How to Handle a Business Reputation Crisis Step-by-Step

Firestorm. PR Nightmare. Going viral (not in the good way). However you describe it, a business reputation crisis can feel like an explosion just waiting to happen and threatening to engulf your company. A single tweet, review, or news story can spread like wildfire, causing irreparable damage to your brand and bottom line. 

Don’t panic. 

While you can’t always predict a crisis, you can control how you respond. This post will give you a step-by-step guide to navigate an online business reputation crisis, minimize damage, and emerge even stronger. 

Whether you’re currently in the midst of a crisis or want to be prepared for the unexpected, this guide will equip you with the knowledge and strategies to safeguard your business’s most valuable asset: its reputation.

Causes of Business Crises

Crises can feel like they come out of nowhere, but many are actually rooted in predictable patterns and preventable issues. 

This is actually good news, because it means you can create an effective response ahead of time. 

Understanding these causes can help you fortify your business against reputational damage (before it becomes a huge problem). 

Social media mishaps

The immediacy and reach of social media make it a breeding ground for crises. A single off-the-cuff tweet, offensive post, or poorly handled customer interaction can quickly become a viral disaster. 

With 86% of Americans valuing transparency from businesses, there are plenty of social media users ready and willing to hold brands accountable for their missteps (Source: SproutSocial).

Example

In 2021, Burger King UK faced severe backlash for a tweet on International Women’s Day that read, “Women belong in the kitchen.” 

While the intent was to promote their culinary scholarship program for women, the execution was tone-deaf and sparked accusations of sexism. 

The tweet was quickly deleted, but not before causing significant damage to the brand’s reputation.

Negative reviews and online complaints

Online reviews are a powerful force in shaping consumer opinions, with 93% of consumers saying that online reviews affect their shopping choices (Source: Frontiers). 

A surge of negative reviews on platforms like Google Business Profile, Trustpilot, Yelp, and more can significantly damage your reputation and deter potential (and current) customers.

Example

In 2022, the popular video game “Cyberpunk 2077” was plagued by bugs and performance issues, leading to a flood of negative reviews and refund requests. 

This severely impacted the game’s reputation and led to a significant drop in sales. CD Projekt Red, the game’s developer, faced a class-action lawsuit and had to work extensively to rebuild trust with its customers.

Content crises

Inaccurate, misleading, insensitive, or plagiarized content can quickly erode trust and spark backlash. This includes everything from blog posts and articles to website copy and marketing materials.

Example

In 2023, clothing retailer H&M faced accusations of “greenwashing” after a report revealed misleading claims about the sustainability of its “Conscious Collection.” 

Consumers felt deceived, and the brand faced criticism for its lack of transparency and potentially harmful environmental practices.

Data breaches and security incidents

In the era of increasing cyber threats, data breaches can severely damage a company’s reputation, leading to loss of customer trust, financial losses, and potential legal repercussions. 

According to the IBM Cost of a Data Breach Report 2024, businesses faced $1.47 million in “lost business costs”, up from 11% in the previous year. This figure includes revenue loss due to system downtime, as well as the cost of lost customers and reputation damage. 

Example

In 2021, the social media platform Twitch suffered a major data breach that exposed sensitive user information, including source code and creator payout details. 

This breach not only compromised user privacy but also damaged Twitch’s reputation as a secure platform.

Employee misconduct

Employee actions (both on and offline) can reflect poorly on the company. This includes instances of discrimination, harassment, or unethical behavior. 

According to HR Acuity, as many as 52% of employees have experienced or witnessed inappropriate, unethical, or illegal behaviors at work. 

But, only 58% of employees who experienced or witnessed these behaviors ended up reporting them. With so many issues left unreported, a crisis regarding employee misconduct could occur at any time. 

Example

In 2022, Activision Blizzard, a major video game company, faced numerous allegations of sexual harassment and discrimination. 

This led to employee walkouts, public outcry, and investigations by government agencies, severely damaging the company’s reputation and leading to calls for leadership changes.

Related article: The reputations of executives at your company can also play a major role in how crises start, as well as how well your business can navigate through them. Learn more about CEO reputation here. 

Product failures and recalls

Defective products or safety concerns can lead to widespread negative publicity and damage customer confidence. 

And product recalls are on the rise, with as many as 73% of organizations facing product recall in the last 5 years (Source: Hexagon ETQ).

Example

In November 2024, Tesla had to recall over 2,400 of its highly anticipated Cybertruck pickup trucks due to a faulty suspension component. 

This defect could potentially lead to a loss of vehicle control and increase the risk of a crash. 

This recall, occurring shortly after the Cybertruck’s launch, generated significant negative press and raised concerns about the vehicle’s safety and reliability.

How to Handle Each Stage of a Business Reputation Crisis

Business reputation crises unfold in stages, each requiring a unique approach. 

Here’s how to navigate each step of the crisis lifecycle:

Warning

Every crisis has a starting point. In the warning stage, you might get subtle hints or early indicators that a crisis might be brewing. This could be an unusual spike in negative online mentions, customer complaints, or internal whispers of discontent. 

What to do:

• Monitor online conversations: Use social listening tools and actively track brand mentions across social media, review sites, and online forums.
• Pay attention to customer feedback: Analyze customer service interactions, product reviews, and online complaints for recurring themes or emerging issues.
• Don’t ignore internal red flags: Address employee concerns, investigate potential issues, and foster a culture of transparency and open communication.

What not to do:

• Dismiss early warning signs: Ignoring potential problems can allow them to escalate into full-blown crises.
• Assume things will resolve themselves: Proactive intervention is crucial in the warning stage to prevent further damage.
• Overreact without sufficient information: Gather data and assess the situation before taking action.

Risk Assessment

Once a potential crisis is identified, it’s crucial to assess the severity of the situation and its potential impact on your business.

What to do:

• Gather all relevant information: Collect data from various sources, including social media, news outlets, customer feedback channels, and internal reports.
• Identify key stakeholders: Determine who is affected by the crisis and who needs to be involved in the response.
• Evaluate potential consequences: Assess the possible impact on your brand reputation, customer relationships, and financial performance.

What not to do:

• Underestimate the situation: A thorough risk assessment is crucial to avoid downplaying the potential damage.
• Delay decision-making: Swift action is often needed to contain the crisis and prevent further escalation.
• Focus solely on short-term impact: Consider the long-term consequences for your brand reputation and customer trust.

Response

The response stage involves taking concrete steps to address the crisis and communicate with affected stakeholders. Delivering a response in the wrong way can jeopardize your reputation even further. 

What to do:

• Craft a clear and concise message: Address the issue directly, express empathy, and outline the steps you’re taking to resolve the situation.
• Communicate proactively and transparently: Use multiple channels to reach your audience, including social media, press releases, website updates, and email communications.
• Be responsive and address concerns: Engage with your audience, answer questions, and provide timely updates.

What not to do:

• Stay silent or ignore the issue: Silence can be perceived as guilt or indifference, further damaging your reputation.
• Issue a defensive or dismissive response: Avoid blaming others or downplaying the concerns of your audience.
• Make promises you can’t keep: Maintain credibility by setting realistic expectations and delivering on your commitments.

Management

The management stage focuses on ongoing efforts to contain the crisis, mitigate damage, and monitor the situation. 

What to do:

• Track online conversations: Continue monitoring social media and online platforms for mentions and sentiment related to the crisis.
• Adjust your response as needed: Be flexible and adapt your communication strategy based on the evolving situation and feedback from your audience.
• Address new developments promptly: Respond to emerging information and address any misinformation or rumors that may arise.

What not to do:

• Become complacent: Ongoing vigilance is crucial to ensure the crisis doesn’t resurge or spread to new platforms.
• Neglect internal communication: Keep employees informed and provide them with the resources and support they need.
• Lose sight of your long-term goals: Align your crisis management efforts with your overall business objectives and brand values.

Resolution

The resolution stage marks the point where the immediate crisis has subsided, and the focus shifts towards rebuilding trust and restoring normalcy. 

What to do:

• Reinforce your commitment to change: Communicate the steps you’ve taken to address the root cause of the crisis and prevent future occurrences.
• Express gratitude for support: Thank your customers, employees, and partners for their understanding and patience throughout the crisis.
• Focus on positive messaging: Highlight your company’s strengths, values, and commitment to customer satisfaction.

What not to do:

• Declare victory prematurely: Avoid claiming the crisis is over before fully addressing its underlying causes and consequences.
• Revert to business as usual: Use the crisis as an opportunity to learn, improve, and strengthen your brand reputation.
• Forget the lessons learned: Document the crisis management process and implement changes to prevent similar incidents in the future.

Recovery

The recovery stage involves long-term efforts to rebuild your brand reputation, regain customer trust, and restore your business to its pre-crisis standing. 

What to do:

• Invest in reputation management: Implement proactive strategies to monitor your online presence, address negative content, and promote positive brand storytelling.
• Focus on customer experience: Deliver exceptional service, exceed customer expectations, and foster strong relationships with your audience.
• Continuously evaluate and improve: Regularly assess your crisis management plan, update your communication protocols, and adapt to the evolving online landscape.

What not to do:

• Underestimate the time required for recovery: Rebuilding trust and restoring your reputation takes time and consistent effort.
• Neglect online reputation management: Proactive monitoring and management of your online presence are essential for long-term success.
• Become complacent about crisis preparedness: Remain vigilant and continue to invest in crisis prevention and response strategies.

How to Prepare Your Business for an Online Reputation Crisis (Before it Happens)

The best time to address a crisis is before it even begins so you have time to draft an effective response. 70% of companies who fail to manage a crisis effectively end up losing business and facing long-term reputation damage (Source: Vorecol).

But, by taking proactive steps, your corporate reputation can withstand any storm and emerge even stronger. 

Here’s what to do:

Draft a crisis management plan

Don’t wait for a crisis to hit before figuring out how to respond. A well-defined crisis management plan acts as your roadmap, guiding your actions and ensuring a coordinated response. 

Tip: Include a detailed crisis communication strategy in your plan, outlining who will be responsible for communicating with major stakeholders (customer, media, employees) and through which channels) social media, website, press releases). 

Related Article: In your response strategy, you’ll likely require a multifaceted approach that includes both online reputation management and PR. Learn about the differences here: PR vs Reputation Management. 

Monitor online mentions

Keeping a pulse on online conversations about your brand is crucial for early crisis detection.

Tip: Use social listening tools (like Brandwatch, Mention, or Sprout Social) to track brand mentions, identify sentiment trends, and uncover potential issues before they escalate. 

Anticipate incidents

While you can’t predict every crisis, you can identify potential vulnerabilities and prepare for likely scenarios. 

Tip: Conduct a comprehensive risk assessment to identify potential threats to your reputation. Consider factors like your industry, customer base, and online presence.

Educate leadership

Ensure your leadership team is well-versed in crisis communication and understands their roles and responsibilities.

Tip: Conduct crisis training for key decision-makers, equipping them with the skills to navigate challenging situations and make informed decisions under pressure. 

How Can Online Reputation Crisis Management Help My Business?

When a crisis hits, every second counts. In the blink of an eye, you can lose customers, investors, and even employees to the fallout of a crisis. 

But, there’s hope.

Reputation911 specialized in online reputation crisis management, acting as your digital shield during turbulent times. 

With 80% of Americans getting their news online, and 60%+ of searchers trusting Google News more than traditional outlets, what appears in those search results is critical. 

How we can help:

• Swift Action: We move quickly to assess the damage and implement a tailored strategy to mitigate the negative impact on your online presence.
• Search Result Suppression: We utilize proven techniques to push down negative search results, ensuring that the first page tells the story you want people to see. This is crucial because businesses with just one negative article ranking online risk losing over 20% of prospective customers – and that number jumps to 70% with 4 or more negative articles.
• Content Creation and Promotion: We develop and promote positive content that highlights your brand’s strengths, values, and commitment to customer satisfaction. This helps to counteract the negative narrative and rebuild trust.
• Strategic Monitoring: We continuously monitor online conversations and search results to identify and address any new developments or emerging threats.

Why it matters:

A damaged online reputation can have far-reaching consequences:

• 90% of consumers avoid businesses with a bad reputation. Losing customers means losing revenue and market share.
• 70% of prospective employees would reject a job offer from a company with a bad reputation, even if they were unemployed. Attracting top talent becomes an uphill battle.

Reputation911 is your partner in protecting your brand and navigating the complexities of online reputation crises. We provide the expertise, strategies, and support you need to emerge stronger and safeguard your business’s future.

Contact us today for a free confidential consultation by calling us at 866-697-3791 or filling out our contact form . Let us help you take control of your online narrative and restore your reputation.

(Source for statistics in this section: Status Labs)