In this video, it explains why the power is now with the consumer. You no longer own your brand when your customers or enemies have the power of social media in their hands.
One misquote by the CEO can send a brand into freefall as Gerald Ratner discovered in 1991.
Although widely regarded as “tacky”, the shops and their wares were nevertheless extremely popular with the public, until Ratner made a speech at the Institute of Directors on 23 April 1991.During the speech, he commented:
We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, “How can you sell this for such a low price?”, I say, “because it’s total crap.”
He compounded this by going on to remark that some of the earrings were “cheaper than an M&S prawn sandwich but probably wouldn’t last as long.” Ratner’s comments have become textbook examples of the folly of making fun of, and showing contempt to, customers. In the furore that ensued, customers exacted their revenge by staying away from Ratner shops. After the speech, the value of the Ratner group plummeted by around £500 million, which very nearly resulted in the firm’s collapse.Ratner resigned in November 1992 and the group changed its name to Signet Group in September 1993.
Michael S. Jefferies, the slightly overweight and un-cool CEO of Abercrombie, made it clear about the focus of his brand in an interview in 2006, but has resurfaced and now with the power of social media has gone viral.
“In every school there are the cool and popular kids, and then there are the not-so-cool kids,” Jeffries said in the article. “Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.”
This has unleashed a torrent of abuse, calls to boycott the stores, and affirmative action as the video below shows.