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What Companies Can Learn from Setbacks to Come Back Stronger
A public setback can threaten any business. When you’re a healthcare brand, and consumers depend on your products for relief, the challenge is particularly delicate.
Zicam experienced a setback when we voluntarily recalled our nasal swab and nasal spray products in 2009 after a small number of consumers reported losing their sense of smell, a known side effect of the common cold. Although there was no scientific evidence necessitating a recall, the measure was taken out of an abundance of caution.
Successfully navigating a setback is a crucial skill for all types of companies, not just those in healthcare. Whether a voluntary recall or other situations such as bankruptcy, hiccups can damage a brand’s reputation and require careful maneuvering. However, setbacks are also opportunities to regain consumer confidence in your brand and ultimately come back stronger than ever.
Steps to navigate a business setback
When faced with a setback, there are a few steps a company can take in the immediate short term. First and foremost, open communication with consumers is crucial to alleviate public concern and prevent a situation snowballing into a larger issue.
Let consumers and stakeholders know that their concerns are being heard and be as transparent as possible about the situation and the steps taken to address it. In the case of Zicam’s 2009 voluntary recall, we immediately requested that retailers stop selling the recalled product. Additionally, we asked them to inform customers at points of sale about the recall and advise them to return the products for a full refund. We also maintained open communication and cooperation with the FDA.
When the bakery company Hostess announced in 2012 that it would seek bankruptcy court permission to close its business and sell its assets, the company released a public statement outlining all of the facts to the public. Hostess declared that it was unable to gather the financial resources needed to weather a national strike by The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and that the company had tried its best to reorganize its business with key constituents over the course of 18 months. This disclosure helped to quell any rumor-mongering. While consumers were likely still disappointed and confidence shaken, these steps maintained a sense of transparency and thus respect for the company.
Once initial steps are taken to alleviate the situation, a brand begins the challenging process of moving forward. To maintain positive momentum, it’s important to continue listening to consumer needs via all channels, including social media, phone and snail mail. Have your teams respond to questions in a timely manner and embrace your brand’s strong, loyal fan following.
When fashion retailer C. Wonder announced its shutdown in 2015, fans were heartbroken. Building off of continued consumer demand after its close, C. Wonder returned in the spring of 2016 with a new collection exclusive to QVC – a clear sign that they had been listening to their fans.
In Zicam’s case, we redoubled development efforts in response to consumer demand for the return of the products via social channels like Facebook. This led to our decision to reformulate and relaunch the popular nasal spray and nasal swabs in the fall of 2014 and 2015, respectively.
Similarly, when Hostess’ Twinkies were taken off the market, nostalgic fans were devastated, sparking a Twinkie black market on eBay. The brand maintained such a strong fan base that when it returned under new owners Metropoulos & Co. and Apollo Global Management in 2013, customers were quick to accept its campaign slogan: “The Sweetest Comeback in the History of Ever.” New packaging of the fan favorite cake, Suzy Q’s, were marked with fan messages from social media. For example, some packages read, “Casey has waited long enough” and “Chris demanded we deliver it.” This encapsulated fans’ excitement for the return of the product and showed that they were loved.
Strategizing for a successful comeback
One of the most important steps to ensure that regained consumer confidence is not immediately lost is to be 100 percent certain that any relaunched products are completely ready to re-enter the market. Zicam took almost five full years to relaunch the nasal swabs, making sure enough time was spent reformulating and testing the new product to deliver the same cold shortening experience our consumers loved.
Bringing our nasal products back to market required the focus of all areas of the organization. We pulled together top talent to run all aspects of the Zicam business and created a collaborative team environment. Zicam’s product development team formulated and tested innumerable prototypes to ensure that the consumer experience would be outstanding. Our supply chain team ensured that manufacturing resources were ready to scale the selected prototype as soon as they were given the green light. Our marketing and sales teams found ways to let loyalists and new consumers alike know that Zicam Cold Remedy nasal products were coming back and would provide a new and unique way to alleviate symptoms of the common cold. As a result, Zicam’s small but deeply experienced team was well positioned to pull off a best-in-class return to the market.
In Hostess’ case, to ensure a calculated return, the company downsized its operations from 11 to four factories and 19,000 employees to 1,800 and made the decision to outsource its entire distribution system. In addition to a refresh of its product line, Hostess responded to consumer demands for simpler ingredients and greater transparency of nutritional information. For example, the relaunched Mini Muffins featured whole grains and eliminated high fructose corn syrup. Fans and new customers alike can enjoy the new products and more comfortable about what they’re consuming.
C. Wonder also had its own strategy for a successful return. Fans loved the company for its whimsical, fun prints and colors, so the brand focused on maintaining this aesthetic while bringing on E! News’ “Fashion Police” co-host Brad Goreski as its new creative director. The brand knew this creative face would inspire consumer confidence in the relaunched brand, and retailing the products through QVC ensured a sustainable market re-entry with minimal risk.
Of course, once your company moves past its setback, the focus must shift to maintaining positive momentum. You can achieve this through various ways with one of the strongest being sharing the relaunch of your product and sustaining positive conversation around it through targeted channels. Promote to your core audience – which you’ll identify through careful market research – to generate buzz and clearly communicate the message about the return of the product. Beyond consumers, find your advocates in media and among influencers who can help drive positive awareness and lend credibility.
Despite setbacks like voluntary recalls and bankruptcies, consumers will respond to a well-executed return of their beloved products, as witnessed through increased sales of Zicam products despite a slow cold season last year. Build up your brand and products ahead of market re-entry and maintain the confidence of consumers at all stages, and you will relaunch your brand successfully.
About M’lou Walker, CEO of Zicam and Matrixx Initiatives Inc.
M’lou Walker brings over 25 years of experience in healthcare product marketing and management to her role as CEO of Zicam and Matrixx Initiatives Inc.
Prior to joining Matrixx in 2012, Walker was the co-founder and COO of Scerene Healthcare, a startup focused on product and brand development in the personal care and skin care space. She also led the development of the award-winning “Mr. Mucus” advertising campaign for Mucinex as SVP of Marketing for Adams Respiratory Therapeutics and managed a broad spectrum of OTC and HBA brands at Pfizer Consumer Healthcare and its predecessor Warner Lambert Consumer Healthcare, including Listerine, Lubriderm, Benadryl and e.p.t.
Over the course of her career, Walker has won several marketing, advertising and PR awards. She has previously been named one of the top 50 marketers by Advertising Age and one of the top 25 marketers by OTC Perspectives. She sits on the board of directors of the Consumer Healthcare Products Association, the trade association for OTC healthcare companies, and Young Audiences-Arts for Learning of New Jersey & Eastern Pennsylvania.
Walker received her MBA from Columbia University Graduate School of Business in Marketing and Management of Organizations, and her BA from Yale University.