How to Mitigate the Reputational Risks of a Bad Product Launch

Predicted figures for the broader security market have painted a positive picture for the 2025 business year.

Indicators include a home security market projected to reach $7.6 billion and the potential for networked access control and management solutions for buildings and premises at $8.5 billion. Additionally, the commercial security market is projected to reach $588.45 billion by 2034.

By the end of this year, many companies will have launched security solutions (products and services) to capitalize on market opportunities. A fair number of these launches will fail.

Failed Brands

While there are myriad reasons why, here are some reputation-linked reasons that may precipitate failure:

 1. Rush to market

Companies usually feel pressure to launch a new product as quickly as possible. They do this because they want to recoup their investment in the new solution and take a share of the market.

 There is no margin for error. Users purchase and install the solution and expect it to work ‘as promised.’ When a product is rushed to market, there is always the risk that it will not work as intended. As a result, negative media coverage, contract cancellations, customers withholding payments, and potential legal action are distinct possibilities.

The outcome? Reputational damage to the new product before it has had a chance to establish its market position, credibility, and profitability. The company launching the new solution has also been impacted.

2. Slow incident response

When customers encounter issues with a company's new solution, they expect a prompt response. They do not want to see a company that drags its feet or downplays the issue.

The lack of a rapid response will fuel negative customer sentiment and erode trust in the business. The risk is that this can spill over into the media, especially trade media, resulting in a multifaceted crisis that involves the media, customers, employees, and other stakeholders. Companies that fail to respond adequately to a problem with their solution risk long-term reputational damage, which can be costly to repair. Therefore, contingency planning is vital.

3. Super hype and poor delivery

Marketing teams often aim to catch the eye of both current and potential customers by showcasing what a new product can do. They create 'spin' around its features to boost understanding, awareness, and generate sales. This common practice is also implemented to generate media coverage.

Customers lose faith in a company when the solution they implement does not perform as anticipated. Consider a company that installs an “unbreakable encryption” solution or a “failproof AI weapons detection system” that fails when needed. The customer asks the obvious questions: Will this fail again? Why is it not performing as promised? Can I trust the company that sold this to me? Could my business, employees and customers be at risk?

It is vital for marketing content, salesperson messaging, product capabilities, and value propositions to align.

4. Data privacy concerns trigger a backlash

70% of Americans say they have “little to no trust in companies to make responsible decisions about how they use AI in their products.” AI has made a significant impact in the security sector, presenting a unique challenge to data privacy for specific solutions.

If customers believe that the new solution they’ve implemented might be vulnerable to a hack or is collecting personal information, they may consider a few options. They could end their contracts, seek legal advice, eliminate the solution, or switch to a competitor. Employees will be informed about the reason for the solution's removal, customers may need to be notified, and the media may also become aware.

Once a brand is associated with privacy mismanagement or faces regulatory scrutiny and lawsuits, it is likely to face an uphill and costly battle to restore its reputation.

5. Ignoring ethical issues

Marketing security solutions can be challenging, especially when they incorporate facial recognition, threat detection, surveillance, and geofencing capabilities.

Sometimes, advocacy groups and concerned segments of the public have ethical and privacy concerns about these solutions that contain these abilities. Problems develop when there is a misunderstanding of how the technology works and how it will be used.

Many of these organizations fail to understand that companies and government departments that purchase and use these technologies often have the necessary oversight and operational procedures in place to safeguard the privacy of the groups and individuals they are monitoring.

For this reason, companies must have a well-communicated ethical stance and clear usage policies that clearly explain how they protect the personal rights of the public. 

Failure to Launch

With a clear understanding of some of the reasons for a potential launch failure, companies must have several risk mitigation steps in place to ensure a launch is as successful as possible. Here are four key aspects to consider:

1.  Market intelligence

Companies launch new security solutions for various reasons—these range from meeting customer requirements to taking advantage of a market opportunity or opening new revenue streams.

Market research should be undertaken before research and development occurs to ensure the success of a launch. This research should include a thorough analysis of a competitor’s solution, marketing and sales processes, customer acquisition strategies, product messaging, the quality of the competitor’s customer service, and prospective customer pain points, as these aspects also provide essential insights.

Market research provides valuable insights that can help avoid potential risks once a product has been launched.

2.  Invest in pre-launch testing

Some security companies perform ‘in-house’ testing before launching a new solution. There is a case for testing to be carried out by external and independent testing entities. 

Pre-launch testing can provide valuable insights that can be used to verify the product's effectiveness, fine-tune it, or inform decisions to delay or cancel its launch altogether. Any defects that are not fixed before a launch may prove costly. The impact could range from a loss of business to an erosion of trust from current and potential customers and stakeholders.

3.  Develop and implement a crisis communications plan

Many companies are not ready for a PR crisis. Those who have PR crisis plans in place. Crisis communication plans must be specifically tailored to a business and focus on the potential impact a crisis may have on it. Off-the-shelf crisis plans should be avoided at all costs, as no two crises are the same. 

Every company needs a crisis communications team tasked with successfully implementing the crisis communications plan. Crisis team members need clear roles and responsibilities. They should know exactly what to do when the plan is activated, and they also need to be trained to deal with the media. The plan should include holding statements for the media, partners, and employees, with defined policies and processes. It must also be tested and exercised every six months. 

A risk monitoring process must also be included to track issues that could develop into a crisis. It is advisable to monitor social media posts, call center feedback, questions about the new solution, and media coverage. The crisis team's rapid response to verified information is vital.

4. Industry and customer relationships count

Having strong, established relationships with critical external stakeholders is crucial for the successful launch of a new security solution. These stakeholders could include security industry bodies, analysts, and current and potential clients. Ideally, they should be engaged months ahead of the product launch. They will help create positive market sentiment. 

Analysts and industry bodies play a crucial role in the launch, as they may refer new business to the company following a solution briefing. Clients who have successfully tested the new product prior to its launch can provide valuable third-party endorsements. This will solidify the customer's brand and reputation, fostering long-term customer loyalty.

Despite all the best planning, strategic thinking, and implementation of tactics, things still go wrong. If a security company takes the following six steps when a crisis unfolds, it could minimize its reputational damage and regain credibility with the media, customers, and employees:

Media Reputation Protection

1. Disseminate open and honest comments

Crisis communications messaging must be open, honest, and straightforward. The issue being addressed must be resolved. The crisis communications team must outline the steps being taken to address the problem. The company’s commitment to its customers, their security, and a speedy resolution to the current issue must be proactively communicated and repeated. All corporate stakeholders must be informed about the progress to resolve the crisis. 

A company’s crisis management team cannot bury its head in the sand and hope that the issue will go away. This approach increases the odds of the company suffering severe reputation and brand damage. The crisis team's communication must be precise and clear. A well-crafted response will help control the narrative and prevent misinformation and doubt from spreading.

2. An open door for the media and analysts

The process of repairing a damaged business is a complex undertaking.

Companies must maintain regular, honest, and proactive communication with key internal and external stakeholders. It is essential to be frank about what went wrong and to let them know how the issue is being addressed. 

The company spokesperson must provide regular updates to key editors and journalists from the trade and mainstream media and when necessary, they could be supported in interviews by key executives. Executives who speak to the media contribute to balanced reporting and communicate accountability. It also ensures that the facts about how a company manages the crisis are accurately expressed and helps to counter the harmful and often inaccurate rumor mill.

3. Quickly and effectively fix the problem

Crises are part of the business landscape. Just to let you know, customers know this. They will not accept when a company drags its heels to resolve an issue. They want their issue sorted quickly, particularly when a problem with a newly implemented solution could impact the safety of their facility, employees, and visitors.

A company can manage its customer frustration levels and reduce the likelihood of ‘frustration escalation’ by proactively providing solutions that address its customers’ concerns. This includes offering support when needed, refunding, replacing parts, or extending the warranty. Doing what's fair for customers demonstrates that a company genuinely cares about resolving issues.

4. Unrestrained support and communication

Customers want to be able to reach a vendor for support or to ask questions when they encounter difficulties with their new solution. This will help lower their stress levels, build trust, and increase transparency.

Companies can establish dedicated customer service channels, such as call centers, where agents can address questions, assist with issues, and clarify product policies and procedures. 

I want you to know that part of maintaining direct lines of communication includes responding to all customer inquiries promptly and following through on your commitments. It is essential to provide regular updates on the progress of resolving the product issue. This will reassure customers that the company is committed to resolving the product issue.

Employees as Reputation Protectors

1. Regular internal briefings

It is crucial for senior management to debrief employees about the product launch crisis the business is facing and to be open and honest at all times. Personnel must be aware of their employer's actions to manage the situation and understand how they can assist with the recovery.

Management reinforces trust in its company and leadership by holding regular meetings with employees to update them on progress and tactics used to manage the crisis. This process also helps maintain workforce morale. To ensure consistency, internal and external stakeholders, including the media, receive the same messaging, preventing misinformation and rumors from spreading. 

The last thing you want is a customer asking an employee about the crisis. The employee contradicts what the media is reporting or what the company spokesperson is saying.

2. Empowered employees build trust

Employees are the company’s greatest advocates and can easily be used to communicate to clients about how the company is attempting to resolve the crisis.

However, they are only effective brand spokespeople if they are briefed correctly, permitted to speak to clients using approved and clear talking points, and can see that their company is doing everything in its power to fairly and honestly resolve the product crisis. If they perceive otherwise, they can become the company’s harshest critics. 

It is essential to maintain an open-door policy, allowing employees to ask management relevant questions about the crisis and to involve them in the solution process. This will make them feel valued and result in a workforce more likely to support their company’s efforts to manage the crisis.

Conclusion

Product launches are costly projects for security companies. To mitigate the risk of a failed product launch, companies need to be prepared. This enables them to proactively identify emerging issues, communicate effectively, maintain trust with their target market, and mitigate potential fallout. This will ensure that the company's corporate reputation and brand, and the services and solutions it provides, are protected.