While I chose to focus on an event that occurred around two years ago, I think that it provides a great lesson in managing consumer fallout. Big retail chains such as Target and Wal-Mart have always interested me, mainly because of their ability to provide a supply chain that allows consumers to pay discount prices for their goods. As we all know everyone always wants the most bang for their buck, and Target or Wal-Mart is the place to go. Target, like any other large retailer on Black Friday has always seen a large influx of customers around that time of the year, and Black Friday two years ago was no exception. However, during that time period Target was attacked by hackers who managed to steal around 70 million different customer’s credit card numbers and pieces of identification. This attack couldn’t have hit Target at a worse time, as many people were doing their holiday shopping there. Customers immediately began to stop heading to Target to shop on their credit cards, as they were afraid that there might be another leak and their information might be taken.
Despite this event having the potential to cause a large impact to the company’s finances, Target did a great job of managing the fallout from the data breach. It provided a free year of credit monitoring and identity theft protection to everyone who was affected by the breach. While Target still took a decent loss from this event, the stock price fell 1.5%, as a result of their quick actions to reassure consumers that it was indeed safe to shop at Target the company recovered nicely. Taking into account all we talked about with Apple as well as stakeholder management, I think that Target did a great job with managing an issue that arose.
But why aren’t all companies like this? When trying to get some ideas about what I wanted to write this blog post on I read Lexi’s post about how BP hesitantly admitted to what it had done in the Gulf and never really provided residents with the clean up efforts that it should have. There’s a contrast that can be seen between companies that take responsibility for their actions and ones that only do the minimum that they are required. Every company will ultimately face a public relations challenge, it is almost guaranteed, but it is up to management to decide how to handle it which may even determine the fate of the company.