Bank of America Got the Hint

So after weeks of hearing my friends bicker about Bank of America’s new debit card fee and the viral outbreak against the bank online, Bank of America dropped its plans yesterday to add the monthly $5.00 charge for debit card users. J.P. Following suit, J.P. Morgan Chase has decided to drop its plans to add a fee as well.

The company statement reads as follows:

“In response to customer concerns and the changing competitive marketplace, Bank of America no longer intends to implement a debit usage fee. We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee. Our customers’ voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”

This story is very reminiscent of the recent Netflix fiasco that erupted: Company makes announcement. Customers across the country are enraged. Customers take their rage to social media. Company realizes the hole they dug for themselves. Company drops plans.

At least we know companies are taking consumers’ concerns on the web seriously and that they are beginning to understand the power of social media more than before. Bank of America better get the word out quickly because I already know a handful of people who are planning to leave the bank soon. I’d be interested to see how many customers they have lost since the initial announcement.

Kudos to BofA for resolving its PR crisis!

Speaking of PR crisis, this would be a nice time to plug my Halloween costume with the rest of the Hunter PR interns. We were struggling to come up with a group costume for the holiday, and I figured why not poke fun at our own industry? I constantly hear about PR case studies every week in class and thought of a fun and unique way to present them. What better way to showcase the case studies than in a #PRFail group costume?

PR Crisis from left to right: BP, Netflix, Motrin, ConAgra Foods, Walmart

Sometimes we just have to laugh at ourselves and what goes on in our industry. Happy November!

Nick Schweers

Director

Can Netflix Save Itself?

After the Netflix PR crisis that occurred the past few months after the service’s price raise in July, CEO Reed Hastings recently tried to make things right. He scrapped Qwikster and announced that Netflix would return to the service that everyone has grown to love. While the price raise will stay because “the price change was necessary,” Hastings promises that “we are now done with price changes.”

It is now almost two weeks after Hastings made this last announcement. What can we learn from this crisis? Where does the company go from here?

Carolyn Kepcher provides a checklist in her article, “Netflix provides good example of what NOT TO DO in big business strategic changes.”

DON’T:

• Assume that success is forever: Don’t let your success get to your head because you never know when an obstacle can arise.

• Make a big change without communicating: Kepcher explains that people everywhere need an explanation, a chance to give their own opinions, and some advance notice.

• Follow a mistake with a bigger mistake: When involved in a crisis, make sure you handle it promptly but efficiently to avoid digging an even deeper hole for yourself.

• Do too little, too late: Don’t wait too long to respond to your crisis, or you’ll never recover from it.

I believe Netflix is on the right track to recovery, even if it took one or two tries to please consumers. Hastings hopefully learned his lesson after the heavy public backlash on the Internet and will not act so quickly next time to fix something that does not need fixing. As for the price increase, I do not know if this will continue to hurt the company, but I think everyone appreciates Qwikster’s elimination. Some say the company does not want to be in the DVD business much longer because Hasting wants to move towards online streaming, but hopefully Netflix will survive this rough time to even move in this future direction. With the recent addition of the CW Network to its streaming service though, I see Netflix getting out of this rut and surviving this hardship.

What do you think? Did Netflix dig itself too deep or will people forget about this in a year or two?

Nick Schweers
Director 

GASP! Another Poorly Handled PR Crisis

OKAY, so today’s lesson is how you DON’T handle a PR crisis on your hands.

While I was on the train today, I came across a tweet about a customer complaint email and response that ‘s currently viral on the Internet. The tweet referred to GASP clothing, an Australian fashion chain. We hear about similar situations all the time, but I was quite shocked when I read further…

Warning: my post is highly opinionated, but I feel most people writing about this story all feel the same way.

According to Keara O’Neil’s initial email to GASP, she was inside the store shopping with her three bridesmaids when an eager staff member approached them. At first he was “helpful and funny,” but she went on to explain that he became overly aggressive in trying to make a sale. He began to make questionable statements about her size, such as “With your figure I really think you should buy it.” Immediately the women left the store when the sales assistant yelled, “Have fun finding something at Supre” and commented, “I knew you girls were a joke the minute you walked in.”

It almost seemed too ridiculous to be true, but I no longer doubted O’Neil’s shopping experience after reading GASP’s unapologetic email response. If O’Neil’s story alone did not already have potential to hurt the brand’s reputation, this PR crisis reached its peak after the company’s unapologetic email response.

Keara O’Neil

O’Neil stated in her email, “I am pretty laid back and was quite happy just leaving your store, it was my bridesmaids who felt the need to say something to him […] I’m just one retailer notifying another of an extremely inappropriate sales assistant.” I don’t believe O’Neil expected the email response that she received from Matthew Chidgey, a GASP area manager.

Chidgey’s response was unprofessional, rude, and outright offensive. He made comments such as, “Similarly these items are priced such that they remain inaccessible to the undesirable” and “Chris is a retail superstar, who possess unparalleled ability, and I am sorry you feel upset by him, but he knew you were not going to buy anything before you even left your house.” I think my favorite line from the email is “So if you would like to do us any favours, please do not waste our retail staff’s time, because as you have already seen, they will not tolerate it.”

With a manager having such a pompous attitude, it is no surprise that the sales assistants would act in such a way towards their customers. Stories like this make me question what companies are thinking and how they could be so irrational when dealing with customer relations. This will affect sales whether Chidgey wants to believe it or not because so many people are upset about the incident. It is no surprise that GASP shut down their Facebook page after receiving the overall negative response from consumers. With today’s economy, companies should never be too comfortable with themselves. People who were once loyal to this brand will gladly spend their money elsewhere if they are offended by this news story. Make sure you read GASP’s full email response. I can say it is THE MOST unprofessional email I’ve ever read from a company. It gave me a good laugh on my train ride.

When I came back to school, I saw a video of an interview with Chidgey about the incident (see video above). It is clear he has no training in media relations based off his answers to the news anchors. He came off very ignorant or just plain stupid to me. I’d like to believe his side of the story, but I’m on the consumer’s side in this one.

Today’s lessons learned:

Don’t ever be overly confident in your brand.

The customer is ALWAYS right.

Think twice before you hit “send” on that email.

What do you all think? Will this incident hurt the brand, or will people forget about it by next week? How should GASP have handled the situation differently?

Nick Schweers
Director
PRestige Agency