How Does a Company Recover from a Tragedy?

Aug. 6, 2009— -- When tragedy strikes a company, sometimes the only thing it can do to win back customers is to make a radical change.

After Tuesday's deadly shooting at an LA Fitness Club outside Pittsburgh, the gym chain now faces a public relations nightmare: how to ensure that its name is not forever tied to this horrific event.

"Generally speaking, death and violence does not help any brand. It's not something that you can easily walk away from," said Robert Passikoff, founder of Brand Keys, a New York consulting firm. "The sense about what has occurred is generally very far reaching, into the DNA of the brand."

It's too early to say how LA Fitness is going to recover -- and company officials did not immediately return calls seeking comment -- but one option for the gym is to change its name.

ValuJet changed its name to AirTran after a 1996 crash in the Florida Everglades killed 110 people.

And then there is Philip Morris. When the tide of public opinion against cigarette makers hurt its image, the company rebranded itself as Altria Group. It's not exactly a name that rolls off consumers' tongues, but that's O.K.

For LA Fitness it's a trickier issue. It's not as if the company was directly responsible for the damage to its brand. But still, it risks always being associated with this shooting.

"Sometimes there is such visceral damage to the brand -- whether it's the brand's fault or not -- that any attempt at branding as usual would be a Band-Aid remedy, and so you are better off walking away and starting fresh," Passikoff said. "It is easier to establish a neutral name than to repair the old name."