Start-ups that receive negative attention for a dodgy product or service, such as via the Shonky Awards, should acknowledge their mistake and use it as an opportunity to rebrand, an expert says.
Jo Macdermott, founder and director of Next Marketing, says negative PR can seriously damage a brand’s reputation, particularly if that brand has a high profile in a niche market.
“It can really stay in people’s minds… I do think that especially if you have a very narrow target audience, it might be a problem for the brand,” Macdermott says.
“If it’s something that’s not as emotionally connected, it may not spark that emotional recall. But it can be very, very damaging.”
Macdermott’s comments come on the back of consumer group Choice’s annual Shonky Awards, which name and shame dodgy products and services.
Alarmingly, the entire insurance industry made the list for selling a product so confusing it left homeowners in three states without cover after the spate of natural disasters earlier in the year.
Other award “winners” include the Smurfs’ Village app, a children’s game that requires players to use real money to purchase “Smurfberries” to use as currency while playing.
Get SmartCompany FREE to your inbox every weekday
In some cases, it costs as much as $109.99 for a batch of berries. While the game provides disclaimers, Choice argued many children would not be able to read or understand them.
Other recipients include Quail Kingdom eggs, Peachy Pink shapewear and Sensaslim weight loss spray – none of which provide any evidence to back up their health and/or beauty claims.
Also on the list were Go4Green EnergySmart– a device that claims to save customers 10% on their energy bills – and the Chery J1 car, which has roof racks for “cosmetic purpose only”.
But the standout product was crystal-encrusted baby dummies. The crystals, which easily fall off the dummies, were found to be a choking hazard by Choice.
The dummies have been banned by the Australian Competition and Consumer Commission but are still available from overseas suppliers who label them as “jewellery”.
Choice spokesperson Christopher Zinn says the aim of the awards is to remind businesses they can’t take advantage of consumers by bending the rules or putting risky products on the market.
According to Macdermott, start-ups that receive negative media attention – such as a Shonky Award – should acknowledge it and remain “as open and transparent as possible”.
“It’s better not to ignore it because it won’t go away,” Macdermott says.
“Acknowledge your mistake or your downfall and use it as an opportunity to do better [by encouraging consumers to] watch this space.”
“A great example is a brand called mooo, which is a children’s online store that had a recall. They did the opposite of hiding – they did full page ads [in relation to the recall] – so they rebuilt the brand based on a bad experience.”