Happy New Year to you! In episode 6 of the Reputation Rainmakers podcast we take a look at the top 10 Reputation Roadkill of 2016.
Each week, we’ll take a look at the most interesting reputation management stories, answer your questions, and share valuable ORM tactics. In this week’s episode:
- Join me as I count down the ten worst reputation crises of 2016.
- I could add another bullet point, but really, it’s just going to be a top 10 count down. 😉
If you have a question you would like us to tackle, please leave a comment below or on my Facebook Page.
Transcript (forgive us for any typos):
Happy new year to you. I hope your 2017 is off to a good start. Hopefully it won’t be any worse than 2016 was for a lot of people. In fact, what I thought we would do with this week’s podcast is take a look at the top 10 reputation roadkill moments of 2016, just a quick reminder of what we saw in the past year, and then look at the lesson that can be taken from that, what we can learn from it so that we don’t make the same mistakes in 2017. Let’s get straight to it.
Literally just squeaking in at number 10 on the list is Mariah Carey. Now even if you didn’t watch her live performance, you’ve definitely heard about it. I happened to watch it live, and it was very hard to watch. Basically she couldn’t hear herself in her earphones, and so just no way that she could sing along to the audio track that was playing. Now questions about whether or not it was bad rehearsals on her part or sabotage on ABC’s part, regardless of what actually happened, it was pretty bad for Mariah Carey.
Now the lesson from this is always have a plan for when you face a crisis. That way you’re not trying to think on your feet so much. You’re not in the middle of the crisis trying to figure out, okay, what should I do here? What’s my backup plan? What’s my go-to plan for this kind of situation? In hindsight, well, maybe not in hindsight, I remember at the time thinking to myself, “She just should have them cut the music and just sing a cappella and, uh, just do a melody on her own.” But she probably couldn’t think that fast while everything’s going on, or was perhaps hoping that the music would come back on. Always have a backup plan and you won’t find yourself in the same situation she was in.
Coming in at number nine is Huawei, the cell phone manufacturer. They had a nice social media campaign that showed these really great photos that we all thought were taken with the new smartphone. What was actually transpired is that if you looked at the metadata for the images, they were taken with some high-end DSLR cameras. Now Huawei had to kind of do some damage control and claim that they weren’t ever really trying to deliberately mislead someone, but when you put a photo out there promoting your new smartphone’s camera and don’t actually tell people that they were taken with a high-end DSLR, then it’s pretty safe to say you’re trying to mislead someone. Our lesson here is don’t try to fake it. Never try to fake anything to try and improve your reputation. You may get short-term benefits, but in the long run, someone will always find out and the damage that comes with that will be much higher than any benefit that you got by faking it.
Moving on to number eight, we have Grubhub, Kellogg’s, and New Balance. Now they all decided that they wanted to make a political statement right after the election. Some sent out an email. Some issued a press statement. Whatever the means of conveying it, they decided to get very political and effectively alienated a big chunk of their audience, alienated probably many of their employees in the process. Our lesson here is just be very careful about getting political. There are some brands where it’s in their DNA to make political statements, and that’s absolutely fine. That’s part of your reputation, but when you’re serving up breakfast cereal or you’re selling running shoes, that’s not really … That doesn’t go hand in hand with political statements.
I don’t buy Frosted Flakes because of the political leanings of the manufacturer. You have to think long and hard about, do we want political statements to be part of our brand? For the most part, with Grubhub, Kellogg’s, and New Balance, it backfired on them, so be very careful about making any political statements or any kind of leaning or whatever it may be, because that will become part of your brand. If your customer base and your employees and your stakeholders are not used to that, you’re going to find that you will alienate them.
For number seven, let’s go back to the Olympics earlier this year and recall Ryan Lochte claiming that he had been held at gunpoint. It transpired that actually, yeah, that was somewhat true, but only after they had vandalized a gas station. It wasn’t so much that they were asked to hand money over, but more a case of paying compensation for the damage done. Well, he went on national TV, claimed he had been held up. Brazil was already struggling with a reputation of it not being a safe place to visit, and of course, the media jumped on that. Like any made-up story, people started questioning the details, and it all unraveled. When the videotapes came out, we realized that he had basically lied. It was a case of vandalism and he was trying to cover it.
The lesson here is when you do something stupid, don’t lie about it. Don’t try and cover it up. Don’t try and fight it. Certainly don’t embellish it to make yourself look better. Confess that you’ve made a mistake and apologize, and then let people know that you’re going to strive to do better. That is going to be much better for your reputation. It’s going to be received a whole lot better than if you try to turn it into something from the outset by lying and trying to make it sound like it wasn’t your fault and then the details are different. Then the true facts coming out, and now you’re in major damage control. Ryan Lochte lost a lot of sponsorships, and part of his sentence, I think, was he was forced to go on Dancing with the Stars.
In at number six is two people we’ll probably never see on Dancing with the Stars, that’s Hillary Clinton and Donald Trump. Now I’m not going to get very political here, but suffice it to say that both candidates had things that they’d rather have kept private that came to light and did them some damage. Our lesson here is, when you’re building a brand, when you’re building a reputation, assume that nothing is off the record. Assume that your emails or recordings or telephone calls, at some point, someone’s going to record it, someone’s going to copy it, and someone’s going to make it public. If you conduct yourself in private the same way you do publicly, you’ll never have a reputation problem.
Moving on to number five is Wendy Bell, who was a TV news anchor who decided to take to Facebook and make a statement that was racially charged. After there was a murder in the city, she kind of basically painted a picture of who she thought was going to be the culprit. It didn’t go down well, and she was subsequently fired. The lesson here from Wendy Bell is there’s really no difference between your professional reputation and your personal reputation. She probably thought she could make a personal observation, but she is a news anchor. People are used to her presenting the news with factual statements, and for her to deviate from that, even if she thought it was just a personal opinion, it’s just not going to help with her reputation. When you are in the spotlight, whether that is a media personality or just somebody that’s representing your company at a conference, you are the face of that company. What you say personally, what you say off the clock, is going to reflect on both your professional reputation and that of your company.
Speaking of employees being the reputation of your company, at number four, we have Chili’s where a local store manager, local restaurant manager, decided that he wasn’t convinced about a veteran getting his free meal on Veteran’s Day and not only challenged him, but took away his leftovers, didn’t let him take his doggie bag home. It was all caught on video and a big reputation nightmare for Chili’s. Now it could have transpired that this was the case, but all the evidence pointed this to be a legitimate veteran who was there with his service dog and was just taking advantage of a free meal that Chili’s was offering. Even if you suspect that may not be the case, it’s a hamburger. It’s a $10 meal that’s probably only about $2 worth of ingredients, and now you’ve created arguably hundreds of thousands of dollars of negative publicity for your company’s brand.
It’s important for you as a company to ensure that your employees know that they are the reputation of your company. How should they act? What are some of the things that you could train them on? What are the benefits of them always treating the customer with respect? Letting them understand that they’re always on the record, someone could always be videotaping their actions, and to conduct themselves in a manner that, if it is recorded, they would be happy with how they acted if it was shown on the evening news.
If you give them that kind of leeway and that kind of instruction to say, “Hey, look, however you treat our customers, whatever you do, assume that it’s going to end up on the nightly news,” that way they’ll be sure to kind of reflect the reputation you’re trying to build. If they still go against it, if they still act in a really bad way, then you need to look more about your company’s reputation and the values that you have and the training that you have, because it’s generally flowing from the top down.
In at number three is Chipotle, or Chipotle as I jokingly often refer to it, but Chipotle basically can’t get out of its own way. 2016, you had the norovirus. You had unlawful social media policies. You had accusations of wage manipulation. Just about anything that could go wrong for Chipotle went wrong. This really highlights one of the key mantras of reputation management, and that is your reputation is only ever strong as your character. All the PR and all of the crisis communication, that is not going to help you one bit if you continue to have an underlying character that just keeps on messing up.
Chipotle did a good job initially over the years of its branding, of fresh ingredients, and it was very popular. I used to go to Chipotle and be very frustrated at how long it would take because the lines were huge. These days, I can drive by a Chipotle, and hardly anyone’s in it. I think the company is in bad shape. From an outsider looking in, it looks mostly because they’ve not invested the time and the resources into training their employees and to creating a great culture where those employees can thrive and do well. You can’t put lipstick on a pig basically, so there’s our lesson.
Runner-up for reputation roadkill of 2016 is Wells Fargo. They incentivized employees based on the number of new accounts that they created for customers, and so these employees felt very pressured to meet their quota. What did they do? They created fake accounts. They signed customers up for accounts that they had no knowledge of in order to meet these goals. That later was released to the news, and Wells Fargo’s been struggling ever since to regain their 164 year old reputation. Now what’s interesting is there is a personal aspect here, because I’ve been banking with Wells Fargo for a number of years. They’ve always provided great service. They’ve always been good to me, so I have no plans of moving away. I’m not going to move my account. Those that were affected by this directly, they’re going to move their account more than likely.
But the biggest factor in this is those that potentially may have become a Wells Fargo customer, those that bank elsewhere or are looking to open their account for the first time. They’re probably not going to choose Wells Fargo, and so the lifetime value of those customers is lost. I talk a lot about the lifetime cost of a detractor. Well, here’s the biggest one. You’ve got the media and all of the customers that were affected just telling everybody that will listen, “Hey, look, you can’t trust Wells Fargo because they’ve got these incentives and they’ll create fake accounts.” That banking customer who would have then opened up a business account or got their mortgage with Wells Fargo, all of that business is now lost, so that’s the biggest issue there.
The lesson to learn from this is incentivize your employees to make your customers happy. Don’t incentivize them to create more sales. If you can incentivize employees, especially in a financial situation, a financial industry, incentivize them to ensure customer satisfaction, guess what? They’re going to open up more accounts. They’re going to expand their business with you. When you incentivize sales, you basically end up with being the Comcast of your industry, which is, “Hey, we got quotas to meet. You can’t cancel on us, and if you do, we’re going to do something stupid, say something stupid, that’s going to create a rep-, a reputation issue.” Incentivize happy customers, not sales.
Okay, well, you’ve probably guessed who’s the number one reputation roadkill of 2016, so wherever you are, in the car or your office, wherever you may be, say it with me, Samsung. Now Samsung is on the list, because, well, you could pick. You could either pick the recalled phones that had the batteries blowing up on airplanes, or you can pick the washing machines that were trying to take the heads off of their owners. Either one of those probably would have been enough to get Samsung on the top of the list, but combined, definitely going to be our number one reputation roadkill for 2016.
Be interesting to see how well Samsung can recover from this. They’re already slowly leaking reports of a new phone coming out, but I think the biggest lesson here for Samsung is to slow down. Measure twice, cut once. When things are going well, it can be easy to overlook quality control. You want to get that new product out. You need to keep that new product cycle just continually going. You got to keep up with Apple and all of these other brands. Let’s not spend quite as much time on testing the battery or testing to see whether or not washing machines are going to attack their owners. Slow down a little bit. When things are going well, that’s not the time to cut corners in order to improve your bottom line, to improve your profit margins.
That’s the lesson that we can learn from Samsung is maybe they got just a little bit too cocky maybe. Maybe they cut corners. We all remember the Dell Hell scenario, and if you don’t, go back and read about that, where Dell, the Goliath of the computer industry, decided to cut corners in customer service and it came back to bite them. Don’t let that happen to you. When things are going well, take those profits, invest it back into creating better customer service, better products. Don’t just send it back to the shareholders or put it in your own pocket.
All right. Well, that’s our reputation roadkill countdown for 2016. Hope you enjoyed that. Hope it brought back some fond memories, comical memories, or perhaps even nightmares if you were part of the teams that were involved with those individuals and companies. We’ll be back next week. Erin will be back with me. We’ll get back to our normal format, and hope you’ll join us then. Thanks a lot for listening. Bye bye.