The following is an opinion piece written by Victoria Robinson (pictured), MA, head of marketing and communications, at the Institute of Risk Management (IRM). The views expressed within the article are not necessarily those of Corporate Risk and Insurance.
Reputations can take years to build and can be lost in a day. With the prevalence of consumers airing complaints and displeasure on social media 24/7 for the world to see, companies have never been under such scrutiny to delight the customer and go the extra mile.
The introduction of GDPR in the UK has meant that marketers need to tighten policies and procedures around the way in which customer data is held, stored and managed. We have seen huge, well-known global corporations: airlines, hotel chains, banks and online retailers suffer at the hands of hackers. The 2017 Cost of Data Breach Study from the Ponemon Institute, sponsored by IBM, puts the global average cost at $3.6 million per incident, or $141 per data record. That’s a reduction on the average cost in 2016, but the average size of data breaches has increased.
An important part of any risk management plan should incorporate crisis management planning - including the responses that an organization pushes out to its public and stakeholders should something go wrong. Detailed plans should include robust responses for scenarios ranging from loss-of-life (such as airlines) to loss of data/personal records - the key risks will vary depending on the nature of the business. Sometimes, it’s as much to do with what is said post event as the actual event itself that can help manage reputation.
According to Marketing Week, consumers’ trust in brands is failing, everyone thinks they’re a marketer and are more willing to put pressure on organizations online or via the press. Brands should have a Corporate and Social Responsibility (CSR) agenda embedded through the brand – consumers are much more easily able to switch their brand allegiance and vote with their feet.
Consumers are becoming more discerning and aware of protecting the planet, about the provenance of goods and, in FMCG industries aware of slavery and working conditions - transparency is key. An example of this would be Iceland’s recent cause related campaigning around palm oil and deforestation - climate change is one of the biggest risks facing the planet.
In summary, brand and reputation should be taken into account on any organization’s risk register and horizon scanning employed to mitigate risks and seek out opportunities.