How to Manage a Corporate Crisis

What You Can Learn from the Tylenol Cyanide Crisis

In the fall of 1982, the unthinkable happened. Someone replaced Tylenol Extra-Strength capsules with cyanide-laced capsules, resealed the packages, and put them on the shelves of at least a half-dozen stores in the Chicago area. The poisoned capsules were purchased and seven people died. Suddenly, Johnson & Johnson, the parent company of McNeil Consumer Products Company, maker of Tylenol, was in a catastrophic crisis.

Johnson & Johnson handled the cyanide crisis masterfully and the Washington Post said, “Johnson & Johnson has effectively demonstrated how a major business ought to handle a disaster.” Much can be learned from the Tylenol crisis on how to manage a crisis and restore customer confidence after a corporate disaster. Johnson & Johnson acted quickly to identify a crisis management team, took steps to prevent a future crisis, won sympathy from the public, and offered reparation.

Here are the 5 steps Johnson & Johnson took to successfully manage the Tylenol cyanide crisis.

  • Crisis Management Team – In any crisis situation, a small team of senior executives, including the organization’s legal counsel and public relations executives needs to be immediately formed to steer the actions and communications for the company. One of the first actions Johnson & Johnson’s CEO, John Burke, took was to form a 7-member strategy team. John had the team focus on two things: 1) How do we protect customers? and 2) How do we save this product?” The strategy team took swift action and Johnson & Johnson’s first step was to alert the public not to consume any Tylenol product until the extent of the tampering could be determined. The company pulled all Tylenol capsules from Chicago stores immediately and then pulled all Tylenol capsules nationally. The decision to withdraw Tylenol capsules from all shelves in the United States showed that Johnson & Johnson was willing to bear the short terms costs in the name of consumer safety. This move played a key role in restoring consumer confidence in Tylenol.
  • Rectification – Restoring customer confidence in the midst of a crisis requires rectification. Rectification is taking calculated corrective action to avert a repeat of the crisis in the future. When Johnson & Johnson created and immediately implemented the triple sealed packaging and developed random inspection procedures, they successfully rectified the crisis.
  • Sympathy Strategy – Rebounding from a serious crisis will happen much faster if an organization gains sympathy from the public. Johnson & Johnson brilliantly won support of consumers by depicting Tylenol as the victim of an external agent that acted maliciously to hurt customers. The company also gained sympathy when they pulled Extra-Strength Tylenol off of all shelves in the United States because they put consumer safety over profits.
  • Reparation – Reparation in the form of compensation to help victims after a crisis can help an organization restore equity. Johnson & Johnson provided victims’ families counseling and financial assistance even though they were not responsible for the product tampering. Not only did Johnson & Johnson’s reparation efforts help to restore equity with victims’ families, it also improved the company’s reputation with the public as the media showed the organization taking positive action to help the victims’ families.
  • Immediateness – Not only is rectifying the problem critically important, but an immediate rectification will enhance consumers’ evaluations of the organization. The longer it takes for the organization to provide a full rectification, the greater the public’s perception that the victims have been treated unfairly and the greater the threat to the company’s reputation. Johnson & Johnson acted swiftly in forming a strategy team, withdrawing Tylenol capsules from the shelves, keeping the public informed via the media, and working to rectify the situation.

Johnson & Johnson successfully managed the cyanide crisis by acting quickly, putting consumer safety above all else, and strategically restoring customer confidence through rectification, sympathy, and reparation. If ever your organization finds itself in the midst of a crisis, take a lesson from Johnson & Johnson’s text-book perfect response to crisis. But don’t wait for a crisis. Take proactive steps now to prepare your team to react and respond to crisis situations. When you prepare and plan, you’ll find that managing the crisis and restoring customer confidence is far easier.

 

The Moment of Truth

 

Every customer contact is a Moment of Truth that creates a Moment of Misery, a Moment of Mediocrity, or a Moment of WOW. In the Moment of Truth you can create customers for LIFE or you can initiate a slow and painful demise of your company one customer at a time.

A Moment of Mediocrity is what most often occurs in business to customer interactions and this is where the customer’s expectations were met – and those may even be low expectations. Customers who experience a Moment of Mediocrity, feel “satisfied” but will not reward the company with loyalty. These customers are only your customers because they haven’t found a better experience.

A Moment of Misery is created each time you fail to meet the customer’s expectations. Often, Moments of Misery result in damaging and highly persuasive negative word-of-mouth advertising and customer defection.

A Moment of WOW is created when you exceed the customer’s expectations. Service must be truly outstanding and service providers have to go “Beyond WOW” to create the Moment of WOW. Moments of WOW create a profitable base of loyal customers, which results in growth, increased profits, and lasting value. (For hundreds of ideas on how to create Moments of WOW, pick up my brand new book, Beyond WOW)


Two years ago I stayed in a luxury hotel in Miami with a corner ocean view room. I paid $179 for a one-night stay and my expectations for service were high. I experienced a myriad of problems during my short stay and one situation stands out. The morning of my departure I called the Concierge to arrange transportation to the airport. Here’s a summary of this Moment of Truth:

Me, the Customer: “I need to be at Miami International Airport by 5:00 pm for a 6:00pm flight. Can you arrange transportation with Super Shuttle for me? “ Simple request – or so I thought.

Concierge: “Ma’am, you have to give at least a 24 hour notice for a shuttle to the airport. I cannot call for you. You can take a taxi or we can arrange a car for you for $99. “

Me, the “paying” customer: “Why do you need a 24 hour notice for a routine ride to the airport?

Concierge: “It’s our procedure. You can take a taxi or I can arrange a car. Those are your choices.”

Me, the customer/ the reason you have a job: “Okay, can you just veer away from “procedure” and see if the shuttle can pick me up eight hours from right now?”

Concierge: “I can give you the number and you can call.”

I called Super Shuttle and the representative said, “Sure, the royal blue van will meet you out front at exactly 4:30.” See how easy that was? Why couldn’t the Concierge just pick up the phone and check?

Here’s what the Concierge should have said upon my request for a shuttle: “Ms. Golden, typically Super Shuttle requires a 24 hour advance notice, but I’ll see what I can do. If I cannot arrange transportation with the shuttle, we can get you to the airport by taxi or private car. Let me check on that and I’ll call you right back.” This response would have made the Moment of Truth a Moment of Mediocrity and perhaps I would have considered another stay at the hotel. But my moment was Misery and not only will I not return, but like every customer, I’ll spread negative word-of- mouth advertising.

A Moment of Misery is created every time you:

*Tell a customer “No” without first telling them what you can do

*Quote policy

*Fail to follow-up/follow through

*Make the customer tell and retell their story with unnecessary transfers

*Respond to complaints with an accusatory or interrogatory style

*Refuse to take responsibility for problems

*Fail to apologize to customers

*Tell a customer they are wrong – even when they are wrong

*Cut a customer off

You only get one Moment of Truth with customers. What will it be?

Tweeting for Customer Service

 

More and more companies are discovering that Twitter can be a powerful tool for capturing the voice of the customer –and responding to that voice with immediacy. Twitter is a free social networking and micro-blogging service that enables its users to send and read other users’ updates known as tweets.  

One of the biggest appeals of Twitter is that it’s a great way to keep in touch with friends and colleagues quickly with short “tweets”. For example, this morning I tweeted: Watching a bunny nibble grass and listening to birds sing as I work on my laptop from my patio this morning.” And just like that, I let 2000 of my friends know what I was doing.

 But, Twitter isn’t just a cool site for personal use. Businesses can use Twitter to have conversations with customers, solve problems, and to update on promotions and products. Here, I’m featuring 3 ways companies are using Twitter for customer service and I then I’ll show you how YOU can get started using Twitter TODAY for customer service in 4 easy steps.

Zappos uses to Twitter to surprise & delight customers.

 Last month I posted this tweet: “Researching Zappos service culture for ideas to help my clients. I got so excited during my research that I placed my first Zappos.com order.” And 7 minutes later I received a tweet from Zappos:

“Thanks for trying us out! I have upgraded you to one day shipping so you will get your order tomorrow.”

Zappos followed through…the next day at 9:04am, my Zappos order I arrived. I was so thrilled that I went back to Twitter a posted a praise tweet.

Cox Communications Tweets to find and fix problems. 

Recently I experienced problems with my high-speed Internet. I made several calls to Cox Communications and after four days the problem persisted. Frustrated, I logged on to Twitter and posted this gripe:

“Cox Communications in Tulsa just basically told me there’s nothing they can do about my modem constantly dropping Internet!!!!” 7:23 PM Apr 7th from web.

First thing the next morning, I received the following Tweet from Cox Communications:

If you need help getting your Internet problems resolved I’m here to help.

8:33 AM Apr 8th from web

 

And the Cox tweeter did help. He sent out a tech the next business day. After the problem was fixed, I posted a praise tweet.

Southwest Airlines gets involved in conversations with customers.

Last spring BusinessWeek magazine reported that  a Southwest customer experienced a two-hour delay and while waiting around the customer tweeted his displeasure. The customer was surprised to receive a Tweet from Southwest the next morning with the following message: “Sorry to hear about your flight –- weather was terrible in the NE. Hope you give us a 2nd chance to prove that Southwest = Awesomeness.” How awesome is that?

Ready to start using Twitter for customer service? Here are four simple steps to get you started, right now, on Twitter.

1. Setup a Twitter account TODAY. Go to http://www.twitter.com/ to setup your free Twitter account.

2. Start making posts.  Get the conversation started by making 10-12 posts that will be relevant to your customers. Here are some examples of posts from companies:

  • @Starbucks -Get ready … We’re giving away 5 $100 Starbucks Cards. We’re taking the answers on the MyStarbucksIdea blog. Question coming in 10 minutes.2:13 PM May 22nd
  • @myragolden – Be everywhere, do everything, and never fail to astonish the customer. -Macy’s Motto
  • @DellOutlet- 20% off any Dell Outlet Latitude™ Laptop or Tablet PC. Enter code PHTK5R655CZZWX
  • @JetBlue – We’ve started our “Live from Terminal 5” concert series at JFK. Traveling through today? That’s Dan Dyer http://www.dandyer.com performing.

3. Conduct a search on your brand. Find out what people are saying about your brand by going to http://www.twittersearch.com/. Twitter search will give you real-time search results on every single conversation on Twitter about your brand. You’ll want to conduct this search every day, several times a day.

4. Get in on conversations about your brand. If your Twitter search pulls up anything about your brand, you’ll need to respond. Remember, when Cox did a Twitter search and found my gripe, they immediately engaged me with “If you need help getting your Internet problems resolved I’m here to help.” And engaging customers really is that simple. You spot a gripe (or compliment) and then you hit “reply” and start the conversation.

You need to be right there when and where consumers talk about your brand online so you can respond in an immediate and personal way. Adopt these 4 steps for using Twitter for customer service and you’ll be on the cutting edge of serving customers through the powerful social media.

Are you monitoring online conversations about your brand? If not, why aren’t you? My blockbuster webinar, “Social Media Is the New Customer Service” will put your company on the fast-track to protecting your brand credibility by listening to online conversations. The live event has passed, but you can download the digital recording right now and watch it with everyone on your customer service and marketing teams. Here are the details:

 http://www.callcenterwebinars.com/socialmedia_rec.html