Pepsi's response to the outcry this week over its television ad featuring Kendall Jenner and protesters offering a soda to police is a reminder to advisory firms of the benefits of having a crisis communications plan.
Communication professionals say while speed in reacting to a public relations crisis is important, firms need to make sure that what they come back with sends the right message.
"Pepsi was right to pull the ad, but their apology came across very inauthentic and insincere and that really made the whole episode worse," said Deb Gabor, chief executive of brand strategy consultancy Sol Marketing. "The way you deal with adversity can really make or break a brand."
Advisory firms are best positioned to react to a public airing of a personal or professional transgression of one its employees or to a misunderstanding or insensitivity that may come through social media, if they have already formulated an approach or response strategy, experts say. It should include initial steps, as well as a longer term plan to evaluate and repair any damage done to client perceptions of the firm.
While financial advice firms could face an overall branding controversy, they are even more likely to receive heat from the actions of an errant or thoughtless adviser or other professional.
In one recent case, a principal with Liberty Advisor Group in Chicago
sent a 23-word tweet insulting the widow of a Navy SEAL killed in combat while she was being honored by President Donald J. Trump in a speech.
The story went viral and the morning after Mr. Trump's speech, the firm
apologized on its website and said the offending tweeter was no longer affiliated with Liberty.
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Watch your mouth on social media - or else)
Those are appropriate initial steps, Ms. Gabor said. But more action is needed after the original crisis is handled.
"After a misstep, it's time to get in touch with customers and really understand how grave it was," she said. "How much did you anger customers?"
Firms need to renew their commitment to clients and positively express what their brand stands for and is about, Ms. Gabor said.
"That goes a long way to mending fences," she said.
Most companies do not have a strategy outlined for dealing with a public relations crisis and that can make the whole incident more expensive, according to Scott Sobel, a senior strategy executive with kglobal, a Washington-based public relations firm.
The longer the negative image of a firm is out there the more it can hurt sales to new customers, he said. In addition, professional help dealing with a crisis will be more expensive if there's no plan in place.
(More:
Hire a PR firm or be a do-it-yourselfer? Questions advisers should ask)
One essential component of a plan is having a team in place who will deal with such a crisis and make quick decisions that take into consideration every aspect of the firm's operations, everything from sales and marketing to legal.
"Someone should be clearly identified as the official spokesman," Mr. Sobel said. "This person will be the face of the company."
That person should be well spoken and be able to think on their feet, he said.
