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GOVERNMENT

COCA COLA

SWISSAIR PASSENGERS
50
issue 25. summer 2006 EBF

D6PTH
By Dominique Turpin, IMD

"No comment". Those two simple words can shatter a company's reputation and cost it millions in lost sales. So how can you turn a corporate crisis into competitive advantage?

n October 2001, news of potentially harmful bacteria found in a McChicken Burger in Buenos Aires, Argentina, spread across South America via television and the internet. Although no one was proved to have been made sick or placed at risk, the incident cost McDonald's several million dollars in lost sales and damaged brand eguity {Turpin, 2002). Effective or ineffective communication during the first hours - or even minutes - of an emergency can have dramatic implications for the image of a company (Dawar and Pillutla, 2000). A study of 2,645 consumers conducted by the advertising agency DDB Needham showed that a company's handling of a crisis ranked as the third most important influence on consumer purchasing, after product quality and handling of complaints {Marketing News, 1995).

issue 25. summer 2006

51

When disaster strikes: communicating in a crisis

Crisis-management experts are unanimous in concluding that it is not a matter of if a company wiil be faced with a crisis, but when and how weii-prepared executives wili be to weather the storm {Albrecht, 1996). Indeed, no company is immune to a potential crisis created by flawed products, blackmail by unscrupulous consumers, dishonest acts by employees or managers, the sudden death of a senior executive, terrorist acts or natural disasters. In any one of these situations, saying the "right" thing, showing real concern and compassion wifh actions that are consistent can save companies much trouble. Even if management perceives the crisis as "unfounded" or "unfair" because of below-the-bett attacks