What Is a PR Crisis and How Can It Affect Your Business?

It’s a nightmare scenario that befalls even the most prestigious and well-meaning businesses: a PR crisis.


For some businesses, it’s just a bump in the road. For others, it’s the beginning of the end.

There is a fine line between low-profile customer service mishaps and a full-blown issue that affects your bottom line. If you’re wondering whether something is a PR crisis, ask yourself: Was this serious enough that it went beyond the PR or marketing team, and management and leadership needed to get involved? If so, it warrants the title.
Some leaders might still think that all press is good press. On the contrary, public relations crisis can damage your emerging brand, kill the trust you’ve built up with your existing customers, and hinder—sometimes permanently—any marketing and/or sales efforts you’ve made up to this point.
So how do you handle a business crisis—or better yet, get out ahead of one? Let’s review what a PR crisis is, how it’s affected other businesses, and how you can prevent a future crisis from affecting yours.

What is a PR crisis?

A PR crisis can take many different forms.
It could occur as a result of a mistake in some other area of the business, such as operations—failing to secure enough inventory to satisfy demand, for example.
Or, it might happen after your marketing arm threads into troubled waters—an insensitive Twitter reply to a customer complaint or an ad campaign that offends a certain population.
It might not even be directly related to your business or something your employees did, but rather a black mark on your industry or niche. Examples range from a disease outbreak that (unfairly or not) taints products from an entire region to a scandal that plagues a business with a name similar to yours.
Yes, even a case of mistaken identity can have long-lasting effects on your business.
And that last part is the most important: a PR crisis is any sort of bad publicity that affects your business’ ability to operate at peak capacity.
Chances are, if you run a quality business, you won’t have to deal with a PR crisis of considerable magnitude. That doesn’t mean you shouldn’t plan for the possibility of one, or understand the consequences of one hitting your business when you least expect it.

How can a PR crisis affect your business?

Businesses face PR crises all the time. In the past year alone, companies such as H&M, Southwest, and Facebook dealt with PR issues that threatened their sales, user base, and the trust of the people who bought from or used them.
For big corporations like these, a PR crisis isn’t fun, but it’s surmountable. They have tons of resources—in terms of money and expertise, often in the form of a third-party PR firm—to throw at a crisis until it subsides.
Other businesses often don’t have that luxury. The line between success and failure is already thin enough for most businesses that any major hit to their cash flow can be fatal.
To those on the outside, a PR crisis seems like it should be a temporary blip on the radar. But the effects can be as devastating as any natural disaster. A recent article published on Inc. detailed the various ways a business can suffer from being on the wrong end of a PR disaster—including lost sales, slowed sales, long-standing reputation issues that trail companies for years, and even closure as the result of subsequent bad reviews, scathing social media reactions, and depressed demand.




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