Making the Best of Corporate-Sized Mistakes
Did you notice Google’s cloud services were down for hours over the weekend?
The level of impact was astronomical: not only were basic services like Gmail and Youtube out for the count, but any site that relied on Google for its cloud hosting services (think major e-commerce operations like Shopify) also experienced several hours of outages. Google’s smart home devices were also impacted: Nest camera systems and thermostats weren’t functioning properly, and users were even left unable to use their smart locks to open the doors of their homes. A basic mistake, or something more sinister?
Google publicly blamed the outage on “high levels of network congestion in the Eastern USA,” but the impact was felt worldwide. Whether due to the outage or a brewing anti-trust probe from the Justice Department, Alphabet stocks dipped significantly Monday morning, even though internet services have widely returned to normal.
So what happened? Does it matter? Corporate-sized mistakes elicit fear in even the most hardened of CEOs, because their impact can be lasting and sometime devastating.
It’s a good weekend lesson you can apply going into this next workweek: how can your company recover from a corporate blunder and regain the confidence of your consumers?
Lesson 1: Everyone Makes Mistakes
Let’s look at a 2017 commercial released by Pepsi. The commercial, which was originally intended to take advantage of the rise of political activism and model Kendall Jenner’s popularity, failed to inspire consumers for the right reasons.
In the ad, a popular young model (Jenner) leaves her photoshoot to join a protest for peace. There’s tension, but she bridges the uncomfortable space between police and protestors by offering an officer a Pepsi. He cracks it open, and everyone cheers. Pepsi has saved the day.
Except, not actually. In reality, the commercial infuriated a number of different demographics for misappropriating Black Lives Matter imagery. The controversy sent Pepsi’s income spiraling.
The way a business like Pepsi—or a business like yours—recovers from a mistake can turn that initial revenue dive into later success. Remember: everyone makes mistakes.
Lesson 2: Respond Swiftly
Consumer response to Pepsi’s blunder was immediate and angry. Almost immediately, the company’s perception level dropped to the lowest level in eight years. In the eyes of its consumers, the company’s credibility and trustworthiness fell, and as a result, Pepsi’s revenue took a hit.
In cases like these, speed is vital, and you should work as quickly as possible to acknowledge and respond to the mistake.
What was Pepsi’s response? Immediate damage control. Just one day after release, the company pulled the ad and issued a detailed apology.
It was, of course, a financial loss. Analysts predicted that Pepsi spent up to $5 million on production itself, in addition to a mind-boggling media buy in the neighborhood of $100 million. Talk about an expensive mistake.
Lesson 3: It’s All in the Recovery
In the years since the commercial’s controversy, Pepsi has made a financial recovery thanks to its speedy response, but its reputation with millennial audiences never fully recovered from this blow (and a few others).
While you may not infuriate the internet with a corporate mistake, there’s no such thing as a perfect business owner. If you do happen to make a mistake that compromises your business’ relationship with your audience, you can take a leaf from Pepsi.
- Read the room: How is your audience reacting to the mistake? Pepsi’s commercial elicited cold rage and confusion from its audience. Understand the mood of your audience. Do they feel betrayed? Confused? Only slightly annoyed? The answer can help you craft a better response.
- Respond quickly: Don’t try to dismiss your audience’s feelings about a mistake. You need to address your mistakes honestly to retain consumer trust.
- Prepare for losses: Like Pepsi (or Google), you may see a blip in business due to a corporate mistake. The degree of this blip will depend upon the mistake that’s been made. Accept your losses gracefully, and remember—honesty and transparency go far to secure consumer trust and revenue stream.
Image attribution: Michail Petrov – stock.adobe.com