From Subway's Jared to Bill Cosby: How Do You Make Hiring a Spokesperson Worth the Risk? In an era when scandals spread like wildfire, company spokespeople can go from the face of your company to a major liability.
By Kate Taylor
Opinions expressed by Entrepreneur contributors are their own.
What do you do when the face of your company becomes a toxic liability?
With Subway recently cutting ties with Jared Fogle amid reports that Fogle paid a teen for sex and Disney removing a giant bust of embattled star Bill Cosby, it's clear that a spokesperson's private life can cause big problems for brands.
While that's always been the case, the rise of social media has made the risk greater than ever as it only takes an instant for a person to become a brand liability. But, if even the most PG-rated spokespeople are risky business, why do brands still hire them?
"Celebrities are worth the risk," says Erich Joachimsthaler, founder and CEO of strategy consulting firm Vivaldi Partners. "They create visibility for a brand. They can create energy and excitement. Celebrities help make brands relevant and salient."
Spokespeople can give companies a relatable human face. In the early 2000s, Jared served as a success story that customers could hope to emulate, with a 2013 Technomic survey crediting him for making Subway the most relatable restaurant brand on the market. According to Ad Age, when the company stopped using him in ads in 2005, sales fell 10 percent.
Spokespeople who are already have large followings are not only relatable, but also have huge power to bring new customers to a business. Bloggers and celebrities charge companies thousands of dollars to showcase a product in one Instagram photo. In many cases, the money is well worth it: While once companies dreamed of the "Oprah bump," today, a product being featured by a social media account with enough followers means an immediate, often extreme, sales boost.
Companies aren't ready to give up on the visibility and relatability that spokespeople bring to a brand. So, the question businesses should be asking is not if spokespeople are worth the stress, but instead, how companies can best mitigate risks.
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Picking a spokesperson to boost – not break – your brand
When deliberating hiring a potential spokesperson, it is key to remember that there are different levels of involvement. Instead of hiring a celebrity as a spokesperson, he or she may be better suited to be sponsored by your company – a less permanent and binding option. Then, you can discover if he or she would be a good fit for the brand.
"Sheer visibility is vanity, strong brand fit is sanity," says Joachimsthaler. "A good spokesperson has a strong fit with the product of the company, and a strong fit with the culture of the company."
To better know what your company is signing on for, it's important learn everything you can about a spokesperson's background, especially if he or she is not already famous. You want to do a thorough background check: While Fogle's reported history of running a pornography rental company in college didn't end his relationship with Subway when reported by VH1 in 2007, it may have prevented the partnership if discovered earlier. Jonathan Bernstein, president of Bernstein Crisis Management, says he recommends companies have potential spokespeople take psychological profile tests to predict potential future problems. You don't want the public face of your company to be that of someone prone to aggression.
Still, even the most thoroughly vetted spokespeople with the best reputations can slip up.
"Right now, Taylor Swift has a reputation of being absolutely squeaky clean, and that's wonderful," says Jonathan Bernstein, president of Bernstein Crisis Management. "But, because she is so visible, if she ever did anything wrong, we'd know about it, very quickly. And it wouldn't just stay where it happened, it would go global. Instantly."
No matter how perfect a spokesperson seems, a carefully worded contract is always key. The contract must specify the relationship can be terminated based on any illegal, immoral or unethical behavior. In June, Donald Trump filed a $500 million lawsuit against Univision when the Spanish-language television network ended its contract to broadcast the Miss USA pageant (co-owned by Trump), due to the entrepreneur's controversial remarks about Mexican immigrants. You don't want your company facing a similar lawsuit if it decides to cut ties with a spokesperson because he or she insults your target market.
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When disaster strikes
Once a spokesperson is hired, there isn't much a company can do to protect its image, except prepare for the worst. If disaster strikes, it is key to have a contingency plan in place.
"It is admirable to stand by somebody, until there is sufficient evidence," says Bernstein, who says the decision of when to cut ties is subjective and depends both on the nature of the scandal and the company's market. "If [the company is] monitoring public opinion closely enough, they will see they reach a point where the spokesperson is no long effective. Then, it becomes a pure business decision."
When it becomes clear it's time to cut ties with a spokesperson, the company needs to be upfront and transparent regarding its decision. Social media can go from a means of spreading news of the scandal to a way to manage the crisis. If your brand has an established online presence, customers will be more likely to trust that the company has behaved properly, and had no knowledge of the spokesperson's wrongdoings.
After that, it's just a matter of waiting for the memory of the link between spokesperson and company to fade in customers' minds. While the brand will suffer in the short-term, Joachimsthaler says that if companies admit to their mistake, their reputations will recuperate to the levels of former strength in the long-term.
Despite the frequent PR crises they cause, don't expect companies to ditch spokespeople completely any time soon. The process of finding the right spokesperson is a balancing act, as companies weigh sales a spokesperson can bring in against a potential scandal. The best spokespeople become icons. The worst drag the brand down with them – if the company doesn't have an escape plan ready.
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