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Interview with Dan Laufer
Associate Professor of Marketing
Victoria University of Wellington, New Zealand
Daniel Laufer, PhD MBA is an Associate Professor of Marketing, and a former Head of School (2014-2017) at Victoria University of Wellington, one of the leading universities in New Zealand.
Dan’s area of expertise is Crisis Communication, and his articles have appeared in leading academic and managerial journals in the fields of marketing and public relations. Dan currently serves as an Associate Editor for the European Journal of Marketing, and he recently completed a 3-year term as an Associate Editor for Business Horizons, a leading managerial journal. He also serves on the editorial board of Public Relations Review.
One of your primary fields of research focuses on crisis communication, and specifically how business leaders need to be prepared to communicate clearly and effectively in a world impacted by crises. What are the main insights that you can share from your research?
I’ve been conducting research in the area of crisis communication for over 20 years since I completed my PhD at the University of Texas at Austin in 2002, and it’s been a great experience working on projects that have important implications for companies. At the beginning of my career, I focused on how and why consumer segments differ in their assessment of blame for product harm crises.
For example, in a study published in 2004 we found that women are more likely to assess blame to a company as observers to a product harm crisis than men. The reason for the difference was increased levels of perceived vulnerability to harm when compared with men. This finding was consistent with the defensive attribution hypothesis from psychology which established a connection between the perceived severity and personal vulnerability of observers to a crisis and attributions of blame. As the perceived severity and personal vulnerability of an ambiguous crisis increases, there is a psychological need to assess blame to resolve the uncertainty. During an ambiguous product harm crisis this need to assess blame translates into more blame to the company, since observers to a crisis view themselves as more similar to the victims (other consumers). In terms of managerial implications, this suggests that women may be more likely to blame a company for an ambiguous product harm crisis than men.
In addition to differences between men and women, we also examined differences between older and younger consumers as observers to a product harm crisis. In our study published in 2012, we found that older consumers felt less vulnerable to harm than younger consumers during a product harm crisis. As a result, older consumers were less likely to blame the company for the product harm crisis, and more likely to purchase the product in the future.
We believe the results of our study are related to age-related differences in primary vs. secondary control processes. Due to the aging process, older consumers have less control over their physical environment as a result of cognitive and physical decline which is related to primary control. As a result of the increased vulnerability, older consumers are more likely to be adversely impacted by events in their external environment such as product harm crises. However, as a result of the aging process older consumers also change how they perceive their external environment in order to reduce distress resulting from their diminished levels of primary control. Changes in their perceptions of the external environment relates to secondary control, and enables older consumers to show greater satisfaction with their current life situation.
Our findings relating to how older consumers view product harm crises is related to secondary control, which causes them to view the situation as less threatening when compared with younger consumers. The findings of our study suggest that companies should work harder to make older consumers aware of risks created by product harm crises.
After publishing a number of articles relating to how consumers arrive at blame attributions, I shifted my focus to product recall communication which was an under-researched topic in Crisis Communication. Product recall communication also has important managerial implications since a major challenge companies face during a product recall is convincing consumers to comply with a product recall request. We felt regulatory focus theory from the field of psychology could help improve the effectiveness of product recall communications, and in a study conducted in South Korea in 2010, we found that adapting the message to the regulatory focus orientation of consumers (prevention vs. promotion orientation) increased compliance with a product recall request.
A good example of differences between a prevention vs. promotion message involves a product recall of automobiles as a result of problems with the engine. A prevention-oriented message would highlight preventing damage to the engine, and a promotion-oriented message would highlight extending the lifespan of the engine. Based on regulatory focus theory creating a fit between the regulatory orientation of the consumer and the message, increases compliance with a product recall request, which is what we found in our study. It is worth noting that researchers have found that consumer segments can differ in their regulatory focus orientation. For example, in individualistic societies researchers have found that people have a more promotion-orientation, whereas in collectivistic societies researchers have found that people have a more prevention-orientation.
A recurring theme that has characterized my research during my career is the importance of understanding your audience which goes beyond stakeholder type. In my case, I have focused on the consumer as the stakeholder of interest during a product harm crisis. However, there are many types of consumers (older vs. younger, men vs. women, prevention vs. promotion oriented), and they can differ in how they perceive crises and corporate communications. In order to develop effective crisis communications, it is important for companies to understand these differences. Theories from psychology (for example, regulatory focus theory and the defensive attribution hypothesis) can help us understand the differences, and develop more effective crisis communications that address stakeholders’ concerns during a crisis.
In your articles, you often state that the cultural environment is an important factor to consider in crisis management. With many companies facing challenges operating globally, do you have any suggestions for effective communications during a global crisis?
Multinationals face a challenging situation when crises occur overseas. How should they respond in different countries? Stakeholders have different expectations because of cultural differences, and a uniform response could be harmful to a company already suffering because of the crisis. My recent research has focused on when to use the CEO as a spokesperson during an overseas product harm crisis. We identified three factors to consider when deciding whether to use the CEO as a spokesperson: the characteristics of the CEO, the characteristics of the crisis, and the characteristics of consumers in the overseas market.
For example, in an empirical study we conducted in China and South Korea in 2018 we focused on a value orientation, Power Distance Orientation, which we believed could impact the effectiveness of a CEO spokesperson during an overseas product harm crisis. We found that consumers that rank high on Power Distance Orientation were more positively impacted by communications from a foreign CEO compared with a regular spokesperson during an overseas product harm crisis. This translated into higher levels of brand trust and future purchase intentions of the company’s product. Our research suggests that sending a foreign CEO as a spokesperson to a country that ranks high on Power Distance such as China could help a company during a product harm crisis. On the other hand, it would not be as beneficial to send a foreign CEO as a spokesperson to a country that ranks low on Power Distance such as New Zealand. In a country that ranks low on Power Distance, the status of the messenger is not as important when compared with a country that ranks high on Power Distance. In those cases a regular spokesperson would be as effective as a CEO based on our research.
A considerable amount of research in the area of crisis communication has focused on the effectiveness of different types of messages during a crisis, however I believe more research should examine the effectiveness of different types of spokespersons on stakeholders. In a global context we found that the effectiveness of different types of spokespersons is impacted by the Power Distance Orientation of consumers. However, future research should examine other cultural factors as well.
What are, in your opinion, the most valuable skills for PR professionals that would like to become crisis communication experts?
The ability to effectively communicate with different stakeholders before, during, and after a crisis is essential in order to be a successful crisis communication expert. Based on my research this involves gaining an understanding of the unique characteristics of the various stakeholders which can differ. Only after the PR professional understands the values and concerns of the stakeholder, a message can be developed which is tailored to the unique characteristics of the stakeholder. For example, in my research relating to product recall communication and regulatory focus theory we found that it is important to understand whether consumers are prevention or promotion oriented. Based on their regulatory focus orientation, a product recall message is developed which fits this orientation (prevention or promotion focused). The result of creating this regulatory fit based on the orientation of the consumer is increased compliance with a product recall request, an important objective of a company during a product recall.
A crisis communication expert should be able to identify these important characteristics, and tailor the message to fit the stakeholder’s preferences. This will increase the effectiveness of an organization’s communications during a crisis.