Transform Betrayal from Brand Transgressions

A company’s best response following a brand transgression depends on whether the transgressing company is headquartered in the same country as the target market of consumers or in a different country. Brand transgressions include product recalls, news of unethical behavior, and similar evidence of betraying public trust.
     According to the University of Leeds researchers who issued this advice, if the transgressing company is in the same country as the target market, the recommended response for reestablishing trust is to financially compensate this domestic target market in a way which shows respect for national values. The example used in the studies, where the transgression was said to be sexual harassment, was, “The company announced that they will be giving a sum of £100,000 for the purpose of founding a non-profit organization called 'Harassment-free UK'. The mission of this organization will be to support the mental health and physical wellbeing of victims of sexual harassment across the UK.”
     On the other hand, if the transgressing company is a foreigner, the better response is to explain the transgression as necessary to fully protect against a threat to the company’s continued existence. The example used in the studies, where the transgression was said to be pay discrimination against women, was, “The company has issued a press release apologizing for the event and attributing it to the increased competition it faces from its key competitor…. The CEO added that they found themselves with no other option than to do so, in order to lower their production costs, given the large percentage of female workforce in the company.”
     The set of studies collected data from consumers in the United Kingdom, the U.S., and Germany. People are generally more favorably disposed to brands associated with their own country than with another country. Consumers consider merchandise to be better when it comes from domestic sources.
     At first glance, this favoring of the domestic seems contradicted by another finding of the University of Leeds study: Consumers were less forgiving of a transgression by a domestic company than of an equivalent transgression by a foreign company.
     But it’s not a contradiction. It’s consistent. The reason for greater upset is precisely because consumers had greater trust in the domestic company and therefore feel a greater sense of betrayal. There’s also the matter of the nation’s reputation. Study participants considered domestic brand transgressors as traitors to their home country, deserving punishment.

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Image at top of post based on photo by Andrew Neel from Unsplash