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Storyboard18 | What can fix the brand crisis of consumer internet companies?

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

November 29, 2021 / 06:30 PM IST

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 negative impact on society to hurting religious sentiments have 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, which are 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 owing to social media outlets aiding people to take their grievances and concerns to a lot of people in a short span of time. 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 founders

Karthik Srinivasan, a communications strategy consultant believes that brands are not individuals, to have perspectives or point of view but brand owners can have perspectives and offer them as part of conversations he says. To some extent, Zomato does this consistently well, and the founder and CEO Deepinder Goyal, is a good example of such engagement, even when a topic is negative to the company.

“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.

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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 influencers

Advertising experts note that research work for communication purposes is critical for new-age companies as it will be easier to understand what would be 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 and conversations etc. In 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, 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 which 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) as well as 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 which is 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 communication

Sreedhar 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 really fast unlike a Taj Hotel or Unilever. “Therefore, it also becomes imperative for these startups to instill 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.
Saumya Tewari is Assistant Editor of Storyboard. Storyboard is Network18's flagship platform focussed on the advertising & marketing community and a leading source of news and analyses on the business of brands.
Tasmayee Laha Roy is Assistant Editor of Storyboard18. Storyboard18 is Network18's flagship platform focused on the advertising & marketing community and a leading source of news and analyses on the business of brands.
first published: Nov 29, 2021 06:30 pm
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