#7 – Aspen restaurant fines, Jenna Bush Hager’s fast apology & Chipotle sued for $2b
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We’re barely into 2017 and already seeing lots of Reputation Roadkill for the Reputation Rainmakers!
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:
- Erin Jones of Social Ink joins me as co-host.
- Aspen, CO restaurants start charging a $100 no-show fee for dinner reservations.
- Jenna Bush Hager avoids becoming Reputation Roadkill with a quick apology.
- Chipotle once again can’t stop shooting itself in the foot. Why is it being sued for $2 billion!
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):
Andy Beal: January 11, 2017, I did the Reputation Roadkill of 2016 last week but Erin is back with me this week, how are you Erin?
Erin Jones: I’m doing great, how about you?
Andy Beal: I’m doing pretty good thank you very much. Now I have to ask the alpaca, is it going to happen or not?
Erin Jones: We are not getting the alpaca.
Andy Beal: Darnit.
Erin Jones: It kind of started I posted an ad for a free alpaca on my Facebook page because, for those of you that know me, I love farm critters and I’d posted it jokingly and it kind of picked up a little bit of steam because my friends know that I’m a little bit crazy.
Andy Beal: It’s taken on a life of it’s own for sure. There’s going to be hashtags and t-shirts made, I can feel it.
Erin Jones: I know and I don’t know maybe some day we’ll get an alpaca but right now two small children are enough wildlife for me in addition to what we already have.
Andy Beal: Basically if you got an alpaca it’d create a household reputation problem you don’t want.
Erin Jones: Right, now if someone had a pink alpaca maybe I could be talked into it but for now I think we’re going to let the experts stick to that because I feel like there’d probably be a little bit of a learning curve that I’m not prepared for with that.
Andy Beal: I’m sure, I’m sure, you’re probably making the right decision, definitely the right decision. Now speaking of decisions and whether or not they’re right, you had a story this week about restaurants in Aspen, tell us a little bit about what you discovered.
Erin Jones: I did and I’m a little bit torn on how I feel about this. Several restaurants in Aspen have announced that they’re going to be charging up to $100 per guest for cancelled or abandoned reservations. As far as the terms go I don’t know. They’re saying anything less than a 48 hour window because they’re losing a ton of revenue on cancelled reservations. I have lived in several resort ski communities and I do know that a lot of people come in from out of town and they’ll make reservations at six different places, poll their group on where they want to go and then abandon the other reservations. I could see how these restaurants are trying to protect their servers and their bottom lines.
Andy Beal: I’m sure in Aspen they’re really hurting, the meals are not exactly expensive. No, they’re very expensive. Go ahead.
Erin Jones: Sorry, and getting food to these remote mountain locations is expensive.
Andy Beal: Good point, I mean it’s a difficult situation. There’s probably only so many people they can seat and if you make a reservation and don’t show up then they may not necessarily be able to fill that spot and recoup that revenue, but it’s definitely a bold move if nothing else to say you’re making a reservation, just need your credit card number because if you don’t show up we’re going to charge you $100. Some people put this out on Twitter and as some friends pointed out well the hotel industry does something similar so maybe it’s about time for the restaurant industry to do this.
Erin Jones: Right and I mean $100 per guest for a large party could be a substantial charge. The vacationer in me finds this a little bit frustrating but as someone who’s worked in the mountains and had friends that relied on tipping or sales to make their bottom line I can see a little bit of both sides of this. I don’t think that 48 hours, that’s a long time. I feel like they could make that up in a day, but then again in a ski community what do you do if someone gets hurt and ends up in the hospital calling to cancel a restaurant reservation may not be their first top of mind thought, so I’m a little bit torn here.
Andy Beal: Yes, one of the things I’m a big believer in is letting the market decide for itself as to whether or not something like this is accepted. Like airlines introduced baggage fees and same-day cancellation fees, that kind of stuff and we didn’t like it but we kind of accepted that was the new normal. You may have switched to a different airline that didn’t charge that and that’s your prerogative. With the restaurants there certainly may be people that say well I’m never going to make a reservation with that restaurant because just on principle I don’t want to have this fee over my head and they’ll lose business from that. Then again the restaurants may be fine with that because they’re saying well we get so many people trying to make a reservation that if they skip out on us we’ve got other people there.
It’s going to be difficult. I personally don’t like the move, I think that it could backfire against the restaurant. We’ve already seen how people that just have a mediocre experience just take to Yelp and attack that restaurant and drag their Yelp ratings down because everybody else and their friends and social media they all pile on. It’s fine that you’re charging this but I wonder how long it will stick once these restaurants get a one star Yelp review and then those customer’s friends pile on, and next thing you know that $100 they got from charging for that late fee is turned into thousands of dollars of lost business.
Erin Jones: Agreed, that and I think when someone calls you to make a reservation the part of the hospitality industry that goes with that, when you turn around and say okay we’re going to need your credit card in case you bail on us, it doesn’t foster a great beginning relationship between the patron and the restaurant.
Andy Beal: Now one of the things they could do is they could actually start showing hey, since we’ve implemented this policy we’ve reduced the cost of our meals, so if they could actually somehow demonstrate that look, rather than charging everybody for this lost business by spreading it out across the cost of a steak and vegetable dinner, we’re going to just charge those that are hurting us and since we’ve implemented this we’ve saved so much money from wasted cancellations that our average prices have dropped 10%. That’s how I would play it from a branding perspective is if you’re going to implement something that effects the minority, the very few, you’re going to have to demonstrate how this isn’t just going to line your pockets but it’s going to help the remaining customers who are going to say well that’s great, we never bail on our reservations and just not show up so why should we have to pay for those that do?
Erin Jones: That’s a great idea, or even offering a better bread selection when people are at the table. We’ve saved this much money so we’re able to provide you with these free items while you decide what you’re going to order. Incentivizing the people who do show up somehow I think would be a great idea.
Andy Beal: It’s a bold move, it could work out well. It’d be interesting to see if there’s any downsides to this but we’ll keep an eye on it. The first time we see some backlash or if we start seeing this is working well we’ll update the story.
Erin Jones: Yes and I think that Aspen is going to be an interesting market to try it in. It may not be something you could pull off in small town North Dakota but it just might work there.
Andy Beal: Oh heck, you couldn’t probably pull it off in Raleigh, North Carolina. We’ll see, like I said my initial reaction was like oh my gosh, what are they thinking? This is going to be reputation roadkill but maybe if they’re clever, if they explain the benefits to the other customers they can pull it off.
Erin Jones: It could happen.
Andy Beal: Let’s move on to something a little bit more positive. You may have heard about Jenna Bush Hager accidentally mixing up the movies Hidden Figures and the movie Fences and creating a new movie called Hidden Fences, which I’ve already seen somebody is probably somewhere trying to figure out how to create a movie called Hidden Fences and just kind of capitalize on all the buzz. As social media does look for the negative in that and piled on pretty quickly with Twitter and Hidden Figures and Fences are both movies that tell a story of racial division and struggling and overcoming that, and so it was easy for the Twitter lynch mob to kind of make the connection that this was just indicative of the attitudes of a white female in Hollywood. To her credit Jenna very next day on the Today Show was just very humble and sincere and apologized.
Erin Jones: Yes, I think that she handled it well. I think that it helped that a lot of people jumped to her defense. Several of the cast members from both movies said it was an honest mistake, thank you for owning it, we really appreciate that you loved our film and let’s move on.
Andy Beal: These mistakes happen. I think when we look at when companies or individuals mess up they’re the ones where you just kind of slap your head and say how in the world did they not see this coming? There was another story that was shared with me that was related to Hidden Figures where it was a sewing pattern company that jumped on the band wagon of trying to promote a particular pattern for that style of clothing from that time in history, but they used a white female model when the natural choice would have been an African-American woman. They got backlash. Now something like that I can kind of see where it’s like hey you got greedy, you didn’t think this through, that was kind of self-inflicted. She’s seen both movies, sometimes gosh I mean if I got attacked for every time I got words confused in my head I would probably not be in the reputation business.
Erin Jones: Oh agreed, I am very, very good at putting my foot in my mouth.
Andy Beal: There is one thing I will point out here, if you do watch her apology. Now it’s very sincere, you can see that, you can see that she’s very upset and apologetic. However, you’ll also notice that she says in her apology, she uses the words if I have offended anyone. That is something that when we make a mistake just take that out of your vocabulary. I mean saying the words if I have offended kind of takes a little bit of the sincerity away from the apology because it’s basically saying, it’s implied hey I don’t think anybody should be offended by this but if you are I’m sorry. I don’t think she meant it that way. I think that sometimes we turn to those words and we don’t mean anything by it but when you have an opportunity to craft an apology you have probably upset somebody and those are the people that you’re talking to.
It’s not if I have, it’s okay I have clearly offended people and so you’re just making an apology, just let your sorry be sorry, don’t put any kind of caveats in there or try and have any mitigating circumstanced, just remove that and just make it a hey I made a mistake, I’m sorry, I hope people will forgive me. Anybody knows me knows that there was nothing underlying here, that kind of thing. That was the one thing that jumped out at me that I would probably have tweaked.
Erin Jones: I agree, I feel like it’s kind of the I’m sorry you’re upset but. Like you said, I don’t think that she meant it but if someone is already offended and upset all they hear is I don’t really understand why you’re upset but I’m apologizing so that you won’t be mad at me anymore.
Andy Beal: I watch enough, as a confession time here, I watch enough of The Real Housewives where they are always upsetting each other but when they apologize it’s always well if I have upset you or I’m sorry you felt that way. It’s like no, no, no, just apologize so there’s my confessional.
Erin Jones: If you weren’t such a baby, it just doesn’t feel very sincere.
Andy Beal: Let’s move on because back in the news, barely 2017 is Chipotle. They made it on our Reputation Roadkill list for 2016 which shows how bad they are because the original E. Coli outbreak was in 2015, at the end of 2015 but in 2016 they just kind of kept reloading that gun and shooting themselves in the foot. They’re back in the news, not sure if you’ve seen this one but they are being sued for a whopping $2 billion for using a photo of a woman that didn’t sign the release when the photo was taken, she didn’t want her photo to be used and they’ve been using it in advertising campaigns and signage I believe. She is suing I think for their entire profits from 2005 to 2015 or 2006 to 2015, something like that. It’s like just when you think they’re free and clear and turning things around they’re back in the news.
Erin Jones: Yes and I think that this is a tough one because it sounds like it may have been more of a filing accident or something than a blatant disregard, but I also feel like the lawsuit has taken this from something that got my attention to something that makes me want to roll my eyes because of the amount that she’s asking for.
Andy Beal: Oh good point, you think she’s just being greedy and jumping on it and just trying to capitalize?
Erin Jones: Well that or being really obnoxious. I mean $2 billion for someone using your likeness is …
Andy Beal: A little over the top.
Erin Jones: Yes.
Andy Beal: To say the least.
Erin Jones: Definitely.
Andy Beal: If you look at this and if you trace it back there are some potential good signs for Chipotle this year. They have identified and basically realized that they’ve almost gone down the path that Wells Fargo went and that is everything, all the training, all the incentives for employees were based on sales and growth and all that kind of thing. In fact they had a promotion program that had 27 different measures but not a single one of them was customer focused. It’s no wonder they started having these issues with customers, employees and their reputation because your employees are the core of your reputation.
Erin Jones: Agreed and it makes me a little bit sad. Chipotle started out as a Colorado company and when they were small they were very customer centric.
Andy Beal: Well they’re going back to that, so they’re getting rid of the old program and now there’s just going to be five things that employees are measured on and three of them are going to be customer service focused. Hopefully that will get them back on track. They’re also going to launch a new ad campaign in April, they’re going to focus on digital orders, mobile orders, that kind of thing, and new menu items including I think they’re going to add desserts to the menu. They’re at least trying, but I don’t know about you I mean I stopped going to Chipotle when this all started to happen and do you go there, has it changed your expectation, your opinion of them?
Erin Jones: You know I actually haven’t gone in a very long time. The concern of food poisoning is definitely one that will slow people down. I haven’t been much since they were purchased by a big corporation.
Andy Beal: Right, and I think I read somewhere that they’re doing pretty good at getting new business, new customers to come in so they’re doing well there, but there are approximately 60 million previous customers that they’ve not yet won back. It’s going to take a while and it starts with the character of the company and what you’re trying to do with your employees. If everything is pushing profits, profits, profits corners are going to get cut, customers are going to get left in the wayside. Whereas, if they can actually focus on the customer, hey guess what? You got happy customers, they tell everybody else, they say, “Hey, have you been to Chipotle recently? Oh my gosh, there’s hardly any lines anymore, the stores are really clean, you should go back and check it out. There’s hardly anyone there so you won’t have to wait.” That kind of word of mouth by focusing on the customer.
Erin Jones: Right, and I think that this has been a very, very expensive lesson but it sounds like they may have started to figure out exactly what you said, that by focusing on the customer, they’re going to drive profits instead of focusing on profits and driving the customers away.
Andy Beal: Right, exactly, well let’s hope they have learned the lesson. Fingers crossed they won’t make it on the Reputation Roadkill list this year, but we’ll keep an eye on that. I have a feeling I don’t know, they may have one more bullet left in that gun but hopefully they’ve turned that corner.
Erin Jones: Yes, hopefully you can get back to eating your burritos while you watch your Real Housewives.
Andy Beal: On that note alpaca up and get out of here, so thank you so much again for joining me this week here. It’s always a pleasure to have you on the show.
Erin Jones: Thank you for having me. Hopefully next time we chat I will not have a new alpaca to tell you about.
Andy Beal: I’m sure your husband, who’s pulling for that result too. Thank you guys for listening, please head to our Facebook page which is /andybealorm, leave us a question, we’re happy to answer any questions you may have about your reputation or the reputation of your friend. Submit those there or leave a comment in the blog post that accompanies this podcast. Thank you for joining us, we’ll hope you enjoy next week, have a great week and buh-bye.