Be Prepared to Say it First.

30.03.2010

POSTED IN Blog, CMS Blog

Public relations is an instrument that, when used properly by a company, can pay great dividends. At the moment, Toyota Motor Corporation is learning the outcomes that a lack of effective public relations can have on a company. Businesses, whether small or large, all have the same tools available to inform, attract, and communicate with customers or prospective customers. From marketing to advertisement to public relations, these tools should be part of the arsenal used by companies to grow revenue. Out of these tools, public relations is probably the best option for generating the most results without a large amount of capital invested.

Public relations includes communication, community relations, crisis management, customer relations, employee relations, government affairs, industry relations, investor relations, media relations, mediation, publicity, speech-writing, and visitor relations. In simple terms, it is communicating to everyone associated with your business, the good, the bad and even the ugly.

How does public relations grow revenue? Let us examine a scenario involving Company ABC. Company ABC partners with a local college to offer internships. Company ABC along with the institution make a public statement about the new partnership and their dedication to education. Customers of Company ABC indirectly feel like they have contributed something to this worthy cause and feel good about continuing their relationship with Company ABC. Prospective customers see this public announcement and are influenced to commit to future business to Company ABC .

Adversely, bad PR can effect your position with customers and future customers in a negative way. Once again, we have to take a look at Toyota. Toyota chose to acknowledge the issue too late, chose not to take a stand on the issue and is now denying that the issue exists. On March 22, MarketWatch reported that Toyota stock price is down 15% and is expecting a 9.9% decline in revenue for the third quarter. Would Toyota have suffered as much if they had publicly announced the problem and a solution 5 years ago when the problem was first reported? Hindsight is always 20/20. The exact outcome of such an announcement may never be known. But I do know this, I own a Toyota Tundra and have always spoken highly of the Toyota brand. My next car purchase may not be a Toyota depending on Toyota’s actions in the near future.

Public relations is a powerful tool for any business. Having good PR means addressing issues when they arise and working to associate your brand with good service, worthy causes, and other positive business relationships. Having good public relations before a crisis occurs is a positive thing, but the actions you take when something unforeseen happens are critical to maintaining your revenue throughout the situation. If your company is prepared to act first, admit there is a problem, and offer a solution you have a better chance of keeping your client loyalty and regaining your brand positioning once the problem is remedied. If you wait until the issue is discovered by a third party, you run the risk of damaging your customers’ trust in your brand, and starting damage control after the fact is unlikely to be effective.

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