(Source: Lubna Rezzoug)
Helen van der Weij responds optimistically to the Samsung Galaxy Note 7 crisis in her latest blog: “You might think that a crisis like this will have negative effect on an organization and will…end their elite reputation…it did not for Samsung. I… use Samsung as an example of how an elite organization can save itself… and make sure that their reputation won’t explode like their phones.” Do I agree that Samsung as a company survived in the long run? Yes, definitely. Do I believe they got out this crisis without a scratch? No, as matter of fact their profits and reputation did ‘explode like their phones’ – in a bad way. Only the recall of their products already cost them $5.3 billion and according to the BCC their valuation even shrunk by $20 billion! Do I agree that media coverage on the crisis was rather neutral as a response to Samsung’s ‘successful’ crisis communication? No! Curious to why I disagree? I will shed more light on this below.
BRAND REPUTATION: HARD TO WIN, EASY TO LOSE.
Samsung has not always been as elite as may be suggested. Think of it, they build up their emporium from scratch in only twenty years. In the current social media-driven landscape where people are highly connected and news travels time, negative news has the tendency to gain more attention (as suggested by Soroka and Trussler). Nowadays, elite or not – it doesn’t really matter – Reputations are hard to win and easy to lose. Even though, Samsung replied to the crisis very promptly by recalling the defect products and offering new products. Their reputation got harmed by a worst case scenario: The new devices also showed defects. The Edelman Trust Barometer of 2017 shows 60% percent of consumers trust companies only when they offer high quality products or services and that the majority of consumers only buy products from brands that they trust. Additionally, research showed that ‘a product-harm crisis’ results in significant decreases of trust and purchase intention of consumers. This reflects how a brand’s reputation can lead to severe losses.
In contrast to Helen’s suggestion:”.. the media in general were really neutral and definitely not negative about Samsung”, the image below shows that there was a negative sentiment towards Samsung during the crisis. Some argue that the negative sentiment towards the brand would have been lower if they reacted sooner on the exploding phones. Should they have replied even more swiftly? I will elaborate on this in a bit.
(Source: Zignal Labs)
TIMELINESS VS. ACCURACY
I don’t think they should have replied sooner. Showing a prompt and caring response towards their customers already backfired on Samsung. Why? Isn’t it good these days to communicate timely during a crisis? Yes partly, as scholars argue that “a prompt response is required since the speed of information dissemination on the Internet is incomparable to that of traditional media.” But speaking out too quickly can also add fuel to the fire by disseminating false information. This happened with Samsung, as they spread inaccurate information which frustrated regulators and consumers even more.
So, how to find a balance between trust, timeliness and accuracy? I would say to come up with a strategy that meets the expectations of all the stakeholders that are involved.