Friday, August 26, 2016

Crisis Management Perspective ... Ryan Lochte

If you doubt the importance of good communications during a crisis, the Ryan Lochte Rio Olympic incident is more proof that it can hurt your bottom-line. In the wake of the scandal, Ryan Lochte has reportedly lost all his major sponsors including Speedo USA and Ralph Lauren Corp.
This is because sponsorship and endorsement deals usually include a "morals clause" that will allow a sponsor to terminate the deal if the athlete's behavior conflicts with the values of the sponsors.
Although some may argue that Lochte would have lost his sponsorship deals even if he had not subsequently lied about the incident, we believe there is a significant difference. The former could have been managed as a "moment of weakness" under the influence of alcohol, while the latter cannot be easily dismissed. This is because lying goes to the character of a person and while people can easily forgive a person for making a mistake, they will not easily forgive one who has an integrity issue.
Thus, if Lochte had come clean and admitted his mistake in the first instance, we believe that he would have been able to keep most of his major sponsors. Additionally, the task to rebuilding of his personal brand would be quicker and easier.
At CW Fong & Associates, we advocate that in instances where the organization is directly responsible, it is always best to accept responsibility, apologize and offer contrition. Attempting a cover-up will usually fail and will turn what is a forgivable mistake, into a crisis of integrity.

Tuesday, August 23, 2016

Digital Marketing ... Viral Marketing Gone Wrong

STOMP yesterday revealed that the online threat, by a jilted lover, to release a sex video exposing her boyfriend's identity after he disappeared after having sex with her was a marketing ploy by a Hong Kong moon cake brand.
Like many, we were intrigued by the story (sorry we are humans too) and talked about it both online and offline. Score one for the digital marketer that thought this up. Good try at using sex and curiosity to drive likes and shares on social media.
viral digit marketing campaign singapore
Unfortunately, the final reveal of the company's name lacked impact as nobody likes to be used. Netizen's disappointment in this instance is justified as they were tricked into using their social media network for a commercial purpose. In fact, just look at the negative publicity that the Rebecca Lim false retirement generated and the reputational backlash she suffered.
In our opinion, the company could have done better using subtle product placement in their quest for greater brand awareness. Viral marketing campaigns are effective, but digital strategists need to avoid making their customers feel that they were used and their feeling cheated. This may alienate the people you are trying to engage.
P.S. We doubt that STOMP is an innocent "victim" of this viral campaign. We believe they were paid to run it.


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Saturday, August 20, 2016

[Crisis Communications Insight] Can Suing Your Customer Ever be the Right Thing to Do?

[Crisis Communications] Can Suing Your Customer Ever be the Right Thing to Do?

Feline Wedding Studio is in the news again four months after gaining infamy over poorly taken wedding day photographs by their professional photographer. This time, the fiasco with another couple over a sour deal which the couple took to the bridal studio’s Facebook page to voice concerns over what they alleged were unethical business practices. This led to the bridal studio suing the couple for defamation and the couple counter-suing.
From a crisis communications perspective, taking legal action is often seen as a proactive approach to defend your company’s reputation as it sends a strong signal that you have been wronged. This is because legal actions are likely to result in counter-suits and media scrutiny that only an “innocent” company can withstand. Thus, if you sue, the perception is that you are right.
In view of the above considerations, we at CW Fong & Associates believe that a company can and should sue a customer for defamation if the company can conclusively and objectively prove that their actions are above reproach. Sure there will be mud-slinging and “he said she said” comments circulating, but in the end if the Court finds the company has been defamed, the verdict will stand the company in good stead.
In the context of Feline Bridal Boutique, we however do think that their decision is foolhardy. They are just recovering from a recent scandal that tarnished their reputation, they have (from what we can gather online) a history of poor service, and they cannot conclusively and objectively prove that their actions are above reproach. Whatever the verdict, Feline Boutique has already lost the war for perception and if the debacle four months ago did not kill the business, we believe this latest controversy will.
A company suing a customer for defamation is thus not necessarily wrong. In fact, in the era of social media, robustly defending your company’s reputation is a must. Companies should however ensure that the desired outcome of a protected reputation is not destroyed in the process. Let’s not miss the forest for the trees.