By Katie Paine
One of the problems inherent in being a cultural icon is that when things go wrong, they go wrong publicly. As we've explained to clients for years, "The bigger the target, the
worse the results." Work I did a decade ago measuring media and reputation showed that, as companies increased their visibility, the percentage of coverage that was negative grew
proportionately. That theory was borne out this past month with revelations that the latest version of Apple's iconic iPod - called "the nano" - had problems with the
screen scratching and breaking. Surprisingly, Apple, normally the master of media manipulation, this time stumbled badly by initially trying to ignore the problem.
As always in this new-media world, the bloggerati rose to the occasion. All it took was one frustrated consumer to start a Web site, and Apple was thrown into full crisis mode.
It eventually agreed to resolve the issue, and the anti-Apple Web site came down, but not before the stock stumbled and more than 1,000 stories ran detailing the problem.
The other icon to stumble in recent weeks was Kate Moss, the British model who long has served as the face of Chanel and other high-fashion houses. Caught snorting
cocaine in an undercover operation by U.K. tabloid The Mirror, she abruptly was dropped by Chanel, Burberry and clothing retailer H&M.
H&M, a Dutch chain that recently had signed Moss to promote a new line of clothing created by Paul McCartney's daughter, had the most to lose. Her contracts with Chanel and
Burberry were coming to an end anyway, but H&M was set to launch. Initially, it agreed to continue the contract in exchange for a pledge from Moss to stay clean and sober.
However, like Apple, the customers had something to say about that action. After getting bombarded with outraged emails from customers, H&M cancelled the campaign.
That action wasn't without controversy, either. Savvy U.K. customers likened H&M to Major League Baseball feigning surprise at the use of steroids by its players.
Rumors about Moss' drug habits have been floating around for years, so it surely was no shocker. However, like Apple, when your customers decide it's time to slap you upside the
head, it's time to give up your ostrich positioning.
Contact: Katie Paine, CEO of KDPaine & Partners LLC (Durham, N.H.), can be reached at 603.868.1550, [email protected].
| PR News Report Card: H&M | |||
|---|---|---|---|
| Criteria | Grade | Comments | Advice |
| Extent of coverage | F | You can't link a celebrity's name with cocaine and not expect to generate widespread coverage. H&M's exposure dwarfed Apple's, mostly because it received such extensive international coverage thanks to the addition of a rock star and a video that quickly made its way onto the Internet. |
H&M should have known before it signed Moss that her past was a bit sketchy as far as substance abuse goes. Why it ignored the facts and rumors is a mystery. Signing any celebrity is risky, but the best way to guard against crisis is to do your homework ahead of time on the character of your chosen spokesmodel. |
| Effectiveness of spokesmen | D | H&M's spokesmen were pretty invisible, but they still managed to get the message out. | They would have avoided charges of hypocrisy if they'd had more human interaction with the media. It's easy to dismiss a press release; it's harder to dismiss a credible and likeable spokesman. |
| Communication of key messages | A | The message that Moss' cocaine use was "against H&M's strong stand against drugs" was communicated frequently in press coverage. | If you're going to let a statement do the talking and not a spokesman, keep it short and simple. |
| Management of negative messages | C | The vast majority of coverage reported on H&M's contract reversal - which made the company look hypocritical. However, by blaming the shift on customer response, some of the damage was mitigated. |
If you can attribute your strategy to "listening to customers," it always will go over better. |
| Impact on consumers | B | The vast majority of customer feedback on the initial decision to back Moss was negative, so it was not surprising that H&M ultimately canned the program. While the hypocrisy charges might smart a bit, they probably won't impact customer behavior and the added publicity for Stella McCartney's new line of clothing no doubt will boost sales. |
You should be spending as much time and effort listening to customers as you spend talking at them. However, it is far better to listen proactively, via customer research, than to wait for a crisis to hear their cries. |
| Impact on employees | C | If you think the media and consumers were confused by the shifting policy, just imagine what the employees were thinking. | In any crisis, make sure employees get a consistent message. It improves morale and reduces the amount of time people spend gossiping around the water cooler. |
| OVERALL SCORE | B- | It was far from a perfectly handled crisis but, all things considered, H&M came out in the positive column. | Listen more to your customers than to the media. |
| PR News Report Card: Apple | |||
|---|---|---|---|
| Criteria | Grade | Comments | Advice |
| Extent of coverage | F | If Apple had simply acknowledged the problem before the disgruntled customer had time to put up a Web site, no one even would have known about it. |
Reread the "Cluetrain Manifesto." Your customers now are in charge, and all you can do is keep them happy. If not, they get to start Web sites and blogs that ultimately can wreak havoc on both your reputation and your sales. |
| Effectiveness of spokesmen | D | Apple's Phil Shiller came across sounding an awful lot like the infamous Intel spokesman who started a six-month-long crisis of confidence in Intel's chips that ended with IBM canceling a big order. Intel kept insisting the flaw really wasn't a flaw, and it essentially blamed over-zealous users for the problem. Apple told its customers to "buy cases" for their nanos. |
Never, ever blame the customer for a problem. And never call a problem "minor." It may be minor to you, but it is not to a customer who has just shelled out several hundred dollars to buy your product. Even blaming a vendor generates exasperation. It immediately makes a customer wonder about all the other vendors that somehow were approved. |
| Communication of key messages | D | Messages decidedly were mixed. The crisis came at a time when Apple had just launched a major advertising blitz, and the buzz was just starting to build. Many of the stories mentioned the iPod's prior success, but they also referred to the company as "standoffish" and not helpful. The major product message seemed to be: "The nano is fragile." |
People will remember bad news longer than good news, so even though your coverage may mention success, the bad news is what will remain. |
| Management of negative messages | F | Apple's first mistake, like Intel's a decade ago, was to forget just to whom they were speaking. iPod fans tend to be more technologically savvy than the average consumer, so it was not surprising that word about the problem spread so quickly through the blogosphere and the Internet. Why Apple thought it wouldn't is beyond our comprehension. |
Modern-day consumers are not shy about venting frustration online. Ignore the blogosphere, newsgroups and chat rooms at your peril. |
| Impact on consumers | D | The good news is that not that many people had actually purchased the nano product yet, so the impact was less than it might have been. However, it had a major impact on the early adopters, those influential customers who tell others whether or not they should purchase the product. |
Bloggers have been shown to share all the key characteristics of influentials. They recommend more products, go to more meetings, talk to more people and wield far greater influence than does the average consumer. So if you annoy the bloggerati, chances are good they'll pass it on to your consumers. |
| Impact on shareholders | C | Apple's stock initially took a nosedive due to the bad news, and it has been up and down since. Another new product announcement, however, seemed to buoy investors' confidence. |
It takes a large product problem to impact shareholders. By ignoring the problem, Apple guaranteed it would end up making front-page headlines. Once a problem is printed above the fold, shareholders take notice. |
| Impact on employees | C | No one likes to deal with angry customers, and Apple's employees are no exception. Compounding the problem was their being branded as being "indifferent" and "standoffish." Apple's HR department will need to do some morale-repair work. |
Employees always are on the front lines in a crisis. In this case, it was employee attitude that contributed to the problem. Some serious internal- communication research needs to be done to figure out how it got that way. |
| OVERALL SCORE | D- | This was a disappointing handling of a crisis by a company we expected more of. Is it possible that Apple's famed corporate culture may be losing its luster? It's one thing to blame a vendor and/or your customers. Apple should be examining the internal culture that causes employees to dismiss the feedback they were getting from customers. While they were spending millions "talking at" their customers via their ad campaign, how much were they spending to "listen to" the customers? |
Any company going through a crisis should take the opportunity to listen to its customers and to take a hard look at the elements of its corporate culture that contributed to the crisis. |