The CEO apology: A new kind of brand booster?

June 25, 2010

By Lori Walderich


"I'm sorry …

So sorry …

Please accept my apology."

These days, CEOs are singing Brenda Lee’s song.

Unless you were comatose or on a shuttle to Mars last January, you would've caught the chatter about Domino's CEO Patrick Doyle's apology advert for products that — judging from focus group comments sprinkled throughout the ad — the pizza-eating public detested. Doyle lamented that his company had forgotten how to produce the kind of great pizza that people actually preferred over "cardboard" crust and sauce like "ketchup."

If you opened the Wall Street Journal on June 7, you probably saw the article featuring Starbucks CEO Howard Schultz discussing the mistakes his company made when it placed growth above great coffee. The company's excesses, he admitted, had resulted in fussy concoctions and frantic expansion that turned off core customers who felt that Starbucks had come unmoored from its hip, homey origins.

And if you've spent 15 minutes in front of the TV lately you cannot have missed BP's 60-second Gulf spill mea culpa featuring BP CEO Tony Hayward in full-on repentance mode: "To those affected and your families, I'm deeply sorry," Hayward mourns. He then promises to make any oil-soaked American shores as good as new, his British intonation weirdly reminiscent of the Orbit Gum Girl ("Dirty beach? Clean it up!")

What are we to make of this recent trend of corporate self-censure? Could we be seeing the latest, most counter intuitive-ever approach to brand building? That might be taking it a bit far. But it does seem that companies — especially restaurant chains — are discovering the power of the apology.

And that's not a bad thing. In the first place, it suits the tenor of the times. After the Great Wall Street Debacle, consumers are feeling used and abused by banks in particular and by all large companies in general. A chain restaurant that can buck up and say, "We admit we haven't always done our best for you, but we’re going to do X to fix that" can generate uncommon goodwill in times like these.

In the second place, an apology can satisfy consumers' desire for connection with a company. A sincere apology credibly delivered (more on that later) can demonstrate that you actually grasp and regret your customers’ frustrations. This, reasons the consumer, is a good basis from which to start a mutually beneficial relationship.

So yes, when an apology is due, it can help build positive feeling about a brand. But glib, "Oh, gee, sorry 'bout that" contrition … not so much. That ranks with zipping in to steal a parking space another driver has been patiently waiting for, then shrugging your shoulders and mouthing, “"h, sorry!" as you nip into the mall. In response to your disingenuous gesture, you can expect the business equivalent of nice key-job from your customers.

To benefit your brand in the end run, an apology must accomplish several missions, many of which must be undertaken even before your CEO wraps his tongue around those three scary syllables, "I'm sorry." Here are five:

Before you apologize, make sure you fully understand the problem. The last thing you want to do is apologize for not meeting certain expectations, only to have customers (or worse, the media) heckle you for not having a clue why people were annoyed with you. Don’t assume you know already what the issue is; believing you knew everything is what gave rise to the problem in the first place.

Commit to solving the problem. Howard Schultz was so determined to fix Starbucks that he jettisoned every distraction — including outside board obligations — in order to concentrate on the immediate task of righting the ship. What's more, he made sure that his vision was also the vision of every other Starbucks employee from C-level to store-level, going so far as to close stores early to retrain baristas. That's Problem-Solving 101: Everyone takes ownership; everyone takes action.

Implement the solution before issuing an apology. People don't want to be told that BP will clean up the spill; they want to know that BP has stopped the flow of oil that's causing the spill. At best, vague promises are written off as self-serving noise. At worst, they deepen consumers' cynicism about your intentions and motives. If you want people to think you're serious about making things right … make things right.

Make your apology credible. That means no spin. When KFC president Roger Eaton apologized (sort of) for his company's bungled free grilled chicken promotion, he represented the problem as a good thing. In a video released by KFC, Eaton explained that people were so crazy for the taste of KFC's new grilled chicken and the response had been so positive, they were going to have to modify the coupon program. His painfully over-the-top performance seemed to indicate that this rationalization rang false even to him. "Really? The problem was that the promotion was too popular and not that it was so poorly planned that it couldn’t be properly executed? Who knew?" Uh, everybody knew. Even KFC, which has since carefully scrubbed the Web to remove every embarrassing trace of the Eaton video.

Once the apology has been issued, continue to work on building trust. Encourage customers to return with offers that show your appreciation for their business (Starbucks announced recently that it will offer unlimited free Wi-Fi). Keep core customers loyal with deals aimed at them (more on Starbucks: The company also has announced free access to subscription-only online sites such as The Wall Street Journal, starting this fall).

Above all, stay vigilant to ensure that problems don't reemerge. If you have to keep issuing apologies, you're going to start looking awfully inept; and at some point, even offers and deals can't overcome the deficit. Eating a little humble pie is one thing. Putting it on your regular menu is quite another.

Topics: Business Strategy and Profitability , Consultant / Analyst , CRM , Customer Service / Experience

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