April 22, 2017 Bella Zabinofsky

Steps United, Pepsi can take to recover from a really bad month

This article was authored by Daniel Bukszpan for CNBC, and features insights from Clyde Group Managing Director, Alex Slater. 

For a prominent brand with a long history, public relations crises are all but inevitable. That said, not all PR flaps are created equal — something to which United Airlines and Pepsi can surely attest after a rough week in the news.

Earlier this month, Pepsi created a stir with a spot featuring Kendall Jenner that many observers felt trivialized protest movements everywhere, which prompted the company to pull the ad. The crisis was overshadowed just days later, when a passenger on a United flight was forcibly removed from his seat for refusing to give it up to accommodate a few of United’s employees.

With both scandals still fresh in the public’s collective memory — and the source of an endless font of Internet ridicule — CNBC spoke with several crisis communicators to see what United and Pepsi could do to smooth the ruffled feathers of outraged consumers. The advice may also prove instructive to American Airlines, which on Friday found itself caught in the middle of a controversy stemming from an on-board altercation caught on video.

‘Don’t make it worse’

Beck Bamberger, founder of Bam Communications, said that Pepsi actually did a few things right in responding to the backlash, but could have done better.

“Pepsi did issue an immediate apology and yanked the ad, but a better crisis protocol is to detail what action you — the brand, CEO, whomever — will do moving forward, and then execute immediately on the action promised,” she told CNBC.

Todd Mitchem, organizational change expert and author of the book “You, Disrupted,” said that Pepsi’s best bet was to put the whole affair in the rearview mirror.

“There’s no need to make this worse by attempting damage control,” he said, adding that the beverage giant should steer clear of political content.

Alex Slater, managing director of the Clyde Group public affairs firm, suggested Pepsi should “lay low and wait it out. People will move on to yelling about something else as soon as you stop feeding the fire and let them.”

When PR goes ‘off the runway’

Unlike Pepsi, the experts who spoke to CNBC said United’s woes appeared to be much more complex, and wouldn’t go away easily given the circumstances.

“When the world heard the screams of the doctor dragged off the plane, [United Airlines CEO Oscar] Munoz should have responded first as a human and not a CEO,” said Michelle Marasch Ouellette, a professor of journalism and public relations at SUNY Plattsburgh.

Munoz’s now infamous use of the term ‘re-accommodate’ led to widespread mockery and indignation. “There was no accommodation involved in what happened to that passenger,” Ouellette said.

Slater of the Clyde Group said that United would have been best served by ditching the legalese.

“I wonder if behind the scenes, they need to invest not just more money but more authority in their teams to overrule cold, legalistic language,” he said. “In my experience that’s what leads responses to go as poorly off the runway as theirs did.”

As one might expect, crisis management doesn’t come cheap and gets even pricier depending on how large the gaffe might be. Andy Desai of SW & Associates Public Relations recommended keeping a public relations specialist on retainer — which costs about $5,000 per month.

Companies that have to find a firm when they’re in a bind may end up paying at least six figures to manage a PR crisis, and perhaps even millions, experts said.

United and Pepsi are “going to have to pay some crisis rates over the next couple of weeks to get them out of the acute phase of these crises,” said Ann Barlow, partner and president of Peppercomm West.

Still, an ounce of prevention is worth a pound of cure, PR veterans told CNBC. They recommend that companies already have crisis strategies in place when troubles arise.

In the case of Uber — which is reeling from a sexual harassment scandal as well as some other self-inflicted wounds — all of the money in the world may not fix what ails the company, one expert said.

“Uber could spend millions of dollars on public relations and advertising and none of it would make a difference if they don’t fix the company’s culture,” said Dan Hill, founder of crisis communications firm Hill Impact and a former adviser to ex-New Mexico Governor Gary Johnson.

“It requires a total reset on their mission and values, and company executives have to actually live by the same standard that they will expect from others.”

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