Negative publicity is probably inevitable for most firms, but how one responds to it is very much something within your control. Research from the University of Texas at Arlington explores some of the best ways to manage such occasions.

The researchers analyzed 30 years of work on the topic of how product crises affect consumer confidence. Much previous research suggests that product issues understandably dent consumer responses to that particular product. The magnitude of this reaction is dependent on the unique characteristics of the crisis, however, as well as the target consumers and the product itself.

“When threat severity is high, and if the product is health-related or directly involved in the crisis, negative publicity is likely to have a lasting impact,” the researchers explain. “In those instances, businesses need to respond quickly and decisively.”

Product crises

The researchers highlight the recent problems around baby formula, which were linked to issues at a manufacturing facility. The company making the formula was aware of a potential problem back in October 2021 but failed to adequately prepare for any fallout that may result from recalling the product and shutting down the plant.

“Now here we are several months down the road with shortages and panic,” the researchers say. “Given that this crisis is high in threat severity, is health-related and involves a performance-related product failure, our research suggests that Abbott Laboratories should have immediately initiated an aggressively proactive crisis response strategy.”

While the researchers accept that they weren’t able to examine things like spillover effects, the baby formula incident does demonstrate that others, including rivals, the wider sector, and even government institutions, can also be affected by the mistakes of a single firm.

The key is for companies to firstly detect any trouble early on, before then accurately diagnosing the nature of the crisis, the product itself, and the consumers affected by it. Only then can appropriate action be taken. It’s also important to note that not all crises should be approached in the same way.

“Organizations will always be composed of fallible people, so crises are bound to occur,” the authors conclude. “The results of this study will help companies to predict and understand how negative consumer reactions are likely to be, so they can craft a more appropriate response when that time inevitably arises.”