Best Buy Latest in Corporate Apology Headliners
Excerpted from the article by Minneapolis / St. Paul Business Journal Managing Editor Mark Reilly:
Best Buy Co. Inc. CEO Brian Dunn has gone public with a defense of the company’s business model — and some mea culpas — after a rough couple of weeks in the media spotlight for the electronics retailer.
The Richfield-based retailer has been the subject of several critical stories over the past month, ranging from a disappointing third-quarter earnings performance to a widely read essay at Forbes.com that argued Best Buy would be out of business within a few years.
Dunn, on Best Buy’s CEO blog “Brian’s Whiteboard,” acknowledges that some of the criticism is fair, and apologizes for the retailer’s cancellation of some online orders just before Christmas.
Too little, too late, or the now pro forma post-Netflix PR move? What’s your take? The comments section is open!
An Explanation And Apology from Netflix
Netflix handled the announcement of their new pricing and service rollout poorly. People reacted negatively to the fee hike–to be sure–but perhaps more so the tone deaf nature of the announcement itself.
So, Netflix followed today with an apology from their CEO via email–take a look. Do you think it’s enough? Of course it is, but it won’t immediately repair (completely avoidable) damage to a beloved brand. It’s another lesson in carefully considering the PR damage that a dramatic change in service, fees or products can cause when customer reaction is (apparently) not a top consideration when crafting the announcement.
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| Dear Alex,
I messed up. I owe you an explanation. It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing. For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do. So here is what we are doing and why. Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies. I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service. So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently. It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming. Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated. There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready. For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you. I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly. Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions. Respectfully yours, -Reed Hastings, Co-Founder and CEO, Netflix p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments. |
Hershey’s Not-So-Sweet PR Confection
PR Issue, Bar None
The New York Times reports that a walkout by hundreds of foreign exchange students protesting “low pay and physically draining work” has executives at the Hershey Company and three others related firms scrambling “to sort out which one was responsible for the conditions that prompted the students’ complaints.”
Sound familiar? We’ll get back to that after we look more closely at the Hershey situation.
In a (Zag)nutshell, foreign exchange students, came to the U.S. to participate in a summer visa arrangement as part of a longtime State Department program that allows the students to work for two months, then get some travel and cultural enrichment in the U.S.:
In a way, they did. About 400 foreign students were put to work lifting heavy boxes and packing Reese’s candies, Kit-Kats and Almond Joys on a fast-moving production line, many of them on a night shift. After paycheck deductions for fees associated with the program and for their rent, students said at a rally in front of the huge packing plant that many of them were not earning nearly enough to recover what they had spent in their home countries to obtain their visas.
They said they were expecting to practice their English, make some money and learn what life is like in the United States [...] “There is no cultural exchange, none, none,” said Zhao Huijiao, a 20-year-old undergraduate in international relations from Dalian, China. “It is just work, work faster, work.”
And so begins the finger pointing. Hershey is pointing at the subcontractors. The subcontractors are pointing back at Hershey–we think. Basically what we have here is a bit of a PR cluster–and we don’t mean Goo Goo.
If you’re thinking back to the ugly moments after the tragic Deepwater Horizon disaster, where BP tried placing blame on anyone but BP, then you win a Hershey bar. Or something. Essentially, Hershey is trying to deflect blame from itself to subcontractors, a strategy that failed miserably in BP’s case. We don’t wish to imply that loss of life and massive ecological damage is equitable to what’s happening at a plant that packages chocolate, but it does call Hershey’s labor practices into question–and that’s not a far cry from questioning their commitment to human rights. Bad PR any way you slice it.
Perhaps in this case Hershey should take a page from the kids who love their chocolate:
If a nine-year-old kid gets caught intentionally breaking a neighbor’s windows, the parent can’t just say “It’s his fault. Don’t look at me. I’m just his Dad.” There is a reasonable expectation that the grownup charged with the kid’s upbringing will discipline the nine-year-old and help make restitution. Can’t the same be argued for large companies in relation to the actions of the downline companies they hire?
Hershey has stated that they are “actively working with the parties involved to come to a solution that would address the students’ concerns.” We think Hershey would do well to actively take control of this situation–and can do so without accepting blame. How? Issue a statement that denies direct responsibility for the situation, yet make it clear that Hershey recognizes that rightly or wrongly, the “buck stops with them” and they want to help make it right.
How? First commit to a top-to-bottom examination of the way Hershey participates in the work program. Pledge to work with the State Department and subcontractors to ensure that the student workers are treated fairly and the program is conducted “as advertised.”
Hershey could also make a grand gesture: perhaps reimburse a portion of the students travel visa costs. Sure, that could leave a bad taste in some people’s mouth–smacking of “buying” the students off; but the PR value of such a gesture coupled with a serious commitment to fixing the program would be pretty sweet.
Whatever solution they conceive, the folks at Hershey’s are apparently hoping that aside from the New York Times (and a few foreign papers) this one stays under the national American media radar. That seems to be working, if Google’s news search is correct.
What do you think? The comments section is open for your thoughts.
Check out the New Look of PRCG’s Blog
I’m proud and very fortunate that AlexanderG PR is a active member of the respected national PR collaborative PRConsultants Group. Due to the hard work of several members (including noted writer and PR pro Amy Smith) PRCG has a spiffy new PR blog: PRCG Powerlines.
Check it out…it will be updated frequently with PR news you can use, info and more. You might even find a piece by yours truly.
Time and Tide Wait for No PR Man
Alex Greenwood on site in Joplin, MO.
On an early Monday evening I sat in my front yard, admiring my freshly cut grass and grousing about the growing list of work I needed to do on my aging house. My cell phone rang–it was a respected PR firm in NYC asking if I could go to Joplin, Missouri to manage PR on the ground for Tide’s “Loads of Hope” and Duracell’s “Power Relief” efforts. (AlexanderG’s membership in the PRConsultants Group made this happen. We love being part of PRCG!)
There was very little time to plan–time and Tide wait for no (PR) man. They needed me there Wednesday as Duracell was opening up for business then and Tide was setting up to open Thursday. I had to get my media lists together, consult with NYC on key messaging and make sure I had a place to stay. My wife’s aunt lives in Joplin–luckily her house escaped the worst of the storm and I could stay with her.
The Tide Loads of Hope mobile laundry program provides free full service laundry to relief workers and residents who need resources and support following the storm–we’re talking washed, dried and folded, free of charge. Pretty cool. Duracell’s Power Relief Trailer gave community members the ability to reconnect with their loved ones through recharging stations for their mobile devices, distribution of key Duracell products and information on how to get assistance in the area. It also features a computer kiosk station and Wi-Fi to help in recovery efforts.
News reports that described Joplin as looking like a “war zone” were not being hyperbolic. Set up a mile or two from the heart of the damaged area in a Wal-Mart parking lot, I worked a couple of very long days managing media covering the Tide/Duracell relief efforts. I interacted with the AP, local TV, newspapers from Joplin and St. Louis as well as radio and TV from the Kansas City-area. I kept in constant communication with NYC as well as managing a team of photographers and videographers who recorded the Joplin residents as they enjoyed the comforts of clean clothes and recharged mobile devices and computer access.
Joplin was a lot of activity crammed into a few days, but very rewarding. It was a good reminder when I returned home that the long list of home improvements I groused about only days earlier mean so little compared to the loss the citizens of Joplin have endured.
Toyota Mommy Blogger PR Debacle to Be Topic for Marketing Strategist Shelly Kramer
The recent Toyota Mommy Blogger PR Debacle is to be the topic for marketing strategist (and frequent AlexanderG collaborator) Shelly Kramer, a panelist at BlogWorld and New Media Expo in New York City May 24-26.
“I’m looking forward to participating in this event for a few reasons, said Kramer, CEO of V3 Integrated Marketing headquartered in Kansas City, MO. “The foremost being it’s my first trip to BlogWorld. It’s a fantastic conference and I’m excited to get the chance to experience it.”
“I’m also looking forward to participating because my co-panelists are a bunch of the most wicked smart, successful and downright amazing people I know,” she added. “BlogWorld is very much a conference attended by thought leaders in the integrated marketing, PR and social media space, so it’s a great honor to be invited to speak.”
Kramer, who blogs on related topics at http://www.v3im.com/blog will join Ann-Marie Nichols of The Write Spot, Lucretia Pruitt of The Social Joint and Christopher Barger of Voce Communications in discussing #ToyotaFail: The Crisis that Wasn’t.
“We’ll discuss the whole #ToyotaFail ordeal and how the misguided ambition of a mommy blogger and the already struggling reputation of Toyota collided in a spectacular hot mess. We’ll look at how their social media team dealt with what could have been a full on brand crisis,” she said.
“We’ll look at the dangers of working with inexperienced bloggers and the damage that could happen to you and your brand as a result. And we’ll also discuss best practices in brand crisis management in general, including how your PR and social teams must work together and how dealing with crises in real time can make all the difference in the world,” she said.
Kramer’s panel will be meet Wednesday, May 25th from 11:30 a.m. to 12:30 p.m.
The world’s largest social media business conference and new media industry tradeshow, BlogWorld & New Media Expo is the first and only industry-wide tradeshow, conference and media event dedicated to promoting the dynamic industry of new media. Thousands of attendees learn about Content Creation, Distribution, Monetization and Social Media Marketing strategies, including step-by-step techniques and bleeding-edge tools from the most successful and influential Bloggers, Podcasters, Vloggers, Web TV & Radio Broadcasters, Social Influencers, New Media Pro’s and Online Journalists.
“If you can’t make it to the conference – keep an eye out for our discussion on Twitter and join in the conversation.” Hashtags are #ToyotaFail and #BWEEAST. For more information on Blogworld, visit http://www.blogworldexpo.com/2011-nyc/ .
Kramer is the CEO of V3 Integrated Marketing http://www.v3im.com , a full service digital communications agency headquartered in Kansas City, MO. A 20+ year marketing veteran, Kramer is a digital marketing specialist, content creator, speaker and web savvy geek particularly adept at helping individuals and brands find their respective voices in the realm of new media and all forms of digital communication and marketing. To the astonishment of her many mathematics professors, she’s also become partial to stats, numbers, analyses and measurement of all kinds, which is quite fortunate for her clients. Forbes has named the V3 blog as one of the Top 20 Best Marketing + Social Media Blogs and PostRank ranks the V3 blog as one of the top blogs about Marketing + Social Media.
She has written for numerous publications, including AmEx OPENForum and Mint.com and SocialTimes.com. Kramer has been named as one of the top 150 Most Influential Women on Twitter and recognized by Forbes as one of the 30 Women Entrepreneurs to Follow on Twitter. Kramer writes about marketing, brand strategies, industry trends, social media and anything else that moves her at http://www.v3im.com/blog.
Omaha Steaks: Should They Dump Trump?
I’ll admit it–an occasional viewing of Donald Trump’s The Celebrity Apprentice is a guilty pleasure. I guess I enjoy watching people make fools of themselves: performing silly tasks, arguing about perceived slights, petty machinations, the personification of ridiculousness that is Star Jones, etc.
However, it’s the bowing and scraping to “Mister” Trump that I find the most egregiously funny. I mean really–they’re kissing this ridiculous, gold-plated vulgarian’s um…ring? Sheesh. However, aside from my issues with whether the show’s in good taste, it’s “good television” if the ratings are to be believed. Good ratings mean a sure winner for advertising, right?
Well, maybe–but you have to wonder if the good folks at Omaha Steaks are regretting getting on the strange-haired, orange-skinned business tycoon’s bandwagon.
As Omaha Steaks honcho Todd Simon said:
“We don’t really know what to expect. At the very least we know it’s going to get our brand out there and it’s going to raise awareness of all the different gourmet items we sell.”
That said, I’m fairly sure they knew what they were getting into when they decided to make their product identifiable with that loveable kook Gary Busey–but Trump’s wildly careless political rantings? Doubtful.
As you may have heard, Trump is again dallying with running for CEO of America. (Or president. Whatever). In so doing, he’s appealing to a vocal minority by questioning President Obama’s citizenship, college grades and management skills. Well, that has set off a group who wants to take him down:
Remember back when Glenn Beck called President Obama a racist? He lost 100+ advertisers. Consumers have the power to do the same thing to Trump’s show, Celebrity Apprentice. If, in fact – as is suspected – all this birtherism is simply a ploy to get publicity for his show, I think it’s time that real Americans, those who are willing to state unequivocally that we accept President Obama as an equal American, show Trump that not only is the birtherism going to backfire in terms of his 2012 presidential bid, it’s going to backfire in terms of pumping up his show. Boycott his sponsors . . . and here’s who they are:
Enterprise Rental Car, Clorox, Bristol-Myers Squibb and Walt Disney. On February 25, 2011, the following sponsors were also announced for the upcoming season: Dr. Pepper Snapple Group, 7-Up, OnStar, Australian Gold, Camping World, ACN, Omaha Steaks, Farouk Hair Systems, www.kassatex.com, Hallmark Collectibles, Inc., Talbott Teas, and, of course, all things Trump. Dump ‘em. All of them. Today.
There’s even the ubiquitous Facebook page.
As a commentator on all things PR and a consumer of Omaha Steaks I wanted to see what their take was on this mess, so I called them. I got through to customer service and said I had a question about Trump. They put me through to a different representative. Very polite. I explained that I was concerned about the image of Omaha Steaks–she explained that there had been “other calls” and that they appreciated my call and would take all customer concerns into their consideration for future marketing.
I inferred that the deal with Trump had caused a lot of agita, and I really doubt they will ever align their brand with The Celebrity Apprentice again.
I’d love to know if they sold a lot more steaks due to their exposure on the show. I may be naive, but I’d wager the PR damage was probably not worth it. I wonder also if there wasn’t some sort of clause in their contract with the show that if politics or very embarrassing actions by people connected to the show would be grounds for some sort of refund? Wait. What am I saying? This show featured Gary Busey and Star Jones. The show is all about embarrassment.
The question is age old–do you travel with the freak show so you can sell more snake oil? Omaha Steaks will no doubt come out of this just fine; though I have to wonder if even their gourmet steaks will get the bad taste of Trump’s bad taste out of the consumer’s mouth.
