Message to The Brick: Nobody wins in PR disasters

Canadian furniture retailer The Brick is learning a valuable lesson as the PR disaster surrounding its accidental online discount spins out of control. All marketers can learn from this to improve their brand.

It all started on the evening of December 24, when shoppers who visited the website got a surprise Christmas present as they placed items into their shopping cart. Each item would be discounted by a further 50 percent. This continued into the morning of Christmas day. The company won’t say how many people were affected, but these things tend to get lots of attention very quickly and no doubt news of the discount was heavily shared among friends and families, quite possibly leading to an explosion of online orders.

A very similar scenario took place on Thursday morning over at Delta Airlines, as their website was accidentally offering customers flights at up to 90 percent off, a glitch that lasted at least two hours. Similar technical errors have happened before to various retailers.

What differs between these two is the way the company handled the problem.

While Delta Airlines made the decision that they would honor those ultra-low prices, The Brick claimed that because it was a technical error, they will not honor the price and are asking customers to pony up the rest of the money before they ship the items that were purchased.

The Brick claimed that because it was a technical error, they will not honor the price and are asking customers to pony up more money before they ship the items that were purchased.

As it turns out, the Brick’s website does not complete the order until reviewed by a human being, so no order was finalized until after the glitch was discovered, enabling the company to make this bizarre request for more money.

Even worse, they offered to give affected customers a mere 10 percent coupon that could be used on a future order. Talk about rubbing salt into the wound!

As PR disasters go, this is about as bad as it gets.

Brands don’t win by holding their ground in a dispute

As someone who has built retail websites, I’ve learned how hard it is to get a customer to the point of putting an item in their cart on any retail website. It takes between 20 times and 40 times more money and effort to get a first-time customer than it takes to get a repeat customer. People have lots of choices. While shopping online involves a few clicks and keyboard presses as compared to transporting yourself around physically, there are still surprisingly big challenges in getting people to visit your site and then to actually put something in their cart.

In a case like this, people have taken that first step and made their purchase. They got to the site, looked around and picked a product they liked. They made the decision to place it in the shopping cart. That’s a big deal! Until that moment, many of them had no idea that a special discount price would appear. These may have been repeat customers, or they may have been first-time customers. But it’s pretty likely that every one of the affected people will never be a Brick customer again.

As one upset customer wrote on the company’s Facebook page: “Soo you made a system error giving everyone 50% off, and now your going to bill them for your mistake and just give them 10% which on works in ur store and for regular priced items probably over $200 or something like that… Total BS!! You made the error, deal with it.”

Another customer compared the experience to that of going to a retailer and buying an item and then, after getting home, having them call and ask for more money due to an error on their end. “Really?” she asks. “I don’t see how The Brick cannot honour the price for an item already bought and paid for.”

The outrage expanded to twitter and was picked up by numerous media outlets. What does this ultimately cost The Brick in lost customers and lost sales? The reality is that no brand can win in a PR disaster.

If I were a competitor, I would have jumped on this instantly with an ad along the lines of “Show us your dishonored Brick receipt and we’ll match the price AND give you free shipping.” It would be a great way to gain these customers over to my retail store for life.

How this kind of problem could be handled

In my view, the PR disaster could have been avoided quite easily by preparing in advance. The best brands have crisis management plans in place, in which various unpleasant (and hopefully never to happen) scenarios are outlined with a plan of action for dealing with each one. A crisis management plan would have allowed the company to handle this much more elegantly in the first place.

But even without such a plan, the company could have still turned this situation to its advantage with the right attitude.

Even in a worst-case scenario, where there were so many orders that the company would be in financial despair had it honored the errors, it could still save face.

Get Transparent
First, transparency about the number of people affected goes a long way. We don’t know how many customers placed orders during the technical glitch, and we have no idea how much money was involved. There are good reasons for brands to keep this information quiet (it can give valuable info to competitors), but in today’s world transparency is incredibly powerful. People would be much more understanding if they knew that the losses would amount to, say, millions of dollars. Left in the dark, people assume that the company would be out only a few thousand dollars, making it hard to justify such a rigid stand.

Be Understanding
Second, the response needs to be sensitive to the reality of the emotional investment these customers have made. Each of the affected customers probably shared their good luck story with many family members and friends over the Christmas holiday. Good cheer and congratulations were in order. Marketing staff need to keep this in mind when coming up with a solution. You certainly don’t respond with a harsh, “It was our glitch but you have to pay up” message!

The offer of 10 percent off a future order is almost inexplicable. It’s a slap in the face.

There are a variety of ways that a problem like this can be resolved that would build customer loyalty to the brand rather than destroy it.

Give Something Away
The bottom line is that you have to give something to deal with the mess. You can’t ignore it. After all, it was the company’s mistake. The Brick could have come back and said it was unable to honor the 50 percent discount due to the overwhelming loss it would mean to the firm, but that it could offer, say 25 percent and give a coupon for 50 percent off regular priced merchandise on a future order. Or it could have offered a lesser discount with a free extended warranty. It could have offered to give a lesser discount with the rest of the balance on an interest-free payment plan. Or it could have offered to extend a lesser discount to those customers for an entire year. In fact, a retailer could even create a special loyalty card just for those affected and give them a lifetime discount, or interest-free purchases for life or a combination. Imagine how that kind of solution would have built goodwill instead of bad feelings!

There are a variety of ways that a problem like this can be resolved that would build customer loyalty to the brand rather than destroy it. Offering nothing at all, except for an absurdly low discount on a future order is inexcusable. Customers have a right to be angry.

What I struggle with the most is that the Comrie family, owners of The Brick, are warm-hearted people with a great respect for customers. I have met Bill Comrie and members of his family and appreciate their passion for people. I worked side-by-side with a member of the family and saw qualities of genuine humility and concern for others. The company is involved in community support programs like Habitat for Humanity and has supported the building of homes for disadvantaged families. This makes the corporate response to the problem that much more unexpected and hard to imagine.

A valuable lesson for all merchants

A number of years ago I was heading up the marketing program for a major franchised restaurant chain. Visiting the business owners across a wide geographical region I saw two distinctly different views they had of their customers:

Some franchisees understood the value of each and every customer. When a problem happened — and they happen in every business — these leaders would bend over backwards to make sure the customer was satisfied. They didn’t see the problem as a loss but as an opportunity to build goodwill. Instead of talking about the problem in a negative way, these customers would go away and tell others how well they had been treated. Many of them turned into the most loyal customers of all. These stores enjoyed the highest year-over-year sales increases.

Other franchisees only looked at the short-term revenue generated with each transaction. When there was a problem, they would try to justify it. They thought customers were trying to “rip them off” when they complained about things. I have no doubt that a certain percentage were indeed stealing from the company by deliberately creating false scenarios. But these franchisees would punish the other 95 percent of customers who had encountered a genuine problem. They failed to recognize that none of these people would ever return, and their negative stories of ill treatment would spread far and wide, leading to continuously sluggish sales despite any amount of advertising.

What I found fascinating was that the same franchisees who saw customers as short-term profit centers would complain about the successful franchisees, somehow assuming that their sales growth was the result of being in a better location or some other unfair advantage. In my experience, it was never about such trivial things. In fact, customers would go out of their way to visit the stores that treated them well.

Brands don’t win in disputes with customers. And nobody wins in PR disasters.

How about you? Did you experience company errors from merchants? How did they resolve it? How did you feel? If you’re a business owner, have you thought about a crisis management plan? Share your thoughts using the comment area below.