Watch Out! Your Suppliers Can Launch You Into a Communications Crisis

Editor’s Note:  The below case study is written by Juan J. Aldaz. Juan is an e-Marketing professor at the Universidad de La Sabana, in Bogotá, Colombia.

Last week there was a communications crisis worth mentioning in Colombia. It originated in one of the stores of the biggest supermarket chain in the South American country´s capital, “Carulla”.

The morning of December 1^st a couple entered the store and the incident was recorded by another customer. This customer uploaded the video on December 5th, which quickly went viral on youtube and Facebook, with 343,907 views within 4 days, and 4,427 comments. Before you watch the video I would like to give you some context and mention what was said by Sergio Leguizamón who was the man attacked by the security guard.

On December 6^th Sergio narrated his version of what happened on a popular news radio station (BluRadio) “… She [his girlfriend] wanted to rest on a stairway inside the store, I bought a soda because she felt ill. She took a couple of sips and had a vomiting episode, then the guard comes and tells me I had to clean”. Sergio refused to clean as “that’s the maintenance’s job”.

Then what can be seen on the video is that the couple tried to leave the store and the guards stopped them and started pushing both of them. As the argument heats-up, one of the guards punches the Sergio in the face. He asks for the manager of the store and the guards say that there is none. The couple then requests the police and it is only then that they’re permitted to leave.

Take a look at the video of this disastrous episode that quickly went viral:

The… apology?

On December 6^th (one day after the video went viral) the Human Resources VP of the mall finally gave an official declaration that they published on Twitter that read (Juan has translated the below statement from Spanish):

“Our raison-d’être are the clients, and it hurts us on the soul that a situation like this has happened. We will be at the side and will be attentive all along the process. We will take corrective measures so a situation like this one never happens again.”

This “apology” didn’t sound very convincing, and was published too little too late. As Melissa mentions on her blog about “United Breaks Guitars”, the situation was self-inflicted and expectations included “sincerity, compassion and patience”, so what are the consequences of this particular crisis for the retailer?

Consequences of this viral and disastrous situation

The number of followers for the Twitter account of @PlaceresCarulla was 5.618 followers on December 8, 2013. There was no significant change (either rise or decrease) in their followers over the last week. However, Sergio @chechojajaja now has 4,759 followers, which means that he gained around 3,300 over the last week due to the David and Goliath effect of the situation. (I’ve made this deduction using the average of 1,439 given by Twittercounter.)

For better or worse this whole episode occurred when students were on vacation, which means they had a lot of time on their hands which resulted in a lot of memes and cartoons circulating on social networks. These memes and cartoons used the battered face of Rocky or Schwarzenegger saying that Sergio ended up like that simply because he went to do groceries at Carulla. There’s another that says that his next mission will be to go to Carulla and to come back unhurt. These cartoons and memes are, of course, collecting lots of likes, shares and retweets, most of them very funny if you are the general public, but very worrying if you are the retail store.

Though I used several freemium tools to monitor the behavior of what was happening online, the biggest problem for the retail brand may still be to come: people are using social media to organize a boycott of the mall on December 13, 14 and 15, calling for a “no shopping weekend” against the store. So, to make a comparison, if you will, to the United States, imagine a retail chain like Target or Wal-Mart without sales for 3 days. This boycott risks having a severe impact on the store’s finances – and would also set a precedent in Colombia.

Although almost 10 million people in Colombia went to the streets in 2008 to protest against the brutality of FARC leftist guerilla, for what was called the 4F movement (and was coordinated via Facebook), this could be the first time a movement is coordinated from social networks against a corporation.

Common sense would tell me that the 3,300 new followers of the comedian are, for a start, waiting for a direct and sincere apology from the brand. Unfortunately, to-date there has been no such apology. @PlaceresCarulla has only posted one tweet and it’s about a project for a kitchen-school for 2014. Apparently they feel that if they ignore the situation it will disappear on its own. This, as we know, is not the best strategy. It didn’t work for anyone from the arab springs to United Airlines. Today’s issues and crisis management, especially when gone viral on social, calls for acknowledgement, action, and to deal with it in a direct and professional manner. Refusing to do this can result in the issue quickly developing into a crisis, which can keep gaining momentum, worsening the consequences for the organization.

An old marketing saying says that “it is 3 times more expensive to gain a new customer than to retain an existing one”. I never heard of a study about the cost of bringing back a lost customer, but my guess is that it shall be even more expensive.

In conclusion

In conclusion, I would like to say that in my humble opinion this crisis was caused by:

1. Poor selection of the store’s outsourced security company.
2. Lack of policies and guidelines from HR and PR for their suppliers.
3. The situation was worsened by poor handling of the situation. In other words, the whole situation is “self-inflicted”.