PR disaster: How can HelloFresh rebuild its brand reputation?

What next for HelloFresh? There’s no doubt that the shine has started to fade for the OG meal kit business, which has taken a series of PR hits in recent weeks.

Most recently, a BBC investigation found that Hello Fresh has been charging customers who had closed their accounts – just weeks after it was fined £140,000 by the ICO for sending out 80 million unsolicited spam marketing emails in what the regulator called a “clear breach of trust”.

Stuck in a PR nightmare of biblical proportions, where can the once-thriving, market-leading recipe box firm go from here? The news earlier this month that its share price had plunged by more than 40% will hardly help matters.

At this point surely the only way is up. But Hello Fresh must first address customers’ very real concerns about the way in which it operates – and there is clearly something very rotten about the way in which customer data is managed.

In a time of watertight privacy protections and GDPR legislation, businesses simply can’t get away with a blatant disregard for the data protection laws which underpin much of the world of direct marketing.

Nail in the coffin

After January’s ignominious fine and a very public slap on the wrist by the ICO, the last thing HelloFresh needed was another PR scandal – but that’s exactly what it ran head-first into when it began charging de-activated accounts.

Revealed in a damning consumer investigation by the BBC, the brand was found to have been incorrectly charging customers who had deactivated their accounts, before going on to threaten them with third-party debt collectors if they went through their banks to cancel the incorrect direct debits.

After committing such a blatant breach of customer trust on a mass scale – you have to wonder where HelloFresh’s brand reputation team figures in all this.

How can such a well-known and – until now – well-trusted brand allow such blatant rule-breaking to occur? A spectacular failure of oversight would have needed to occur for both incidents to happen accidentally – and this in turn leads to questions about what lies at the very core of HelloFresh’s marketing culture.

Alarmingly, not only did the firm display very clear instances of data breaches by reactivating and charging these deactivated accounts – it continued to ignore correct procedure by attempting to bully people into paying, instead of reporting and acting upon their complaints.

Speaking to Marketing Beat about the case, the Data and Marketing Association’s (DMA) managing director, Rachel Aldighieri points out that a “responsible marketing approach should sit at the core of all marketing teams”. She says this is key not only in ensuring “the protection of consumers”,  but also for for the “maintenance of brand reputation and customer engagement”.

It is clear that HelloFresh’s approach to marketing and brand reputation has fallen far short of what should be expected.

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Putting the customer first

The root cause of the issue is of course the brand’s flagrant disregard for consumer data protection – as exemplified by the staggering 79 million spam marketing emails and one million spam texts illegally sent out to customers.

The unsolicited marketing spam prompted a major two-year ICO investigation that culminated in a very public admonishment and a £140,000 fine.

ICO head of investigations Andy Curry said it was a “clear breach of trust”.

“Customers weren’t told exactly what they’d be opting into, nor was it clear how to opt out. From there, they were hit with a barrage of marketing texts they didn’t want or expect, and in some cases, even when they told HelloFresh to stop, the deluge continued.”

Aldighieri says the ICO fine “highlights the importance all businesses should place on how they collect, store, use, and protect customer data”.

“It is the responsibility of the business to ensure the responsible and dutiful care of consumer’s privacy and data, and teams must understand these responsibilities and respect them,” she adds.

“Accountability and transparency are the two core principles of GDPR, it is now crucial HelloFresh focuses on these pillars of data privacy and takes steps to rebuild trust for consumers engaging with the brand.”

Can HelloFresh rebuild its reputation?

So, can the HelloFresh brand reputation recover from this battering? And what can other businesses learn from its mistakes?

While shady marketing practices may not be directly linked to this month’s revenue warning and 40% drop in share price, news of the company’s financial struggles will have done nothing to help rebuild consumer trust.

Worryingly for shareholders, the German firm has now said that it will scrap its revenue and profit targets for next year having registered a drop in earnings of over £100m year-on-year. This sharp fall in revenue can be largely attributed to a falling demand for meal kits, but the last thing HelloFresh needs during such a moment of financial weakness is a series of reputational crises to deal with.

Coming back from its current position will not be impossible for HelloFresh – but it must take the advice of both the ICO and the DMA and ensure it takes an unfailingly consumer-centric approach to its marketing.

If the customer really is always the main priority, then it should be second-nature for a business to protect their privacy and earn their trust. It seems that HelloFresh may have lost sight of that in recent years – but for a brand looking to “change the way people eat for ever”, it’s never too late to put the customer first.