The Post Office, once an iconic British brand has fallen from grace following the Horizon IT Scandal. With over 11,500 branches, it’s the largest retail franchise network in Europe, offering a variety of products – not just postal, but cash and banking, foreign exchange and government services. Post offices are also often an important social hub for communities, not to mention offering a chance to run a vital local business for people around the UK.
The Horizon system, developed by Fujitsu, was introduced in 1999 to help branches manage transactions, accounts and stocktaking. It has since been revealed as faulty, causing account shortfalls often initially blamed on those people running the branches (known as sub-postmasters and mistresses). As a result of the system’s errors, these workers were accused of fraud and theft, and wrongly prosecuted. A new ITV four-part drama has put a spotlight on the scandal, renewing pressure on the government Post Office to exonerate and compensate hundreds of former workers.
One of the UK’s most trusted brands only a few years ago, the Post Office has since drawn near-universal ire for its treatment of its sub-postmasters and mistresses. The ITV show has only reignited the controversy.
Trust is crucial to the relationship brands develop with consumers. These connections help attract new customers, but also create long-term buying habits. It takes time and effort to build this kind of trust, but it can crumble in an instant, as major brands like Facebook, Boeing and Volkswagen – and now the Post Office – have found. Rebuilding this trust after a scandal takes even more time and effort and the results can be mixed.
Brand trust is multifaceted but can be thought of as the confidence, reliability and credibility that consumers and other stakeholders – such as investors, suppliers, employees and even competitors – associate with a brand. It reflects the belief that a brand is competent, consistent, honest and takes responsibility for delivering on its promises and acting in the best interest of consumers.
People can develop strong emotional attachments to brands and trust is typically at the core of these relationships. Trust underpins people’s commitment and loyalty to a brand. And when a brand earns people’s trust, it can be rewarded with more sales, positive word of mouth, and long-term custom, according to research. Academic studies also show the importance of trust to corporate reputation.
So, when this trust is broken, it can be highly damaging for a brand, as big names have found in the past.
In 2018, social media platform Facebook was at the centre of a major data breach. Governments around the world questioned the company’s commitment to data privacy after 87 million users were confirmed to have had their personal data shared with Cambridge Analytica. The political consultant was using the data to target voters during the 2016 US presidential election.
Facebook founder and CEO Mark Zuckerberg apologised in a Facebook post acknowledging “a breach of trust between Facebook and the people who share their data with us and expect us to protect it”. But his initial response – deafening silence for five days – probably didn’t help shore up consumer trust in the brand.
The scandal had huge implications for data privacy and governments acted swiftly to pass laws and regulations to protect consumers, including the EU’s Digital Services Act. In the aftermath of scandal, Americans were also less likely to trust Facebook.
More recently, aeroplane maker Boeing’s reputation for quality has been decimated. First, a damning Netflix documentary examined the 2018 and 2019 crashes of two 737-MAX jets and the company’s choices about passenger safety. Boeing spent four years rebuilding trust after the two fatal crashes. But the recent mid-air cabin panel blow out of a 737 MAX 9 has seen Boeing hit the headlines again, further damaging the company image and leaving customers, pilots, crew and regulators asking why they should trust the company.
At an all-staff meeting shortly after the incident, CEO Dave Calhoun told employees that Boeing must acknowledge “our mistake” and has promised total transparency. A video of his opening statement was also posted on the company website.
Volkswagen experienced similar trust issues after a scandal dubbed “emissionsgate” or “the diesel dupe”. The car company is still struggling after the US environmental regulator accused the company of cheating on vehicle emissions tests. Customers lost trust in the brand and the company, after admitting fault, also had to pay billions of dollars in fines and compensation claims.
“Our most important task in 2016 is to win back trust,” Volkswagen CEO Matthias Mueller said in a January 2016 speech at an auto industry event.
In the aftermath of a brand crisis, communication in the form of this kind of brand apology is key. But Boeing is still being accused of doing crisis management “all wrong”, and Facebook has also been criticised for its scandal response.
The speed of the response matters. An effective crisis management approach typically involves company leaders issuing swift public statements – often filmed – acknowledging responsibility and full transparency about the mistakes that lead to the scandal and the remedial steps.
Trust can be rebuilt but it’s a long-term process. Some companies such as Starbucks and Gucci have successfully repositioned their brands to alter the perceived image held by consumers. This involves changing marketing elements such as prices or promotional methods to attract new customers and refresh the brand image. In some cases, it involves a complete rebrand with a new logo and tagline.
The latest headlines have reignited debate about what the Post Office and the government should do to address the Horizon IT scandal. The Post Office must find the right kind of crisis management strategy if it wants to weather this storm and regain its position as a trusted British brand.
Sameer Hosany does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
