The True Cost Of Bad Publicity

As the adage goes, any publicity is good publicity. However, most businesses focus on attaining positive publicity, aspiring to create buzz about their companies that helps attract new customers. Good publicity can help your business grow and thrive, but savvy companies and public relations specialists also embrace another goal: to avoid negative publicity. Negative publicity can impair a company — short-term and long-term. 

Here’s a closer look at the ways in which negative publicity can impact your business. 

Loss of Sales and Income 

Negative publicity directly impacts your bottom line in that it affects sales. Bad publicity drives potential customers away and can make a potential customer who is amid choosing whether to purchase a product or service from your company choose a competitor. 

If your company has a strongly established brand, this kind of publicity may be less harmful, while newer and smaller businesses may feel its impact more. Bad publicity may affect your ability to get your product into stores; lessen the likelihood that a customer will choose your product; or make another customer choose a different business to provide the service for which he or she is looking. 

Less Trust in Your Company 

Bad publicity that results from your company appearing to be dishonest or unreliable can impact customers’ degree of trust in you. As a business, customers expect you to deliver what you promise. When you fail to do so, and the public becomes aware of your failure, potential customers may decide that they cannot trust you to provide the product or service they need — or that they cannot trust you to provide it in the way they desire. 

The heavy influence of social media and online business review sites has only accelerated this impact. The majority of customers look at online reviews before choosing a business, and negative reviews will turn off a potential customer, breaking trust before you’ve even had time to create it. Even if you already have positive online reviews, negative ones can cause potential customers to question their validity. It can take months if not years of positive reviews to offset them. 

It’s important to note that this impact on trust isn’t only externally focused. Bad publicity can also impact employee morale. Employees want to work for companies that not only value the work they do, but that have good reputations. Negative publicity can corrode employee satisfaction and pride in their work. 

Harm to Your Brand’s Reputation 

In addition to the lack of trust bad publicity can cause, it can affect your overall brand. Your brand’s reputation has a powerful impact on numerous factors — including your ability to grow, to attract new customers and to attract new employees. 

Brand equity refers to the value that customers associate with your brand, not the service or product that you provide. Ideally, your brand equity is high but bad publicity can cause it to plummet. It’s important to note that bad publicity can stem not from a proven misstep or safety or health issue. A rumor, even one unfounded, can hurt brand equity. 

How to Handle Negative Publicity 

Nearly every business will deal with some kind of negative publicity. You may be tempted to ignore it, but it’s better to tackle the issue head-on. First, confront the source of the negative publicity, if possible, rebutting it with facts that support your position. If you’ve made a mistake, acknowledge it rather than trying to cover it. People appreciate transparency and willingness to admit mistakes. Also consider enlisting the help of a media monitoring company.

Address the issue, if possible, such as offering a customer a full refund when he or she complains about your company on social media. You can also help offset negative publicity by asking loyal customers to post positive reviews on social media and business review sites. While some negative publicity may be unavoidable, the way you respond to it can help protect your brand and your business’s future. 

Author bio: David H Lasker is the founder and CEO of News Exposure, a digital content solutions company specializing in media research and monitoring. Lasker has over 25 years of experience in the industry and focuses on TV and radio broadcast monitoring, media intelligence, and PR analysis.