The company says "To be very clear, Progressive did not serve as the attorney for the defendant in this case," but an article on the Mail Online states, "Court documents clearly show that Progressive filed as an 'interested party' and was 'allowed to intervene as a party defendant' and 'granted all rights to participate in this proceeding as if it were an original party to this case.'" Over on Consumerist, a Maryland attorney attempts to shed more light on Progressive's actions, and it is noted that "it's not unheard of for this to happen." And while some tweets and posts claim Progressive paid for the defense of the man responsible for Kaitlynn's death, this is not the case--the driver's attorney confirms Progressive did not do so.
Since I am not a lawyer and this is not a law blog, I am not going to weigh in on the legal merits of this situation one way or another. I do, however, wish to explore if this situation is really a "social media disaster." That term gets tossed around a lot, and it is beginning to irk me. It carries with it the implication that social media is responsible for brand and corporate reputation damage. Perhaps it is time that our view of social media matures and we begin to put the blame where it belongs--not on the medium where people discuss, share and criticize, but on the corporate actions that cause these discussions, shares and criticisms.
Social media disaster: Case closed? Not so fast. While this is not exactly a case study for how to handle a sensitive PR crisis, did Progressive's tweets and blog post make matters worse? And while this situation was exacerbated by social media, was the problem truly created by social media? To use an analogy: If you jump off a cliff, do you blame gravity for your situation or trace the problem back to your decision to leap from the cliff in the first place?
No, this is not a social media disaster. Social media is not responsible for the tragic accident, did not create Maryland's liability laws, and did not decide on a legal course of action. Progressive is not suffering because of social media; it is suffering because its actions in this case seem contrary to the public persona presented by the company's ads and brand communications. If a mistake was made, it was not a social media error but a blunder of judgment and corporate culture.
Social media is not the cause, and neither is it the cure in this situation. Nothing Progressive tweets or posts to a blog is likely to change many minds, because actions always speak louder than words. Don't get me wrong, Progressive could accelerate the brand healing with a more human and candid response, but healing will happen in time anyway. Soon, this crisis will blow over, just as it is already doing for Chick-Fil-A and did for Nestle, Delta, United and many others before. Time heals all wounds, even social media ones.
The fact reputation problems shared in social media have a relatively short half-life does not mean companies should take them lightly--they come with real costs. Some sales are lost, costs for PR and marketing are increased, executives lose focus on other priorities to deal with reputation issues, expenses increase as changes are made to prevent recurrence of similar situations, and brands may suffer some long-term loss in trust and value. Look at BP: The BBC estimates that the Deepwater Horizon disaster will cost BP shareholders "some £40bn in lost income" in the long term, even though the actual costs of the disaster are estimated at £26bn. Since the disastrous oil spill (and BP's CEO's slightly less disastrous public relations missteps), BP stock is down 31% while the Dow is up 19%. A lot of that is obviously due to fines, cleanup costs and changes in safety procedures, but some of this loss in value is due to the fact BP today enjoys less trust among investors and consumers.
Progressive may face real costs as a result of this situation, and if it does, who is to blame? The social media team? No, it is stuck between a rock (the consumers) and a hard place (the demands of a sensitive legal situation). The real source of this PR crisis is, instead, the Legal Department at Progressive.
|Matt Fisher and his sister, Katie|
Source: Huffington Post
In this case, the costs Progressive faced were a mere $100,000. That is the amount Kaitlynn Fisher's policy covered in the event an uninsured driver caused injury or death, according to an attorney for the Fisher family. Was this worth $100,000 to Progressive? The company spends around half a billion dollars every year telling consumers it is fun, caring and trustworthy--just like Flo. This single $100,000 claim represents 0.02% of the company's annual ad spend, and now social media is speaking louder than Progressive's advertising. So, was it worth it to fight the claim in this case?
I cannot count the number of times I have said this, but in today's social era, every employee is a social media employee. Your delivery driver can become an overnight YouTube sensation. The employee who makes burgers in Ohio can become an inadvertent anti-hero. And an attorney who decides to deny a claim, forces a grieving family to pursue a lawsuit, and files papers in support of the person responsible for the death of the insured may, indirectly, become a social media influencer. We do not know who the man or woman is who made this decision, but today, he or she speaks louder than Flo on behalf of Progressive.
If every employee is a social media employee, then every decision is a social media decision. Watching this situation develop reminded me of another case from many years ago involving a Walmart employee, Debbie Shank. She was injured in an auto accident and left brain damaged. The family was awarded $1 million by the trucking company involved in the crash, and then Walmart chose to file a file a $470,000 lawsuit against the family to recover the expenses paid for Shank's medical care. Walmart won in the court of law but had to reverse its actions after online reaction threatened to harm the company's reputation. (When I share this story with audiences, I sometimes become choked up when I recount that Shank is unable to form new memories, so she frequently asks about her son and relives anew the anguish each time she is reminded her son was killed in Iraq.)
Like Walmart before, Progressive is dealing not with a social media problem but a legal, reputation and brand problem. Social media did not cause it, but now that the Fisher case is a cause célèbre, Progressive will perhaps be forced to handle the outcome differently. In addition, it is likely this situation will bring a change in how Progressive (and other insurance companies) deal with these sorts of claims.
So let's stop calling this a "social media disaster." This is not a result of social media but of corporate actions and culture. Once again, I am reminded of the words of Ralph Waldo Emerson--a quote I have shared more than once on this blog:
“Who you are speaks so loudly I can't hear what you're saying.”
Your tweets may help your brand's reputation, but they cannot speak louder than who your company is or what its actions are.