crisis—the time to build a personality through a social channel is not when a crisis hits, but when there's absolutely no crisis whatsoever and things are going swimmingly well. Be proactive and leverage influencersAdvertising experts note that research work for communication purposes is critical for new-age companies. Because it will be easier to understand the possible pitfalls (of a campaign/content piece) and then accordingly create the mitigation plan. “…. whenever the internet companies or new-age startups tend to take a point of view, they tend to be a little bit more extreme in their point of view. They tend to push the envelope a little more than the traditional companies. Because that way, they tend to get more eyeballs, conversations, and so on. In the absence of research work, the brand and communication teams should always factor in the risk mitigation plan,” says Rahul Vengalil, managing partner, Isobar India, a Dentsu-owned digital agency. The risk plan, Vengalil adds, could include influences coming in to tone down the negative publicity, with a different cut of the same campaign. “…Influencers will play a big role, especially when it comes to creating positive conversations online and countering content on challenges that a brand might be facing,” he notes. Apart from advertising campaigns, product and service-related issues continue to be another huge challenge that is specific to internet companies. Amazon and Flipkart, for instance, are often pulled up on social media for delivering wrong or absurd products. Zomato received flak when its delivery staff was caught eating a food delivery order. More often than not, these issues snowball across digital platforms, attracting negative customer perception. Isobar's Vengalil suggests that companies should invest more in data insights and social listening—which can be on their own platform (through reviews/feedback) and social media platforms (talking about brands). “There’s enough and more data that they have to dip into to create patterns of how customers react, their experiences. Brands should start acting the moment they see a dip in such patterns. Companies not only should fix problems but also communicate how they are fixing them. Being proactive, backed by consumer data, always helps,” Vengalil says. “Brands should be mindful about highlighting positive changes they might have made at their end in all their content and not stop creating content with innovative storylines,” says Mitesh Kothari, co-founder, White River Media. Beyond communicationSreedhar Prasad, internet business expert and former partner at KPMG, tells Storyboard18 that once a company acquires a certain scale, its brand becomes the mote and customers are loyal to it. It is extremely critical for such companies to have a tracking mechanism that keeps a tab on whether unfavourable things are being said about their brand, whether bad elements are misusing the brand name for personal gains across digital and offline platforms. "The company has to be vigilant about such malpractices,” says Prasad. Many new-age startup brands grew fast, unlike a Taj Group hotel or Unilever. “Therefore, it also becomes imperative for these startups to instil a culture in the company at a fast pace that is followed by its employees and partners. There has to be some sort of fear mechanism as well which pushes its employees to become accountable for their actions and that will bring down service-related issues," he concludes.