Rebuilding trust in businesses after a scandal

Julie - rebuilding trust

After a scandal the reputation of a business is invariably damaged, but the actions taken by its staff in the immediate aftermath and beyond can help to mitigate – or even worsen – the crisis. Such scandals emerge in the news on a regular basis, with recent examples including United Airlines treatment of its passengers on overbooked flights and computer failure causing widespread flight cancellations for British Airways passengers.

Researchers at Bournemouth University are exploring how consumers have reacted to recent crises and how businesses in different sectors could best respond to a scandal. The project is being led by Dr Julie Robson, an expert in financial services marketing.

“We are exploring consumer’s reactions to a number of recent and on-going scandals, including the misselling of payment protection insurance (PPI), last year’s rollercoaster crash at Alton Towers theme park and Sports Direct’s working practices,” says Dr Robson, “Our research so far has shown that people react in very different ways according to what the scandal is, the type of business involved and how it’s handled.

“Take the PPI scandal, for example. Our focus groups have found that people often view the banking sector quite negatively, because it seems to move from one crisis to another – misselling products, market rigging, handling laundered money – and it never seems to get an opportunity to recover. In the case of Alton Towers, however, consumers have been much more forgiving because they feel the company handled the crisis quite well. They closed the theme park, issued an apology and have done a lot to try and repair their image.

“Sports Direct is different again, as people’s perception is that the issues they’re facing are as a result of the decisions taken by the company’s founder, Mike Ashley. They place the blame on him. Consumers also seem to have much less emotional investment, as they see a need for Sports Direct – it supplies products at an affordable price, which is what they want.”

The next stage of the project is to interview stakeholders across the three different sectors, to find out how industry as a whole pulls together in a time of crisis. When a scandal emerges, entire industries can be affected, as seen by the VW diesel emissions crisis from 2015. Something on that scale can have an impact on the perception of a whole industry, not just a single organisation.

The results of the project will be developed into a toolkit designed to help businesses explore why they may have lost consumer trust and how they can go about repairing it. This will be widely shared with businesses in a number of different sectors.

“There are a number of different actions businesses can take to start rebuilding that relationship,” explains Dr Robson, “It can be as simple as issuing a swift and sincere apology, to gaining an endorsement, such as getting a quality assurance award. No matter what the step is, it’s important for companies to be telling their consumers what actions they’re taking, as our focus groups show that people don’t always know what an organisation has done to rebuild trust.”

To find out more about this research, sign up for the Festival of Learning event ‘Lies and Scandals: Whatever happened to trust’ which is being run by Dr Robson and Samreen Ashraf on Tuesday 11 July, 5:30pm – 7pm.

This story featured in the Bournemouth Research Chronicle, which can be read online or downloaded.