Five New Lessons about Crisis Management

Given the state of politics, it's probably never been easier getting into a crisis and never more difficult to get out of one without alienating someone. Unfortunately, this became true for a client that had been in business for a decade or so, and, for most of that time, had the good luck of avoiding any crises. 

We provided counsel to them, and compiled the following five lessons (some based on other observations):

1. Develop a crisis plan before a crisis. You may have built up goodwill and strong relationships with your customers and your community over the years, and have avoided a crisis – but that doesn’t mean you don’t need a crisis plan. Crises can happen to good companies but it makes sense to develop a plan. The plan should include a range of crisis scenarios – even though you should expect that the actual crisis probably won’t exactly fit into any one of your scenarios. But at least it starts the process of how to respond. If you don’t have a process when a crisis hits, it’s harder to know how to respond, and that’s when a potential small fire can start to burn out of control. The other aspect of a crisis plan that’s is important is developing an internal communications process so that when a crisis hits, different layers are informed and understand 1) that the company recognizes it’s dealing with a crisis; 2) that it is taking the crisis seriously; and 3) that people inside the company have the information they need to know to manage their jobs during the crisis. We’ve seen situations where board members, for example, didn’t know what the plan was and were second-guessing every time the company issued a statement.
2. Make sure to allocate appropriate resources. One of the other aspects of a crisis plan is to determine a task force of people who can focus on the crisis. Another aspect is to understand the potential costs. According to a colleague, one client felt the crisis would quickly die down so it asked that its agency to stop work several times over a two-week period, to save the budget, only to be caught short-handed as its crisis continued to spiral. They kept a short-term perspective both in terms of budget and in terms of working towards an outcome. Also make sure to have people monitor social media, and decide what to respond to and what doesn’t need to a response. And also to develop messages that appropriate staff can communicate to key stakeholders that include employees, customers, and others.
3. Sometimes clients are in a no-win situation. It’s important to understand, that through no fault of their own, clients may several possible paths – and none of them may be ideal because one group or another will be left unhappy. Social media reactions can make the in-crisis organization feel like they’re between a rock and a hard place. In that case, organizations need to consider:
• What’s the worst-case scenario and how can we minimize the likelihood?
• What’s the best-case scenario, and how can we make that happen?
• If we can’t avoid upsetting people on both sides, how can we minimize the impact?
• What steps do we need to take after the crisis is over to rebuild goodwill?
• Do we announce a post-mortem showing that we’ve learned our lessons?
• Do we suspend any of our operations – like advertising or even what’s on our social media platforms?
4. If you send an email to employees, expect it to circulate. This did not happen with our most recent client crisis but we’ve all seen this before. So keep in mind: Even a well-intended note to employees can be hard to craft, and you should expect that any email will be distributed to outsiders or posted on social media. Also keep in mind that if you communicate to employees in a town hall setting, someone may tape the discussion. The point here is just make sure that whatever you communicate to employees is something that you won’t mind seeing in print or on social.
5. Make sure to communicate via the channels most relevant to the upset. We have seen clients who responded to traditional reporters but ignored social media. Responding on social media may not be the right vehicle but it’s important to look at options. Please know that whatever you post could be misconstrued as easily, if not more so, than employee communications.

Please keep in mind that your experience, as they say, may vary. No-win situations are more likely given the politicized nature of decisions that used to be ones you didn't discuss with others. But that ship has long set sail. We're just saying that organizations may need to re-evaluate their plans, policies and responses based on this not-so-new reality.   

7 PR Lessons from O’Reillygate

(This post originally appeared on CommPro.Biz: http://www.commpro.biz/public-relations/reputation-management/bill-oreilly/)

The recent credibility scandals of Brian Williams and Bill O’Reilly are shocking and fascinating. But for PR and marketing professionals, there’s a lot that can be instructive.

• There’s no statute of limitations when it comes to the truth. Both scandals stem from incidents that took place between 12 and 33 years ago — long enough ago that it might seem the truth is no longer relevant. It matters if only because both Williams and O’Reilly retold their embellished Iraq and Falkland war stories several times within recent few years.
  • PR pros should keep in mind that a crisis could originate years before an executive joined an organization.

• There at least two ways to handle a scandal: 1) Issue an apology, conduct an investigation, and hold someone accountable or 2) Conduct a scorched-earth approach of attacking your critics and their character. NBC followed the first approach, O’Reilly and Fox, the second. Both can claim the victory of a post-scandal ratings boost.
  • Since no laws were broken, for PR professionals, the right approach depends, to some extent, on your brand and your audience. NBC suspended Williams to hold him accountable and protect its credibility — whereas had he apologized, O’Reilly would have greatly harmed his brand and his connection to his audience. In fact, keeping the controversy alive may actually strengthen the O’Reilly brand, ratings and value.

• If you decide to fight the scandal and your critics, don’t wait for the facts to start making your argument.  O’Reilly started attacking his critics well before he had time to assemble his facts. By doing so, he was able to frame the narrative to focus on the credibility of Mother Jonesand the other reporters who subsequently came forward in support of Mother Jones — instead of his own credibility — while keeping others off-balanced through intimidation and threats.
  • This is a case of “don’t try this at home, kids.” His scorched-earth approach is working for O’Reilly but he has a nightly bully pulpit, and you don’t. That said, framing the narrative is an important element of crisis communications, and can be done without resorting to oppositional research.

• By commenting on his show and in other outlets, O’Reilly is able to keep the attention where he wants it: on him aggressively attacking his critics. During a crisis, most organizations try to avoid speaking to the media. Not O’Reilly. He’s not hiding. He’s arguing his case on his program and many other outlets, providing new statements almost daily since the Mother Jones article hit. The resulting coverage has focused on O’Reilly’s eagerness to attack, which is a win for O’Reilly because it deflects attention (from questions regarding the credibility of his reporting) while showcasing O’Reilly brand’s combativeness.
  • Most organizations should not follow the O’Reilly playbook of attacking and intimidating reporters. But it can be a mistake to go silent, too, which lets the media spend endless cycle time speculating. For example, the NFL went silent during most of the intensive Deflategate speculation, and lost control of the narrative, which hurt its credibility.

• There is a distinction being made between journalist and pundit.The line between fact and opinion can be very blurry – but in the case of Williams and O’Reilly, the demarcation is widely recognized, and O’Reilly benefits from lowered expectations for pundits. (What’s being overlooked is that the questions about his accuracy stem from when O’Reilly was a reporter.)
  • This blurred line between fact and opinion is important to keep in mind when your client or CEO asks you to respond to an inaccurate opinion article. It’s almost impossible to get an opinion writer to apologize.

• Despite the media’s tendency to attach the word “gate” to every scandal, the media this time is not referring to it as “Williamsgate,” “O’Reillygate” or even “Truthgate.”This is far from the most important element but it speaks to the fact that some crises follow a certain pattern while others will go in a different direction from the crisis plan you assembled.
  • Good plans address likely scenarios and then also figure a way to address unlikely crises that may still occur.

• Truth is not always quantifiable and what’s at stake depends on your value system. Just as some people see that dress as black and blue while others insist it’s white and gold, there are two camps when here: Those who say the truth matters (and invariably cite a spinning-in-his-grave Walter Cronkite) and those who believe freedom of speech is more important. Where you fall has quickly become another political polarizing question.
  • For PR pros, it’s important to understand which stakeholders are important and what their perspective is – is an important element in determining the path you should take.

Despite all the acrimony from both side, there is one thing both O’Reilly and his detractors probably agree on — these lessons are irrelevant to them. But understanding them — like starting the vetting process to cover years before an executive joined the organization — may enable a PR function to better weather a future crisis.

Progressive Insurance's Crisis Response Looks a Little Regressive

People like to complain about several types of businesses: among them, cable companies, airlines, telemarketers, used car dealers, and insurance companies.

So on Monday, when comedian Matt Fisher published a devastating blog post entitled "My Sister Paid Progressive Insurance to Defend Her Killer In Court," about how Progressive mishandled (from his perspective) issues after his sister was killed in a car accident, the story took off and became a social media crisis.

From a crisis communications perspective, Progressive also mishandled this crisis.

That's surprising because Progressive has a Twitter team of 11 people, posting more than 6,100 total tweets, averaging a couple of tweets per day. So I might have thought the company would be more nimble to the negative response to how Progressive handled the Fisher case.

Yet, Progressive did not post any tweets on Monday. And did not post anything until nearly 3pm on Tuesday.

Instead, Progressive's initial reaction was an auto-response tweet, “This is a tragic case, and our sympathies go out to Mr. Fisher and his family for the pain they've had to endure. We fully investigated this claim ... and feel we properly handled the claim within our contractual obligations.”

Part of the problem with Progressive's response is that it seems biolerplate, detailed by legal counsel, not by actual human beings with real empathy for the situation.  

It's yet another example of by-the-book crisis communications that turns people off.  

As a public company, Progressive has to balance the necessity of its fiduciary responsibilities to its shareholders -- the fact that the company feels it "properly handled the claim within our contractual obligations" -- along with its need to maintain a brand that appeals to consumers.  One other variable affecting Progressive's strategy is that its stock price actually improved a few cents after the social media storm hit (from a low on Monday of $19.67 to a high of $19.96 midday Tuesday).

Progressive seems to have made the decision to ride out the social media storm, and cynically, that may be the best approach. Even if the company communicates its fiduciary responsibilities and explains more fully its "contractual obligations," those obligations can't hold up in a court of public opinion when compared to Fisher's horrible story. Progressive's approach: if we can't win, we won't play...for a few days.

Finally, just before 3pm on Tuesday -- basically 20 hours since Fisher's post -- Progressive finally posted a response to the criticisms.

It's a better response, and I think it's because someone inside Progressive realized that its brand image was being affected, even if its stock price was relatively unaffected. Progressive has invested years and millions of dollars to develop a recognizable brand epitomized by good-natured, slightly wacky Flo -- while portraying the other guys as working for a company that places "contractual obligations" over policy holders. 

Progressive finally recognized that they had to make a change to its response, and did so by putting a specific person's name to the response, and while it wasn't warm-and-fuzzy, the explanation -- "There was a question as to who was at fault, and a jury decided in the Fisher family’s favor just last week. We respect the verdict and now can continue to work with the Fisher family to reach a resolution" -- shows them moving for a solution. 

In this case, I hope they follow "contractual obligations" and pay the Fisher family the full balance owed them under the policy.

But Progressive's reaction -- its officious initial comment, the delay in responding -- shows the failure of following by-the-book response crisis management that generates a generic response that can be used in almost any crisis.  Instead, crisis communication templates should always provide room to customize the response to address the specifics of the current crisis. That's something a number of recent responses to crises have forgotten.

"Natural" Causes Problems for Companies like P&G, J&J and Kelloggs

This week, we've seen two consumer companies get called out for misleading consumers about the ingredients in their products. 

Procter & Gamble was subject of calls to reformulate its Tide Free & Gentle (fragrance free) and Tide Original Scent because they included low levels of a 1,4 dioxane, a possible carcinogen. And Kashi was booted off the shelf of an organic food store because the owner found Kashi uses genetically engineered, non-organic ingredients.

Both companies issued non-apologies that stated they did not break laws of do anything wrong.

Legally, that seems to be correct. But both brands have a responsibility to their consumers that go above "not breaking the law" -- and that is to make sure their ingredients live up to its marketing.

This is more of a challenge in an age of social media, where this kind of information can spread quickly. Transparency when it comes to ingredients is important given the trend that public health advocates are looking at the formulations of products Americans use to see if the products are natural, if that's the claim, or might harm users.

Knowing that, companies like P&G, J&J and others should get out in front, start evaluating and reformulating their products. The fact is they're going to reformulate their products -- P&G did so with its Herbal Essences line last year and J&J is going through with its reformulation of Baby Shampoo despite initial response that it wouldn't do so.

The point is these companies should get ahead of the issue -- even highlight being proactive in weeding out problematic ingredients. But for some reason they're not doing so. They're risking controversy that they can avoid.  True, some consumer don't care, but committed "natural" consumers do care, and it makes no sense to alienate these consumers. And, to be clear, the alienation happens twice: once because of the ingredients and again because of non-apologies that don't address the consumers' concerns.

Three Social Media Lessons Not to Copy: Claire's disengages in face of charges that the retailer copied designs

Claire's Stores, a U.K./U.S. retailer with 3,000 outlets and revenue of $356 million in Q3 2011, has become embroiled in a social media scandal. An an independent U.K. designer, Tatty Devine has accused Claire's of ripping off its designs in this blog post. For more context, check out this ZDNet article, "Claire's Stores ignores Twitter criticism over copycat design claims."

When it comes U.S. intellectual property laws, designers cannot, apparently, copyright or trademark their designs. That's the crux of a current case between Christian Louboutin and Yves Saint Laurent. Current U.S. law apparently does not provide much protection against copies or knockoffs. (For that matter, U.S. law apparently does not protect the use of titles of books, movies and song.)   So the issue here is not whether or not a big retailer like Claire's copied designs from an independent designer; the issue is: how did Claire's address the issue via social media.  Claire's did not do a very good job. Here are some of the issues:

1.     On both Facebook and Twitter, Claire's provided generic statements that probably caused more confusion because the statements did not directly address the situation. On Facebook, Claire's stated that it is a "responsible company" that aims "to provide innovative collections that bring customers all the latest fashion trends. As such, we take any allegations of wrong doing seriously."  Some of the initial posts actually asked, "What happened?" A good initial statement needs to provide enough information so that it is clear  that the company understands the scope of the issue, even as it sets to investigate further. On Twitter, Claire's was limited to the 140-character limit, saying merely, " Claire's responsibly provides customers with the latest trends. We take claims of wrongdoing seriously and are reviewing the matters raised." That snippet perhaps left greater questions about what "the matters raised" is all about.

2.     On Facebook, the company deleted some users' feedback that was negative to Claire's, but did not otherwise engage with upset fans. The only interaction between someone at Claire's corporate seems to have been a post saying, "We do not tolerate the use of profanity on Claire's wall. Thank you." Just because you can delete posts written on your wall, doesn't mean you should.

3.     There was no follow-through on Twitter or Facebook. That one comment on Twitter at Feb. 24th at 12:46pm was the only statement the company posted -- even as it posted five other tweets. Same for Facebook. In fact, the only response from Claire's corporate was the Facebook comment about deleting a post due to profanity. Instead, the only one responding from the company was a manager from one of its U.S. stores; and after what she called a "lively debate," the store manager deleted her comments, instead, saying that she's "going to let my company handle it." That's good, except for one thing: the company has not responded.

In light of the fact that Claire's has a strong Facebook and Twitter presence, with more than one million likes on Facebook 15,500 followers and 2,100 tweets, you'd think the company would better understand how to engage with customers and potential customers via social media. Right now, the company has been stonewalling rather than engaging. They have not provided its one million Facebook fans with information to support the company's statement that it is responsible and that it is vital source for the latest fashion trends. The company basically disengaged, which is the antithesis of how you're supposed to approach social media.

Non-apologies and Non-answers Don't Help Non-profits

The well respected nonprofit Susan G. Komen for the Cure foundation is now embroiled in a scandal of its own making. The reaction to the news that the foundation had decided to cut funding of $700,000 of grants to Planned Parenthood has generated a storm of front-page coverage, angry editorials, tweets and Facebook comments.

The organization, which has built up tremendous goodwill and strong brand recognition with its iconic pink ribbon, has a right to distribute its $93 million in grant money as it sees fit, consistent with its mission, fiduciary and legal responsibilities.  However, the foundation has clearly miscommunicated an apparent policy change with regard to Planned Parenthood.

Critics are claiming that the reason Komen cut grants to Planned Parenthood is due to politics -- specifically the desire to placate some anti-abortion donors who have been targeting Planned Parenthood, which provides breast-cancer screenings along with privately-funded services, which may include abortion.

In its attempt to explain the change in policy, the foundation issued a statement, followed up by a video by Komen founder and CEO Nancy G. Brinker, that it continually measures the impact and that  the organization "has the highest responsibility" to make sure "these donor dollars make the biggest impact possible." 

At the end of the video, Brinker invokes the promise she made her sister, Susan G. Komen, in explaining the foundation's mission. She does a good job in articulating the passion she feels for the organization, its goals and its impact.

Unfortunately, though the video is intended to provide background on the organization's policy changes, Brinker never actually mentions Planned Parenthood by name. Nor, in stating the organization revamped its guidelines and policies in terms of grant-giving, does Brinker explain what new criteria Planned Parenthood and others organizations now must meet in order to continue to receive grants from the Komen foundation.

Ultimately, her explanation is neither an apology -- Brinker's a bit to defensive here -- nor a direct response to the questions people have.

And because she doesn't provide a true answer about its decision that impacted Planned Parenthood, Brinker has actually flamed the fires, enabling people to assume that the decision was motivated by anti-abortion politics that has spent the past year targeting Planned Parenthood, investigating it for possible misuse of government funding (which is kept separate from any abortion services Planned Parenthood provides).

The lesson here is that goodwill takes years to build up but can be damaged in a heartbeat if communications are mishandled.  I don't know if the Komen foundation will see long-term negative impact on its programs and fundraising -- just as I don't know if Planned Parenthood will see a long-term positive impact to its fundraising and its support.

But I do know this damage is self-inflicted, even if unintentional. Policy changes don't have to be scandals. But it shows, yet again, that in the social media age, organizations need to be more sensitive than ever to the impact of its decisions and to the way those decisions are communicated and responded to.

UPDATE: After this article was posted, the foundation actually reversed its decision,and did a better job of explaining its new policy:

Our original desire was to fulfill our fiduciary duty to our donors by not funding grant applications made by organizations under investigation.  We will amend the criteria to make clear that disqualifying investigations must be criminal and conclusive in nature and not political. That is what is right and fair.

This information was not communicated well before -- which meant that the conflicting information coming from inside the organization and from former employees was getting significant play as people were trying to make sense of things.

That said, the tone of part of the response is more defensive than it might have been: "We have been distressed at the presumption that the changes made to our funding criteria were done for political reasons or to specifically penalize Planned Parenthood.  They were not."

At this point, the question remains: what long-term impact will this blunder have on this worthy organization. Let me know what you think.

Johnson & Johnson Misdiagnosis of its Crisis

Perhaps it depends on how you define "crisis," but there are more than 200 articles by the third day of the month about the concerns about Johnson & Johnson's baby shampoo as well as a movement to boycott J&J. (Not every call for a boycott is a crisis -- on Facebook, there's a list to boycott those who boycott Arizona, so you can have counter-boycott boycotts.)  In fact, this is a big crisis for a brand that last month ranked by Forbes as the most trusted brand in America. This is particularly true because of the concern that some ingredients put babies at risk.

Yet Johnson & Johnson doesn't seem like it's hoping the issue will go away, even as it has posted some information online and on a couple of its Twitter feeds.

For example, there didn't seem to be much activity on Facebook about it, including on the J&J page -- there's one post from the company, from Tues., a day after much of the coverage started hitting. Meanwhile, there are 45 posts on the J&J Facebook wall, most of them from people venting how upset they feel, how they feel the company betrayed them and put their kids in danger.  The lack of engagement is turning off some customers, so that they're feeling as if J&J is not listening to them.

I don't think that's the case, though. I'm sure J&J is listening, but is figuring the company doesn't get much benefit from engaging with angry customers. And there isn't much benefit to engaging if the company is not willing to make changes that address customers' concerns about the possibly carcinogenic ingredients.  The company says it has been reformulating and phasing out some ingredients, but two years have passed and there are still some ingredients that have yet to be replaced in the new formulation.

Meanwhile, J&J has posted a handful of Tweets pointing to the long statement.  Again, it doesn't seem like the company is going out of its way, and possibly for the same reason.  While the company has several Twitter feeds, you'd

have to know where to find them (@JNJStories, @JNJHistory and @JNJComm) to see the posts, which merely offer a link to the long statement. Even the blog post (called JNJ BTW) isn't effective.

Part of the problem is that there's a lack of emotion or a lack of conveying that the company understands the emotion that its customers are feeling. While the organization raising awareness about the ingredients has a Twitter ID (@nontoxicissexy, and while much of the coverage includes a photo of an adorable baby, J&J's "A Statement on Ingredients in the News" doesn't address the emotion and concern -- it doesn't even include a photo of an adorable baby.  Instead, the statement is a rather dry, stoic response, one that hides behind language like "The ingredients used in JOHNSON'S^® Baby products, including preservatives that are designed to release tiny amounts of formaldehyde to protect against harmful bacteria growth, are safe and approved by regulators in every country or region in which they are used, including U.S., EU, and China."

Really? J&J should have realized that citing the fact that some ingredients meet the standards set by China would not help its case.  After all, China has its own safety and quality control issues, since the country has repeatedly let toy companies export lead-paint-covered toys, among other harmful ingredients and products.

I would be surprised if J&J does not completely reformulate its products to take out formaldehyde and other preservatives. As it is, the company merely says, it takes reformulating its products require "extensive efforts, which require complex testing and significant clinical studies to insure that new formulations meet our high standards for safety, mildness and gentleness." But I don't know why J&J doesn't just announce that it responding to concerns, and that will finish that process within a set timetable. They would be in a better position if they did so. Right now, it seems like the company is taking a hit it doesn't need too -- because it will eliminate formaldehyde. The challenge for J&J is that when it does finally sell formaldehyde-free baby shampoo, the company can't really make a big deal of it. It has a teachable moment that it's not effectively using.

Fee, Fie, Foe -- 3 Lessons learned when companies mishandle how they communicate their new fees

In the wake of Netflix's mishandling its new pricing structure and sub-brand (Qwikster, in case you misspelled it), Bank of America recently also blundered in announcing a new charge for debit card customers (check out the Time Magazine about it here and a Financial Times article here).

With a US economy that continues to fluctuate wildly, and continued bad global economic news, it's probably a safe bet that more companies are going to look to raise prices and implement new charges to boost their embattled bottom lines. It's also a safe bet that as they do so, other companies (besides Netflix and BofA) will mishandle their communications around the price hikes.

You can check out Nine Lessons from Netflix and the 'Half Apology." 

Here are some thoughts about lessons from BofA:

1. Some companies may feel that their customers are captive and don't have much of an alternative, but even if that's true -- and I think it's more difficult to change banks than to switch TV channels -- companies need to realize there is a price to pay for mishandling communications. Beyond a company's reputation, publicly held companies have seen their stock prices fall as a result of negative consumer backlash.
2.  Companies need to provide context for restructuring their prices and fees. Blaming new government regulations, as BofA has done, will likely appeal to some customers, but when so many people think the government bailed out the banks while holding consumers accountable for bad mortgages will not generate much sympathy overall or provide enough of an explanation as to why BofA will soon start charging $60 a year for the privilege of using debit cards instead of checks or credit cards.  Especially right now, when there's a lot of anger towards Wall St., with in-person and online protests like #OccupyWallStreet. So for BofA and other banks like Chase, SunTrust, Wells Fargo, Regions, establishing new fees will likely be seen as another example of banks putting their interests ahead of their customers. 
3. Communicating solely by Twitter can be partially effective to get what amounts to a headline, but is not effective in providing detail. Our advice to BofA: Consider steps to take to mitigate the consumer backlash, especially since some reports attribute the drop in its share price to the negative consumer response to the new fees. If the only place BofA has addressed this issue is on its Twitter feed, @BofA_News, the bank should start communicating beyond Twitter.  First, because its 140-character limitation, Twitter is not the right means to communicate a complicated message. Second, fewer than 9,000 people currently follow @BofA_News so the bank can't be sure it's actually and effectively reaching its customer base. 

For example, the bank should prepare a detailed FAQ inserts to accompany its monthly statements and post that information on its website, about the new fee. The FAQ should explain the economics of the fee, should include a statement that explains the reluctance with which BofA realized it had to initiate the fee, and include information about ways that customers can avoid being charged the $5 per month fee -- for example, apparently using a debit card at an ATM won't trigger the fee but using a debit card at a retailer will. Meanwhile, explaining that Platinum customers will be exempt from the debit card fee, will not placate the majority of customers who will soon be charged the fee.

Other companies considering price increases or the implementation of new fees should learn a lesson from Netflix, which did an arguably poor job in communicating the context for its increase of fees. Even if you're in a position where you must pass along higher fees, it helps to explain the reasons for the increase. Otherwise the increase will seem like a slap in the face to its customers.  Again, I have no doubt that we'll see more companies considering raising prices and charging new fees in the near future -- and that there will be negative response if the increases are not communicated effectively.  What's also clear is that companies that mishandle their price increases may also pay a price -- in their stock price, as BofA and Netflix have seen.  With the right planning, companies can announce price changes that don't have to lead to crisis communications. 

Nine Lessons from Netflix and the 'Half Apology"

Until two months ago, Netflix offered one monthly fee of $7.99 to order videos by streaming and DVDs by mail. Then Netflix announced it would charge its customers $7.99 for a subscription to its streaming service and another $7.99for Netflix' mail-order service -- representing a 100 percent increase.

Then, on Sunday, Reed Hastings, CEO of Netflix posted an explanation of sorts: "An Explanations and Some Reflections" only to cause more problems for Netflix. Hastings may have intended it to be an apology, but one person termed it a "half apology," and I think that's about right.

Here's a list of nine lessons learned from this incident:

1. Companies need to provide context when the price customers are going to be charged will increase significantly. Changing the fee can be a critical time in almost any company-customer relationship. But that's especially true when the increase is so dramatic. Hastings said he should have provided more of an explanation about why the company increased its subscription fees. But Hastings's explanation notes that a full justification "wouldn't have changed the price increase." 
2.  Waiting two months to respond was probably too long. The company lost about a million subscribers recently -- probably due to the price hike. Hastings said the company is moving and evolving quickly, but that's not the impression one gets from a two-month lag time before Hastings responded.
3. When communicating with customers, make sure the information you provide them is focused on their needs. While Hastings's  explanation on his blog did a fine job of laying out the company's vision and goals, it didn't really address customer concerns.  Instead, Hastings used the blog post to explain why Netflix is changing the name of its DVD-by-mail service to Qwikster, and to prepare customers for what that change will entail. His explanation was focused on the company, not the customer. Hastings explanation is focused on discussing the upcoming changes from the company's perspective, not the customers, and is tone deaf in addressing customers' needs and perspectives.
4. When launching a company, a blog post on a Sunday night might not be the best strategy. It's difficult to know how much planning when into the spin-off of Qwikster, but the company look unprepared with a lack of a Twitter ID, Facebook page and website, even as placeholders.  
5. If you do use your blog to launch a new business, don't bury the lead.  Hastings' post first mentions the Qwikster name change midway through the post. It made Qwikster seem an afterthought. The post is fairly clear on what the Qwikster experience will be like -- i.e, Netflix with a different name -- but I don't think it does a good job of serving as a launch pad for the new brand. 
6. When seeking to appease your critics, try to lock down areas that might spark further criticism.
   
   As laid out in the post, Qwikster is likely to continue to rub customers the wrong way. Customers have to log onto separate sites to select a DVD-by-mail and to download a video; they have to look at reviews on two different sites (because Netflix and Qwikster will now offer separate customer reviews); they have to update credit card and other information into two different systems, and they will receive two separate charges on their credit card statements. I understand the need for separate brands but there could have been ways to streamline the customer experience.
7. Naming a new brand is very difficult these days; while it's hard to come up with a great name -- and I think Netflix is a great name -- it should be easy to identify a lousy name.  For example, Qwikster.  It's easy to misspell. It doesn't actually deliver on its brand promise (instant downloads are fast; delivery by mail is not quick). And it sounds too much like Friendster.  That said, even though I don't like the Qwikster name, I think the reason behind changing the name makes sense because separating the Netflix brand from DVDs-by-mails may have a better chance for survival if people no longer associated Netflix with its iconic red envelopes. After all, AOL is still associated with slow dialup service, and it gave up that business a few years ago. 
8.  If you're going to claim you messed up, you should explain the steps you will take to prevent a similar mistake in the future. Especially when you identify the nature of the mistake as being not communicating enough.  Hastings may mean for this to be his "sincere apology" but he doesn't outline how he'll make sure that both Netflix and Qwikster will make sure to overcommunicate critical information in the future.
9. Listening and responding to customers' concerns goes beyond branding -- even though it is a big issue for the Netflix brand. Getting this wrong can also exact a real cost to the business. In this case, Netflix has lost subscribers (even as its total subscriber base is larger this year than it was last year; the company has lost about a million subscribers over the past two months).  And Netflix has also seen its stock price drop, too, and that has financial implications as the company continues its global push.

Let me know if there are additional lessons to be drawn from Netflix.

11 Lessons from Weinergate

We knew it was a train wreck when Rep. Anthony Weiner (D-NY) said he could not say "with certitude" whether or not that now infamous photo was of him.

Here are some lessons learned from the past two weeks.

1. Do not take a picture of your junk. If you feel compelled to do so anyway, do not take the photo with your cell phone and do not load it onto your computer -- it's too easy for something unpleasant to happen.  This might seem obvious, but clearly it's a lesson that Brett Favre and Anthony Weiner could have benefited from.
2. Do not share pictures of your junk. Nothing good can come from it. Doing so is unlikely to get you what you want. And, if you're a public figure, is more likely to make the day for your political enemies and late-night comedians. Even Jon Stewart, who on previous editions of the "Daily Show" has said he's good friends with the congressman, had to take Weiner to task.
3. Social media is a great way to connect and engage with people you've never met, but limit the nature of the conversations you have with people you don't know. Your parents told you not to talk to strangers for a reason. This is particularly true for the Internet, where no one know if you're a dog. (Apparently in more senses than one.)
4. If you feel you must respond when a woman says she thinks you're politics are "hot," focus on the politics, not the "hot." It may be flattering for someone to call you "hot," but it's never good for married politicians to respond to those compliments.
5. If you're not sure if a conversation you're contemplating or actually having is appropriate, it probably isn't. Before you post or hit send, ask yourself, if this is made public, how would TMZ respond? What will Andrew Breitbart do with this content? 
6. A little flirting may be okay, but persistent over-the-line conversations are not. Keep in mind that those online conversations that you think are sexy and fun will actually look especially sordid and creepy when other people can read them. Keep that in mind the next time you consider engaging in those sorts of conversations.
7. If a photo or conversation is made public, do not lie and say your account was hacked if, in fact, your account was not hacked. Eventually, the truth will come out, and now people will know, among other things, that you a liar. And a bad one at that. 
8. Remember: it's usually not the deed but the cover-up that causes problems. True, it would have been embarrassing for Weiner to admit at the start that the photo was his. But had he admitted the truth up front, he would have spared himself two weeks of humiliation. And he would have more credibility.
9. By not answering questions clearly and succinctly, you actually raise the distraction level. Weiner is an otherwise feisty, smart and astute politician, with a lot of media experience. He should have realized that providing fuzzy, contradictory answers only stoke the scandal's flames (and not in a way he wanted to via his online exchanges).
10. If you schedule a press conference to finally admit what we all know to be true, do not let anyone else -- especially a political enemy -- commandeer your podium before you get there. Instead, if you're going to be late, at least station a staffer to prevent anyone else from usurping your microphone and airtime.
11. If you hold a press conference to make a teary confession, do not take questions afterwords. Make your statement, explain that you're sorry you've hurt those closest to you, that you made and learned from your mistake, and then left the podium. There will be no sympathetic of softball questions from the media, like, "Congressman, now that this is behind you, are you glad to get back to focusing on the business your constituents elected you to do?

There's clearly a 12th lesson here that was once best illustrated by the Daily Show with a faux press conference but you'll have to search for the link on YouTube.

Check out Don't Be A Weiner for other lessons and a good post on Forbes.com, 5 Tips for Handling a PR Crisis like Weinergate. If you have other lessons from this recent crisis, let me know.

Chrysler & the F-Bomb

Last week, someone working for Chrysler's social media agency accidentally dropped the f-bomb in a tweet from Chrysler's Twitter account, @ChryslerAutos.

You can read about it in Matt Wilson's article in Ragan.com's PR Daily, "F-bomb appears in Chrysler’s official Twitter account."

In his follow-up article, Matt asked some worthwhile questions:

• Did Chrysler overreact to accidental f-bomb tweet?
• Should the automaker have fired the social media manager who sent an offensive tweet? 
• And could it have been spun into a positive? 

Matt points out that when something similar happened to the American Red Cross, "who turned a tweet about beer meant for a personal account into sympathy and blood donations."

But I don't think the situations are analogous.

For one thing, there's a big difference between what was posted on the Red Cross' Twitter feed and Chrysler's -- namely the latter used the F-bomb.  (You can read about the Red Cross' rogue tweet here.)

I think Chrysler couldn't just brush it aside and make a joke of it.

It's one thing for Melissa Leo at the Oscars or Steven Tyler on "American Idol" to let loose, but it's quite another for a company selling an expensive item to a mainstream population.

Plus, a brand has to earn the ability and the trust to joke with its constituents.

And while I enjoyed driving a Jeep for a long time, Chrysler's brand is not a jokey brand (as opposed to most domestic beers and alcohol brands, and, surprisingly, some insurance companies). Which is to say that we don't expect Chrysler to be making jokes -- so if they had tried to joke away the F-bomb, I think it would have fallen flat.

More than that, I doubt the internal culture at Chrysler is one that would feel like turning this gaffe into a joke.  This is not a judgment of Chrysler's culture.  Just some companies can't tell a joke.

What's interesting about social media, especially as illustrated by this situation, is that each organization operates a bit differently.  Everyone's learning and a lot of companies are making mistakes.  But each company's culture, resources, capabilities and relationships are different so that two companies in the same sector may operate and behave quite differently.

And that's ok.  It shows that an organization's focus and values truly are important and that when communicating your organization culture and personality, it's critical to truly understand that culture and personality.

Let me know what you think.

In the meantime, for some good steps for how to handle a mistweet, check out "It’s Okay to Mess Up" by Beck Johns.

Charlie Sheen Makes the Case for Strong PR Support. Inadvertently.

If you've been living on Mars, you may have overlooked the media blitz of your fellow Martian now living on Earth. Perhaps you've been focusing instead on news of lesser importance, like figuring the correct spelling of Libyan dictator Moammer or Muammar Gadhafi, Gaddafi, Qaddafi, Khadafy, or Khadafi; frankly, I prefer to call him Colonel Mo.)

For the rest of us, it's been hard to avoid the real-time train wreck that is Charlie Sheen.  (You've seen or read about them so I'm not going to include the ton of links here.)

I've been talking about the role of public relations in the age of social media quite a bit since a panel I moderated in Oct., including with a reporter and with students at a local university, where I guest lectured earlier this week. And the reason I broke the Charlie Sheen-free-zone I had tried to establish is because I
think Sheen's rants support the case that publicists still play an important role in the lives of their clients, whether an actor or an organization.

Here are three things that Sheen's meltdown can teach us:

1. You may not notice a publicist's behind-the-scenes work when things are going well, but you certainly can see the impact when there's no guidance from a PR professional. A strong publicist is important to provide objective counsel on the types of program on which to appear and the tenor and nature of the comments one should consider making during those appearances.  Clearly, that's not been happening here, leading to Sheen's publicist quitting, saying he was "unable to work effectively” with Sheen -- something of an understatement.  Lest you think it's only an issue with Sheen, remember what Tom Cruise's appearances were like after he replaced his publicist with his sister.
2. You can lose good will and reputation quickly.  For nearly a decade, Sheen has been the lead actor in TV's top-rated comedy, but in a matter of a week, Sheen has gone from delivering punch lines to being the punch line.
3. It can take a long time to repair your reputation.  Just ask Mel Gibson and Tom Cruise.  At this point, Cruise has taken steps to rebuild his reputation, but he had been the top box office star for years, but that changed after he performed his own stunts on Oprah's couch.  Meanwhile, as for Gibson, last night Letterman ran a segment that inter cut lines from Gibson's taped phone calls with Sheen's off-the-wall recent interviews.
4. You can never underestimate the public's interest in a celebrity meltdown. Sheen's story is ubiquitous; it takes more effort to avoid it than to read, see, hear, talk or tweet about it. You might not realize it but there's actually a lot of other news -- some of it actually important with significant implications for us as a country -- being crowded out by Sheen's meltdown. For example, the state of the Arab world and their push against dictators; just because Mubarak has stepped down doesn't mean story's over.  But it's now harder to find news about Egypt. There's the possible budget showdown that, not surprisingly, has been postponed, along with the protests in Wisconsin. But Sheen, followed today by the news of the firing of Dior designer John Galliano, seem to fascinate people. You can't ask why do people care; they just do.
5. You can't just wing it, you need a good story to tell, even if you've got a movie to plug. This lesson comes from an appearance last night of actress Amanda Seyfried on the Late Show with David Letterman.  Letterman's never been a great interviewer but last night, Seyfried's appearance came off as flat and unfunny. The lines she kept expecting to pay off with laughs never hit.  What's perhaps interesting is that she had previously appeared on the Late Show just a few weeks earlier, and had done a much better job.  (In searching for Seyfried & Letterman, her prior appearance showed up first; the brief segment, below, was the comic highlight but doesn't do much for her image.).  Last night, they didn't have much to talk about, not even her upcoming movie.  The lesson this teaches is that you always need a plan and key messages for what you want to say. Even stars need to think ahead for their goal for any media appearance, and shaping that story is something a good publicist should do.

I know that entertainment PR is a specialized niche, but the lessons of Sheen's meltdown are relevant to other parts of the PR world. And it helps make the case for getting good PR support ahead of time. Cleaning up after a disaster is always more complicated slogging than addressing issues before they turn into a crisis.

Carnival's Crisis Turns Into Social Media Case Study

There's a lot of potential for crises in the travel business than most outsiders realize, either from equipment problems like Qantas experienced and Carnival's Splendor fire to natural disasters like the Icelandic volcano that disrupted travel to and from Europe this spring and the Indonesian volcano that erupted this week.

The combination of smartphones and social media makes it very easy for stories to get out to a wider audience than would have been possible just five years ago. We can expect that these kinds of stories will continue to generate noise, and companies need to prepare for that eventuality -- as opposed to hoping that the public's interest and appetite for such news will wane.

This week's two crisis alone provide an incentive for travel companies (but not just travel companies) to update their crisis plans to make sure they address social media as a communications vehicles, something Qantas did not do. (See, Five Lessons on Twittering During a Crisis: Lessons from Qantas.)

Here are some lessons learned from Carnival's response:

1. Carnival did a good job using Facebook and Twitter. There were regular updates on Carnival's website, and links posted on Facebook and Twitter. Carnival might have posted more frequently than once or twice a day, but it did respond when someone said the link to the Splendor's status was not working. (When I clicked on it, the link worked.) And the company posted more frequently as the Splendor reached San Diego.
2. Carnival did a good job when it posted links to the on-board blog post written by Splendor's cruise director, John Heald. The post was positive but also acknowledged the reality, noting: "most important facts and those are that the ship is safe, the guests are safe and that nobody was injured in what was a very difficult situation. I also want to tell you that the guests have been magnificent and have risen to the obvious challenges and difficult conditions onboard."
3. Once Carnival started reporting on the Splendor, the company halted its regular promotional posts -- the ones highlighting locations, ships, even a regular weekly contest -- clearly recognizing that business as usual was not appropriate while a ship was stricken. That was a good move.

In terms of what's next: I think there's some concern about the conditions, and whether or not the ship really turned into "passenger hell," so a lot of the immediate coverage will focus on those conditions. The fact remains that the passengers and crew were safe -- that's important.

Carnival should continue to use social media to communicate any feedback the company gets from passengers -- and already there's a lot of positive feedback on its Facebook page. I think the company should report back on any lessons learned, perhaps something like, in the even a ship is similarly disabled in the future, Carnival will get non-perishable food other than Spam and will develop a process so that people don't have to wait two hours in line for Spam sandwiches.

It's been a busy week for travel crises and social media. There are certainly things that Carnival can improve -- what other lessons do you think are important, please let me know,

(In the interest of disclosure, I've had past connections to Carnival, but I do not and have not worked for the company. )