The Top Ten PR Blunders of 2011

When a serious setback or crisis occurs, not even the most talented PR pro can make it go away. Yet, a poor response invites reputation damage, while proper handling can help mitigate or limit it. Here’s my “Top 10” list, from a communications perspective, of the most badly handled public situations of the year.

10.  Governor Sam Brownback.  Something tells me the governor’s not in Kansas anymore – at least as far as his reputation goes. Brownback looked like a bully and created an unlikely teen hero with his handling of a nasty tweet about him posted by high school senior Emma Sullivan. Brownback’s staff, who tracked down the teen, put pressure on the school principal to extract an apology from Sullivan. When she ultimately refused, it was Brownback who did the apologizing. Meanwhile, the student’s Twitter following soared from 65 to over 14,000. Who’s sorry now?

9.  Delta. The airline hit rough PR weather when U.S. troops returning from Afghanistan were charged onerous fees for extra baggage, with one squadron spending nearly $3,000 out of personal funds. The disgruntled troops took the story of their rude welcome home to YouTube. Delta reacted about a day late to the video, which swiftly went viral, triggering hundreds of complaints on its blog.  It did end up changing its baggage fee policy for members of the armed services but not without reputation damage.

8.  Groupon.  Groupon’s reputation issues come in contrast to its previous image as a media darling. It started 2011 with that ill-conceived Super Bowl ad, followed by a halfhearted apology after it went wrong. It then ran into more PR hot water later as the company prepared for a much anticipated IPO. Founder Andrew Mason made impolitic remarks in an internal memo that was leaked to The Wall Street Journal, raising questions about “quiet period” violations. The Groupon IPO was a success, but its toughest reputation challenge will be to prove its business model actually works.

7.  Burson-Marsteller.  It’s notable when the world’s largest PR firm handles a crisis this poorly. In May, mega-agency Burson-Marsteller was busted by The Daily Beast‘s Dan Lyons after a clumsily executed “whisper campaign” against Google. The campaign was carried out on behalf of a mystery client who turned out to be Facebook. Not only was Burson guilty of a major ethical breach, but its response seemed to blame the client, which made it look both weak and defensive.

6.  AOL and CrunchFund.  TechCrunch Editor Michael Arrington’s plan to start an investment fund immediately raised conflict of interest questions. More troubling was the response from corporate owner AOL. CEO Tim Armstrong excused the move by referring to TechCrunch’s “different standards” of journalism. He was immediately contradicted by Arianna Huffington, who announced Arrington’s departure from AOL, which was then “clarified” by a subsequent announcement that he remained with AOL Ventures. While AOL struggled to get its stories straight, the incident undermined the credibility of senior management and its content standards.

5.  Netflix. The famous Netflix mea culpa is a good example of a public apology that backfired in a rather spectacular way. Instead of letting its admission of “poor communication” regarding a price increase stand, Netflix used the occasion to announce its split into two units – doubling the cost, and the hassle, for customers. It made the classic mistake of focusing on its business rationale rather than the customer interest and was forced to backpedal.  In the end it was Netflix that paid the price in lost business and a depressed stock value.

4.  The U.S. Congress.  One way to read the summer’s debt ceiling gridlock is a case of too great an emphasis on PR – to the detriment of real issues or progress. Both sides of the debate were so focused on their public posture — Tea Partiers hewing to the no-tax-increase line and progressives preoccupied with blaming the GOP — that everyone looked bad and absolutely nothing was done.

3.  Bank of America.  Its move to institute a $5 monthly debit card fee was not only poor judgment but terrible timing. B of A made the announcement just as the Occupy Wall Street movement was gaining steam. The new fee wasn’t tested, pre-announced, or even particularly well explained to customers, who responded with predictable outrage. Although the bank tried to justify the fee by tying it to new regulations, its argument was ineffectual. It ended up retreating a month later in the face of harsh criticism by consumers, bloggers, and even government officials.

2.  Herman Cain.  Political scandals were rife in 2011, but Cain’s meltdown stood out because he showed real mastery of public communication at the outset (remember “9-9-9”?). Yet when the candidate was hit with allegations of sexual harassment, the campaign’s response was amateurish. Politico sat on the initial story for ten days – an eternity in crisis response time – but Cain’s reactions ranged from denial, defensiveness, and hostility to humor and a plea for privacy. Consistency, credibility, and message control deserted the Cain campaign, and the result is history.

1.  Penn State. No shock here. Penn State will end 2011 taking the trophy for most egregiously bad handling of a crisis. Granted, the allegations against Jerry Sandusky would have been damaging no matter what, but it’s even worse when you consider that the Grand Jury investigation started in 2008. The university had plenty of time to prepare its public communication strategy. But when Sandusky was arrested in November, the statement by ex-President Graham Spanier, in which he called the charges “troubling,” was a study in what not to say.  Its focus on closing ranks and defending those in the know helped turn a shocking scandal into a serious breach of responsibility by the top players.

A version of this post was originally published on MENGBlend.

How To Turn Bad Publicity Into Good PR

There are those who think any PR is good PR, but let’s face it, sometimes it’s just plain bad.

Faced with withering reviews for its plan to separate its DVD and streaming businesses into two distinct units, Netflix has canceled Qwikster. This latest plot twist is a bit reminiscent of Gap’s unveiling of that infamous new logo. The negative buzz forced it to backpedal and eventually restore the original, iconic identity. Though at first it seemed like a miss for Gap, many brand-watchers think it made the brand more relevant than it had been in a long while.

Netflix doesn’t suffer from lack of currency, and it’s a bit early to tell if it can woo back irate customers. (If Reed Hastings’ recent New York Times magazine interview is any indication, I’d say they still have some work to do.) But bad publicity can, paradoxically, wake up a brand’s loyalists. And there are ways to turn a PR failure into a net gain. Here are a few techniques that helped companies turn around embarrassing mistakes.

Apologize. If offense has been given or customer safety or satisfaction threatened, a prompt apology is necessary. And it shouldn’t be drafted by lawyers. To have teeth, a mea culpa should be swift and sincere, and it should take responsibility. One of my favorite public apologies is the widely viewed video of Domino’s Pizza President Patrick Doyle after the employee stunt that made us all lose our appetites in 2009. Doyle, and the Domino’s brand, had an advantage as the victim of a disgusting hoax. But as brand crises go, the stakes were pretty high, and the company delivered in a way that helped feed our natural sympathy.

The mistake Netflix made, by contrast, was in wrapping a half-hearted mea culpa with additional news that was bound to anger customers. Not good.

Fix the problem. Better yet, be part of a larger solution. The classic lemons-to-lemonade strategy after a misstep is to be part of the fix for everyone. Mattel set a new standard when it announced enhanced product inspection and supplier audits following massive product recalls of toys made in China. JetBlue also raised the airline industry bar with its “Passenger Bill of  Rights,” a kind of flight plan to prevent incidents like the one that buffeted its reputation on Valentine’s Day 2008.

Share your learnings. Office Depot, a client of my former firm, took advantage of its own experience weathering successive hurricanes at its Delray Beach, Florida headquarters over a period of years. It turned adversity to advantage with a PR campaign that focused on disaster preparation and management for small businesses, – a key customer segment.

Stay the course. Sometimes, despite a public rush to judgment, a brand is right. Royal Caribbean opted to keep on going, even in the face of annihalating coverage, after its luxury cruise liner resumed calls at Labadee, Haiti shortly after the earthquake. It was undoubtedly a tough call, but most experts and passengers agree that supporting survivors with both supplies and commerce was the right move.

Fight back. That’s what Taco Bell did when it was slapped with a lawsuit by a customer who had a beef with the meat content of its tacos. It jumped into the food fight, threatening a countersuit, and launching a response through executive videos, a statement on its website, and a major market ad campaign about ingredient quality. The customer suit was quietly dropped.

Make good. Sometimes it’s better to pay – financial penalties, customer retribution, or legal settlement – to protect a brand’s reputation. For many companies, this also comes down to empowering retail or ground-level employees to spot and nip problems in the bud. If a Delta attendant had been able to waive excess luggage fees for returning U.S. veterans, the airline could have saved itself loads of bad reputation baggage after the servicemen took their complaints to YouTube.

What Netflix Can Teach Us About Apology PR

Public apologies can be powerful, especially when they come from the top. Even in our crisis-of-the-day era, there’s something arresting about a chief executive admitting he was wrong, or a company making amends to customers.

As a self-appointed “apology PR” analyst, I’m fascinated by the communications strategy, language choices, and delivery of a corporate mea culpa. And all apologies are not created equal. Many are a non-apology, the “We’re sorry if anyone was offended” type of statement that can do more reputation harm than good.

Even more often, the expression of regret comes far too late. Or it’s crafted by lawyers instead of communications pros.

But the now-famous Netflix apology is the first in my memory where the mea culpa caused a far bigger problem than the problem itself. The statement, which was also communicated in a video by CEO Reed Hastings, starts out okay. Hastings acknowledges customer ire and admits to a certain “arrogance” on the company’s part when it announced a price increase in July.

But instead of letting the apology for “poor communication” stand and resolving to do better, or, better yet, offering a make-good for customers, the statement turns into an explanation of its decision to split into two companies and rebrand the DVD business.

It’s an account better suited to a corporate press release or earnings call, not a customer communication. And they had to know that the split into two companies would annoy loyal customers. If they didn’t know, that’s even worse. Maybe that’s where the arrogance comes in.

It’s likely Hastings thought he was making the case for the greater value that its customers would reap over the long term, but he made the classic mistake of focusing on its business issues rather than the customer benefit.

Netflix would have done better to take its lumps after the price increase announcement, which, after all, caused its stock to rise sharply. Then, it should have quietly worked on improving the service, and the selection, around the streaming product, and let its customers discover the value. No apology necessary.

Although its competitors have seized the opening (stay tuned for Blockbuster’s ‘September Surprise’), the Netflix brouhaha will probably die down. Yet, it’s a good reminder of a fundamental principle of apology PR: know your audience. Customers want benefits, not business strategy. If you ignore the “what’s in it for me?” factor, you’re denying your love for the customer. And that means having to say you’re sorry…in more than just words.







It’s No Contest, The Netflix Prize Is A Winner

Partly because I gave four stars to Woody Allen’s Manhattan, Netflix is recommending the dark and brooding East German indie The Lives of Others. Hmmm.

I don’t know about you, but for me, recommendation engines that try to predict our likes and dislikes in books and movies usually miss the mark. I’m talking about the collaborative filtering tools you find on sites like Netflix and Amazon.com.  I’ve always chalked it up to the quirks of personal taste, however. Normally I hate violent movies, yet Kill Bill 2 is on my Top 5 favorites list. Who knows why…I defy an algorithm to figure out that one.

Which is why I was interested in the attention around the Netflix Prize. That’s the global competition that promises to award $1 million to the person or team who can improve on Netflix’s current algorithm for predicting member preferences by at least 10 percent.

Although some have dismissed it as a PR stunt, it’s designed as a real research project, which seems to have generated lots of positive PR for the brand. And there are a couple of counterintuitive aspects to the Prize that make it worth watching.

First, it’s an admission by Netflix that its internal efforts to improve the preference engine simply haven’t worked. It needs help. Normally that might reflect badly on the brand, the service, and its technology capabilities, but it hasn’t. Netflix seems to have tapped into the crowdsourcing thing at just the right moment.

I also like the packaging of the event, down to its grandiose label.  No cheesy “contest” here. It’s a “prize,” as in “Nobel.” This isn’t just another Ben and Jerry ice cream flavor, folks!  We’re talking innovation.

Finally, it has real drama. The competition culminated in an exciting, horserace-style photo finish at Sunday’s deadline. Though the actual winner won’t be announced until September, you’re able to follow the rankings on a leaderboard, which showed a last-minute surge by an upstart team, complete with cheers, jeers, and impressive participation by over 44,000 valid entrants. The blogosphere has covered it heavily as well.

In its longevity and substance, the Prize conveys a true commitment by Netflix to both technology innovation, or at least enhancement, and customer service.  And there are real learnings here. Today’s New York Times story about the value of teamwork to an undertaking like this actually positions the Prize as precedent-setting for predictive modeling.

It’s an impressive case history on how to run a contest…oops, global competition. I’m curious to see how the winning entry will be conveyed to everyday, non-techie Netflix members like me. But, the real proof, of course, will be in how it performs in picking winners for movie night.

By the way, I did see The Lives of Others.  Rent it now. Amazing movie.