As I write the British and Irish food industries are reeling from the discovery of horse meat in processed beef products*. Now if you’re not in the processed food industry you may wonder what this has to do with your business but there are some lessons for us all so please read on.
How much would negative publicity cost your business?
When traces of horse meat were found in Tesco beef burgers a few weeks ago £300m was wiped off the company’s value in one day. The scandal didn’t just affect Tesco so a number of suppliers have lost their contracts with the major supermarket chains costing them millions in lost business. It is highly likely that the retailers will claim compensation from their suppliers for their lost business (see my post on ‘Too many eggs in one basket‘) placing an even greater financial burden on suppliers.
Negative publicity almost invariably leads to a loss of trust which leads to reductions in sales and profits. Some businesses never recover from negative publicity and fold, just look at Ratners Jewellers. What would bad publcity cost you?
Minimise your risks
It’s important to have systems in place to minimise the chance of something going wrong.
- Do you have quality control procedures in place?
- Do you monitor your returns for inherent faults?
- Do you make it easy for your customers to give you negative feedback as well as glowing testimonials?
- Do you spot check production or deliveries?
Spotting problems early can help you to fix them before the word gets out. Even if you do come in for some criticism you’ll be able to deal with it positively.
Manage negative publicity
Burying your head in the sand when you are the subject of negative publicity is a bad idea. Take some professional advice and then act on it. Talk to a lawyer. Hire a PR company. Don’t ignore it, it will not go away.
If you can show you have taken responsibility and action to put things right you may well be able to recover quickly. It’s all about maintaining trust with your customers.
Learn from the experience. Should you have a policy or procedure for dealing with bad publicity?
- How will you deal with press enquiries?
- Who will deal with the media?
- Could you extend your insurance policy to help you deal with problems?
Be ready to capitalise on someone else’s problem
It is suggested that small, independent butchers are benefiting from the horse meat scandal. Customers are more willing to trust a burger made in the shop than they are a pre-packed version from the supermarket. Every small butcher should be communicating their trustworthiness to the world. This is the butcher’s chance to regain some of the ground lost to the big boys in recent years.
Are you ready to capitalise on someone else’s misfortune in your industry? A true entrepreneur sees an opportunity and grasps it fast. Are you a true entrepreneur?
Have you benefited from someone else’s misfortune? Have you learned from a big mistake in the past? Please share your stories we can all learn from your experience.
* (For readers outside the UK the scandal is to do with the fact that product labels claim the product is beef and there is no reference to horse in the listed ingredients. Horse meat is rarely served in the UK.)