Why Volkswagen needs to slow down the deployment of its crisis comms plan
Volkswagen has sounded the klaxon and is currently manning the crisis comms pumps, but it is going through the motions far too soon in my mind.
Andy Barr urges VW to take it slow...
VW is in a mess, a mess of its own causing, and you can see exactly why when the global head of comms got the alert, they reached for the crisis communications playbook and started rolling it out.
Let’s take a whistle-stop look at what has happened so far:
The global CEO got fired, not just from VW, but also from all of its sister companies such as its shareholding in Porsche, Audi and the Truck division.
Crisis Comms Stage One ticked: have a senior level casualty to show the firm is taking it seriously.
Next up, an across-the-globe internal investigation was announced, alongside the various investigations being announced by governments all around the world.
Crisis Comms Stage Two ticked: announce an independent inquiry into the issues.
Moving on, VW announces to the stock markets that a $7bn provision has been put to one side to rectify vehicles that are affected.
Crisis Comms Stage Three ticked: try and assign a financial cost to give reassurance to shareholders that this is not going to break the bank.
Then, most recently, VW took out adverts in national newspapers to try to rebuild trust, at a significant cost to the ad budget no doubt.
Crisis Comms Stage Four ticked: try to slowly rebuild trust.
On paper, this is a crisis comms wet dream, perfectly rolled out, perfectly handled and perfectly covered by the global media… but, it isn’t, not in my mind anyway. Volkswagen has bolted too early and here is why.
This has all been done in less than one month since the starting gun was (mis) fired. The CEO should have been left in position until far later down the line, not least because he would have become the focus of the media ire and deflected the rage away from the company. Once the investigations were underway, and a more true financial impact been established, only then should he have gone.
The announcement of an over-arching, independent enquiry is academic now. When you have governments knocking at your door, threatening to shut down the sales of your product, you need to be concentrating your PR efforts on making it look like you are complying with these investigations, rather than harping on about your own efforts. I know this all too well having worked for global FMCG brands that have been the focus of government attention due to seemingly defective products.
Moving onto the cost and that $7bn set aside to try to reassure shareholders that VW has this in the bag – well, many automotive industry analysts in the US alone are putting the cost for this at around $18bn, once the costs for repairs and vehicle modifications as well as government fines are taken into account.
Even if it comes in under $18bn, the global cost is almost guaranteed to be higher than £7bn so VW will need to announce this and will look commercially naive by undervaluing the crisis in the first place. In addition, many city folk are saying that VW will need to release new shares to pay for all this, and this is a quagmire in itself. Why did they try and assign a value so early on?
Finally, those adverts! This is where I feel VW has massively underestimated its brand profile and brand strength. First of all, for all the reasons above, it was far too early to try to rebuild trust. No one really knows the full impact yet.
Consumers are confused as to what they need to be doing with their vehicles, not sure if this affects the value when it comes to the buy back price, if it devalues their car now when they try and trade them in, if they can in fact trade them in whilst this is on-going… all these questions hang in the air.
Punters are further wary courtesy of the appearance of sites such as emissionsclaims.co.uk which is essentially lead-gen for legal companies but is already getting credible mentions on the likes of Top Gear’s website and is being presented as the next potential PPI-esque misselling scandal.
The consumer side is now muddied by the fact that the approach to customer communications has not been tackled at a global level. According to VW letters placed online by affected customers, the UK consumer does not get an apology, but the US customer does. This may be down to the variance in the legal ramifications of giving an apology, but a consistent approach is Comms 101.
Back to the brand profile and brand strength I mentioned earlier, and the one area where years of consistent success for VW is now paying off. When I talk to friends in the car industry, they all say how VW is the most reliable and best performing German car brand on the market – far better than BMW, Mercedes or Audi – and how it represents great value for money.
VW is behind iconic brands like Golf and Beetle; it has lots of positive brand sentiment in the bank. Now is the time to try and cash in on some of this, and get third party stakeholders to give it some love in a way where it does not look forced.
When I worked for a now-defunct ex-government utility company, we spent hundreds of thousands, if not millions on supporting community projects through the good times. When the bad times came and hundreds of thousands of homes were affected by power outages for hours and in some remote cases, days, we called on these community groups to support us and help with the rescue and support work.
It gave us opportunities to get a different message out, and the groups were only to happy to go on record with how pleased they were to get involved. As yet, VW has not really had any of this. It needs to unearth and subtly seed the positive stories from its bank of goodwill.
There is no doubt in my mind that VW can survive this blip in its history. It just needs to slow down a bit and stop jumping the gun.
Andy Barr heads up the PR agency 10 Yetis. He tweets @10yetis