Previously, three scenarios involving an alleged breach of trust¹ were proposed. These were matters classified as a:

1. Passing concern;
2. Troubling development; and
3. Full-blown crisis.

This article discusses the ‘passing concern’ category. It is the shortest of the three parts because the recommendation is to do nothing – no matter how bad things initially look. The important first step is identifying which of the three situations the business is confronting.

Almost always, in the event of negative publicity that is assumed to affect trust, internal colleagues repeatedly lose objectivity. Board members are sometimes the worst offenders for calling for corrective action when doing nothing may be the best course of action.

Trust is at the nexus of marketing and public affairs. Trust needs to be fostered and managed for a broad church of stakeholders such as shareholders and regulators. For marketing, trust is part of the brand promise and for some categories and buyer situations, heavily factors into consumer choice.

To assess the situation, the brand should pose two questions:

1. Does the matter go beyond a single news cycle? If no, ignore.
2. If yes, objectively measure the market’s comprehension, and attribution.

It is important to acknowledge that some breaches of trust continue to escalate from the steady state to a passing concern, elevating to a troubling development, and eventually become a full-blown crisis.

Do we need to respond to the negative publicity?

In February 2009, Australia experienced its worst bushfire disaster with 173 fatalities, 414 non-fatal injuries and over a million acres burned. Maurice Blackburn, the largest plaintiff law firm in Australia funded a record-breaking class action for the victims of the Black Saturday bushfires. A furore erupted amongst some plaintiffs concerning the timeliness of the distribution of the damages which attracted national media attention – Exhibit Two.

The negative attention certainly went beyond a single news cycle. The clippings above range from May 2017 to March 2018. The leadership of Maurice Blackburn decided that the continuing issue had become brand damaging and so briefed a creative agency to make public, their version of the circumstances causing to the delay in distribution of damages.

Given the matter had gone beyond a single news cycle, the next step was to objectively measure the market’s comprehension, and attribution.

Is the matter brand damaging?

Marketing research was conducted. Respondents were reminded that a class action had been undertaken in the Victorian Courts for Victorian Black Saturday bushfire victims. Respondents were asked (Exhibit Three) if they could recall anything about the case.

Only six percent of Australians raised the issue of compensation to the plaintiffs. Most respondents (twenty-four percent) said that they were aware that the case had been won and twenty-three percent said that the plaintiffs had received the proceeds from the case.

Respondents were then asked to name the law firm that ran the class action representing the victims. Exhibit Four shows that only twenty-three percent of Australians could name the firm involved in the action. Fifty-five percent could not name any firm.

Finally, respondents were asked if the outcome of the class action for Victorian Black Saturday bushfire victims changed how likely you will be to use Maurice Blackburn. Only 4 percent said they were less likely to use Maurice Blackburn (Exhibit Five).

From a brand perspective, the matter was a passing concern rather than a matter that required an organizational response to the negative publicity. Therefore, the recommendation was to do nothing.

Maintain perspective in the event of a "crisis"

Brand is goodwill in the form of future purchase intentions. Building trust is building an intention for buyers to associate their personal and organizational brand with your organization. Trust is both and emotional and rational act.

Emotionally, it is where you expose your vulnerabilities to people, but believing they will not take advantage of your openness. Rationally, it is where you have assessed the probabilities of gain and loss, calculating expected utility based the actions of the past, and concluded that the person or organization will behave as expected.

Management must always believe and behave as though there is another crisis just around the corner. Trust cannot be built in the midst of a crisis. Organizational trustworthiness equals stored value in the form of forgiveness. Forgiveness is the market’s preparedness to regard wayward behavior as an aberration.

Trust has a long shelf life. It can be stored. Indeed, trust is a repository of preparedness to act during vulnerability and indeed, the presence of trust leads to a willingness to be vulnerable. This is the notion that mutually insured relationships are maintained over the long term by reciprocal acts of vulnerability and reliance.

Trust is a therefore a dynamic, interpersonal link between people and organizations. Depending on a plethora of attributes, in the immediate term, trust can be an antecedent to buyer behavior and in the longer term, trust can simply be an attitudinal gauge as to whether or not an organization or an individual is trustworthy. It is vital to build stored trust, and to appreciate that these banked reserves represent a present value.

All in all

In the event of negative publicity, internal colleagues almost always lose perspective. Board members are usually the worst offenders. Bring some objectivity to the discussion by gauging the awareness/attribution/blame of the matter with your existing and prospective customers. Polling the marketing in this way is relatively inexpensive and can be done overnight.

References

¹See article You Can't Fatten A Pig On Market Day