Clarity Blog

Clarity Blog

How Much Does A Reputation Melt-Down Cost?

Let’s say the principal your company was named after said something some time ago some folks determined was racist.  The media happily jumped on the story, the blogosphere lit up and tweets twittered for days.

What’s that going to cost you?

How about $100 million?

“Oops!”

That’s what Najafi Companies, a private-equity company led by the owner of the Book-of-the-Month Club, Jahm Najafi, is investing in the tarnished brand of Paula Deen, the butter queen. Says the Wall Street Journal:

By its own description, Najafi Cos. often invests in business that are “out of popular favor.” Mr. Najafi said he doesn’t see investing in Ms. Deen to be an extraordinary risk. Despite the controversy, he said, her brand has strong, broad support from core fans across the U.S.

Still, if it takes $100 million to reinstate a brand, we’d say, first,  there’s a fair chunk of risk involved, and second, better to not tarnish the brand in the first place. Have good messages, learn them, and stick to them.

That’s why none of our clients has been deep-fried.

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