Posts filed under ‘Diabloguer’

Toyota and BP: Surviving the crisis

By Judi Schindler, Principal

As both Toyota and BP wage war to preserve their brands in the face of colossal crises, my money is on Toyota.

Last November, when the story broke about safety issues and mammoth recalls, the Japanese automaker violated every rule in the crisis management book by foot-dragging on safety issues, minimizing problems, distributing misleading statements and showing too little compassion. As a result, it suffered from stinging articles in the media and became the butt of every talk-show comedian.

Then, sometime in February, Toyota seemed to get its communication act together. President Akio Toyoda appeared before Congress and apologized. The company established “Smart Teams” of 200 engineers to investigate individual issues and appointed nine quality officers worldwide who could answer media questions

It created webcasts to respond to critics regarding gas pedal and electronic system issues and launched a website designed to address the issues. One of the most effective sites features video interviews of Toyota owners who have brought their cars in for recall repairs – all of whom express confidence that “if something is wrong, Toyota will fix it.”

Then there’s BP, whose issues are massive and ongoing. Worst of all, top management at the petroleum company seems to compound one misstep (or misspeak) on top of another.

On the other hand, BP hasn’t done everything wrong. The company has a well-executed  website, which includes videos, photos and press releases on the cleanup, where you hear first-hand from the individuals who are out in the Gulf every day working to contain the damage. (One video features actor Kevin  Costner praising BP’s efforts.) There are also state-by-state updates, claims forms and information on how to file a claim.

Both the BP and Toyota websites get high marks. But let’s assess the damage to the two brands.

There is no question that the carmaker’s consumer loyalty has slipped, but in the first quarter of 2010, 57.6% of trade-ins resulted in purchase of new Toyota – higher than any other brand. Sales have also recovered, up 24.4% in April, and in May the company reported net profits were 48% higher than the same period in 2009.

The public is not quite so forgiving of BP, especially since the crisis situation has yet to be abated. On June 21, several dozen demonstrations took place in cities across the country as part of the “Worldwide BP Protest Day,” a Facebook group that claims to have more than 350,000 supporters. Four days later, on June 25, the company’s stock hit an all-time low of $28.56 low, down nearly 53% since April 20.

So what’s the prognosis? In my opinion, the general public is more favorably disposed to Toyota than to BP. Toyota has a long history of building reliable automobiles and providing good service. It has happy car owners. Energy companies, like BP, do not enjoy the same favorable image. While BP had a better reputation than most oil companies, the entire industry has a reputation for price gouging and air pollution.

Toyota simply has a larger storehouse of goodwill, and, frankly, we are more willing to forgive someone we like.

The moral of the story is that crisis management must begin long before a crisis ever occurs – by building a reputation for dealing responsibly with the consumers, by behaving like a good corporate citizen, by providing reliable products and services and by communicating openly and candidly with its many publics. In other words, a company that nurtures and maintains good public relations over a period of years will have a better chance of surviving a crisis than one that doesn’t.

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July 12, 2010 at 8:17 pm Leave a comment

The year the aporkalypse afflicted Chimerica

By Sally Saville Hodge

I think we all have a love/hate relationship with buzzwords. On one hand, you can’t help admire the creativity that brings many of them about. On the other, many are just so apropos that they are used again and again and again…ad nauseum. Enough with “staycation,” please!

It’s that time of year when far-higher-profile pundits than I weigh in on the best/worst of buzzwords of the year just ended. Probably the most fun treatment can be seen in a New York Times contribution by Grant Barrett.

Barrett’s notable, by the way, as one of the founders of Wordnik, a site worth bookmarking if you appreciate words and how they change and/or become part of the vernacular.

Here are some of my favorite buzzwords and catchphrases that he identifies from 2009.

Aporkalypse: Undue worry in response to swine flu. Includes unnecessary acts like removing nonessential kisses from Mexican telenovelas and the mass slaughter of pigs in Egypt.

Chimerica: The intertwined economies of China and the United States, which together dominate the world economy. Popularized by Niall Ferguson in his book The Ascent of Money.

Government Motors: A nickname for General Motors, which is now majority owned by the U.S. federal government.

Mini-Madoff: A person who perpetrates a Ponzi scheme smaller than Bernie Madoff’s.

Vook: A digital book that includes some video in its text.

January 4, 2010 at 7:21 pm Leave a comment

Don’t curb your enthusiasm. Just find different ways to express it.

By Sally Saville Hodge

A recent post by my friend Suzanne Shelton on her Facebook page elicited 10 responses and merits some followup discussion. It read:

Suzanne Shelton wants to gently remind people not to over use exclamation points. It devalues the emphasis, and isn’t a substitute for choosing language that conveys your enthusiasm. More than one per paragraph is far too much. Plus, it’s really annoying

Those pesky, insidious exclamation points. They’re a device that people fall into the bad habit of using. Overusing, to Suzanne’s point. And I am among those guilty as charged.

I think a lot of it stems from the more casual nature of the writing environment.

WarningIt started with e-mail, where early on, you’d find many people completely ignoring rules on capitalization – either eschewing capital letters completely, whether in starting a sentence or using proper names, or playing it safe and just keeping the caps lock key permanently in play. Salutations are more often then not lost, and for that matter, so are name signoffs. Why sign your name when the recipient should know who you are from the e-mail address?

It’s only gotten worse with the spread of texting and Twitter and, yup, Facebook and LinkedIn posts. “Good” writing (with or without exclamation points) is beside the, ahem, point when you’re trying to squeeze a lot of information into a tiny, 140-characters-or-less post. Your communiqués really become something for insiders only, almost like a secret language.

I recently re-read one of my sent e-mails and slapped myself on the side of my head. Four sentences. Four exclamation points. When did I become so darn enthusiastic?

Another overused device that I’ll cop to: the dash – using it as a way to emphasize a point. When I caught myself using it three times in one paragraph, I knew I was overdoing it. I’m making a concerted effort these days to either use colons or parenthesis or just (gasp!) changing the sentence structure to force myself to mend my lazy ways.

While I’m at it, I’d better lose the LOLs, though at least I’m not guilty of writing “hahaha” with every post even when there’s no humorous aspect to it whatsoever.

Lesson, people? Our language can be too beautiful a thing to so abuse. Let’s be careful out there.

June 1, 2009 at 5:27 pm Leave a comment

Are newspapers becoming synonymous to buggy whips?

Sally Saville Hodge

reading the news...I stopped my subscription to the Chicago Tribune a year ago. After about 20 years or more of faithful home delivery. And despite twinges of guilt over the loyalty thing. I did, after all, work there for a few years back in the ‘80s.

I don’t really miss it. (With a rueful apology to all my old buds there who haven’t yet been laid off.) See, I don’t have time to do a leisurely daily read in my garden with a cup of coffee or tea. I can get my news fix on the Web, weaving my scans into my workday. And it gives me access to a wealth of voices, not just the Trib’s.

My hands stay a lot cleaner, too.

Even though my decision was one of a million or more nails that have been pounded in the daily newspaper business’ coffin, I still fret over what can be done to save it, and, ultimately, what’s a proud and (mainly) honorable calling. So it was with no small degree of excitement that I read the cover headline on Time magazine a few weeks ago: “How to Save Your Newspaper.”

Great, I thought. Smarter people than I have come up with a solution. Must read!

Alas. I’m sure the author is smarter than I, but the proposed solution? To charge for content. Just a small amount – micro-payments – following the same approach that Apple took in building up its iTunes business. The problem is that it’s too late. That horse has left the gate.

I do wish that he was right in his argument. That people are willing to pay for well-written content. But the reality is that he overestimates how discerning most people are. Convenience trumps quality in most instances. I did a decidedly non-scientific poll of the 20-somethings I work with along with many of the 30-somethings I know, and only one of the 15 preferred the hard copy newspaper. None was willing to pay for online content. “Why, when I can go to a different site and get the same news for free?” asked one.

They did, however, cite exceptions, notably of one of the strongest brands in the business: the Wall Street Journal. Its quality was deemed worth paying for.

And quality is a critical component of brand equity that continues to erode in the newspaper industry each time another round of editorial layoffs is announced. Last week, the Tribune laid off another round of reporters, including Pulitzer Prize winner Don Terry and two of my favorites, Susan Chandler in business and Jeff Lyons with the Sunday magazine.

With each round of cuts – at the Tribune, and at scores of other newspapers across the nation, you see more wire copy being used to fill the dwindling news hole, and it becomes increasingly difficult to differentiate one news source from any other. We no longer have much of a reason to choose one over another – much less pay for whatever delivery mode.

The newspaper business is fast becoming an anachronism. I’m beginning to think the new model will be found less in micro-payments for content and more in solutions like that devised by the Christian Science Monitor. Survivors will be those that find ways to embrace their online selves – profitably – as the “paper” part becomes synonymous to buggy whips. Hopefully, they can do it before the voice that makes them distinctive is totally lost.

February 20, 2009 at 6:17 pm Leave a comment

A modest proposal to help the financial industry’s tattered brand

Sally Saville Hodge

pigs_troughThink about it. You and I and every other U.S. taxpayer have recently taken on the additional financial burden of $5,073 each to help keep Wall Street afloat. That’s how the $700 billion Troubled Asset Relief Program translates in an up close and personal way.

Am I willing to help out to this extent? Well, sure. I guess. Though I don’t recall anyone asking me and, even if they had, I would have said I had certain expectations tied to my generosity.

See, it’s actually a sacrifice for me to be doing this. I have plenty of other debt, personally and for my business, and really don’t need to be shouldering anybody else’s. Plus, mine is a small business and, yup, we’ve been feeling the pinch of the spiraling economy for awhile now. I’m already sacrificing, and so, for that matter, are my employees. Nobody’s gotten any raises in a long time. Bonuses? What a concept.

So I am more than mildly irked that the hotshots who played a major role in getting us into this mess a) haven’t turned the lending spigot back on; b) have not accounted for the uses to which they’ve put our money (because they weren’t required to); and c) have had the absolute and utter gall to keep bonuses and exorbitant salary structures in place for many, many executives – not to mention others further down on the business’ totem poles.

It’s all been delved into this week in Congressional testimony that has had a decidedly defensive tone. As Wells Fargo’s John Stumpf told lawmakers: “We are frugal. We’re Americans first. We’re bankers second.”

Really? The latest issue of Vanity Fair outlines in fascinating, if painful, detail how the sector has continued to line its own pockets even in the face of cascading red ink and the government rescue.

Consider Morgan Stanley. Its CEO, John Mack, and his top two lieutenants didn’t take bonuses for 2008. It was the second bonus-less year for Mack. Other senior managers in the firm saw their compensation cut by 60 to 75 percent. That didn’t mean bonuses were eliminated, though. The pool was just cut – all the way down to $5 billion.

How much did Morgan get in TARP money? Ten billion dollars. What makes it okay to put half the bailout total into bonuses? Well, the bonus and TARP monies were not the same money! Never mind, as one noted gadfly said, that “if the government hadn’t bailed these people out they would have gone bankrupt and … no one [would have gotten a bonus]!”

It’s not just Morgan Stanley. AIG had its secret “retention” awards of between $92,500 and $4 million to as many as 7,000 employees, bestowed to keep them from jumping ship during the sale of assets. One Citigroup trader took home a bonus of $125 million. Two lieutenants of Merrill Lynch’s John Thain, who departed with him last month after the firm’s acquisition by Bank of America, were lucky enough to carry home with them about $100 million in contractually agreed-upon pay and bonuses.

What’s clear through all of this is that the idea – much less the practice – of reputation management seems to have gone down the drain in this sector at a time when proactive measures have never been more needed. The financial industry is getting thoroughly tarred, and ironically enough, the hand that’s holding the brush is its own.

Here’s a modest proposal that might help restore badly needed trust and confidence. The leaders of these businesses – actually, any business that’s being forced to lay off thousands in the wake of a down economy – should consider foregoing not just bonuses, but their salaries until sales and profits begin to come back.

Unlike many who have been hardest hit by the recession, it’s not like they don’t have other assets to fall back on in the interim. And I think at this stage, the public wants more than lip service that the beneficiaries of our largesse actually do feel our pain.

February 12, 2009 at 5:13 pm Leave a comment

Municipal PR, Chicago Style

By Chris Scott

There are 34,264 metered parking spots in Chicago and by 2013, the per hour rate for meters that charge a quarter in 2008 will rise to $2, a 700 percent increase.

Chicago residents know this because Mayor Richard M. Daley proposed that the city follow earlier fundraising strategies and lease control of the city’s parking meters — and the money they collect — to a private company for the next 75 years.

You would think that such a serious issue would be managed through the experienced PR machine in place at City Hall and its departments, with residents and news organizations aware of the bidding process and the proposals. Chicago citizens would then be able to attend Town Hall meetings where residents and business owners could voice their opinions on how such a deal might affect their quality of life in the Second City.

But you would be wrong.

In the space of less than one week of the Mayor’s proposal, drivers who will be forced to pay the higher rates — as much as $6.50 per hour in certain areas like downtown — were told that a City Council committee had passed the proposal and that it would be voted on by the full City Council within two days. And faster that one could say “Get your 26 quarters together!” the $1.15-billion deal was sealed. One bidder, one contract.

It’s not that the infrastructure to get the word out to the press and the public in a timely manner didn’t exist. The city of Chicago spends an estimated $4.7 million each year to pay for 50 public information officers in a variety of city government offices and agencies. Additionally, weeks before the parking meter lease agreement, the Daley administration announced contracts with 10 outside PR firms for services that could net each firm as much as $5 million per year. Those contracts were announced at about the same time that city officials revealed an anticipated $469-million budget gap for fiscal 2009 along with layoffs of 929 city employees and the elimination of 1,346 vacant positions in city government. (A reduction in city services and higher fees for other things like parking tickets also will be implemented to save money in these troubled economic times, the mayor said.)

What’s wrong with this picture? Absolutely nothing from at least one perspective. Anyone who engages a PR firm is essentially free to utilize or ignore the vendor’s capabilities or advice as they see fit. If the city believes — as Mayor Daley expressed when questioned about the new contracts — that these relationships with the outside PR firms are necessary, so be it. But don’t the agencies with relationships with City Hall have an obligation to advise the client that it might be a good idea to remove even a whiff of impropriety in the ways “The City That Works” generates an anticipated $1.15 billion in upfront revenue through solid, proven PR strategies (community forums, press conferences, more transparency)?

As it turns out, the city suspended the contracts with the PR firms until the budget crisis “is over.” It’s apparently the same old story: Chicago citizens don’t hear about City Hall decisions in advance. What do you expect from an administration that destroyed a municipal airport’s runways in the dead of night in 2003 with no public relations effort or public comment before the bulldozers rolled? At least City Hall is consistent in how it delivers its message, regardless of the number of agencies it hires to consult on such matters. And that counts for something to taxpayers, doesn’t it?

December 29, 2008 at 5:21 pm Leave a comment

Managing the viral spread of bad customer experiences

Sally Saville Hodge

You may have heard this factoid mentioned when it comes to customer service: A satisfied customer is likely to share the experience with one person, while one who’s dissatisfied will share it with ten.

Now, think about the implications of those numbers in a Web 2.0 world, when anyone and everyone has a voice and can make it heard resoundingly around the world. Whether through a blog, a Twitter, a YouTube feed, or a MySpace post. The possibilities for sharing positive, but (human nature being what it is) more often, negative experiences have exploded.

Any business that understands the value of a strong brand is going to do whatever it takes to consistently deliver a superior customer experience. Part and parcel of the deal is monitoring the conversation and seizing any opportunity to identify any disconnects – real or imagined – in the way the business is delivering. And find ways to make it right.

What’s amazing to me, though, is the number of businesses that still don’t get the power of the Web as more than just a messaging channel du jour. It’s also a great, grassroots way to keep the pulse of changing customer perceptions and to respond in real time and in authentic ways to shape them.

Or not.

Consider Brenda and Gerald Moran. These folks love cruises. They were such fans of Royal Caribbean that they booked two trips a year and even bought stock in the company. This despite a customer experience that was less than ideal for each and every trip.

Some of their complaints were laughable: Her birthday greeting was delivered to the wrong cabin. (Get over it.) Others? Not so much. On their most recent, two-week Alaska/Northwest cruise, their cabin reeked of sewage, which was blamed on other guests flushing everything from oranges to diapers. With no more rooms available at this floating inn, their balcony door remained open in 40-degree weather to offset the odor. Yet the Morans were happy with the cruise line’s offer of a 20 percent discount on their next cruise.

But here’s the deal. Brenda wrote, as she always did, a post-cruise review on Cruise Critic, which sparked an active viral dialogue. Royal Caribbean responded by offering the Morans an additional discount for their next trip…and, oh, by the way, now will you pull your review?

Brenda declined. Cruise Critic later declined to pull or modify it. And Royal Caribbean soon thereafter banned the Morans from its cruises – for life.

Even in the olden days before the Web boosted the power of word-of-mouth, such heavy-handed tactics would have been ill-advised. Royal Caribbean would have been much better served with a variety of other courses of action:

  • Apologizing in the discussion forum for the Morans’ experience and detailing steps being taken to make it right (and remember, it’s not always about money!) and create a consistently positive customer experience for all its guests.
  • Identifying the Morans’ (and others’) specific complaints about the customer experience, their relative degree of importance, and possible fixes besides discounting that would create goodwill.
  • Identifying and cultivating other satisfied customers (which the Morans really were, overall) who could serve as brand ambassadors and encouraged, among other things, to share their own positive experiences.
  • Monitoring the conversation and employing an ombudsman, perhaps (see what Comcast is doing), to run interference in real time as a means of enhancing customer satisfaction.

The Web’s current role and future potential to help make or break brands is only growing. For those that don’t like the way the conversation goes, killing the messenger isn’t the answer. Finding better ways to keep the negative word of mouth from spreading virally to hundreds or even thousands more is.

May 20, 2008 at 8:23 pm 3 comments

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