How Two Companies Handled Repairing Their Damaged Brand Image
In the 48 hours before the most crucial sales pitch of his career, Tracy Myers barely slept a wink. He was busy consulting with his wife, his parents, his lawyers and the guys down at the shop. Myers owns a used car dealership in Winston-Salem, North Carolina. He had devoted considerable energy to making it a symbol of success. The walls were lined with awards chronicling his achievements. The dealership, Frank Myers Auto Maxx, began with the original Frank Myers store opened by Myers’ great-grandfather in 1928. It had thrived for 83 years. Now it was in danger of collapse—all because of a news release that damaged the brand’s image.
On March 14, 2012, the Federal Trade Commission (FTC)—the country’s consumer protection agency—released a statement that “five car dealers around the country have agreed to Federal Trade Commission settlement orders that require them to stop running ads in which they promise to pay off a consumer’s trade-in no matter what the consumer owes on the vehicle.” The action taken by the FTC was part of an effort to “protect consumers in financial distress,” according to the statement, and Myers’ business had been singled out for claims such as: “Uncle Frank wants to pay [your trade] off in full, no matter how much you owe.”
Now, on the surface, this seems like a fairly harmless pitch—especially coming from a used car dealer. But the FTC had learned that certain shifty dealers were using similar claims to scam their customers. According to the FTC’s statement, “The FTC’s complaints allege that despite the dealers’ claims, consumers still end up being responsible for paying the difference between the trade-in loan balance and the vehicle’s value.”
The FTC vs. used car dealerships
Here’s how it happened: Should a down-on-his-luck owner go to trade in his SUV and purchase something more affordable, the SUV may be worth less than he owes. In the industry, this disparity is called “negative equity.” Some of Myers’ rivals were promising to pay off that negative equity but were secretly rolling it into the customer’s new loan. Indeed, this is what the FTC accused four of the five dealerships cited in its news release of doing: “The dealers rolled the negative equity into the consumer’s new vehicle loan or, in the case of one dealer, required consumers to pay it out of pocket.” The fifth—Frank Myers Auto Maxx—got lumped in with the others for asking customers to pay the sum out of pocket before closing the deal. A reasonable request? Yes. But disingenuous if you take what you heard in the Myers’ commercials as the gospel truth.
What happened next is the stuff of nightmares, a horrific example of just how much engagement bad news garners and how thoroughly it can ravage a brand’s image in the age of social media. Websites have plenty of suggestions on how to manage the fallout and repair the damage, but that doesn’t mean it’s not important to be proactive. If you’re smart, you’ll consider each threat and prepare a response as if you’re engaged in a fire drill. Because as Myers can tell you, once the sparks start to fly, you don’t have much time to react.
When representatives from the FTC first approached him in fall 2011, he was happy to hear them out. After reviewing their concerns and discussing options for resolving the issue, he agreed to remove five ads—all with similar language—from his YouTube page, and to avoid using that language in the future. To his knowledge, not one customer had come forward to voice a complaint about the claims in those ads. Instead, the language in his YouTube videos had been flagged by the FTC during their investigation. He applauded its efforts on behalf of the public. After the agreement, he heard nothing from them. At no time was he charged with a crime or asked to pay a fine. The proceedings had been cordial. So Myers was shocked and disappointed when he read the FTC’s news release.
A brand image damaged by a press release
It turns out that the FTC issues news releases on every settlement, spelling out the allegations and what businesses agreed to stop doing. “We’re not singling anyone out,” an FTC official says. Sometimes more than one business may be included in a news release, and it can take some time after agreements are reached before a release is issued.
But by the time the media picked up the story, every bit of nuance had been stripped from the narrative. News outlets including the NBC affiliate in Winston-Salem reported that all five dealers in the news release had deceived customers. The news soon spread to other websites as well. The Better Business Bureau lowered the Myers dealership’s rating to a D. Just like that, the company’s proprietor found himself looking at a public relations disaster.
At first glance, this may seem like a unique predicament, the sort of thing you as a small-business owner could never imagine, much less anticipate. But that’s the wrong way to think. One lost package, an unplanned product recall or a few employees goofing off in a restaurant kitchen can quickly lead to a world of trouble. If a dissatisfied customer or a ruthless rival wants to damage your reputation, there are dozens of forums in which to do so. Facebook, Amazon, eBay, Twitter, Yelp, TripAdvisor, Angi, YouTube. Don’t forget email, too.
In the wake of the FTC news release, Myers struggled with what to do. “We had always portrayed ourselves as consumer advocates,” he says. “We consider ourselves the good guys in an industry plagued with a bad stereotype.”
How Myers fixed his damaged brand’s image
His attorneys advised him to sit tight. This will all go away in a couple of days, maybe a few weeks, they said. But Myers hated that idea. He knew he couldn’t take the FTC to court—he’d go broke trying to argue his case—but he couldn’t stomach the idea of holding his tongue. He was a community leader, a local celebrity, one of the few people on the planet who could wear an Uncle Sam top hat on TV without looking foolish. “Right or wrong,” he says, “I just went on gut instinct. I was in survivor mode.”
One day later, on March 15, he sat down behind a video camera in his office. He wore a white button-down shirt with the dealership logo to one side. His eyes were weary, but he looked straight into the lens as he began to speak. “There is another side to the story that’s not being told, and I think that it’s important that I share the rest of the story with you tonight, as Paul Harvey would say.” he said.
For the next 11 minutes, he laid out the facts without disparaging the FTC. “We never meant to mislead anybody or deceive any consumer,” he said. “That’s not who we are, that’s not what we’re about, that’s not what this dealership stands for.” In closing, he invited people to contact him by phone or email with questions, complaints or praise. Before calling it a night, he posted the video on YouTube. Was it enough to save his company? He had no way of knowing—not yet anyway.
The United Airlines saga
In many ways, Myers’ video is a testament to the wisdom of brand management, due to his quick response, his candor and his customer-centric focus. But it’s instructive to look at a less successful effort, too. Consider the saga of Dave Carroll and United Airlines.
On March 31, 2008, Carroll was sitting on a plane at Chicago’s O’Hare International Airport when a woman glanced out her window and said, “Oh my god, they’re throwing guitars outside.” Carroll had checked two guitars—an Ovation Elite and a $3,500 Taylor 710ce—with his luggage. He was on his way to Omaha, Nebraska from Halifax, Nova Scotia, to perform on a one-week tour with his band, Sons of Maxwell. Carroll tried to report the incident to three airline employees. None heard him out. When he arrived in Omaha, it was after midnight and he had to be up early.
At sound check later that day, he discovered the damage. The Taylor had been stowed in a hard-shell case outfitted with a protective padded cover. When he pulled out the guitar, there was a hole in the base, where you plug in the electric cable. The cedar face was cracked and separated from the sidewalls. In the end, it cost him $1,200 to repair.
Taking matters into his own hands
For nine months, Carroll tried to get United to take responsibility. He was shuttled from one employee to the next, directed to a call center in India and told to return to Chicago to present his guitar for inspection. Finally, a woman named Ms. Irlweg informed him via a series of emails that his claim and request for $1,200 in flight vouchers had been rejected. The musician conceded defeat, but only after vowing to write three songs about the experience and post them online.
“The truth held enough drama and tension that I didn’t have to make anything up, so I decided the verses would lay out the facts as though I were reporting a crime to the police,” he later explained in a book entitled United Breaks Guitars. The first song, also called United Breaks Guitars, got right to the point:
United, United,
You broke my Taylor guitar.
United, United,
Some big help you are.
You broke it, you should fix it,
You’re liable, just admit it.
I should have flown with someone else or gone by car
’Cause United breaks guitars.
Carroll’s video rendition of the song cost him $150 to produce. His friends played the on-screen roles. One clip includes a crime-scene-style chalk outline of a guitar with a broken neck. Another features three men in fake black mustaches, sombreros over their hearts, mourning the instrument in its case. The finished work was posted on YouTube on a Monday night in July 2009. Carroll wrote a Facebook post to let his followers know it was there. By Friday, it had recorded 1 million views. By the end of the month, according to an MIT Sloan Management Review article, it had reached around 5 million views. “Thirteen million views later,” he says, “it’s still trucking along.”
He became a genuine internet celebrity. “I get stopped all over the world,” he says. “If you ever wonder if there are cameras in airports, you don’t have to anymore. Because by the time I got to the security belt in Glasgow, the head of security was standing on the other side of the metal detector, waiting for photos and autographs. He saw me coming.”
A brand image damaged due to lack of response
If United had been as observant, it would have saved itself from a heap of trouble. Soon after the video was posted, the company called to offer the songwriter $1,200 in travel vouchers and another $1,200 in cash. He turned the offer down. United later presented a $3,000 donation in his name to the Herbie Hancock Institute of Jazz (then known as the Thelonious Monk Institute of Jazz).
According to a statement sent to ABC News by United, the company conceded that Carroll’s song “struck a chord,” continuing on to say that, “We are in conversations with one another to make what happened right, and while we mutually agree that this should have been fixed much sooner, Dave Carroll’s excellent video provides United with a unique learning opportunity that we would like to use for training purposes to ensure all customers receive better service from us.” But throughout the crisis, United was routinely late in its response.
To be fair, though, the Carroll-United affair happened at the dawn of a new era, back in the days when YouTube, Facebook and Twitter were relatively new platforms. Remember the Comcast repairman who fell asleep on a customer’s couch while waiting on the phone to consult with colleagues in the office? That 2006 video of his nap drew just 200,000 views in the two weeks before The New York Times reported on the story. The Wednesday following a YouTube video of a Domino’s Pizza kitchen employee inserting strands of cheese up his nose, among other health code violations, “the video had been viewed more than a million times on YouTube. References to it were in five of the 12 results on the first page of Google search for ‘Dominos,’ and discussions about Domino’s had spread throughout Twitter,” according to The New York Times. The pizza video preceded Carroll’s YouTube video by about three months.
Helping companies with damaged brand images
Even Carroll sees his video’s rapid success as a tipping point. In a span of weeks, thousands of people reached out to him with their own horror stories. Before the year had ended, he was invited to speak to the customer service executives for 700 worldwide brands. In February 2012, he launched a website named Gripevine.com to help companies big and small resolve complaints. Customers file their grievances and the company is notified. The two parties can chat publicly or use a private messaging system to settle the dispute.
United is not among the firms that have claimed their businesses on the site—and the company’s late responses didn’t stop with Carroll. In June 2012, a 10-year-old girl traveling alone from San Francisco to a summer camp in Traverse City, Michigan, landed at O’Hare Airport in Chicago to discover that the escort her parents had requested was nowhere to be found. The girl said she tried to explain her predicament to United employees and asked for a phone to call her parents, but she kept being told to wait. Hours later, after the plane had landed in Michigan, the camp counselor informed her parents that she was missing.
Once again, United was slow in responding to a crisis. In August, after the Bay Area’s NBC affiliate got involved, United had no choice but to respond, offering apologies and a refund of the frequent-flier miles used to buy the ticket and the $99 unaccompanied-child fee.
Good reviews equals positive brand image
Current consumer expectations are high. These days, people rely on the internet to help them choose everything from the right car to the right hotel, insurance, restaurant, wedding venue, plumber, camera and TV set. They place great faith in what they read on the web and may change buying behavior based on negative reviews—even though many of those reviews might be fake. According to Uberall’s “The State of Online Review Fraud” report, “Of the four platforms examined, Google had the highest average percentage of inauthentic reviews across business categories (10.7%). Next in descending order were Yelp (7.1%), TripAdvisor (5.2%) and Facebook (4.9%).”
There are dozens of brand and online reputation management firms, each with their own methods and claims. In March 2012, Patrick Ambron, co-founder and CEO of BrandYourself.com, “launched the first do-it-yourself platform that makes it easy for any person to take control of their own Google results,” according to a company press release. It’s a low-cost way for people and businesses to take charge of their own brand image, damaged or otherwise.
Ambron discovered the need for this service when a college buddy (now a co-founder) had a rough time landing an internship. It turns out there was someone with the same name who rated higher in online searches—and that guy had a criminal history. To distance himself from this evil twin, Pete Kistler would either have to pay a service thousands of dollars or learn to utilize SEO, with no guarantee that he’d be the clear frontrunner the next time Google updated its algorithms.
An active role in repairing a damaged brand image
The secrets of getting into the public eye via social media and SEO can be complicated, especially if you don’t know how to use the algorithm to your advantage. Myers’ YouTube statement was a fine first step, but he had to keep hustling to put it in the public eye. “All we focused on for 48 hours was making sure that that video was seen,” he says. Myers told his supporters to go there to make their comments—“That was huge,” he says—and used Google Alert to monitor the response. He also gathered his staff together, around 33 employees in all, and screened the video for them, fielding questions about the FTC’s actions and the dealership’s response. He advised them not to talk to the press. “We don’t need anything spinning out of control,” he explained.
Instead of inserting your brand into conversations with strangers, says Amy Lanigan, the self-employed owner of AmyLanigan.com, it’s better to start with people who know and admire your work.
“We lost a lot of sleep and got some gray hair,” Myers says of his brush with the FTC. “But other than that, our business has been on an incline for the past three years.” Yes, his efforts to restore his brand paid off in the end. But, as Myers is quick to point out, he also benefited from a stroke of luck: The federal government is one of the few organizations that people dislike more than used car dealers.
This article was updated June 2023. Photo by PeopleImages.com – Yuri A/Shutterstock
Chris Raymond is a contributing editor for SUCCESS magazine.