2020-03-24
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Coronavirus: protecting your business reputation

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Posted by Daniel Jennings on 24 March 2020

Daniel Jennings Partner

Whilst most businesses are understandably husbanding every penny and looking to cut costs to survive the coronavirus crisis, you must be strategic about your survival tactics. If not, you may find that your actions mean that you have no business left after the crisis has abated.

While it is to be hoped that most businesses will heed advice to seek emergency funding offered by the Government, there are those whose actions are in danger of damaging their reputation among their employees and their customers to the extent that, even if they do survive, people will not readily wish to do business with them.

Britannia behaving badly

Many people will remember the fuel crisis under Tony Blair’s Government. The garages that sought to profit from the situation quickly found out that, once the fuel suppliers returned to normal, no one would entertain buying from them ever again.

Unfortunately, there are businesses falling into the same trap. Circulating initially on social media and then on conventional media, was a shocking letter from Britannia Hotels.  Although the hotel chain was understandably under pressure, it had not only written an insensitive letter to its Aviemore employees dismissing them from their jobs with immediate effect; but also ordered them out of their accommodation immediately. For a business that relies upon reputation and goodwill, it was an extraordinary act of callousness to fire and evict all its staff onto the street on the same day with no notice. 

Their error was further compounded by a statement blaming that old chestnut, the traditional ‘administrative error’. Regardless of the truth of the matter, that sort of passive response will always fail to undo damage caused.

Don’t take advantage of the situation

Before the advent of social media, and a greater willingness on the part of consumers to call out bad behaviour by businesses, companies might have been able to get away with actions and / or explanations like that proffered by Britannia. These days, any business behaving badly is likely to face irreparable damage in the longer term, even if they survive the initial backlash.

Businesses that are currently thriving can also find themselves on the wrong side of public opinion if they are tempted to take advantage of the situation, as some petrol stations did in 2000. With photographs of packs of four toilet rolls being sold for £15 a time circulating on the internet, businesses need to recognise that “market forces” have their limit – consumers are not fools.  Their profiteering behaviour will be remembered and they will be punished for putting profits before people.

Don’t be tempted to trade your reputation for short-term gain

Therefore, we would encourage all businesses to think about their reputation while weighing up what will be extraordinarily difficult financial decisions. Yes, you do need to ensure the survival of your business beyond coronavirus but at what cost? Beware of trading your reputation for short-term gain.

Acting impulsively to deal with the coronavirus crisis can have unintended consequences: a knee-jerk reaction made by directors acting under immense pressure can lead to the business losing its reputation, carefully nurtured over years, in seconds. Along with all the other aspects of keeping your business afloat during this crisis is your business’s reputation. You will need to rely on that heavily when you emerge on the other side.

Businesses that cherish their reputations during this critical period by acts of kindness and by having a considerate approach to their customers and employees alike, will have a much brighter future. Think carefully about how you manage your business through the next few months and take a measured, thoughtful approach towards the difficult decisions you are likely to face; by doing so, you will protect the business and its future.  

About the author

Daniel advises clients on all aspects of commercial litigation and dispute resolution.

Daniel Jennings

Daniel advises clients on all aspects of commercial litigation and dispute resolution.

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