I was recently asked by one of my post graduate MBA students how important public relations really is to a company. She said “after all it’s not like there is any direct trackable impact on the bottom line”. For the most part she is right, a lot of public relations are completely untrackable, and it has no direct impact on a company’s profit margin or bottom line. However, indirectly it has a huge impact and is a prime factor in marketing even though in most cases there is no response mechanism that can be monitored. Public relations is one of the most important aspects of marketing for a company, and while many small and medium sized companies public relations is done from within the marketing department, most larger companies have a department dedicated to public relations. Public relations has the ability to sway a consumer to buy or not to buy.
One of the biggest public relations decisions ever made in the history of business was in 1982 by Johnson & Johnson, the manufacturer of Tylenol, when seven people died from cyanide poisoning after taking extra strength Tylenol capsules. It was reported that than an unknown suspect put more than 10,000 times the cyanide that is necessary to kill a person (Time). This left Johnson & Johnson with a huge problem, because even though it was not their fault, the fallback was affecting their business. Against the advice of everyone including the FDA James Burke the CEO of Johnson & Johnson made the decision to pull all 31 million bottles of Tylenol off the shelves nationwide regardless of the cost. Following their company guidelines of protecting people first and property second McNeil Consumer Products, a subsidiary of Johnson & Johnson recalled all Tylenol and halted all advertisements for the product at an estimated loss of over $100 million dollars. (http://iml.jou.ufl.edu/projects/Fall02/Susi/tylenol.htm).
Business and Financial analysts said that Tylenol was done, over, kaput, that there was no way that they could recover from this. They were wrong, they did recover. Several weeks later Tylenol came out with tamper proof packaging, the first of its kind. Because Tylenol reacted so quickly and made the public’s health a priority over its profit, it survived. Not only did it survive, it quickly became the number one selling pain reliever in the country. The public appreciated what was done on their behalf, and they rewarded Johnson & Johnson for their decision. This was public relations at work and while it was a huge gamble, it paid off; in the end Johnson & Johnson came out looking like the hero.
Public relations is such an important tool for all businesses, including small business, because the ability to maintain a positive public image is critical to having a successful growing business. No matter what type of business you are in or how big or small that business is, use public relations to connect with the public, your customers, and potential customers.