Let’s face it, there are likely to be several corporations every year that run afoul of the public in one way or another. Some of the problems are mainly about poor timing and bad choices trying to move toward recovery afterward and some of them are choices made by the company that progressed until someone exposed the ugly lies and actions underneath. It’s not like there were only three big ones happening in 2016, but let’s look at just three to see what went wrong and how it could have been differently… and we hope, better.
Wells Fargo and Playing With Customers’ Trust
Wells Fargo Bank is one of the largest banking institutions in the world, and up until earlier this year, one of the most trusted. What happened was because of bad and fraudulent corporate practices and it played out in a way that seemed to show them as “money above trust and honor” to the public. The public side of their nightmare began when news broke that they faced a fine of $185 million because as many as 2 million unauthorized customer accounts had been opened by WF employees.
Of course, the first thing out of the CEO’s mouth was him laying blame on the employees. Carrie Tolstedt then “retired” with a $125 million golden parachute after being the person overseeing the unit where all the fraud happened, looking very much like she was being paid to take the blame in WF’s attempt to stop the problem in its tracks. Didn’t happen!
Trying to shift the blame ended up being a really bad mistake from the PR perspective. Tolstedt may have received a large payoff, but not so much the 5300 employees, who started telling their side immediately, and all the records proved their points. WF had given unrealistic quotas for the number of new customer accounts that needed to be opened by each customer service person, and if they didn’t meet those quotas, they were threatened with punishments including the loss of their jobs. When a brand is caught in bad practices, it needs to fess up, take the hit, and present a plan to fix the problem immediately so moving past the crisis can happen quickly. Don’t blame others.
Oops! Shortly after the Galaxy Note 7 was released in September, reports about the smartphones being such a hot ticket that they were catching fire during charging began to circulate. Samsung acted quickly, although they tried to downplay the scope of the problem. They got the word out, asking people to bring their phones back for a refund or exchange. That was a great PR move, but the problem was the company didn’t have enough new phones with an upgraded battery and charging system to replace all of the ones that might have problems. They worked hard to get them all replaced and just about the time they felt they could take a breather …
The next problem arose when top-loading washers from the company displayed a different type of problem, in some cases still rather explosive. The washers began vibrating excessively, so much so that some of the problem washers’ lids detached and went flying. More than 700 washers did this, causing the company to face another huge out-of-pocket recall of over 2 million washers. By this time they knew what to do as far as PR goes, but when such a large company faces two major problems on very different products in just a few months, it just brings the public back to the original problem along with the newest one.
When products go haywire, even when it’s the fault of an outside manufacturer, take the hit, fix the problem, and show how service-oriented the brand is. It was a PR nightmare for Samsung, but they make some good choices along the way. Unfortunately, they made some big mistakes in the beginning, and it cost them.
Bad Timing by Cheerios
Twitter is a great PR vehicle, but it can also be a PR disaster waiting to happen. That’s what happened with Cheerios in April when they tweeted a Rest in Peace picture after learning of Prince’s death. It was a nice thought, except the company decided to turn it into a branding opportunity as well, using the “i” in the message to place an image of a Cheerio instead of a dot above it.
Fans were offended at the company’s decision to use such a high-profile artist’s death as a way to build their brand. Once the brand realized this, they deleted the post and sent out a message to explain they had only wanted to “acknowledge the loss of a musical legend in its hometown.” Of course, the image of the post lived on in the internet. Just pay tribute and leave it at that.
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