Every so often, a brand crisis comes along that makes every other PR person in the entire communications industry empathetically say to ourselves, “Man, I’m glad I don’t work there right now!” Currently, that crisis is the Volkswagen emissions scandal.
For those who may have been sleeping under a rock or not paying any attention to the business pages this month, here’s the nut of it: Volkswagen knowingly installed manipulative software in more than 11 million of its diesel vehicles, both in the US and Europe, that would allow them to “cheat” on emissions tests, rigging the software to help make the engines seem to emit fewer nitrogen oxides (NOx) than they really were. The cheat caused the cars to emit up to 40 times the amount of smog-forming pollution allowed by U.S. law. But this goes beyond just a pollution issue. Some in the media have suggested that the additional pollution allowed by the cheat might have been responsible for additional deaths around the world. There’s even speculation that Volkswagen’s deception might actually kill off the entire market for diesel cars, even those not made by VW.
This is not a small embarrassment that will soon blow over; it is a reputational crisis of the highest magnitude that has the potential to destroy the company altogether.
Beyond the business fallout — CEO Martin Winterkorn has resigned over the scandal, the New York Attorney General and Senator Bill Nelson of Florida are among the more prominent of US political leaders calling for investigations, and the company’s stock has plunged 50% since news of the deceit broke — there’s the immeasurable damage done to Volkswagen’s credibility. Not just with consumers, but with their own dealer network as well. One is left to wonder and speculate: Can Volkswagen survive this scandal? And from a PR perspective, what can or should VW do to begin to regain the trust they’ve lost? How can PR help save Volkswagen?
It’s an uphill battle, unquestionably. If they’re able to pull it off, they’ll be a case study along the lines of Johnson & Johnson in the post-Tylenol era in 1982, taught to PR students in colleges for decades to come. So how can they do it?
This is one of those business situations in which PR and business actions have to work in tandem. This problem is too big to “PR out of” — the only way to win back trust and recover from a sales and credibility standpoint is to take concrete business actions, supported and promoted by PR. But if I were working for or consulting with VW (I’m not), here’s what I’d be suggesting.
Strategically, Volkswagen has to convey three things to the public and to its dealers in order to have any shot at recovery.
Accountability. VW can’t just simply take responsibility for the deceitful software. It would be easy enough, I suppose, to simply pay some fines, recall the affected vehicles, and claim they’ve made things right. But that wouldn’t be enough to dig them out of this hole. Rather, Volkswagen needs to take concrete, verifiable steps to hold itself accountable — not only to regulators in multiple countries, but to its customers — for the fact that this scandal happened.
The CEO’s departure is a good first step, but it’s not enough; no one is going to believe that the CEO alone engineered the deliberate placement of software designed to skirt emissions tests. This went much deeper into the engineering and probably financial side of the house, and there are heads that will need to roll and jobs that will need to be lost. Many people will need to be held accountable. Who knew about this, when did they know about it, and why didn’t they put a stop to it?
The CEO’s departure is a good first step, but it’s not enough
Recovering from this reputation catastrophe will require much more looking forward than looking back, but Volkswagen will need to look back long enough to identify who, at all levels, was responsible for this scandal — and the company has to be willing to hold these individuals accountable as well as being willing to be held accountable by government regulators. Rules were broken, and both some individuals and the company as a whole have to pay. (That means that VW should not challenge or appeal any regulatory fines that come their way; as painful as it may be to the bottom line, they need to take their medicine humbly and quietly and accept what’s thrown their way.)
Sincerity. This one is harder to quantify, but Volkswagen has to make sure people believe that they’re genuinely sorry that this software is in their vehicles — not just sorry they got caught, but truly sorry that they broke their compact with their customers and dealers. Every business depends on the trust of its customers, and VW deliberately played its customers and the market for fools.
Every business depends on the trust of its customers
Whether in business or in personal relationships, “sorry” only works if it’s believable — and backed up by actions, not just words. VW have to make customers and consumers believe that VW is as upset that this happened as the public is. They’re going to have to spend the next few months apologizing at many turns; there’s no limit to how often they’ll need to say it. They’ll need to do so with humility. They’ll need to let people vent at them on Facebook or Twitter without taking the negative comments down. They have to be seen as willing to let people be mad at them. And they have to be seen as wanting to not just put the scandal in the rear-view mirror, but to genuinely do whatever they have to do to win customers back.
They’re going to have to make a significant and sincere effort to address the environmental damage they’ve caused. Given the concerns that this incident has raised about the diesel industry in general and the sincerity of VW’s commitment to environmental protection, they may need to make a grand gesture that goes beyond symbolism and is seen by green organizations and consumers to be something that actually takes genuine steps to protect the environment or make things better for those most impacted by poor environmental air quality. They could donate significant sums of money to fund asthma research; they might support further independent research into the impact of NOx in the atmosphere, contribute mightily to a charity that helps sick children with breathing problems… some kind of action and gesture that goes beyond a mere apology. The more they can put action behind their words, the better off they’re going to be.
If VW comes off looking like they’re only sorry to have been caught, they’re going to fail in their effort to win people back.
Reflection and Learning. Volkswagen is going to have to do some serious — and public — soul searching about how this situation was allowed to happen. They have to be completely transparent from here on out, including self-reporting if this goes any deeper than just emissions software.
They’re going to have to be very upfront and publicly reflective about how this happened, why it happened, and why there weren’t enough safeguards in place to prevent it. How is it that an entire company’s worth of people seemed to be okay with deceptive software being installed in their vehicles? Why did no whistle blower step up? Did something in the culture prevent the airing of problems or the reporting of issues? Why was it so hard for someone — and the company at large — to do the right thing? And why did so many people go along with the wrong thing?
They have to have concrete and actionable lessons from this situation
In the end, they have to have concrete and actionable lessons from this situation, and they have to tell the story of how they’re implementing those lessons to make sure something like this never happens again. They may even need to submit themselves — as General Motors did following the ignition debacle in 2014 — to independent third party review/consultation in order to identify the problems they need to solve. The public is unlikely to trust an internal report or analysis. They should team up with a top business consulting firm to do a review of processes, procedures and culture to determine not only how and why it happened, but how to ensure that in the “new” Volkswagen, nothing like this is going to be allowed to happen in the future.
I don’t want to lay out an entire PR plan for Volkswagen in this post, but there are a few tactics I’d implement if I were mapping out their public relations program for the next year or so.
First, they need to switch to a local spokesperson in each market where vehicles with the deceitful software were sold. A German spokesperson probably doesn’t resonate well in the United States; an American probably wouldn’t do the trick in the United Kingdom. A local spokesperson understands the local consumer, has a better grip on the environment in which they’re communicating, and can more effectively convey key points to local media.
Next, I’d announce a short moratorium on advertising new VWs. The dealers won’t like it, but Volkswagen can’t be seen as still trying to gin up interest in buying its current fleet, at least until the problematic software has been replaced (and third parties can verify that the new software works properly). Let the dealers spend a month focusing on helping make things right with existing customers and getting the fixes in, then worry about driving new sales.
I’d go big with an apology/”new VW” ad during the Super Bowl. They have 5-6 months between now and then to start getting things right; while conventional wisdom might say that in six months something else will have taken over the headlines and you don’t want to bring it back to the fore, I would argue that they should use that big platform to once again apologize. (I learned from my GM days during the bankruptcy that a candid “we messed up, and we let you down” acknowledgement resonates really well.) They should then highlight all the steps taken since the story broke to make sure it doesn’t happen again and how they’re going to be a new VW. This could include self-publicizing the third party findings.
They’re going to have to implement some sort of (very expensive) customer program — not just to give affected customers some sort of redress, but to incent them to come back to or stay with Volkswagen despite the serious breach of trust. Drivers being able to go to their dealership and get the correct software installed or the bad software uninstalled is just the beginning. What about significant incentives to current owners to buy or lease a new Volkswagen — discounts far greater than those normally offered in the auto industry? Perhaps a cash back program that puts several thousand dollars or euros back in the pockets of customers willing to remain with VW?
This generosity must go double when trying to attract new customers. It will be costly to Volkswagen, but maybe a program that offers free maintenance of your new VW vehicle for as long as you have the car? These are expensive fixes; there’s a reason automakers don’t do these kinds of things under normal circumstances. But these are hardly normal circumstances; VW’s very existence is at stake. They have to be willing to spend the money to get customers back no matter what it takes. One of the first steps in recovering their image and their business has to be that they’re seen as extremely willing to step in and make things right for those customers they’ve misled.
They’re going to need a dealer relations program or exercise as well. The dealers are the ones who will take the most immediate financial hit out of this situation, yet (unless more is revealed) they were innocent victims of corporate malfeasance who are going to bear the brunt of the hit. Also, as the first point of contact with the customer, they’re going to be the ones directly dealing with angry people and bearing the brunt of consumer frustration on this matter. VW needs to implement some kind of emergency communication to its dealers, and to develop some sort of plan for helping dealerships stay afloat during the period of a year or more while business slows due to low consumer trust.
To better connect with the consumer audience, Volkswagen should consider executing an ongoing video chat or vlog series on its social channels in which senior company leaders and people within engineering, talking about how the company is moving forward and highlighting ongoing efforts to fix the culture and right the wrongs. Transparency matters, accountability matters, and they’re going to want to be very hands-on and direct with customers and the body public about how they’re going forward.
If I were working with VW, I would tell them to ramp up on community management — increase the size of their online community management staff, empower them to actually interact with the audience instead of just publishing or cut & pasting canned lawyer-approved statements (this will mean extensive training of the community managers so that they don’t say things that will get VW in deeper trouble or have a plaintiff’s lawyer licking their chops), and make being ultra-responsive to consumers “the new normal.” People want to feel like they’re being heard and actually *listened to,* not just getting a canned response back.
Lastly, I might implement an in-person “listening tour” during the major auto show season. The senior executives will all be on hand at the major shows anyway (they almost always are), so they should extend their stays and spend time actually talking with customers and consumers during the public days at LA in November (which is the especially important green show), Detroit in January, Chicago in February, Geneva in March, New York and Shanghai in April, Frankfurt in September, and Paris in October. The company and its leaders must convey a sense of complete openness, and that senior leadership is willing to listen to customer concerns and to make the time to hear what customers have to say. Then, I’d do some very public blog posts or videos highlighting what they’ve heard, some of the best ideas that have come from the conversations, and steps VW is going to take to address what they’ve heard. Again, the words and gestures have to be backed up by action.
None of this would be cheap, nor would it be easy. The automotive industry isn’t used to complete and utter openness. The industry is notoriously insulated and private for fear of industrial espionage and losing competitive advantage; talking openly about cultural flaws, engineering mistakes, and future activity will make traditionalists within Volkswagen very uncomfortable. But VW is now in a fight for its life — and even if regulators leave it in a position to survive, its ultimate fate is in the hands of consumers. If they want those consumers to keep them alive, they have to embark on an unprecedented set of efforts, no matter the cost, to win trust back. If they’re willing to do it, they have a chance.