I’m quoted extensively in this in-depth article from Risk & Insurance magazine about how Target responded to its recent data breach. A good read for the retail industry and beyond.
three hundred 600 of your passengers fall ill to a virus out on the ocean, it’s big news and a crisis. When millions of your customers have their data stolen because they shopped at your chain stores, it’s also big news and a crisis. So why did the leaders of Royal Caribbean and Michael’s Stores this weekend try so hard to bury the bad news and insulting the intelligence of their critical audiences and beyond?
Both these companies have active Twitter and Facebook pages. But 24+ hours into their respective crises, only customers are reporting the obvious news while the companies offer little insight into what happened. One big problem in these situations is that company executives limit release of their crisis statements to the media.
That’s a huge miscalculation because the media is rarely going to run the full statement.
To have the best chance at defending reputation, companies need to post their own statements on their websites ASAP with links going to their Twitter and Facebook pages as well. CEOs and company presidents might also consider creating short YouTube videos about the crisis to show real compassion.
In a crisis, do you really want everyone else to tell your story?
I’ve written and lectured about this subject for more than two decades and remain baffled at this widespread disregard for honesty, ethics, social responsibility and their own corporate reputation. Is it the lawyers telling them to not say anything or is it their own decision-making? Or, do they foolishly not prepare for a crisis that happens over the weekend because no one is in their corporate offices?
Unless we are inside these (and other companies), we’ll never know. But it’s clear that withholding or burying critical information that customers need in a crisis is a great way to alienate loyal customers and impacts the ability to attract new ones.
I believe part of the problem is that many companies today are too worried about short term revenues, short term rises in stock prices and counting on short memories.
When they start focusing instead on long term reputation by dealing with a short term crisis head-on with transparency and compassion, they are more likely to be rewarded with repeat business by more loyal customers for decades.
Update: Michael’s finally put its CEO letter front and center on its website but didn’t mention it on its Facebook or Twitter pages.
Royal Caribbean finally acknowledged Sunday night on Twitter — for the first time — that there was a crisis. And here’s the statement that the company finally issued: It’s impersonal, shows no real concern for health of passengers and has no attribution.