Learning How to Apologize is Essential for Crisis Management

So Living Social thought it’d be fun to host a seven sins-themed Halloween party last Saturday at its downtown D.C. office space. Great idea, and to be honest, it sounds like a blast – who wouldn’t want to party in specially designed cardinal sin rooms? Sloth, Lust, Gluttony, what’s not to like?

Except when a company that should have known better decided to put dreidels, the traditional Jewish spinning top associated with Hanukkah, in the “Greed” room.

Sure, there was likely no inherent anti-Semitic intent, but to put a prominent Jewish symbol in the “Greed” room – surrounded by gold coins, no less, is beyond bad judgment and totally inexcusable, reinforcing, knowingly or not, a hurtful stereotype associating Jews with greed and money.

You know as well as I do that the people responsible for planning the event had to get everything approved by their superiors. There were many layers in the planning process and it is disturbing to me that no one thought to pull the plug on this idea.

What’s more alarming, from a PR perspective, is the company’s response.

LivingSocial representative Kevin Nolan apologized in a statement to Washington Jewish Week (the first to break the story) saying, “We have looked into it and determined that the inclusion of dreidels with the other games in the gaming room was not a smart choice, and we are very sorry to have upset anyone. Certainly this behavior does not reflect who we are as a company.” He said a full refund of the $59 ticket price and apology was offered to the customer who complained.

He continued in a statement to The Washington Business Journal, “We do not condone prejudice, nor do we tolerate inappropriate or hurtful behavior of any sort. What happened at the event does not reflect who we are as a company and we are deeply apologetic. We will offer a full refund to anyone who attended the event. Customers who attended the event and wish to be refunded can call our customer service department directly and they will be reimbursed immediately.”

In addition, this apology was posted on LivingSocial’s site—from their CEO.

An Apology

Poor judgment was exhibited this past Saturday when religious holiday symbols were associated in a degrading manner during a Halloween event located at our 918 F Street venue.

This insensitivity was offensive and inconsistent with our values as a company. Let me make this perfectly clear – we do not condone prejudice, nor do we tolerate bigoted or hurtful behavior of any sort. What happened at the event was an embarrassment to us as a company and we are deeply apologetic. We are offering a full refund to anyone who attended the event. Customers who attended the event and wish to be refunded can call our customer service department directly and they will be reimbursed immediately.

We know we let you down. We promise to make it up to you, and demonstrate that LivingSocial is better than this, now, and every day forward.

Tim O’Shaughnessy

CEO and Cofounder

So what is wrong with how they handled this? Three main things:

Why did a representative for the company and not the CEO make the first response statement? This communicates to the public that the offense was not worthy of a response from the top executive  and further damages the brand.

Where is the explanation—an essential part of any sincere apology? How did this happen? What was the thought process behind it? A thoughtful and honest explanation goes a long way in restoring brand confidence.

Where is the request for feedback? A real apology will start a conversation, not serve to end it. Here, there is nothing tangible that can be repaired. It is nice that they are offering a refund, but that reparation hardly makes up for the offense. The offering to make it better should have been focused on restoring dignity—and it should have come in the form of initiating a dialogue, not refunding the cost of a ticket.

This may just accelerate LivingSocial’s decline. The company reported a $26 million loss in the third quarter, according to an Amazon securities filing. Amazon now values the DC-based company company at just $48.4 million. That’s an extraordinary decline from June 2012 when Amazon valued LivingSocial at nearly $1 billion.

What other mistakes do you think the company made in the wake of this crisis? Email me.

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2018-02-15T22:52:49+00:00November 1st, 2013|