Pizza chain Papa John’s has recently announced a loss of $20 million in quarterly financial returns.
Its sunken income is being attributed to a storm of bad publicity earlier this year when its founder, John Schnatter, was caught on a media training call using racial slurs. Ironically, the conference call had been organised by a media training company attempting to help Schnatter avoid negative PR incidents from occurring.
The media training company has apparently disassociated itself with the pizza takeaway brand and so too, it seems, have many customers appalled by Schnatter’s actions. They have used their feet and thumbs to stay away from Papa John’s shops, website and apps. It would seem the dough has gone somewhat sour – and not in a tasty artisan sourdough way.
While Papa John’s downturn may be a temporarily blip, the points illustrated are not only about the power of reputation but the power of consumers in today’s society, emboldened by choice to make decisions that can have major repercussions for the likes of one of the world’s biggest food chains. The daisy chain effect of social media, and fast-paced web news generally, can have a momentous impact on building and destroying reputations. Today, brand perception is linked to consumer action – whether it be people rushing to buy an apparently sought-after gadget or those boycotting a produce in their droves.
Papa John’s, like any company should in such a situation, has taken action to address its dented image. Schnatter resigned as chairman of the board and has since been removed from all of its marketing and advertising. Branding and marketing is being revamped with a newly-established ‘Voices’ campaign putting a diverse range of front-line staff in front of the camera to tell their story in a bid to project positive authenticity.
Time will tell whether this exercise wins back customers. In the meantime, a quote from Chris Anderson, an American journalist, certainly rings true: “Your brand isn’t what you say it is, it’s what Google says it is.”