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LA Fitness fights for reputation in court of public opinion

January 25, 2012 by Jonathan Hemus

When LA Fitness threatened to enforce its contract with a heavily pregnant woman who had fallen on hard times, it may have had the letter of the law on its side.  But once the story became public, it was found guilty in the court of public opinion.

LA Fitness is just the latest business to find out that protecting reputation means doing the right thing in the eyes of the outside world, not simply complying with regulations or the law.

Ten years ago, LA Fitness’s dispute with a customer over whether her gym contract could be enforced would have been a private customer service issue in which the company held the balance of power.  Today it requires crisis management skills, is conducted in public and public opinion has far greater influence.

This transparency needs to be understood by businesses and factored into their behaviour, decision-making and communication. The imperative to act in a way that matches the  expectations of external stakeholders is largely driven by the power of social media.  In the old days, customer complaints could be dealt with in private and media criticism dismissed as tomorrow’s fish and chip paper.  Today, because of Twitter, Tripadvisor, Google et al, customer service – and crisis management – has become a spectator sport.  Worse, the spectators actually influence the game.  Whether businesses like it or not, this is the reality.

This transparency has raised the bar in terms of ethical and acceptable corporate behaviour – it’s much harder to do bad things and simply get away with it (which, of course, is a good thing).  It also means that the need for thorough crisis  management planning is more pressing than ever: reputational risk assessment, social media monitoring, scenario planning and realistic social media simulations should all form part of this.  A slow or inappropriate response to a crisis will be punished with damage to reputation.

LA Fitness appeared to be forced into a u-turn, and  this never looks good.  Ultimately, the key for businesses is to control the crisis rather than let the crisis control them.  Being able to perceive a crisis from the outside in and acting quickly and appropriately when company behaviour clashes with public expectations is essential to preserve corporate reputation.

Jonathan Hemus

  • Jonathan Hemus, Insignia Communications
  • Follow Jonathan on Twitter @jhemusinsignia

6 Comments

This was a total car crash. The public statement was very slow in coming and seemed to be dishonest, prompting an open challenge from the Guardian journo who wrote the story. It was also done in totally the wrong way. The opening was weird, it was spread over at least half a dozen tweets so couldn’t be shared in full. And the Facebook page was set only to show LAFitness posts, basically censoring the conversation.

What this shows – yet again – is that big companies are not taking social media seriously. They need experienced, trained channel managers in the driving seat in these sorts of situations, not clueless juniors. LA Fitness is not just a gym, it’s a multinational leisure business with tens of thousands of customers (probably more)and it needs to start taking its communications seriously.

I have written about eight key steps businesses need to take to avoid online crises if any of your readers are interested: http://bit.ly/k6ibMS

Thanks for a great contribution to the debate Jonathan!

Michael

Michael

Comment by Michael Taggart — January 25, 2012 @ 10:10 am

Michael

I agree with your view that this should act as a wake up call for other businesses which are not yet taking social media sufficiently seriously. My experience is that as soon as a company is stung by social media, it quickly invests time, attention and money in upping its game. The danger though is that this is often a case of locking the stable door after the horse has bolted.

One of the best ways of creating momentum is to run a realistic social media crisis simulation: it focuses the mind (even among social media cynics) and gives a taster of the damage that can be done by a mis-handled online issue. But without having to go through the pain of a real incident.

Jonathan

Comment by Jonathan Hemus — January 25, 2012 @ 5:33 pm

I totally agree re customer service. Dealing effectively with customer complaints mirrors best practice in crisis management: say you’re sorry, show empathy, address the problem quickly and thoroughly. Apply this approach in either situation and you can end up with an enhanced reputation and a stronger relationship.

Jonathan

Comment by Jonathan Hemus — January 25, 2012 @ 5:36 pm

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