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The branding fallout of Dubai’s anti-corruption drive has, unfortunately, been coupled with the lack of proper crisis management, says experts.
October 9, 2008 8:48 by kippreport
“Change in the pocket.” One of the biggest opportunities these companies have missed is the chance to build brand equity with consumers and stakeholders so that, should another crisis hit in the future, they have what Behrens refers to as “change in the pocket.”
“We’ve seen brands in the past try to mask things that are going on and that’s when you really start to compromise your brand,” he says. “Brands are about relationships. With good relationships, even when you make mistakes you can still rebuild those relationships and have change in the pocket. Good, strong brands that have built a relationship of trust with consumers can survive a blemish. It’s when you don’t have that trust that you’re most exposed.”
A backlog of good faith can make a difference economically as well, says Tinsgström. “You often read that investors don’t give you the benefit of the doubt and will dump shares [in a crisis],” she says. “What’s vital when you’re a quoted company is to have a very strong investor relations function. In a case like this you pick up the phone to your top fifty, or your top twenty, and tell them what’s going on. They might, then, give you the benefit of the doubt and hear your side of the story.”
We can’t be sure about the standard of investor relations in the companies involved in the crisis, but judging by their media relations, it’s a fair bet they’ve got no spare change.
Boom from busts. It’s not all bad news, though. Despite the short-term damage to Dubai’s perception, everyone we speak to suggests that – in the long run – the anti-corruption drive can only benefit Brand Dubai.
“Crackdowns on corruption have happened before, but the names involved this time have been quite shocking,” says Al Zaki. “But in the long run, I think the sentiment has been very positive. People feel that no one should be above the law, and they think what’s going on is great.”
Behrens agrees. “I think it reveals a change in the way that Dubai is managing itself,” he says. “There’s a real need for Dubai to clearly demonstrate that it’s serious about sorting out its issues. This is a great first phase. The fact that people are hearing about these things reflects a greater level of transparency.”
But, he warns, in terms of brand performance, Dubai must continue to deliver on its promise of zero tolerance. “The next couple of months are going to be crucial,” he says. “It’s going to be very interesting to watch.”
And it’s not just Dubai Inc. that is set to enjoy long-term benefits from the bad press. It might also lead to a boom in the region’s communications industry.
“I can guarantee you that since this series of crises, PR agencies are much busier and working with their client base across the board to be much more prepared in terms of crisis communications,” says Jiwin’s Sbeih. “There’s a lot of demand right now from our clients for higher level people to be more engaged.”
And since agencies bill by time, and the time of high-level people is more expensive, that means an increase in costs. Which should also mean an increase in clients’ PR budgets.
“Any company of value that doesn’t recognize the importance of being ready for these kinds of events is crazy,” says Behrens. “They’ve got to invest more than ever to ensure that they have crisis-management plans in place.”
First seen on www.communicate.ae