In the 1984 American slasher film, A Nightmare on Elm Street, four teenagers are stalked and killed in their dreams by the frighteningly mangled Freddy Krueger. The teenagers are unaware that their parents’ dark secret from the past is the cause of this strange phenomenon until it’s too late (unless you’re Nancy). This film franchise has made itself into a brand largely thanks to its cult following and clever marketing. For over 30 years, the Nightmare on Elm Street has stood the test of time and flourished into something generations can enjoy. But, for some brands, they’re in their own version of a nightmare– A Nightmare on Brand Street. We’ve previously written about common brand mistakes before and weird brand decisions that take away from brand equity. But what happens when those mistakes are taken to the extreme? What happens to the brand?Corporate reputations take time to build and can be severely damaged in a heartbeat. We can measure a company’s reputation through the Harris Poll Reputation Quotient. Release annually since 1999, the Harris Pool is a measurement of the brands that are top of mind for the American public. These reasons can be for good or for bad.The survey is designed to quantify a company’s reputation and how their actions positively or negatively affect that reputation.
Financial institutes regularly rank among companies with the worst reputations. Think like Wells Fargo last year. While customers trusted the banking giant with their retirement plans, savings accounts, credit cards and more, bank employees were creating over 2 million false accounts. These accounts led to $2.6 million in revenue from fees, bonuses for employees and a lot of mistrust from the community. Goldman Sachs has a similar reputation. Their shady lending and investment practices have landed them in hot water. Many place a lot of the blame for the financial crisis and Great Recession on them.Because of their poor reputation, their financial performance has been suffering in recent years. After three years of reporting a failure to grow revenue, they finally saw a small increase in 2017. While revenue in 2017 was at $32.1 billion, that’s still below their 2014 record high of $34.5 billion.
Equifax was the target of one of the largest data breaches in history, losing the personal information of 148 million Americans. This information included addresses and social security numbers. While the breach certainly didn’t make anyone happy, it was the way Equifax handled the breach that really made everyone unhappy. Rather than reporting the breach immediately, allowing those affected to take immediate precautions, they waited over a month to announce the hack. Furthermore, in a move many deemed disingenuous and insufficient, Equifax offered those affected one year of free identity theft protection.
The Japanese airbag manufacturer, Takata, faced one of the biggest safety recalls in history. It was discovered that Takata airbags exploded with such force that they shot shrapnel at the faces of everyone in the vehicle. Over 50 million Hondas, Toyotas and Ford had Takata airbags installed and 22 people were killed with 180 injured. Like Equifax, people were outraged at how the company handled the recall. Takata knowingly produced the faulty airbags for eight years. Emails were also leaked that showed executives encouraging manipulation to hide it all. The recall bankrupted the company and another company, Key Safety Systems, took over Takata’s remaining assets. While not every brand that makes a bad decision is considered a nightmare by the general public, some just seem to not handle things the way they should. Brands looking to make a swift recovery should hunker down and prepare for the long haul, preparing to face their reputation decline.