Unit Two Case Study

The Kryptonite Bike Lock Fiasco (Read the following case study, and then answer the case questions in a 2-3 page academic paper, employing the provided writing guidelines.)

Introduction

In 2004, the well-known Kryptonite Bike Lock Company leaped into unwanted social media prominence when an online video demonstrated how to defeat a $50 Kryptonite lock using a Bic pen. Kryptonite bike locks were a substantial improvement overlocking technology at the time of the company’s founding in 1972.

Challenge

After biking enthusiast Chris Brennan posted onto a forum a demonstration of how to use a Bic pen to open a Kryptonite lock, the story quickly moved to other media as well. With potential consumers seeing an expensive bike lock being unlocked by extremely simple means, the company faced an unexpected public relations firestorm.

Strategy

Kryptonite did make a response but apparently not fast enough. The firm’s actions were featured in a prominent book, Naked Conversations: How Blogs Are Changing the Way Businesses Talk with Customers, as a prominent example of what not to do in the face of a crisis. After that negative exposure, Kryptonite became the benchmark of failure to respond to social media criticisms.

Interestingly, Kryptonite responded very quickly to the security problem with its locks. Five business days after the first forum post, Kryptonite announced a lock exchange program with existing customers in order to fix the lock’s vulnerability, and the first exchanges were made a few weeks later. Rather than being out of touch with social media, as some critics claim, Kryptonite took action quite fast, and its social media team was anything but unresponsive. Kryptonite’s head of public relations, Donna M. Tocci, went on to contact Robert Scoble and Shel Israel, the authors of Naked Conversations, and asked to set the record straight (their book relied on secondary sources for the Kryptonite case study and had not asked for the company’s input before publication). In the conversation that resulted, when asked whether Kryptonite’s PR department believes it could have handled the situation better, Tocci replied, “we could have posted to the website earlier, but other than that, there wasn’t much different we could do.

Result

In spite of its proactive response, Kryptonite is still followed by negative publicity from the “Bic-picking” scandal. Although the security issue with its locks has been completely resolved, search engine results still show videos and demonstrations on how to defeat a Kryptonite lock using a pen. Some consumers, rather than digging deeper to find that the exploit has been resolved, leave with the impression that Kryptonite has done little to address the problem. Some reports claim that Kryptonite was unaware of the problem until it reached the national media, an accusation the company denies. In any case, it is undeniable that this experience has changed the way Kryptonite will approach social media in the future.

1. What factors led to the social media explosion of the Kryptonite story?
2. Do you agree with Donna Tocci’s claim that the company couldn’t have done much differently? If so, why? If not, what about its response could have been improved?
3. What can Kryptonite do now to prevent customers from getting inaccurate information about its products?
4. What can other companies learn from this experience in terms of listening to the community and designing their social media strategy and objectives?

Unit Five Case Study

British Petroleum Runs the Social Media Gauntlet

(Read the following case study, and then answer the case questions in a 2-3 page academic paper, employing the provided writing guidelines.)

Introduction

British Petroleum rose to media infamy after an unfortunate accident led to a three-month-long oil leak that despoiled the Gulf of Mexico and the southern coast of the United States. The disastrous offshore leak that occurred in the summer of 2010 continues to have serious repercussions for both the coastal environment and British Petroleum’s public image. BP’s efforts to combat this crisis through social media were largely regarded as unsuccessful, but this large company’s failed attempt makes a valuable case study for future practitioners in the field.

History

With roots in the early twentieth century, the British Petroleum Company was formally established in 1954. At the time most of its operations were in the Middle East, but it quickly expanded to Alaska and struck oil in the North Sea. Today, it operates in more than eighty countries and is the third-largest energy company in the world. Its largest division is BP America, which produces more oil in the United States than any other American company.

Challenge

On April 20, 2010, an explosion on the BP-operated Deepwater Horizon oil-drilling platform released a rapid flow of oil on the bottom of the ocean. The explosion killed 11 workers aboard the rig and injured 17 others. The leak was finally stopped on July 15, 2010, after it had released nearly 5 million barrels of crude oil.

British Petroleum’s early response to the crisis was generally seen as less about public engagement and more about spin control. BP’s social media campaign did not start up in earnest until a month after the spill was announced. The company purchased promotional placement on Google and Yahoo to control search results for terms such as “oil spill” and sent viewers to positive articles about the clean-up. Later, the company spent $50 million on a TV campaign to promote BP’s positive role. These expensive efforts did not help, instead “feeding a meme that BP is tone-deaf — more concerned with polishing its reputation than cleaning up its mess.”

Reaching for more social media platforms, BP’s CEO, Tony Hayward, gave a public apology on YouTube. The video drew several parodies and was generally not received well. More parody accounts were hounding BP on other social networks. On Twitter, the account @BPGlobalPR quickly gathered 175,000 followers by mocking BP’s failure to resolve the oil spill. BP’s official Twitter account, @BP_America, had been used by the company as a broadcasting channel and very little for community interaction. The parody account had more than ten times as many followers as the company’s official Twitter page, allowing the parody to dominate the online conversation. Meanwhile, dozens of anti-BP Facebook groups sprang up, dwarfing the company’s presence on that platform as well.

Results

For many years BP’s core business did not seem to call for, or even suggest, pursuing a social media strategy. The unfortunate result was that when a crisis occurred and BP desperately needed to communicate its message to the public, the company’s attempt to bootstrap a social media presence by purchasing public attention was seen as inauthentic. This negative reaction illustrates the importance of starting a social media campaign immediately before problems arise and have to be cleaned up.

After engaging the media, BP’s initial strategy was to refuse direct responsibility for the leak. When Tony Hayward was interviewed on the Today Show he said, “It wasn’t our accident, but we are absolutely responsible for the oil, for cleaning it up, and that’s what we intend to do.” This statement may have been partly motivated by legal concerns, as a full apology would open BP up to greater liability in court. However, this half-hearted approach did little to win over the general public. As a consequence of the accident and the weakly perceived PR response, BP fell from being the most highly ranked in customer loyalty in the oil industry to being the lowest-ranked. It will clearly be some time before its reputation fully recovers.

Rather than engaging in a top-down image management campaign, British Petroleum could have been better served by a more subtle social media campaign. One of its biggest mistakes was “failing to take advantage of social networking to open a clear line of communication with people living on the Gulf Coast and around the world.” There was an opportunity for BP to take revolutionary steps by engaging with those affected by the spill in more personal ways than grants of aid or clean-up assistance. That chance was missed in BP’s case, but other companies can learn from its mistake by creating social media accounts for damage control, hopefully well before they are needed.

1. What benefits would BP have gained from starting a serious social media campaign a year before instead of a month after the oil spill? Be as specific as possible.
2. While the parody account was posting on Twitter, BP asked for the account to be shut down. The social media site refused, saying that parodies were allowed under its terms of service. Is there a better way BP could have handled the accounts making fun of them?
3. BP was criticized for underestimating the extent of the oil spill at first: the company is said to have underestimated the leak’s size by as much as a fifth the real amount. Would BP have been better off to report a higher number and perhaps risk overestimating the extent of the leak? Why or why not?
4. Go on YouTube and view Tony Hayward’s apology. Was this a well-constructed social media message? Should YouTube have been used differently, the same, or not at all in presenting BP’s case? Explain your argument.
5. Do some external research and look up the Exxon Valdez oil spill. Compare and contrast Exxon’s and BP’s responses to their respective crises. How successful were they in comparison? How much of the difference can be attributed to a change in the times, different corporate cultures, or media strategies? 

Unit One Case Study

JetBlue Uses Social Media to Connect with Customers (Read the following case study, and then answer the case questions in a 2-3 page academic paper, employing the provided writing guidelines.) 

Introduction

JetBlue Airways provides a good example of how a company can successfully use social media to better connect with its customers. Marty St. George, senior vice president of Marketing & Commercial Strategy at JetBlue, speaking at a conference in June 2010, admitted that the airline industry comes in last in terms of American customer satisfaction ratings. However, Mr. George sees social media as a powerful way to ‘bring humanity’ back to travel. In September 2006, JetBlue began with a corporate blog penned by its founder and CEO, David Neeleman, but the blog fell quiet by October 2007. However, participation in other social media platforms, such as Twitter, YouTube, and Facebook, was started after an incident in February of 2007. This effort has proven highly effective in helping the airline get closer to its customers.

Challenge

JetBlue’s goal of ‘bring the humanity’ back to air travel was dealt a serious blow on February 14, 2007, when weather and “…a shoestring communications system that left pilots and flight attendants in the dark, and an undersized reservation system,” caused about 1,000 flight cancelations within five days, stranding thousands of passengers on Valentine’s Day. This type of public relations disaster is what every airline fears. JetBlue reacted by using traditional and social media to make amends to its customers.

Strategy

In an effort to reach out to customers, CEO Neeleman, appeared in an unscripted YouTube video, apologizing for the airline’s mistakes and announcing a “Customer Bill of Rights,” which outlined steps the airline would take in response to service interruptions. The admission of complete responsibility for the incident and an acknowledgment of the pain it caused passengers, coupled with a credible promise to fix it, amounted “to the perfect business apology—in fact, it is likely to become a generally accepted standard for how business errors should be handled.” As a consequence, the video apology received a significant number of comments, most of which were positive because it felt authentic and genuine. The YouTube experience gave the company a glimpse of the power of using social media to establish a two-way dialogue with its customers. The recognition of just how effective social media can be in repairing a damaged image and improving customer relations set the airline down the path of crafting an overall social media marketing strategy. The centerpiece of that social media strategy has become JetBlue’s Twitter account, which grew from a mere 700 followers, as of March 7, 2008, to approximately 1.1 million followers by August of 2009.83 This kind of growth in just over 17 months is nothing short of phenomenal and can be directly attributed to the company’s social media strategy of first using Twitter to see what people were saying about them, then responding to questions and finally engaging in full-blown conversations with their customer base.

Results

Today, JetBlue has rebuilt its reputation and made enormous strides in improving its relationships with customers through the use of social media. Indeed, Todd Wasserman writes on Mashable, “JetBlue is one of the top airlines associated with the web . . . When it comes to social media, it’s less about direct sales and more about brand building, and JetBlue has embraced it with gusto.” As of the end of October 201l, the airline’s YouTube Channel, JetBlue, had accumulated over a million views.86 Its JetBlue Airways Twitter page had attracted over 1.6 million followers, with more than 12,000 tweets. The company’s Facebook page racked over 500,000 fans. The effective use of video, microblogging, and social networking has played a key role in helping the company strengthen its brand. In addition, JetBlue uses its social media properties to attract people to its web site jetblue.com, where they can purchase tickets, converting them from fans to customers.

Why do you think JetBlue became active on more social media platforms following the February 2007 incident?

The apology of the CEO of JetBlue took place several years ago. Do you think that strategy would still be an effective one for a company today? Why or why not?

Do you think JetBlue’s response to the stranding of passengers, was an effective and feasible solution to the situation? Why or why not?  What suggestions would you offer JetBlue in order to increase the effectiveness of their communications?

1. Why has Twitter become the most popular social media platform for JetBlue in helping them improve customer satisfaction?
2. Using the following “Guidelines for Writing Papers”, develop and upload your 3-5 academic paper (case study) before or by the end of each designated week.
3. Guidelines for Writing Papers
4. Your papers should be:

I’m working on a business case study and need an explanation and answer to help me learn.

TurboTax Experts Take Over Twitter (Read the following case study and then answer the case questions in a 2-3 page academic paper, employing the provided writing guidelines.)

Tax software maker TurboTax has a unique problem. Their customers find them incredibly useful. But for a very short period every year. The company has gotten used to the seasonal nature of its business, but this year, they took that approach to Twitter.

By ramping up their staffing efforts on Twitter — and bringing some much-needed expertise to the space, they happened on something great for business: an excellent customer retention program.

Chelsea Marti (@TTaxChels (Links to an external site.) on Twitter), TurboTax’s Social Media Manager, explained the company’s approach at TWTRCON (Links to an external site.) in New York this week.

The company wanted to scale its Twitter effort to help customers with their taxes during tax season. To do so, they follow the approach of Intuit’s founder, Scott Cook. Cook created the concept of “follow me home (Links to an external site.)” by literally hanging around Staples stores at the beginning of Intuit’s history until someone bought his product. He’d then go home with them to see how simple (or difficult) the install process was for them. Says Marti:

“Getting that close to the customer, he was able to make better products year over year.”

That philosophy has been ingrained in Intuit employees. And according to Marti, TurboTax has taken the same approach to its Twitter strategy:

“We’ve basically lived the dream of our CEO and founder Scott Cook.”

The company’s approach to Twitter has grown in importance and size over the last year. TurboTax now has over 20 million customers. And those customers are greatly interested in the company every year in the lead up to April 15th. Says Marti:

“We have a short period of time to get those customers the help that they need.”

TurboTax’s seasonal business is both a strength and a weakness. On Twitter, the company has the chance to own the users who are interested in and commenting on their taxes. But that means devoted resources to the endeavor. And until this year, TurboTax wasn’t able to do that.

Before this tax season, the company had two people in corporate communications and marketing on Twitter. This year they launched TeamTurboTax (Links to an external site.).

The feed went live in February, at the beginning of tax season and upscaled the company’s Twitter efforts from two employees to 40 staffing the feed. They had a live community team — including experts — and scaled the idea of helping customers.

“During tax season, we see a running stream of our keyword,” says Marti. “Two people handling that is not the best situation for a customer.”

According to Marti, they’ve now utilized those customers and the conversations they’re having online:

“Our overarching theme on Twitter is that it’s a persuasion engine that lets us keep customers.”

TurboTax has found that on Twitter customers can help each other. Corporate communications became the hub that farms out questions to the appropriate spokes. The company also uses cotweet (Links to an external site.) to fetter out all the incoming customers.

Now if a customer has a complaint or a problem, it is assigned to the right person. As their Twitter feed bio reads, “TeamTurboTax is who you ask when you have tax, tech or TurboTax questions!”

And as the 2010 tax season progressed, the company realized people were using the feed differently than they expected. Mostly twitterers were coming to ask TurboTax personal tax issues.

“We set out thinking we’d have more technical questions,” says Marti. “But we found out quickly we were getting tax questions.”

The company had employed tax experts for their effort. They enabled them to find a buddy, train a buddy, or recruit a buddy. That effort added 10 to 12 people to the team. Says Marti:

“For us, Twitter was a great way to help customers, but it wasn’t the be-all and end-all. What really made it for us was the expertise that people brought to Twitter.”

Marti acknowledged if the feed had been staffed by herself and corporate communications alone, it would have been far less effective. With experts on deck, the response time was fast. It took an average of four minutes for TurboTax to get back to Twitter questions.

At least half of the people who came to the feed were about to finish a return. The company also found that most of the people seeking out tax help from TurboTax turned out to be existing customers. And they found those customers were 71% more likely to recommend TurboTax because of their interactions with the company on Twitter.

In the end, TurboTax’s expanded efforts on Twitter became a great customer retention program. Says Marti:

“Everyone knows it’s less expensive to keep a customer than create a new one.”

TurboTax has strong name recognition from Intuit’s software Quicken. How did this affect the company’s Twitter strategy?

Name the pros and cons of asking for tax advice on Twitter. What specific social media marketing tactics does the company use to better manage the rush around tax day?

How does the seasonal nature of TurboTax’s work make social media marketing easier? More difficult? What specific steps do you think the company takes to make the rush around tax day easier to manage?

The article names word-of-mouth recommendations as one advantage of TurboTax’s Twitter strategy. What other advantages exist that weren’t mentioned?