The news surrounding WeWork’s failed IPO shocked many investors and observers. It is part of a series of bad press stories surrounding the company: from news reports on WeWork’s major financial losses, to the company running out of money, to reports surrounding its CEO having conflicts of interest.
This news sent WeWork into free fall and has the internet buzzing. WeWork customers to people who have never stepped foot in its offices are taking to Twitter and Facebook to participate in the public conversation surrounding the company.
But WeWork is not alone in experiencing these types of PR dumpster fires. It is part of a large number of companies that have felt the public’s wrath over the past few months, much of which has been amplified by people taking to social media to provide their thoughts and criticisms on the news surrounding companies like WeWork.
Recently, Johnson and Johnson faced public backlash after its baby powder was found to have contained asbestos. Its stocks fell after its products had to be recalled. This news comes on the heels of a judgement against them for having a hand in the opioid epidemic. A judge ordered the company to pay $572 million for its role in the epidemic, making it the first instance that a drug manufacturer was held personally responsible for a national public health crisis.
This news, which went viral in both traditional and digital media platforms, contributed to Johnson & Johnson taking a hit in its public reputation. In fact, according to Alva, a reputation and media monitoring company, Johnson & Johnson has gone from being viewed in the top 10 of pharmaceutical companies in 2014 to second-to-last, serving as one of the many examples of how companies can quickly lose the trust of their consumers.
It’s not just major companies like WeWork and Johnson & Johnson that are facing public scrutiny when they make mistakes. Even smaller companies that lose the trust of their customers can find themselves under the heat of the public spotlight.
For example, the California-based Pacific Asian Enterprises (PAE) reportedly reneged on its agreement with Robert Conconi, a customer who purchased a Nordhavn vessel. According to one news article, PAE failed to honor its agreement with Conconi, sending him an incomplete vessel with structural defects after Conconi advanced money to the company for a completed vessel. Another unsatisfied PAE customer took to the website Ripoff Report to raise their concerns with Nordhavn.
PAE is far from the first company to get a negative review from a customer. However, what this example, along with the cases of WeWork and Johnson & Johnson, demonstrates is that incidents involving dissatisfied customers like Conconi would have most likely gone unnoticed years ago. These days, through the power of social media and online news outlets, reports of unhappy customers can reach large audiences, putting companies both large and small under the microscope of both mainstream media outlets as well as consumers in a matter of minutes.
According to Accenture’s Competitive Agility Index, a significant loss in trust can put companies at serious risk of losing revenue. Not every company can afford to wait out a $500 million valuation loss. Unless they want to close down, businesses must prioritize maintaining a certain level of trust with their customers. And in case they ever forget to do so, their customers will remind them with the click of a button.
Jonathan Thomas is a former Union County, North Carolina Commissioner and currently serves as Administrator at Pruitt Health.