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COURTING CONSUMERS

Lindsay Ma studies how communication can restore customer loyalty after a business blunder.

Lindsay standing outside in fall

Lindsay Ma offers fresh insight into how companies handle disasters of their own creation. “A crisis is the most challenging moment for the relationship between organizations and stakeholders,” she said. “When there is a preventable crisis, consumers usually feel more betrayed.”
PHOTO BY MARK GRAHAM

 

The story is familiar: One partner in a relationship betrays the other, then tries to win the jilted partner back. Is this the plot of a new rom-com on Netflix? Nope, although romantic entanglements did serve as inspiration for Liang “Lindsay” Ma, assistant professor of strategic communication. Instead, Ma studies the relationships between corporations and their customers — particularly how companies attempt to woo back consumers after fiascos of their own creation.

Ma specializes in crisis communication — a big challenge for companies in the social media age. “It puts a much higher demand on organizations for how quickly they have to respond to a crisis,” Ma said. “If they don’t get their side of the story in the news or heard by their consumers, other people will.”

If a company causes a preventable crisis, the stakes are high to get the message right. For example, look to 2016, when Volkswagen agreed to pay $14.7 billion to settle an emissions-cheating scandal that affected more than 11 million diesel vehicles worldwide.

When the scandal broke, executives denied any wrongdoing. They later offered $500 in compensation per affected owner. Instead, outraged customers demanded a buyback of rigged vehicles.

“A crisis is the most challenging moment for the relationship between organizations and stakeholders,” Ma said. “When there is a preventable crisis, consumers usually feel more betrayed.”

ILLUSTRATION BY GETTY IMAGES | Z WEI

According to situational crisis communication theory, a key framework in public relations, a company’s response should be driven by how the public assigns responsibility for the crisis. But Ma thinks companies need to also consider a different factor: How much the crisis threatens the essence, or key attributes, of their brands. She explored the theory in her paper “How the Interplay of Consumer-Brand Identification and Crises Influences the Effectiveness of Corporate Response Strategies,” published in the International Journal of Business Communication in 2020.

A consumer purchase is more than a financial transaction that fulfills a need. A psychological component exists in a concept called consumer-brand identification. “It’s when a consumer identifies with a brand and feels it helps them express what kind of person they are,” Ma said. At the heart of this identification are shared defining attributes, those essential traits that exemplify a brand and represent how consumers envision themselves.

Previous literature argued that if a company had a strong, positive relationship with stakeholders before a crisis, those bonds would buffer the negative impacts of a crisis. Ma questioned if that were always the case. “I thought about it in terms of a romantic relationship,” she said. “If a person dated someone for 10 days versus 10 years, the person who dated for 10 years would feel more hurt or betrayed.”

Ma conducted an online experiment to test how brand identification influenced reactions to hypothetical crises involving familiar companies. Participants identified with Apple for its innovativeness and with Whole Foods for embracing a healthy lifestyle. One of the two hypothetical crisis scenarios for each brand directly threatened the shared defining attribute: that Whole Foods sold nonnatural food in its stores or that Apple had stolen technology.

As Ma expected, the buffering effect of strong identification with the brand was much weaker when the preventable crisis directly threatened the shared  attribute. “That attribute not only represents the core meaning or value of the brand,” she said, “it’s an attribute that consumers consider part of their self-concept.”

“Her research contributes to the crisis communication literature by providing a refined perspective on the type of threat a crisis brings to the organization,” said Monica Zhan, assistant professor of communication at the University of Texas at Arlington, who co-authored a 2016 paper with Ma. “Specifically, when a crisis threatens the defining attributes shared between a brand and its consumers … crisis responses are less effective.”

Ma concluded that among the standard public relations tools, compensation is the most effective way to reduce consumers’ negative reactions to a crisis. In Ma’s hypothetical scenario, Whole Foods customers received a refund for the products that were wrongly labeled organic.

But Ma also proposed a new strategy, one she calls identification-intensifier. “Organizations need to try to rebuild their core identity [after a crisis],” she said. “Then they can remind stakeholders that the core identity is even stronger and that they’ll make sure it’s not going to be compromised again.”

She thinks that message, communicated frequently, will be particularly effective for corporations undergoing a crisis. “Brands should keep open and frequent communication with their consumers, especially those who have a very deep psychological connection with them,” she said, “because those are the consumers who will help you get through this time of difficulty.”

BY KRISTIN BAIRD RATTINI