The PRV Report Card: This Week’s Winners & Losers

 The PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to Malala Yousafzai, for drawing international attention back to the nearly 300 Nigerian schoolgirls kidnapped three months ago by militant group Boko Haram. Though President Goodluck Jonathan said the Nigerian government is working hard to find the girls, there seems to be little progress. In addition to having a press conference during which Yousafzai appealed directly to the militants to “release my sisters,” she met with some of the parents of the girls—something President Jonathan has yet to do.

 The PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (FULL FIASCO) to Oscar Pistorius, who was involved in an altercation in a nightclub last weekend. Pistorius claimed that a drunken patron verbally attacked him about his trial for the murder of his girlfriend, Reeva Steenkamp. The patron alleges otherwise. The real question: Does Pistorius have no one in his entourage who might clue him in to the fact that hitting the nightclub for a pint, while one is on trial for murder, is inadvisable from a PR standpoint?

 The PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to Comcast for their limp response to an incredibly bad customer service interaction that promptly went viral. Ryan Block posted eight of the 20 minutes he spent arguing with a Comcast rep who refused to disconnect his service as requested. Social media, which eats this kind of thing with a large spoon, spread the clip like wildfire. Comcast merely said the employee’s behavior was unacceptable and that they would contact Block to apologize. No word as to whether they’ll honor Block’s request and disconnect him, though.

Netflix Raises Prices – and No One Freaks Out

NETFLIX TV 150x150 Netflix Raises Prices   and No One Freaks Out

THE PR VERDICT: “A” (PR PERFECT) for Netflix.

This time they warned you – Netflix, that is. The on-demand streaming video service that scored one of the worst marketing and PR flops since the introduction of New Coke when they raised their rates in 2011. They announced a price increase for rentals last week, but this time in a way structured to keep existing customers happy – and investors, too.

You might recall Qwikster, the company’s ill-conceived DVD-only service, spun off in 2011 in the wake of a controversial and unpopular price hike that effectively doubled the cost of rentals. Subscribers rebelled and quit in droves, and Netflix reversed course, killing the service before it ever launched. It then spent much of the next year apologizing and begging customers to come back.

Clearly the company learned something from that experience. This time, Netflix moved methodically, initially raising the prospect of price increases months ago. It firmed up that news in late April with a letter to shareholders announcing a pending increase of “one or two” dollars. The final word came in an email to customers Friday – a $1 bump, but only for new customers, and no increase for existing members for two years. So far, the villagers have yet to light their torches or storm the castle.

THE PR VERDICT: “A” (PR Perfect) for Netflix, for taking the time to set appropriate expectations.

THE PR TAKEAWAY: Timing is everything – and that doesn’t always mean just picking the right moment. Netflix, looking to avoid another mass stampede of customers for the exits, wisely started telegraphing its intentions on pricing months before actually announcing the increase. This amounted to a period of test marketing, giving both Netflix subscribers and investors time to get used to the idea. Then, by grandfathering in existing customers at the current price for two years, Netflix actually won a measure of goodwill, solely becauset it set expectations of a price increase for everyone. Investors liked the news also, sending the company’s stock up on the increase.

PayPal’s Quick Payback to Ranting Exec

paypal PayPals Quick Payback to Ranting Exec

THE PR VERDICT: “B” (Good Show) to PayPal.

Another weekend, another tech sector exec behaving badly and embarrassing his employer. This time it’s PayPal, whose now-former global strategist Rakesh Agrawal unleashed a series of Twitter rants that were either his parting shot or cost him his job, depending on what you choose to believe.

Tweeting late night Friday from New Orleans, where he was attending Jazz Fest, Agrawal offered up choice expletives for co-workers he thought should be fired or were “useless,” including PayPal’s communications chief. In the remorseful light of morning, he tweeted that he had been using a new phone to “test experiences” and had intended those messages for a colleague. “Note to self,” he added, “don’t test a new phone when sleep deprived after working your ass off for 20 hours a day while on vacation.”

Within hours, PayPal tweeted that Agrawal, just two months into the job, was on vacation permanently, adding: “Treat everyone with respect. No excuses. PayPal has zero tolerance.” Not one to leave it there, Agrawal answered that he had actually quit Friday to start his own company. He followed that Sunday night with a series of since-deleted F-bomb tweets directed at – well, everyone – and then a promise of a “logical explanation” for the last two days. Please, don’t bother.

THE PR VERDICT: “B” (Good Show) for PayPal, for a quick public display of disaffection with a self-destructing employee.

THE PR TAKEAWAY: Move fast in matters of reputation. Lasting damage can occur literally at the speed of light. PayPal’s fast, direct response established Agrawal’s separation from the company, then pivoted to stress the firm’s zero tolerance for behavior or opinions like his. Companies have different policies on employee tweeting, but to a tech firm like PayPal, pre-screening tweets would run counter to Silicon Valley’s libertarian ethos and would never fly. The individual empowerment of social networks gives those with an axe to grind an instant platform to air their grievances. Companies need not hold back in responding.

BP’s New PR Tactic Is Its Own Disaster

unnamed 150x150 BPs New PR Tactic Is Its Own Disaster

THE PR VERDICT: “D” (PR Problematic) for BP.

Energy company BP is shifting PR gears. In 2010, after the Deepwater Horizon disaster that left 11 oil rig workers dead and the gulf off Louisiana slick with millions of gallons of oil, the company’s PR was geared entirely toward apologies and vows to right the wrongs done. A massive cleanup effort was launched to save the coastline. Payments were promised to the many businesses affected – some perhaps irreparably, such as those of independent fishermen whose catches were contaminated.

The days of apology are apparently over. An article in the weekend edition of the New York Times illustrates a shift in attitude from the international energy giant. BP, once all apologies, is now on the defensive, saying they’re the victim of false insurance claims.

“I think there are really bad public policy ramifications to what’s happening to BP,” the Times quoted Geoff Morrell, senior VP for communications and government affairs at BP America, as saying. “It’s not just bad for this company that illegitimate, dubious claims are being paid to the tune of hundreds of millions of dollars; it is bad for, dare I say, America.” It is also bad for, dare we say, BP’s PR

But does BP care how it looks anymore? Last month, the US government allowed BP to bid again for oil and gas leases in the gulf. And two weeks ago, BP officially ended active shoreline cleanup – and, apparently, the cleanup of their image.

THE PR VERDICT: “D” (PR Problematic) for BP. As much as they’d like to move on, those affected by the disaster haven’t.

THE PR TAKEAWAY: You can stop apologizing, but don’t stop repairing. Part of a company’s recovery from extreme damage is presentation of image. Okay, four years on, BP can stop apologizing. But portraying themselves as victims of insurance swindles? It’s more than moving on. It’s an insulting turnaround that, as PR tactics go, is a disaster in its own class.

 

Bottom Line? It’s Not Always About the Bottom Line

 Bottom Line? Its Not Always About the Bottom Line

THE PR VERDICT: “B” (Good Show) to Mozilla.

When Brendan Eich stepped down from his position as chief executive of software company Mozilla last week, the general assumption was that his personal stance against same-sex marriage was to blame. But was morality the reason for Eich’s resignation from Mozilla after being appointed a mere two weeks ago? No, opines Farhad Manjoo in the international edition of Sunday’s New York Times. Manjoo instead points out a key factor about Mozilla that companies need to heed. For Mozilla, the bottom line isn’t the only bottom line.

Mozilla is a company with a mission, to promote “the development of the Internet as a public resource.” In other words, it’s not all about the money for Mozilla. In a highly competitive industry, Manjoo writes, corporate culture becomes as important as salary. Apple and Microsoft may be able to offer buckets of money to talented coders and software designers, but those people might go for the company offering something they believe in.

Mozillians spoke online of how Eich divided their community. One said, “He is actively harming Mozilla by not making a proper statement on these issues and making things right.” Eich’s probable forced resignation is yet another example of the importance of keeping one’s personal opinions out of business.

THE PR VERDICT: “B” (Good Show) to Mozilla, for distancing themselves from a debate that causes damage to their corporate culture and their brand.

THE PR TAKEAWAY: Remember the refrain from The Godfather: It’s business, not personal. Whether you’re in business purely for profit or you have a mission, personal opinions can cost a company more than money. PR people exist for this purpose; had a few been consulted on this matter, Eich might not have a two-week position on his resume, and Mozilla wouldn’t have a new reputation of axing those it deems wrong.

PRV Report Card: This Week’s Winners & Losers

obamacare logo  PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to the Affordable Care Act, a.k.a. Obamacare, whose supporters, including its namesake, had reason to celebrate Monday when enrollments pushed slightly past the original sign-up target of 7 million. The nonpartisan Congressional Budget Office projected that target for initial sign-up period through March 31. Despite a horribly marred start and with withering opposition at every turn, the mandated healthcare program saw sign-ups somehow make their numbers. And while public opinion is still hardly enthusiastic, one poll did find for the first time that public support for the healthcare law surpassed opposition. Perhaps the rally will prompt lukewarm supporters to stop apologizing and start cheering.

  PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (FULL FIASCO) to General Motors’ chief executive Mary Barra, for a defense statement best summed up by “I don’t know.” As the head of GM faced a House subcommittee investigating what the car company knew and when regarding flaws that led to numerous deaths and injuries, Barra’s responses infuriated senators and the families of the deceased alike. PR is in freefall, and GM is still recalling millions of cars and facing possible criminal charges. In leaving Barra to claim ignorance or hang herself and her company, GM’s legal and PR teams register a complete fail.

  PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to Britain’s Daily Mail and Daily Telegraph, whose editorial boards told a parliamentary science committee they believe humans are negatively impacting global climate conditions. Really? That’s rather confusing considering, as the committee chairman put it, “some papers regularly give a platform to lobby groups or indeed conspiracy theorists – many not even qualified scientists – who pooh-pooh the evidence and attack UK climate scientists.” We are shocked, shocked, to find out that publications, looking to increase readership, might take one view in their papers while believing the exact opposite. Yawn.

Shadow Over GM Recall Grows Longer

 Shadow Over GM Recall Grows Longer

THE PR VERDICT: “D” (PR Problematic) for GM.

The news from General Motors continues to get worse. Last month the carmaker began a worldwide recall of over one million of its vehicles, including the Chevrolet Cobalt and Saturn Ions, due to faulty ignition switches that resulted in 12 deaths. Then, a federal review of those GM vehicles dating from 2003 to 2012 found that faulty airbags were responsible for an astonishing 303 deaths.

Lawmakers are pressing for answers as to how long GM knew about the issues and what they did about them. GM’s answer has been to launch what chief executive Mary T. Barra calls an “unvarnished” investigation. Leading this investigation will be the law firm of King & Spalding – the same firm that had been defending GM in wrongful death lawsuits.

Conflict of interest? Whether it will be in reality or not isn’t really the question. The firm will have to do enough digging to preserve their reputation while still being able to call GM one of their main clients. But if anyone asked internal PR what this move would look like to the outside world, GM apparently ignored that information as well.

THE PR VERDICT: “D” (PR Problematic) for GM.

THE PR TAKEAWAY: Even in times of triage – perhaps especially so – appearances matter. When faced with a product issue that has resulted in death, companies must quickly go into damage control. The smartest take immediate measures to prevent further injury or loss of life, own up, and set their PR firms to work on image rebuild. In GM’s case that time is over. And ironically, the company’s goal – preserve the bottom line by presenting the image of taking action – can shoot itself in the foot with the implication of more coverups, this time by the company’s trusted law firm. It’s an action, but it’s hardly a strategy, and it may cause more damage than it controls.

Comcast Sells Mega-merger, Though Few Buy It

ComcastRoberts Comcast Sells Mega merger, Though Few Buy It

THE PR Verdict: “C” (Distinctly OK) for Comcast and CEO Brian Roberts.

Comcast CEO Brian Roberts had his work cut out for him last week trying to convince anyone that his company’s $45 billion purchase of cable rival Time Warner was a boon to anyone other than Comcast. Yet gamely he tried, and for that he and Comcast earn points for consistency.

The two parties spun the purchase as a “merger,” when in fact Comcast would be absorbing all of Time Warner – that is, if the transaction is approved by shareholders and regulators. Roberts called the deal “pro-consumer, pro-competitive, and strongly in the public interest.” Another Comcast exec took up the anti-monopoly argument by emphasizing that the two companies currently “do not compete in a single zip code in America.” Comcast also claimed the deal would benefit net neutrality, at least until current protections expire in 2018, and predicted regulatory approval.

Not surprisingly, few bought any of Comcast’s claims. A former FCC commissioner said the deal would “run roughshod over consumers.” One industry expert spelled out why the “pro-consumer” argument was “nonsense,” while another shot through the claim that cost-saving “synergies” Comcast predicted would ever make their way into consumers’ bills. And public advocacy groups called on the FCC and anti-trust authorities to block the purchase. Amid the pile-on, however, Comcast kept cool and did not stray from its script.

THE PR VERDICT: “C” (Distinctly OK) for Comcast and CEO Brian Roberts, for keeping their emperor fully clothed – appearances to the contrary.

THE PR TAKEAWAY: Stick to your story. The script Comcast used in announcing their deal stressed the same talking points over and over. Questions implying the contrary were deflected or ignored. With a controversial merger such as this, coming so soon after the apparent defeat of net neutrality, Comcast needs to win in the court of public opinion as much as that of the regulators. It’s hard to predict which will be the tougher fight, but the same arguments will carry in both theaters.

 

Jeffries Out of Style at Abercrombie?

 Jeffries Out of Style at Abercrombie?

THE PR VERDICT: “D” (PR Problematic) for Mike Jeffries and Abercrombie & Fitch.

Fashion trends rarely live beyond a season. The shelf life of those who create the trends may last longer, but an article in the spring fashion issue of New York Magazine may herald the end of one long-running reign: that of Mike Jeffries, CEO and former chairman of the board at Abercrombie & Fitch.

The piece could easily have made more of Jeffries’ pecadillos, such as his extensive cosmetic surgery and draconian regulations about male model staff aboard the corporate jet. Instead, it focused instead on a familiar story: a steady rise, and a precipitous fall. Jeffries created a multi-billion dollar brand with iconic merchandising that teenagers could not get enough of; now, in the wake of $15.6 million losses last quarter, Jeffries is no longer chairman of the board, and there are rumors of replacement.

A&F did not make Jeffries available to contribute to the story. Quotes about his micromanagement style came from former employees and associates, who theorize that brand exclusivity, created by Jeffries, was behind A&F’s success in the 1990s, and its downfall in the inclusive aughts. “What we’ll remember Jeffries for now is for failing to change, for all the store closures, for the way employees were treated,” says Brian Sozzi, head of Belus Capital Advisors. “That’s unfortunate.”

THE PR VERDICT: “D” (PR Problematic) for Mike Jeffries and Abercrombie & Fitch.

THE PR TAKEAWAY: Step to the side, then make a re-entrance.  New York Magazine’s article is the kind that causes damaging chatter within its industry. First defense? Say nothing, as A&F did by not contributing quotes. Second: Pause, so that the next action taken isn’t viewed as defensive. Third, return with bold news – a new line and a new initiative. A&F could still make a comeback. After all, every fashion trend gets another strut down the catwalk.

AOL CEO’s Remarks on Benefits a Detriment

tim armstrong aol AOL CEOs Remarks on Benefits a Detriment

THE PR VERDICT: “D” (PR Problematic) for AOL CEO Tim Armstrong.

AOL CEO Tim Armstrong is back with another PR blunder that contributed to, if not prompted outright, an embarrassing corporate about-face. His latest gaffe came last week after AOL made a change to its 401(k) matching policy for employees, revealing that it would only match employee contributions at year’s end instead of throughout the year, and only for employees who are “active” through December 31.

Bad enough to adopt a miserly policy that robs employees of potential stock market gains in their retirement portfolio, but Armstrong added to the firestorm by blaming the change on Obamacare and on two “distressed” pregnancies that cost the company $1 million each in healthcare expenses. “We had to decide, do we pass the $7.1 million of Obamacare costs to our employees? Or do we try to eat as much of that as possible and cut other benefits?” Armstrong said, digging a deeper hole by going on to discuss the expensive pregnancies.

Too bad for Armstrong that AOL announced, at virtually the same time, a 13 percent increase in quarterly revenues, its best growth in a decade. The next day, he announced that AOL would reverse its 401k decision and apologized for singling out the two new mothers, but not before one observer recalculated his salary in terms of distressed babies per year.

THE PR VERDICT: “D” (PR Problematic) for Tim Armstrong and AOL for bad timing, bad policy, and bad employee relations.

THE PR TAKEAWAY: Avoid scapegoating. Armstrong, like so many other CEOs, looked stingy in blaming Obamacare for forcing cuts elsewhere  – especially with AOL’s simultaneous rosy earnings announcement. (Is anyone managing communications flow at the company?) He doubled down by essentially blaming two specific employees for having the audacity to need expensive health care – pregnant women at that. Why not blame black rhinos for being hunted to near-extinction for their careless habit of having horns that poachers will kill for?