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July 15, 2010

Some are starting to think that Apple may have took a page from BP in the lousy way that the British oil company initially handled the explosion and subsequent sinking of the Deepsea Horizon drilling rig on April 20 that has killed eleven workers and has caused the largest oil spill catastrophy in U.S. history.

Sometimes, it's a lot better to come forward and simply admit that you goofed. After all, nobody's perfect, not even Apple...

The problem stems from Apple's new iPhone 4 "faulty wraparound" antenna design and a corporate marketing department that has failed miserably to adequately communicate to its users what's wrong with the new device. And the situation is rapidly escalating, depending to whom you talk to.

So far, several lawsuits have been filed against Apple, claiming deceptive marketing and false advertising for knowingly distributing a sub-par product. Consumer Reports amended its review Monday, saying it simply cannot recommend buying the iPhone 4 because of antenna issues that will not be fixed by Apple's promised software update.

With all of this negative publicity going on, there are some that are now asking for Apple to issue nothing less but a full recall of the iPhone 4.

But a recall isn't likely. After all, this is only about where you hold the phone. It's not about whether the phone will explode in your face or burn in your hand or anything like that.

Nevertheless, experts on crisis management and public relations say that, like BP's massive oil spill, the manner in which Apple has handled the antenna issue is a textbook example of what NOT to do in a similar situation.

"So far, the biggest snafu Apple has made is that they keep changing their story all the time, just like BP did in the beginning," said Ira Kalb, professor of marketing at USC Marshall School of Business.

Experts in PR and crisis management all agree that there's a well-known set of principles all companies should follow when dealing with any problem with a consumer-facing product or service.

And Apple has not followed any of them!

Number one, you should fully acknowledge reports of a problem right away and tell customers that you are fully investigating it and in every detail. Once the company has pinpointed the exact cause of the problem, then they need to offer a quick and no-cost solution.

Even if you don't find anything wrong during such an investigation, still acknowledging the problem is of the utmost importance. It shows that you care, not just of the product you are selling but it also shows that you care about your customers.

Apple ended up coming off as condescending with its initial response two days after the antenna issue first surfaced. The similarity with BP's actions here is simply starring at you.

"The problem was they said, 'Don't hold the phone like that.' And everybody laughed at them for that," said Kalb. "Then they said, 'We had a software issue where we miscalibrated the number of bars,' and every one laughed at that because that's ridiculous."

Apple has yet to release this software update, but fixing the number of signal bars displayed on the iPhone 4 is highly unlikely to address the issues of dropped calls and throttled bandwidth that can occur when covering the lower left part of the iPhone 4.

A recall isn't even necessary here. Simply an admission of the phone's antenna design problem and an issuing of free so-called 'bumpers' to everyone who has bought an iPhone 4 would settle the matter for most customers quickly.

What's resulted is what PR professionals call "losing full control of a simple story, and then lying about it."

Apple had the chance to dictate how the antenna issue would play out, but instead by ignoring it or giving unsatisfactory responses to customers, now they come out not smelling good at all, and that's what really sad about the whole thing.

Merrill Freund, executive vice president of Schwartz Communications says "There is simply no control over this story. Apple isn't addressing this by any handbook that any public relation person would read from."

While a recall could certainly inflict some damage to Apple's highly regarded brand reputation, its apparent refusal to be up front and totally honest about the issue with customers could actually be even more disastrous, not just in the short term, but in the long haul as well.

Changing the story, or just trying to shift the blame like "you're holding the phone wrong" recalls BP's recent response, though in its case, to far more dangerous circumstances.

A few months ago, even Toyota changed its story several times before fully admitting that there were serious problems with some of their cars' sudden accelerations and faulty brakes-- another PR disaster, just as bad as BP is.

As a result, "Both BP and Toyota lost all credibility," said Kalb. "If you lose credibility, then people don't trust you anymore. It's simple as that! Can you blame them?"

Now a lot of people don't trust Apple anymore... And for good reason.

Can you blame them?

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Source: BTH News.