Don’t try to make it small.

When the oil spills, the money goes missing and the yoga pants you’re pushing are too thin, use crisis communication theory to craft your public relations response. New study shows companies that do, don’t see a drop in stock price.

IMPACT ON STOCK PRICE

-3.2% AVERAGE

DECLINE IN STOCK PRICE

OF COMPANIES

NOT FOLLOWING

CRISIS COMMUNICATIONS

THEORY

STAY ON MESSAGE

KNOW WHERE YOU STAND

Before a crisis hits, do an honest assessment of your company’s reputation. Whether or not your company has a good performance history will determine which strategy is most effective to use. The strategies that work for one company that has a good performance history will not work for a company that has a poor performance history.

DON’T DOWNPLAY When companies downplay or minimize an obviously bad crisis, investors become uncertain. When investors become uncertain, a company’s stock price declines. If you downplay a big crisis, expect a smaller stock price.

-3% DECLINE IN STOCK PRICE OF COMPANIES THAT

RADICALLY CHANGED MESSAGING

About this infographic: This infographic is based on a study titled “We’re Still Sorry: How Companies Manage Prolonged Crises.” The study was conducted as a graduate research project by Mallard Holliday at Syracuse University. Follow Mallard on twitter @mallardholliday for a copy of the entire study. W. T. Coombs’ (1995) Crisis-Response Strategies and W. L. Benoit’s (1995) Theory of Image Restoration were used to analyze 24 statements issued by 12 companies during crisis events. Companies studied include: Apple, Anadarko, AT&T, BP, Carnival Cruise Lines, Costa Crociere, Domino’s Pizza, General Electric, J. P. Morgan Chase, Lululemon, Taco Bell and US Airways. The research project does not examine the many other factors that could have impacted the stock price at the time.

THEORIES BY COOMBS & BENOIT Theories provide a clearer path to determine how to respond in a crisis. Before the crisis hits, know the theory and decide which response is best given your company’s performance history and the severity of the incident.

USE COOMBS’ THEORY DECISION FLOW CHART TO DETERMINE WHAT TO SAY.

MAJOR ACCIDENT HAPPENS WITH VICTIMS

POSITIVE PERFORMANCE HISTORY

NEGATIVE PERFORMANCE HISTORY

USE MORTIFICATION & INGRATIATION STRATEGIES

“WE’RE SORRY. WE HAVE A GOOD TRACK RECORD.” USE ONLY MORTIFICATION STRATEGIES

“WE’RE VERY SORRY.”

DECIDE