Let's say you associate your brand with a high-profile celebrity spokesman. Then something bad happens to the reputation of your promoter. Your brand reputation might take a hit. To cover this damage insurers are coming with a reputational risk products. Call it Tiger Woods safety net.
BNet:
Insuring an Image: What if Woods Can't Deliver the Goods?
By Ed Leefeldt | Dec 17, 2009
A good definition of an insurer is one who profits from the misfortune of others. That’s been true since the days when ships lost their cargo to pirates in the 1600s. And it’s just as true today when corporations lose millions because celebrity endorsers are caught in the act. But remember: An insurer is always there to share your pain - for a price.
The Washington Post reports that a New York brokerage firm is developing a new type of insurance policy to “protect companies against endorsers gone wild,” a la Tiger Woods.
DeWitt Stern Group says it will begin selling “reputational risk” insurance next year to pay policyholders for the loss of sales, ad expenses and endorser fees caused by a public relations crisis, such as Woods’ “philandering.”
Unfortunately too little too late for Nike, Gillette and Gatorade, as well as Accenture, which used Le Tigre in their ad campaigns. Consulting firm Accenture has already unleashed the Tiger, while the others don’t appear to be using his ads. [link]
Now, what is the lesson for these service providers? Data Center Knowledge rounded up major outages of 2009 and stresses the role of Twitter and other social media in service monitoring and customer support communication.
- Lengthy Outage at Fisher Plaza
- Michael Jackson’s Death Slows The Web
- The Sidekick Snafu
- Total Data Loss for Ma.gnolia
- Twitter Felled by DDoS
- Amazon Cloud Glitches
- Downtime at Rackspace
- Fire at 151 Front Street
- Gmail is Down! Gmail is Down!
- Paypal Down, and the Meter is Running
- Air New Zealand Travel ‘Chaos’
To us the lesson is simple: watch the reputation and quality of your service; the damage from an outage is much more than lost customer transactions -- it is the direct damage done to the brand. With the service failure in the background, all well spent advertising and PR dollars start working exactly in the opposite direction. A well publicized outage is a de facto negative PR campaign run by a service provider against their own brand. Reputational risk insurance policies are yet to come to the IT market. In the meantime focus on quality can go a long way to assure an IT service provider's brand and reputation.
posted by: gqpartner
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