When trendy clothier Eddie Bauer ignored the maxim that the customer is always right, it learned how quickly PR disasters can take root and continue to damage a company's reputation well after the incident.
The Eddie Bauer snafu stems from a 1995 lawsuit levied by an African-American teenager suspected of shoplifting a shirt he had bought from a store in Maryland. The claims were filed after a security guard, an off-duty police officer, allegedly harassed the customer and two of his friends.
Three years later, the company has yet to shake the stigma of this isolated incident. It appears it won't be able to work on improving its image without paying a hefty price, literally and figuratively.
In October 1997, a federal jury ordered the company pay $1 million to the teen and his two friends.
Silence Is Deadly
Company execs still refuse to talk candidly about any lessons they've learned on the PR terrain. Last week, EB's in-house assistant PR manager, Chris Doyle, told PR NEWS he couldn't comment about the case because the Redmond, Wash.-based company is "in the appeals process and sensitive negotiations are underway."
Doyle's refusal underscores how lawyers usually win during such a crisis and how often communications is forgotten as essential to repairing reputation.
"This wasn't a PR problem to begin with," says James E. Lukaszewski, an independent crisis management expert in New York. "It became a PR problem when the case wasn't settled.Things like this should never be litigated, but mediated."
In the PR profession, the Eddie Bauer scenario has become a case study in how not to conduct damage control.
After complaints were lodged against Eddie Bauer and ignored on the regional and national levels, The Washington Post got wind of the story.
Damage would have been mitigated if the company had responded quicker and if the company hadn't initially refused to take responsibility for the security guard's actions, sources say.
The company claimed it should not be held accountable for the guard's actions because he was contracted, not an Eddie Bauer employee.
Subsequent stories followed nationwide and by the time the company apologized, its mea-culpa meant little to the teens and the public.
Industry-wide, the EB crisis is guaranteed to go down in the annals of corporate communications as a crisis that didn't have to happen.
Even though the company reportedly offered $760,000 to settle the case, the company's PR pros, consultants and lawyers should have found a solution that kept the case out of the courts.
"These kinds of crises don't have transient impact," he adds. "You don't know how it will affect customers because a brand like this is built on a unique kind of customer loyalty."
The PR residuals of this case are everywhere: Katharine Paine, founder of the media analysis company, The Delahaye Group, Portsmouth, N.H., gave EB a D+ in her "Image Patrol" round-up of how the crisis was handled (see PRN, 11/17/97, p. 6).
"It's a good lesson for all of us: be more sensitive to the small cries for understanding that cross our desks," Paine wrote. "Act fast: take every racial incident seriously and apologize to the individuals as well as to society."
EB could look to its peer Starbucks for some lessons on how to handle a crisis.
That company responded quickly and compassionately when faced with the murders of three employees in its Georgetown, Washington, D.C. shop (See PRN, 4/6/98, p. 5.)
(The Lukaszewski Group, 914/681-0000; Chris Doyle, 425/882-6754)
Asking For Forgiveness
When you need to obtain public forgiveness, strive for these characteristics:
- Candor - apologize and provide details of what you're going to do to fix the problem;
- Explanation - briefly explain why the problem occurred and the underlying reasons. Commit to regularly report additional information until no public interest remains;
- Declaration - show a public commitment and discuss specific, positive steps to be taken to conclusively address the issues and resolve the situation;
- Contrition - convey regret, empathy and sympathy - even embarrassment;
- Consultation - promptly ask for help and counsel from "victims," government and from the community of origin - even from your opponents.
- Commitment - publicly set your goals at zero: zero errors, zero defects, zero dumb decisions, zero problems;
- Restitution - find a quick way to pay the price.
Source: The Lukaszewski Group