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2012’s Most Notorious Events

Happy New Year! As we head into what will inevitably be an exciting 2013, it’s interesting to sit back and reflect on some of the most notorious events of 2012 that caught our attention, and the lessons we’ve learned from each…

In January, just in time for Martin Luther King Day, many visitors to the new MLK monument in Washington, D.C. were taken aback by a misquote of the late Dr. King etched into the new monument. Thanks to the actions taken by the public, including poet Maya Angelou, the quote was eventually changed. Lesson: whether a misquote is printed in a magazine, written online or literally etched in stone, it’s important to speak up and make sure what’s being written is both correct and taken in the desired context.

February brought us the Super Bowl, and of course, Super Bowl commercials. Last year more than ever, companies not only shelled out big money for a 30-second spot on game day, but many ran ads and posted online videos in advance, essentially creating advertisements to advertise their advertisements! While many companies undoubtedly did this in order to supplement their pricey ad spots with cheaper or free additional exposure, ultimately the ads that garnered the most buzz were those who didn’t unveil their spots until the big day. Lesson: Timing is everything, and reaching the right audience at the right time is often more effective than sheer number of impressions.

In March, a Goldman-Sachs employee posted a scathing farewell to the company in the New York Times, igniting a media firestorm that ultimately cost the company a lot of money, as their stock price dropped 3.4 percent after the incident. Lesson: A PR disaster of great enough magnitude can have immediate monetary consequences.

In April, we discussed the Trayvon Martin shooting case, and how two brands – Skittles and Arizona Iced Tea – found themselves tied to the case through no effort of their own. While the association was positive (sales of the two brands increased due to people buying the products to show support for Martin), both companies chose to keep a safe distance, and released nothing more than a statement expressing their sympathy for the Martin family. Lesson: Don’t take credit where you haven’t earned it; we’ve certainly seen the pendulum swing the other way when brands find themselves negatively affected by an event.

We discussed the growing second screen trend in May, when ABC partnered with Yahoo!’s “Into Now” smartphone and tablet application to reach a large audience on ABC’s hit show, “Revenge.” Other popular shows like “Glee” and “America’s Got Talent” soon followed suit by encouraging viewers to use special hashtags while viewing. The verdict is still out as to how effective these specific tactics are, but it’s safe to say that innovative ideas like this are headed in the right direction, given the growing tablet usage and second screen trend. Lesson: Go where your audience is.

In June, we blogged about Facebook’s lack of courtesy for its users, when they made the decision to hide users’ email addresses in favor of displaying their own “facebook.com” email address. This is yet another example of the social media giant changing settings without regard to what its users want, in favor of what’s best for the company and its bottom line. Lesson: While Facebook may be able to do what it pleases with its users now, due to a growing dependence on the social network, they should tread carefully, lest they end up like Netflix, who fell from grace, thanks to poor customer service and increased competitive offerings.

July brought us tragedy when a gunman opened fire in an Aurora, Colorado movie theater, killing more than a dozen people. July also brought us two notoriously ill-timed tweets, first when the NRA took to Twitter the morning after the shooting with “Good morning, shooters. Happy Friday! Weekend plans?” CelebBoutique.com also posted an inappropriate Tweet, speculating that #Aurora was trending due to a dress worn by Kim Kardashian. Understandably, the backlash against both tweets was brutal. Lesson: when you’re a polarizing organization such as the NRA, perhaps scheduled tweets aren’t the best idea. Also, it’s a good idea to figure out why a topic is trending before jumping into the conversation.

Few events can inspire as much social media buzz as the Olympics, and the London games in August were no exception. From the bizarre rants by U.S. swimmer Ryan Lochte to the downright racist comments made by Greek triple jumper Voula Papachristou, there were enough media gaffes to make any PR person sweat, just reading about them. Lesson: An athlete does not a spokesperson make, and anyone thrust into the public eye could benefit from some basic media training.

September led us into the thick of election season, and Sterling’s own Dave Gifford traveled to Charlotte, NC for some contracting work with the Democratic National Convention. Three days before the event, some unexpected weather forced the DNC to change venues, throwing a wrench in what was already quite the logistical undertaking. Thanks to quick planning by Dave and his nimble team of volunteers, the venue was changed with minimal inconvenience to attendees. Lesson: It’s not always about having a B or C plan; sometimes pulling off a successful event requires the willingness to shift gears quickly should the unexpected occur.

In October, Nike found itself in a pickle when compelling evidence against celebrity spokesperson Lance Armstrong was found by the U.S. Anti-Doping Agency. In the end, Nike made the decision to let Armstrong go. While Nike has been known to stand by spokespeople plagued by personal scandal such as Tiger Woods and Kobe Bryant, this time was different in that Armstrong’s transgressions took place on the “playing field” – something Nike takes seriously. Lesson: Stay true to your brand and mission, and have a good crisis communications plan in place.

In November, a snarky and entertaining restaurant review in the New York Times went viral. In the review, award-winning restaurant critic Pete Wells thoroughly flamed Food Network celebrity chef Guy Fieri. Not surprisingly, this scathing review sent Fieri’s PR team into crisis mode, with Fieri himself appearing on the Today Show to assert that Wells had a personal agenda when writing the review. Fieri’s response took the lead in any follow-up coverage and in the end helped douse the flames on the poor review. Lesson: A well-delivered and timely response can help negate bad publicity.

We discussed Redbox’s entrance into the streaming market in December, and speculated how the move would affect an already ailing Netflix. Ever since Netflix alienated their customers in 2011 by poorly communicating a pricing change, the company has been headed downhill, both in terms of stock price and public reputation. Lesson: while it still remains to be seen who will come out the streaming king, it’s clear that treating your customers poorly only diminishes brand loyalty and gives them a reason to switch to your competitor.

What do you think of the lessons learned in 2012? Will 2013 bring us more savvy crisis communications? What new and creative tactics and technologies  will companies employ to reach their target audiences? Will we see more polished tweets and media soundbites, or are brands and spokespeople destined to make the same mistakes as those who have floundered before them?

Amanda Hoffman can be reached at ahoffman@sterlingpr.com. Follow her on Twitter @hoffmandy.

Image via dreamstime.com.

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Will Redbox streaming spell the end for Netflix?

We’ve written about Netflix a few times on this blog. Beginning in July 2011 with their poor execution in communicating a major pricing structure change, it seems this former media darling has been on a downward spiral in the news ever since. And their stock performance certainly reflects this.

But while Netflix’s saving grace has historically been their unique product offering, that differentiation is growing smaller by the day. Amazon and Hulu have been nipping at their heels for a while now in the streaming category, and just today, Redbox announced its beta streaming service will go live later this month and will also include a disc/streaming combo package, not unlike Netflix’s.

In the absence of a proprietary service or unique product, brands must rely on price or reputation to differentiate themselves. Unfortunately for Netflix, at this point the company is neither winning the pricing game or the popularity vote. Had the company handled its initial pricing change better – and its subsequent reaction to the public’s disapproval, they may very well have remained heads above their competitors in the public eye. When consumers are satisfied with a product or service, they have little reason to seek out alternatives. But by alienating their customers, brand loyalty dwindled and Netflix opened the door for their competitors to swoop in with similar offerings.

It will be interesting to see how Netflix will be affected by Redbox’s entrance into the streaming world, considering the latter is already well-known and liked. What do you think? Is Redbox poised to surpass Netflix, or will Netflix find a way to redeem itself in the public eye to keep its customers? Is Amazon still a contender? Or is there a dark horse in the form of another company that we should be watching for? Do you think it will all come down to who offers the most content?

Amanda Hoffman can be reached at ahoffman@sterlingpr.com. Follow her on Twitter @hoffmandy.

Image via CNN Money.

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Communicating a Pricing Change… the Right Way

Last July, my colleague, Scott, wrote about the Netflix debacle with their unexpected pricing change and the brouhaha that ensued.

Netflix’s 60-percent pricing increase on their DVD streaming service left customers feeling confused and betrayed, resulting in hundreds of thousands more subscribers jumping ship than the company originally predicted, and a backlash that is still remembered as one of the biggest PR blunders, more than a year later.

As much of the coverage written about the change readily acknowledges, the pricing change was a sensible move for the company – more customers were switching to streaming, and the company had to pay more for their content. What upset people was the way in which the message was delivered – abruptly, with seemingly no regard for what their customers thought.

As Scott and other PR professionals have noted, Netflix’s biggest “oops” moment came when they didn’t communicate with their customers before and during the change. Customers were left out of the loop and Netflix came off as greedy, caring only for their profit, not about their viewers.

So what happens when you have a client who, for good reasons, needs to make a pricing-model change without alienating their customers?

As with so many things, communication is the key to success.

We’ve been implementing this notion recently with a client that found it necessary to change the way they charged their customers for their product. They came to us for help with creating and rolling out an outreach plan to announce their pricing change model – and to avoid a Netflix-type situation. We sat down with the client to flesh out a plan that would help them navigate the sticky bog of change.

First, we set clear and realistic goals. What did our client hope to achieve? What did they want to avoid? This set the tone for the rest of the outreach plan. We wanted to let customers know about the pricing change without alienating existing or potential customers, and of course, trying to avoid any negative feedback from the press and/or social media.

We then wanted to define a message that would help us achieve those goals. We wanted to be transparent – the pricing change wasn’t coming from a source of greed, but from necessity. Our client had garnered feedback from their existing customers, and was changing their pricing structure to address the concerns and demands of their users. They wanted to be clear about the reason for this change; they knew they weren’t going to please everyone, but they wanted to convey that the majority of their customers had expressed desire for this change.

We then identified what audience we were trying to reach. Customers were our client’s number-one priority. We drafted an e-mail message to be sent to customers, explaining the upcoming change, the reasons for it, and offering the client as a resource for questions, feedback, and help requests. This was where Nextflix fell down – a customer announced their pricing change on a blog, which resulted in a loss of credibility and trust with the company. Our client wanted to address their pricing change head-on.

We then identified appropriate outlets in which we would disseminate our client’s message. This included looking at related media outlets, bloggers, and analysts with whom we had an existing relationship, as well as new ones who were present in our client’s industry. We also decided not to reinvent the wheel – we would use our client’s own tools and existing audience – such as their blog and their social media accounts – to communicate the news of this change. We also set up some talks with industry analysts to get their feedback on the pricing and product changes, as well as the messaging (it was positive feedback, which reinforced our client’s need to implement the changes).

All of this careful planning, however, wouldn’t make sense without a well-thought-out timeline. Timing was a crucial element to this entire plan. Our client wanted to ensure that we were getting out to their audiences before the change was implemented, so it wouldn’t come as a surprise. We created a detailed timeline to lead up to the announcement with our tactics – all to reach the final goals we had clearly defined before the campaign started.

We’re now in full swing implementing this campaign we spent so long planning. While it’s too early to call it a success just yet, initial response has been largely positive. Check back in a couple months for a full recap and analysis.

Deepak Chopra said, “All great changes are preceded by chaos.” (And far be it from me to discredit the esteemed physician and writer.) But, if you have a smart outreach strategy in place, you can minimize the chaos and avoid becoming the next Netflix.

Jennifer Kincaid can be reached at jkincaid@sterlingpr.com. Follow her on Twitter @jennlkincaid.

Photo credits: Cloud9Health; CiteLighter

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Bringing It All Back Home: The Ultimate Decision of Re-rebranding

Bob Dylan's "Bringing It All Back Home"Like the Bob Dylan album title suggests, often the best move to make when all else fails is to go back to basics and return “home” to what made you great to begin with. Stemming from a recent blog entry of mine highlighting Twinings Tea Company’s abrupt revamping and then reappearance of its classic Earl Grey tea blend, here are some other rebranding efforts that were each met with equally negative sentiment, spurring a return to the original.

Netflix, to Qwikster, back to Netflix: On September 18, 2011, Netflix announced its intentions to rebrand and structure its DVD home media rental service as an independent subsidiary company called Qwikster, completely separating DVD rentals and streaming. However, less than a month later, after a flood of negative reaction from customers and losing hundreds of thousands of subscribers, Netflix announced that it would retain its DVD service under the name Netflix and would not, in fact, create Qwikster for that purpose.

Coca-Cola, to New Coke, back to Coca-Cola Classic: On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula of the drink with “New Coke.” Follow-up taste tests revealed that most consumers preferred the taste of New Coke to both Coke and Pepsi, but Coca-Cola management was unprepared for the public’s nostalgia for the old drink, leading to a backlash. The company gave in to protests and returned to a variation of the old formula, under the name Coca-Cola Classic on July 10, 1985. Fellow beverage company Tropicana should have learned from Coca-Cola’s mistake and known better before redesigning its cartons in 2009. Sales quickly thereafter plummeted by an unprecedented 20 percent. Two months later, Tropicana was back to its original design. As noted by colleague Amanda Hoffman in a previous blog entry of hers, the simplistic, short-lived design of the revamped carton looked an awful lot like the generic store brands, making it difficult to market a generic product at a brand-name price point.

Orchard Supply Hardware, to OSH, back to Orchard: It’s back to basics as well for the hardware store that, for decades, has been known as OSH, as the San Jose-based retailer tries to distinguish itself from big box stores. That means a return to an emphasis on customer service, hardware and home décor. As part of the changes, the company is giving its stores a variation of its original brand name: Orchard. It is also laying plans for new stores in the Bay Area and Southern California and renovating existing ones. The moves come as Orchard is about to be spun off as an independent public company from its current owner, Sears Holdings. Orchard, which now has 89 stores, is counting on an updated look and feel to differentiate itself from larger rivals such as Atlanta-based Home Depot and Mooresville, North Carolina-based Lowe’s Companies. Orchard also wants to set itself aside from small retailers such as True Value and Ace Hardware.

KFC, to Kitchen Fresh Chicken, back to KFC: Commercials in 2004 tried to imply that the abbreviation for KFC stands for “Kitchen Fresh Chicken.” You’ll recall that KFC at one time stood for “Kentucky Fried Chicken” – that is, right up until 1991, when they ditched all of the actual words and just went with a monogram. Dieting trends had made “fried” a dirty word, and the plan was to banish it from view. The “Kitchen Fresh Chicken” move went one step further. However, the public largely didn’t buy into the cheap marketing ploy, and KFC was quickly reinstated.

Prince, to Prince "Love Symbol", back to Prince: In 1993, as a response to his record label Warner Bros. “limiting his artistic freedom,” musician Prince changed his stage name to the “Love Symbol.” Because the symbol is unpronounceable, he was often referred to as “The Artist Formerly Known as Prince.” On May 16, 2000, Prince ceased using the Love Symbol moniker and returned to using “Prince” again, after his publishing contract with Warner expired. Not coincidentally, his following albums back under the “Prince” brand name surpassed the sales of those previously released under the Symbol.

Guns in E.T., to walkie-talkies, back to guns: Like the failed effort to replace cigarettes in old movies, director Steven Spielberg swapped out the guns carried by the agents pursuing protagonist Eliot and his extraterrestrial friend for the 20th anniversary edition of E.T. For reasons even Spielberg himself doesn’t seem to understand now – likely sensitivity to criticism by parents’ groups, who didn’t like some of the language he used, and objected to the use of guns, period – the change was met with an extremely negative reaction from purists, who never like it when people tinker with their favorite films (ahem, George Lucas!). With the upcoming 30th anniversary Blu-Ray release of E.T., what’s most noteworthy is a change that Spielberg won’t be making – or, more accurately, changing back. He is, thank heavens, getting rid of the walkie-talkies he digitally inserted in the hands of the government baddies, and giving them their guns back.

So, take a page out of these books and have faith in your brand, as it is generally better off the first time. It’s not so different from sticking with your instinctive first answer on the SAT exam, or the old screenwriter’s tip, “write what you know,” or even the romantic plot point of going back to your first love. Whichever metaphor you prefer, don’t fall into the same trap as those listed above, or else you may end up regretting having made a change.

Jordan Hubert can be reached at jhubert@sterlingpr.com. Follow Jordan on Twitter @jahubert.

Photo credit: Vintagemax via Flickr

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To Wire, or Not to Wire… That is the Question.

In my line of work, a huge part of my role is disseminating material company news to the largest audience possible. (For those not familiar with the term, “material news” is a public company’s news that might affect the value of its securities or influence investors’ decisions). So, when working with these companies, it is absolutely imperative that we, as communications professionals, adhere to the rules of the Securities and Exchange Commission (SEC) to ensure that the company’s investors receive all pertinent information in a timely manner.

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Sound Off Podcast Episode 2: Netflix, What the F***?

panel from the web comic The Joy of TechNetflix’ stock price, brand value and customer goodwill all seem to be tanking after the announced split of its video streaming and mail-order DVD businesses. Not only are most vocal customers unhappy with the changes, but Netflix communicated change poorly twice and made customers feel like they weren’t the top priority, which is unusual.

Netflix wants to get ahead of the sea-changes in its industry, but angering customers while launching a new brand with a video apology isn’t usually recommended by most communication firms.

Separating DVD rentals will no doubt simplify that eventual transition, but many current customers don’t seem to care. Instead, they’re creating new headaches for Netflix and Qwickster, which seems a name better suited for a chocolate milk enthusiast site than a DVD-by-mail service.

How did it all go wrong? What is the fallout for the company’s PR, social media, and branding efforts? And what could have they done differently? Tune in to hear a conversation between Sterling Communications VP Kevin Pedraja and creative director Kawika Holbrook in the latest podcast episode of Sound Off.

Sound Off: Episode 002 – Netflix, WTF?

(Note: At one point during the podcast, Netflix founder Reed Hastings is referred to as Reid Hoffman, the founder of LinkedIn. Sterling regrets the error.)

Kawika Holbrook is creative director at Sterling Communications. Follow him on Twitter @kawika or email him at kholbrook@sterlingpr.com.

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Really, Netflix… really?

Sometimes making a decision and apologizing for it later can really backfire on you. Sometimes, it really IS better to ask permission first.

This concept really hit home for me when Netflix came out with its surprise announcement that it would be separating its streaming and DVD rental services, and thereby abandoning the $9.99 monthly fee in favor of two $7.99 fees. 

So, in my usual manner of veiled condescension, I ask this question: Really, Netflix… really?

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