The Measurement Standard: Blog Edition

Can the Reputation of Health Insurance Companies Be Saved?

by Katie Delahaye Paine

I served on the board of directors and later the advisory board of Anthem Blue Cross Blue Shield of New Hampshire. So I know a lot more about the business than most. When I first worked with what was then BCBS, they were a old-fashioned, non-profit insurance company. Over the years, the company grew, improved and ultimately was sold to for-profit Anthem. As a public company, the need to deliver shareholder return became a major focus. Under Anthem's guidance the old BCBS continues to dominate the insurance marketplace in NH.

In some ways, we could see today's debate over health care reform coming. As I have said many times, "you become what you measure," and the key performance indicator that we on the board looked at every month was cost per member per month vs. revenue per member per month. When revenue exceeded costs, it was good. When costs exceeded revenue, we dropped providers or cut back payments.

For a for-profit corporation, that's just good sense. But it's no surprise that it could lead to horror stories of people losing insurance just when they needed it the most.

The question is, after a summer of bashing by the Obama administration, can the health insurance companies rebuild their reputations? The short answer is yes, but it won't be easy.

First of all, insurance companies have never had that great a reputation anyway. The nature of their business puts them at the awkward intersection of commerce and compassion. Even before the current debate they were the corporations that people loved to hate, commonly viewed as taking advantage of those who most needed their services.

Add to that politics, or, more specifically, politicians. As I said, the fundamental motivation of for-profit insurance companies is shareholder return. Put that together with the fact that decisions regarding health insurance are primarily made by employers (not individuals), and you see why the weakest voice in the debate is the individual policy holder. This plays perfectly into the hands of politicians, whose reelection depends on those individuals. No politician has ever won votes by championing the cause of big bad corporate insurance companies over the needs of the people.

But the bigger problem for insurance companies is their own ham-handed astroturfing (see "The Dark Side of PR," also in this month's issue), such as United Health's use of employees to generate the appearance of support for their points of view, and providing false data as talking points from its wholly-owned subsidiary the Lewin Group. In the pre- social media days, faux protests and facts might have gone unnoticed, at least until the debate was over and the votes were cast. But today, it's just too easy (and frankly fun for many bloggers) to expose corporate America's efforts at media manipulation. So they backfire, and insurance companies have been shooting themselves in the foot.

To restore their reputations, insurance companies will need to turn away from the dark side of PR and start investing in activities that prove them to be open, honest, and reliable. It will take an enormous amount of transparency and trust-inspiring good deeds before most Americans will ever trust them again.

Can Nokia's Reputation Be Saved?

by Katie Delahaye Paine

A few weeks ago, I blogged about damage to Nokia's reputation as a result of the Iranian dictatorship's ability to track and arrest protestors via their Nokia cell phones. The gist of it was that, although Nokia is doing everything right in handling this crisis, thousands of people following #iranelection on Twitter and retweeting the original WSJ story are still sure to affect their reputation:

...I'm wondering if, in this era of instant communications and continuous news reporting, classic crisis communications no longer works. Do you have to do something above and beyond the norm, something proactive, not reactive?

Since that blog post, things have gotten worse for Nokia. If Iranian papers are to be believed, the decline in the brand's reputation is having a direct impact on Nokia's sales. And now that a prominent journalist has implicated Nokia in his arrest, the biggest name in cell phones is permanently tied to the "axis of evil." A boycott campaign has co-opted the "connecting people" tag line and substituted "jailing people."

Until Twitter, all this would have been a minor local incident confined to a relatively isolated country. Now there are daily tweets on the topic of the Iran Election that are followed by thousands (#iranelection). Journalists and news junkies around the world are following each day's protests and tweets with an addiction formerly reserved for Barack Obama or Michael Jackson.

So whether Nokia is to blame or not, Nokia's reputation continues to suffer. Not just in Iran, but around the world among all those who want to do something to support the people of Iran. So they read the tweets and retweet the call for a boycott.

Despite the company's denials the rumors persist. Who says there isn't value to transparency and a good reputation?

United Airlines Faces the Music

Can This Reputation Be Saved?

+ = ?

by Katie Delahaye Paine

In this age of user-generated media, it's way too easy to point out the screw ups of a major brand in a fun and entertaining way. Which is exactly what happened with Dave Carroll, the Halifax, Canada, musician who had his guitar damaged by United Airlines, and wrote a song about it:

 

One might argue that if the song wasn't a catchy tune perhaps it might never have made the leap from Twitter to the top of the YouTube charts, but my hunch is that this story was going to make its way into mainstream media no matter what. So it's no surprise that all the major networks picked it up.

Let's face it, it's got all the makings of a great news item: A good tune, a cute singer, a big bad corporation, plus the social media angle. Once 1.4 million people had watched the video, it wasn't going away. What's fascinating is United's response. They want to use the video as a training tool!

I'll give them credit for trying to do the right thing -- albeit 9 months too late. But the real right thing would have been not to create a company culture in which baggage handlers assume that it's okay to toss guitars through the air.

Now I've been a long-time fan of United, and I still think their frequent flyer program is great. But if I were a musician, or anyone else with precious cargo, I'd think twice before I'd buy a ticket.

But Mr. Carroll has made an even bigger point, which I hope the airlines and all other consumer brands are listening to: It shouldn't take a Twitter/YouTube/blog campaign to get companies to do good customer service.

One of Mr. Carroll's gripes was that he spent dozens of hours on the phone to India trying to sort this out. What did that cost United? And wouldn't it have been a whole lot cheaper to solve the problem back in Chicago or Omaha? And even cheaper to inform the baggage handlers that guitars shouldn't be thrown?

Let's do the math:

Assume that United spends about $10 for each hour of Indian phone time. And $100 for every hour of time the PR team has spent dealing with media inquiries. And $500 for every hour of legal time they're no doubt spending trying to figure out whether they can be sued.

Indian Phone support: $100

United PR team time: $5000

United Legal Team: $10,000

Damage to United's reputation: Priceless

Can the Reputation of AIG Be Saved?

American International Group, Inc.

The short answer: No way.

Rachel Maddow suggested that, "the one thing that can unite the USA is its hatred of AIG." While she may not have statistics to back up that assertion, it certainly seems that AIG is a brand that has little chance of ever earning back the trust of the American populace. Given that we now own 80% of AIG, my guess is that it will be a very cold day in hell before the American public trusts AIG with their insurance, their retirement, or anything else. Like Enron, WorldCom, and other colossal rip-offs in recent memory, AIG will now be forever relegated to the growing list of corporations whose reputations are way beyond repairing.

In the interest of transparency, I'm one of the people who empathize with AIG. I served on the board of the Institute for Public Relations with Nick Ashooh and I continue to serve on the board of the New Hampshire Political Library with his brother Rich. And Nick Ashooh is one of the nicest, most trustworthy people I've ever met, as is his brother. Frankly, I'm not sure there's a worse PR job in the world today. (Okay, maybe VP of Public Affairs for Kim Jong-il, or Dick Cheney, or the Taliban.) Nick doesn't deserve it. Any good millennial PA officer would have long since said FU to the job and fled to Whole Foods or Timberland or to a host of other companies for whom it is easy to do PR. But Nick has stuck it out and been as professional as one can be under the circumstances. Could he/should he have embraced social media and been more transparent long ago? Absolutely. Should he perhaps have questioned more and obeyed less? Of course. But we can forgive him for being a bit preoccupied. (Eds. note: See also this enlightening article in the NYTimes, "Dear A.I.G., I Quit!" for an insider's view of the situation.)

All that having been said, I would argue that Nick has been left holding the bag for a bunch of con men. He's too nice and polite to ever accuse them of being the rip off artists that they really are. And he's now representing a brand that has less brand equity than Bush, and about the same as brand Edsel. --KDP

Can the Reputation of Israel Be Saved?

The short answer: Probably not.

Israel is a perfect lesson in how not to do social media. At the beginning of its most recent troubles in Gaza, it created a Twitter account and hosted, "the first governmental press conference ever held on Twitter." Some people (most prominently Rachel Maddow of MSNBC) scoffed at the idea of a country trying to explain a conflict that goes back decades (centuries, millennia?) in 140 character-messages. But Israel got some recognition for trying, and did at least have a presence and a way to explain its side of the story. (Read more in the International Herald Tribune.)

Israel blundered, however, when it decided to deny journalists access to Gaza. Its hopes of controlling the media only resulted in citizen journalists and Al Jazeera filling the gap. Photos and real life reports of civilian casualties have poured out in all the various media means that today's environment makes possible.

Conversations, of course, are never only one way. Regardless of what Israel might think or do to try to prevent it, the rest of the conversation is still going on.

This is creating a great social experiment: It will be the first war that CNN and the major networks haven't been able to cover. It truly is a new era in war correspondence. The big guys can't get in, there are no embeds. And all the news is coming from people on the streets. No wonder it's sounding so bad for Israel. It's the first no-spin war.

So, (as if it does have enough bad press these days), Israel violated one of the cardinal rules of social media -- do not be inconsistent. Since you will be found out in a nanosecond. So while they thought they were being open and accessible on Twitter, they are now shown to be just another entity thinking it can control its messages. NOT!

--KDP

Can the Reputation of the Big Three American Automobile Manufacturers Be Saved?

Can This Reputation Be Saved?

 

American Car Companies

The short answer: Not likely.

With or without a bailout (we tried that with Chrysler in 1980, remember?), the so-called Big Three car manufacturers (Ford, Chrysler, GM) are now the old, tired, jalopies of the industry. Even if somehow they can survive the current downturn, the Detroit dinosaurs and their products will long be seen as bloated and inefficient.

A bailout or bankruptcy will only delay the inevitable -- the end of a ton of American car brands that no one cares about. Look at the Lovemarks website and try to find an American car on the list; no one is engaged or passionate about American cars. They'll drive miles for a Mini, they want to make love to an Audi, they dream about Porches, and they defend their Elements to the death. But they just don't care that much about American cars any more, and in a down economy and tough times, only passion gets you through. The truth is, cars made in America by Honda, Toyota and BMW are better, more popular cars.

This being the U.S. of A., where the fiery tribulations of capitalism supposedly forge stronger businesses, it is tempting to dream that the Big Three might survive and benefit from the trials of their present crisis, somehow re-inventing themselves as leaner and greener. Tempting, but millions of shareholders are no longer betting their 401Ks on it. --KDP & WTP

Can Alaska's Reputation Be Saved?

Alaska is such a beautiful place and full of so much amazing goodness. But now, the vast majority of the world only knows it as the home of the US Republican Vice Presidential candidate. Given the way public opinion is formed, anyone who didn't know Alaska before, now thinks that it all looks like Wasilla, that most people there shoot wolves from airplanes, that everyone is anti-choice, and that they only care about oil and hockey.

I have two cousins that live in Alaska and they've been rolling their eyes ever since the VP candidate was named. The truth is that Alaska is a gorgeous place, full of wildlife and wilderness and wonderful people. But given the nature of political media coverage, chances are good that most people will never know. --KDP

Can the Reputation of United Airlines be Saved?

Not Your Normal PR Nightmare
United pilots request the resignation or removal of CEO Glenn Tilton, and United sticks its head in the sand.

There are any number of times I've looked at crises for this column and thought of the poor PR person who just gave up any chance of a decent night's sleep for a month because of some boneheaded thing management has done. But generally, at least in the olden days of the 20th Century, those boneheaded things would be reported on by reporters whom you knew and could trust to at least throw in your side of the story.

But all bets are off in this era of consumer generated media. This isn't your normal airline company nightmare: Not just customers, but pilots are listing all the boneheaded things you've done on a website with your CEO's name on it.

That's exactly what the pilots of United Airlines did last week when they launched www.glenntilton.com to point out to the world their grievances with United CEO Glenn Tilton. The site's headline is "United Pilots Request the Resignation or Removal of Glenn Tilton." And the copy says: "This website bears the name GlennTilton.com as a daily reminder to everyone invested in a positive future for United Airlines exactly where the source of our problems lies."

First of all, shame on United for allowing the highjacking of the boss's name. If nothing else, it reveals a stunning lack of appreciation for the realities of a social media and search-dominated world. What were they thinking? (All you PR and communications managers reading this right now: Run out and register the web address of your boss's name. You never know.)

But even worse is United's canned and formulaic response. Dozens of passengers, pilots and crew members have now posted hundreds of damning diatribes on the web site that pretty much back up the pilots' argument that Tilton should go.

(And by the way, this is not the first website critical of United to be created. For example, www.untied.com began in 1996, growing from one customer's unsatisfactory experience with customer service.)

Finally, are the members of the Board of Directors so unbelievably clueless and Web un-savvy that they think they can ignore this? Don't they realize that when you now search for "United Airlines CEO," the first or second site that pops up is the Tilton Must Go site?

Thanks to this website and the nature of social media, I have no doubt that Tilton's name will go down in the annals of bad CEOs, no matter what he does from here on out.

But the far bigger issue is the long term impact on the airline's reputation and its ability to survive. At a time when you're trying to charge customers more for things like food and luggage, and when you have brands like Virgin, Southwest and Jet Blue sucking all the love out of the skies, do they really think that ignoring the pilots and letting this viral sh__tstorm of hostility proliferate thru cyberspace is the way to go?

As a Premier Exec frequent flyer with United myself, I will tell you -- having read many of the www.glenntilton.com entries --I'm a lot less likely to fly United. I can put up with a lot, but when pilots are talking safety issues, as well as efficiency issues, I tend to listen.

The reality is that companies like Southwest and JetBlue are constantly and actively listening to CGM conversations and participating in those conversations. They are the ones that will survive because they earn the trust and confidence of myself and their other customers. -- KDP

Can the Reputation of Bear Stearns Be Saved?

The Short Answer: Not likely

Never mind that the investment bank has disappeared under the corporate umbrella of its new owner JP Morgan -- the brand will live on in infamy. Our prediction is that Bear Stearns will be to the end of the first decade of the 21st Century what Enron was the beginning. Just as brand Enron became code for fraud and shady dealings in the energy sector, brand Bear Stearns will be blamed for the sub-prime mess, even though they were hardly the only guilty party (and, according to this Vanity Fair article, may in fact have been brought down by hostile forces).

Regardless of the exact cause of their demise, Bear Stearns was the first of the major financial services firms to fall, the first to be bailed out, and their executives were the first to be indicted. Clearly Federal prosecutors learned a few lessons from the Enron days. While Enron's executives took years to bring to court, Bear Stearns' execs Ralph Cioffi and Matthew Tannin were doing the perp walk within a few months of the firm's collapse.

Think about it: Even though Tyco, Adelphia and WorldCom may all be just as culpable and may all have suffered just as much bad press as Enron, none symbolize the era like Enron. And even though lots of banks suffered as a result of the sub-prime mess, and many are the subject of rumors and speculation, they'll never be the first. That honor will always go to Bear Stearns.

In an ironic display of corporate hubris, or maybe just futile branding inertia, Bear Stearns' website still proudly announces "Strength" on its home page. The fall of this once great company is an interesting lesson in how a brand that was highly profitable, successful, and, in some circles, respected since 1923 gets to now live on forever -- but not with the same reputation that it spent 99% of its lifetime building. --KDP

Can Twitter's Reputation Be Saved?

Tempest in a Twee Cup?

It's no secret that I'm a big fan of the microblogging site Twitter. I cite it frequently in speeches as a source of ideas, entertainment and breaking news. It got a lot of good press recently when one Twitter user managed to get out the message "arrested" as he was being hauled off to an Egyptian jail. That was all his friends needed to launch an international campaign to get him freed (it worked). Twitter was also recently hailed for getting the word out about the Chinese earthquake before the USGS did.

All this good press, however, has resulted in (see it works!) a rise in usage and a subsequent increase in the number of Twiccups (as outages in the Twitterverse are known.) Actually, it's more than just an occasional Twiccup; sometimes the entire service is down for extended periods of time.

Twitter has responded with cute messages of mollification, but that's done little to assuage the ire of thousands of Twitter addicts who are loudly expressing everything from sadness to outrage, many blaming it on Twitter's owners being distracted by a recent round of VC funding.

Then, to add to the Twitstorm (as they're called) one Twitterer, Ariel Waldman, went public with a problem she was having with the Twitter Terms of Service. She had received a number of hostile responses on Twitter that amounted to what she perceived as bullying. She invoked Twitters Terms of Service agreement which states:

We reserve the right to refuse service to anyone for any reason at any time. We may, but have no obligation to, remove Content and accounts containing Content that we determine in our sole discretion are unlawful, offensive, threatening, libelous, defamatory, obscene or otherwise objectionable or violates any party's intellectual property or these Terms of Use.

When Twitter refused to block the hostile comments she took her concerns to the Twitterverse which responded en masse with the vast majority of people expressing sympathy to Ariel and hostility and disappointment with Twitter. Twitter's founder Evan Williams responded with a blog post of his own explaining the situation. However, Twitter's fundamental response was to change the Terms of Service rather than comply with Laurel's request.

Now the fact that Laurel was a community manager at Pownce, which some see as competition to Twitter, may have something to do with Twitter's response (or lack of it). My hunch is that it didn't, and that the general hostility this has stirred up towards Twitter has been aggravated by the frequent Twiccups. But I have no data to base that on.

What I do know is that you get what you pay for. Twitter is, so far, a free service. And when you're getting something for free, its hard to complain when it goes away. On the other hand it is people like me and millions of others who contribute our Tweets and Twocents that made the service popular -- and presumably valuable enough to secure that VC funding. So we want our opinions to matter.

There is no doubt that Twitter got two big black eyes this week. Were they fatal blows? Probably not. But they may prove fatal to Twitter's ability to monetize its service. --KDP