Collateral Reputation Damage

Via SpinHunters.org -

There is a new reputation term I stumbled across yesterday (via Authenticorganizations blog) so I thought it is worth discussing it. It is called collateral reputation damage and the idea behind it is that some companies could be incidentally defamed, just by having random similarities with another, less respectable organizations or individuals. According to the author:

The collateral damage, (is) not intentional damage, because the folks taking action don’t intend to damage the organization’s reputation. Instead, the damage occurs through guilt by association

How does it work?

The most popular example of collateral damage is when two similar names (let’s refer to them as A and B) are being negatively associated with each other. Usually there is no any relevant connection between them, except their names, nicknames, corporate symbols or initials. Visual resemblance is also possible. The only requirement here is one of the subjects (let’s say A) to have an established bad reputation in people’s minds. So, every time when people hear about the other one, B, they will subconsciously associate it with the negative qualities and characteristics of A. Fortunately, this works only for a very short period of time. However, it could be really damaging only if A is in the middle of a corporate/personal scandal.

This is what happened with Sarah Pailn and the Chiliean wine Palin Syrah. According to Chris Tavelli (a wine bar owner), Palin Sayrah was one of the best selling wines in his pub before her nomination as a Republican V.P. People were constantly put off of its low price and questionable quality.

How the affected party should react?

Well, there is no a straightforward answer really. Everything depends on the specific situation and whether the affected organization is willing to take any further steps to rebuild its reputation. The main point here is the harmed company or the individual must distant itself from the one with a bad image and make sure to demonstrate different corporate values. If the company publicly complains about its reputation loss and provide enough evidences about it, such as significant financial drops, then it has the real chance to increase its popularity, find new markets or even entirely re-position itself. As I always say, it all depends on the abilities of finding an opportunity in the crisis.