Smart business owners know that crises can occur in a moment's notice, so they must prepare their employees to handle any type of workplace situation. While you hope it's never used, this proactive planning minimizes damages when an unfortunate circumstance derails your business. After all, it's easy for employees to panic and make rash decisions when they're under pressure to respond to a significant crisis.

Rather than gunning for the immediate solution, you should carefully select the response that's most human and customer-focused. Whether that be apologizing to victims, protecting your company's reputation, or using humor these strategies should always be chosen and practiced before a crisis occurs.

Free Download: Crisis Management Plan & Communication Templates

Before we craft an effective crisis-communication plan, we need to understand the different types of crises and how they can affect your business. Let's look at the five types of crises that affect every company, regardless of industry.

There are five types of crises that may impact your organization. Let's briefly summarize each type, or you can read a more detailed explanation of each here.

1. Financial Crisis

A financial crisis occurs when a business loses value in its assets and can't afford to pay off expenses. This is caused by either internal or external factors that result in a severe decrease in demand for the company's products or services.

2. Personnel Crisis

A personnel crisis occurs when an internal stakeholder of the organization is involved with an illegal or unethical scandal that impacts the company's reputation.

3. Organizational Crisis

Organizational crises occur when a business exploits its customers to gain more profits or information. These situations often receive lots of media attention that's negative for the company. 

4. Technological Crisis

A technological crisis occurs when an organization's technology crashes -- such as when a server breaks or an error emerges in a software product. When these crises happen, customers and users have no access to the company's products and/or services.

5. Natural Crisis

A natural crisis occurs when severe weather interrupts normal business functions. This can be temporary like a snow delay or more permanent like a flooding evacuation. 

Since there are few different types of natural crises, let's review each one in more detail below. 

Short-Term Delays/Closures

Short-term delays are times where weather temporarily prevents your business from being fully operational. Your business may still be open, but certain features or services aren't available to customers. For example, you may provide a delivery service, but due to severe snow, you'll need to delay deliveries until the following day. 

During these situations, your team should alert customers to any changes that may affect their customer experience. Use an automated email or calling tool to send out a message to your customer base, notifying them of the temporary crisis. It's important to be proactive during these cases as it reduces friction for affected customers.  

Long-Term Closures/Outages

I remember growing up through the New England Ice Storm of 2008. And, while the storm itself only lasted a day or two, the damage it caused left nearly every town without electricity for weeks. 

This is a great example of a long-term outage crisis. While the storm wasn't considered a natural disaster, it did affect how businesses operated. Some companies needed to close completely while others offered limited services until power was restored. 

If your business experiences a similar situation, it's best to communicate with customers as much as possible. If you can, use mobile devices to get messages out on social media and make it clear to customers what you can and can't provide at this time. Alternatively, you can use radio ads to contact customers who are listening to the news and waiting for updates. 

Anticipated Natural Disasters

Fortunately, modern technology has made it possible to anticipate some incoming storms and disasters. For example, hurricanes can be spotted before they reach the coastline and start causing damage. This gives people enough time to prepare for the storm or evacuate to a safer location. 

In these situations, your business should prioritize customer safety before profits. Delay actions like billing and sales pitches until you're sure customers are safe and that damage is limited. If there are urgent tasks that need to be completed, reach out with customer service personnel to see if they can assist. But, remember, these are the times where it's more important to show customers you care about their well-being than to remind them about an overdue bill.   

Unexpected Natural Disasters

Other disasters, like earthquakes and flash floods, aren't caught ahead of time. These can strike at almost any moment and cause devastating damage to towns and cities. 

If your business or offices are affected by this type of disaster, the first step you should take is to assess the damage. Try to determine if you can keep your business open, and for how long. If the damage is severe, call up your insurance documents and anything else you'll need to file a claim for your business. Then, let customers know via social media if your business will be open, or if you'll need to close and when you expect to reopen. 

If your business can stay open, but customers are affected by the disaster, you should focus on your customer service team. Plan for a spike in case volume as people will likely reach out with questions or concerns about their accounts. Remind your reps to be patient as customers may be juggling other important tasks while working with your team. 

Permanent Climate Change

In rare cases, natural disasters create permanent changes in a region. Take forest fires or droughts, for example, as these events present long-lasting changes to an environment. If your business was dependent on a resource found in your area, this can create major problems for your organization. 

For these scenarios, the best response is proactive planning. Creating a plan ahead of time to deal with these potential issues can help you avoid problems once natural disasters occur. You should be constantly updating your plan, too, giving you plenty of alternatives to choose from in case your original backup plan fails. 

Your business can learn a lot from companies that have responded to and overcome these five types of crises. In fact, the next section includes real case studies where notable organizations managed to maintain their reputation in the face of a company-wide crisis.

5 Crisis Communication Examples

1. Tylenol

In 1982, Tylenol suffered a huge blow when seven people in Chicago were reported dead after consuming over-the-counter Extra-Strength Tylenol capsules. Shocked by the sudden crisis, parent brand Johnson & Johnson discussed what to do: Does it risk its reputation by recalling the product or defend its reputation by claiming it to be tampering?

Fortunately, the brand decided to protect consumers over its reputation and conducted an immediate recall of its most profitable product: 31 million bottles at $100 million. Additionally, the company went as far as to issue a national warning against consuming Tylenol capsules. Johnson & Johnson knew Tylenol wasn't responsible for the deaths; however, the brand's focus wasn't on proving its innocence, it was to protect consumers and ensure their long-term safety.

This could've left Tylenol in a very tight spot, but the company's initiative to immediately recall products, issue warnings, and establish hotlines for nervous customers left it in a strong light. Additionally, when Tylenol re-introduced its product, it used tamper-resistant packaging and promoted caplets, which are more difficult to tamper with. It also made over 2,250 presentations on the safety of the new product to educate dubious consumers. The dedication to promoting safety and making customers feel safe has made this notorious incident a model for crisis communication.

2. Pepsi

In 1993, Pepsi faced serious allegations about the safety of its products. The scandal began with an elderly couple in Washington who claimed to have found a syringe in their Diet Pepsi can. Over the course of a week, 50 reports came in about various objects being found in Diet Pepsi cans -- pins, sewing needles, bullets, screws, crack vials, and more.

In response, Pepsi released a four-part video campaign showing the exact process each can follows in production. These videos proved there was no opportunity for a can to be tampered with before it was delivered to a store. Additionally, Pepsi got its hands on a security video showing a woman in Colorado inserting a syringe into a can of Diet Pepsi at her grocery store. This confirmed to consumers that Pepsi was innocent of the crime.

After confirming internally that the business was not at fault, Pepsi took an effective, defensive approach with its video campaign. Rather than claiming innocence and leaving room for controversy, Pepsi proved it using an educational video and security tape. The company even bought a print ad with the headline, "Pepsi, Proud to Introduce … Nothing" as a humorous attempt to move on from the incident.

3. American Red Cross

In 2011, the American Red Cross faced a more lighthearted crisis. One evening, the following tweet appeared on their Twitter account:

Dogfish-crisisImage Source

The tweet was shared by an American Red Cross social media specialist, who accidentally posted to her organization's Twitter account rather than to her personal one. The organization could have faced repercussions from its followers if it had merely deleted the tweet an hour later and ignored it. However, the American Red Cross decided to take a humorous approach to crisis communication with the following tweet:

Image Source

Even Dogfish Head brewery jumped into the conversation, encouraging people to use the hashtag #gettngslizzerd and donate to the American Red Cross. All in all, the incident brought more attention to the American Red Cross and enjoyed a spike in donations. The organization's lighthearted response to the situation -- rather than issuing a formal public apology or taking a more serious stance -- showed customers that even the largest organizations make human mistakes.

4. JCPenney

In 2013, JCPenney faced a headache when it released the Michael Graves Design Bells and Whistles Stainless Steel Tea Kettle. In honor of the new product, JCPenney put up a billboard on the 405 Interstate highway in California. Bemused drivers took photos of the billboard and one user posted it on Reddit, claiming that the kettle held a striking resemblance to Adolf Hitler (If you're interested, you can find that image here).

This crisis could have destroyed the brand, causing a sea of consumers to accuse JCPenney of being insensitive or even anti-Semitic. However, JCPenney acted quickly to change the narrative. Taking a humorous approach, the brand replied to tweets with variations of the message, "If we had designed it to look like something, we would have gone with a snowman or something fun."

In a shocking customer relations miracle, the kettle had gone viral by the Tuesday morning and had been sold out by the afternoon. JCPenney's clever message about the crisis led customers to actually increase the company's sales. However, in order to avoid any further offense, the company decided to remove the kettle from its site, as well as the billboard where it was first spotted. This decision showed that JCPenney could laugh about its mistake but also take the initiative to right its wrong.

5. Virgin Group

In 2014, the Virgin Group faced a massive crisis when a Virgin Galactic test flight crashed. The SpaceShipTwo space tourism craft crashed while flying over the Mojave Desert in California. One pilot died from the crash, while the other was injured. The crash caused a large setback to the Virgin Group's space travel plans, as well as to commercial space tourism as a whole.

The Virgin Group began with sharing details of the crash and showing genuine concern for the pilots and their families. Sir Richard Branson, the founder of the Virgin Group, tweeted numerous times with updates and personal remarks. Branson immediately flew out to Los Angeles to be at the scene of the incident and take ownership for the unfortunate situation.

What made this crisis communication so successful was that the Virgin Group and Branson never strayed from their mission. They didn't quit their efforts with Virgin Galactic, rather, their message stayed consistent: "Space is hard – but worth it. We will persevere and move forward together." They didn't want the pilot to die in vain, and this message resonated with the public.

A common theme we can take from all of these examples is the importance of immediacy. The longer an organization waits to respond, the larger the crisis gets. When a company ignores social media and customer reviews, users start to come to their own conclusions on a crisis -- and those conclusions usually place the company as the perpetrator.

Naturally, you can't plan for every type of crisis, so it's important to use your best judgment. Certain communication strategies, such as humor, can be vastly effective in some cases and absolutely inappropriate in others. At the end of the day, every response to a crisis should prioritize the customer, putting the company and its property second. A genuine consideration for consumers is what will help your crisis blow over.

For more tips on handling a workplace crisis, read about situational crisis communication theory.

crisis communication

 New Call-to-action

Originally published Jan 24, 2020 8:00:00 AM, updated January 27 2020


Crisis Management