Brands Need to Bite the Bullet and Address Screwups Rather Than ‘Catfishing’ Consumers

If they think you're genuine, they won't focus as much on your missteps

VW misleading customers about emissions standards could have been dealt with better. Getty Images
Headshot of Christina Beavis

Did you know that August was Catfish Month? The designation was originally conceived to honor the hardworking catfish farmers of America, but “catfish” has taken on a whole meaning in the age of social media. Nowadays, a catfish more commonly refers to an individual who assumes another identity online and uses it to lure an innocent bystander into a relationship.

The spectrum of catfishing ranges from relatively mundane to full-blown insanity. Businesses are now getting in on the action, too, without realizing that the short-term gains simply aren’t worth the long-term costs.

Capitalizing on loose FDA guidelines for “natural,” cereal brand Kashi labeled itself as “all natural” and touted “nothing artificial” in its ingredients, all things found in nature, like pyridoxine hydrochloride, calcium pantothenate and hexane-processed soy. Kashi was forced to remove those terms from its packaging and its parent company, Kellogg’s, paid a $5 million settlement fee in a class-action lawsuit for its misleading claims.

If your customers know that you are truly willing to stand up, and not only listen but solve their challenges, they won’t feel the need to go and blast your missteps publicly on social platforms.

In 2015’s diesel scandal, the EPA discovered Volkswagen had intentionally programmed diesel engines to activate emission controls only during lab tests, allowing them to meet U.S. environmental standards. In real-world driving, VW vehicles emitted up to 40 times more air pollutants. Stock declined 37 percent over the week following the announcement. The Audi CEO was eventually arrested and the VW and VW U.S. CEO both resigned in disgrace. All in all, VW spent an estimated $7.4 billion covering related costs.

Time and time again, we see that catfishing their customers will actually cost companies more in lawsuits and lost customers.

Companies don’t necessarily catfish out of malice. More likely, its actions are overly focused on profits. That approach might provide a temporary boost to the bottom line, but when cutting corners and misleading customers are discovered, the financial gains prove to be short-lived. Creating value and acting ethically takes more patience, fortitude and integrity than easy shortcuts, but it pays off in the long run.

Companies brave enough to take a stand, listen to customer complaints and solve them will build brand advocates and improve their products and services by listening to the actual people using them. We call this innovation through feedback. Companies are so willing to throw millions of dollars at marketing/ad budgets every year yet make cuts to customer service and quality assurance teams, the very departments that can bring about consistent corporate growth and stability.

Build brand advocates, and you won’t need to spend millions marketing. Communicate authentically with your customers, and you won’t need to continue to grow your social team to fend off customer complaints. If your customers know that you are truly willing to stand up, and not only listen but solve their challenges, they won’t feel the need to go and blast your missteps publicly on social platforms.

In 2014, Target uncovered a data security breach and scrambled to rectify the issue without informing customers. Once the breach became public, consumers saw Target as untrustworthy and its stock price declined for months afterward. Earlier that same year, The Home Depot had a similar data breach that affected 16 million more consumers, yet its stock bounced back relatively quickly.

The difference? The Home Depot CEO Frank Blake, acting against the advice of his legal counsel, came clean immediately. Blake’s public acknowledgment jeopardized The Home Depot’s market share, but his honesty reassured the public with clear actionable steps on how The Home Depot would fix its mistake.

Doing the right thing and having the humility to admit mistakes boosted The Home Depot’s integrity as a brand. People felt comfortable continuing to do business there, and as a result, The Home Depot was able to avert a PR disaster with minimal impact to revenue.

Especially in crisis mode when the lawsuit boogeyman looms large, companies too often evade personal responsibility and take the well-traveled low road. From the wide-angle perspective, though, a consumer’s beneficial perception of a brand generates lifelong loyalty and powerful word-of-mouth advertising.

As the leader of SC Johnson, Herbert F. Johnson, Sr., said in 1927, “The goodwill of people is the only enduring thing in any business … The rest is shadow.”

That goodwill has to be earned. Catfishing customers is a surefire way to torpedo any efforts made in that direction. Somewhere along the way, we adopted a narrative that business is a zero-sum game and that non-transparent business practices equal more profitability. If Catfish Month can teach us anything, it is that those assumptions are blatantly untrue. When a company acts with the customer’s best interest in mind (even when it requires temporary sacrifices), the investment pays off over a lifetime.

@beavischris Christina Beavis is COO of VoxPopuli.
Publish date: January 22, 2019 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT