It’s a disturbing story, but not really a new one. Last week, Dell Computers announced a recall of the batteries in a number of their laptop PCs. The lithium-ion batteries have the potential to overheat, causing the computer to explode and catch fire. (Link to story in Washington Post )
The problem of exploding laptops is not a new one, and not one that is unique to Dell. There have been more than forty reported incidents of laptop computers catching fire in the past two years. Lithium-ion batteries, which replaced the nickel metal hydride variety, are lighter and more efficient, but also more prone to fire hazards. Some sources have reported that lithium-ion batteries are more susceptible to conditions of “thermal runaway,” in which a heat-generating reaction goes out of control. A recent posting on Podcasting News confirms that this problem has scorched not only Dell, but Apple as well. Dell, Apple, and Hewlett Packard have issued repeated recalls of these batteries.
Yet the recent recall by Dell has sparked a surge in publicity, clearly evident from this chart from BlogPulse. Why?
The answer is simple, dude. On Monday, August 14th, Dell, along with the Consumer Products Safety Commission, announced the recall. They may have been hoping to distract people from the disappointing profit announcement which would follow two days later. If that was indeed their strategy, I wonder if they are reconsidering it in the light of the reaction which occurred. Prior to Dell’s announcement, no single battery incident or recall announcement gained enough critical mass to create the sort of coverage we see here. Even the photos of a laptop exploding at a conference in Osaka caused little more than a bubble in the blogosphere.
So what’s the difference? I would suggest it is the law of superlatives. If you can describe a news story using at least two superlatives – the biggest PC manufacturer, the largest recall – then you will have a story with legs. And these days, the traditional news outlets have some serious help from consumer generated media when it comes to getting the story out and spinning it. After the recall announcement, blogs were full of people wondering whether or not their Dell would explode and criticizing Dell.
Does this mean that we need to re-think the way we handle brand crises like these?
Johnson and Johnson’s handling of the Tylenol tampering crisis in 1982 is considered by experts to be one of the best in the history of public relations. Putting public safety first, Johnson and Johnson immediately recalled more than 31 million bottles of Tylenol and offered to replace any Tylenol capsules in peoples’ homes with the equivalent in tablets. They projected trustworthiness by cooperating fully with the media. The media, in turn, publicized J&J’s stance of putting the public interest ahead of corporate profit during the crisis.
In Dell’s case, the traditional media have emphasized the positive aspects of Dell’s recall, but consumer generated content has been less favorable. Some contributions have even used the problem of burning laptops as a source of inspiration. A particularly creative example of consumer generated content inspired by Dell is the “My PC Is On Fire -Dell Laptop Tribute Video (Numa Numa Song)” by roschler. This creative video has received over 90,000 views since it was posted on June 25th and achieved a four star rating from 244 people. (Note that roschler clearly did pay attention to the news from Osaka, and was ahead of the curve on this one.)
By contrast, Stewart Wilson offers us a more mundane offering titled “Evil Dell Laptops“. What is Stewart’s solution to the Dell problem? Buy an Apple. (Sorry Stewart, your Apple is just as vulnerable to fire.) This video has only been given an average of two stars by the people who have rated it since it went live on August 15th.
A couple of thoughts occur to me after looking at these videos and reviewing some of the blog posts.
First, while it is relatively easy to communicate with the traditional media outlets, it is far more difficult to ensure that your news stays on message when it is subject to a vast game of “telephone” via e-mail and blogs. Even if people do not misrepresent the facts or add their own concerns and emotions to the story, the degree to which news is interpreted negatively tends to increase as the story is removed from its original context. It leads me to wonder if Dell should invest in its own broadcast media in an attempt to make sure people hear their side of the story, rather than some garbled version on a blog somewhere. Or, they could take a leaf out of the politician’s play book and have friendly bloggers go head-to-head with the more vocal detractors.
Yet these tactics could have the unwanted effect of dignifying the remarks of Dell’s critics, causing discussion which was initially confined to blogs to be picked up by the mainstream media, circulated more widely, and influencing people who never even read blogs. The level of trust in blogs is still quite low compared to other media, most people do not read them (over 6 in 10 US Web users according to the Pew Internet and American Life Project) and even dedicated blog-readers trust selectively. In a post last May, I quoted Mark Glaser who in discussing people’s trust in blogs, said “People decide on what they trust on a case-by-case basis.”.
A safe strategy for Dell would be to communicate one-on-one with existing Dell owners, and, ideally to offer them something of value in order to retain their goodwill.
My second thought is, if the laptop that exploded had been an Apple, would the reaction have been the same? My belief is that people may have been predisposed to view a recall by Apple in a more favorable light.
A quick look at the WPP’s BrandZtm database, which is created and hosted by Millward Brown, suggests that three times as many people would consider purchasing a Dell as an Apple. However, Dell’s advantage is driven largely driven by massive levels of familiarity with Dell, and poor perceived relevance for Apple. (That relevance may improve now that Apple machines offer the option of running Microsoft Windows.) Furthermore, people are just as likely to recommend an Apple as a Dell (60% say they would recommend each one). This suggests that attitudinally, people are more inclined to favor the Apple brand.
The data suggest that it is not so much the strength of the loyalty which separates the two brands, but the nature of that loyalty. Both brands receive more attitudinal loyalty than expected given their size, but the source of that loyalty – the drivers of bonding - differs. Dell’s loyalty is driven by perceived price, popularity and leadership. Apple’s bonding is driven by perceived differentiation, leadership and both rational and emotional affinity. Essentially people value Dell because it is big and offers a good price. People value Apple because it offers a differentiated product to which people feel emotionally attached. It is a stronger brand, even if it is a smaller company. I suspect that this means people would be more likely to view a recall by Apple favorably than they are Dell.
So does the emergence of consumer-generated media mean that the rules of crisis management need to change? How do companies deal with the peer-to-peer rumor and innuendo facilitated by the web? Is the only defense to a crisis building a true brand with which people feel an emotional connection, before the crisis occurs? Please let me know your thoughts.
(One final thought: even consumer-generated content demonstrates the true value of creativity. The integration of song and video in “My PC Is On Fire” may not be perfect, but it is certainly engaging and amusing, more so than “Evil Dell Laptops, and this is reflected in the ratings received by the two videos.)
(28 votes, average: 3.79 out of 5)
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August 22nd, 2006 at 12:24 pm
There are two aspects of this posting that I would like to respond to: Why Dell? and What Dell could (should do)
Dell is the recipient of a disproportionate amount of negative news for the reason that it is the largest. More bloggers are probably writing on Dell’s than any other pc. (I know I am, as opposed to my Mac at home). When America’s enemies choose to target a convenient symbol, they head to McDonalds, not Subway, not Burger King. When activists choose to castigate the mass merchandiser who has driven jobs from our shores and local stores from Main Street, they picket Wal-Mart, not Target. Same business tactics, same strategy, just better PR.
Which brings me to my second point, what should Dell do? get out ahead (or as fast behind) of the issue as they can? Create positive publicity — have Michael Dell don a fireman’s outfit and have a bonfire. Show a sense of humor along with humility and a honest desire to be right by their customers. Turn the lemon into lemonade. Standing by and allowing the media (read bloggers), to write your future, is just plain dumb.
August 23rd, 2006 at 4:09 pm
The article on WashingtonPost.com said the battery components were made by Sony. Why isn’t Sony taking any heat for this? Firestone was in it with Ford over the tires on the Explorer.
How does this compare with the situation Coke and Pepsi are in in India right now? As I understand it, the soft drinks contain pesticide residues because pesticide residues are in the soil and are taken up when the sugar grows. It’s not as if the bottlers are adding it in. (See NY Times article.)
So why is Coke in trouble because India has not got its agricultural practices under control? Would be interested in your thoughts on this, Nigel and Phil. What parallels would you draw between these situations?
August 24th, 2006 at 4:13 am
It is interesting that Dell have been the ‘victim’ here when any one of a number of manufacturers could have taken the fall. There are stories floating around of exactly the same problems affecting Apple and HP laptops (all using the same kind of batteries).
The fact that there are pictures of a Dell machine bursting into flames clearly don’t help, but they’ve also taken the decision to react to the emergent story. I use the word ’story’ carefully - the technical issue has been known about for getting on for 3 years.
As poster boys for the blogging generation, the company that bought us the iPod almost certainly built a bit more good will with the kind of vocal audience who might share their horror stories online than Dell - mass market, cheap and cheerful (and lacking the cool of Apple). Both corporations also have a history of failing to react to problems that emerge online - Apple with the fragile screen on the Nano, and Dell’s service problems publicised by Jeff Jarvis.
It feels to me as though Dell’s product recall is something of an over-reaction to the actual problem. They should be given credit for holding their hand up to the problem, but I can’t help wondering if they’ve done it because of fear as well as concern for customer safety.
Which means Philip’s idea of injecting a bit of personality into the issue would be spot on. In a sense, Dell have an opportunity to move brand perceptions forward here - but it ain’t always easy to take those brave decisions.
August 24th, 2006 at 9:25 am
Thanks for the comments.
I think the terrier raises an interesting point. Reading the NYT article it is far from clear whether Coke and Pepsi’s products do in fact contain more than the legal amount of pesticides.
If they do then the companies must be held accountable. While they cannot be responsible for the fact that the locally grown produce is contaminated, they are responsible for ensuring that the products they sell meet local health standards and are safe to consume. Two solutions suggest themselves: source raw materials from elsewhere or seek to remove the contaminents before the product is shipped.
If the products do not contain the excessive levels of contaminents suggested then both companies appear to be the victims of a political play to draw attention to an important but local issue. A vigorous offense might be the best defense. As it is, by playing “safe” and checking the facts, the two may have allowed the situation to escalate unnecessarily. The two companies should initiate new policies that would demonstrate their commitment to the best interests of their consumers and their environment. One of the reasons J&J were so successful with the Tylenol recall was because they genuinely did believe that protecting the consumers’ best interests was also in the company’s best interest.
Finally, these examples confirm one important thing. Social responsibility only matters when something goes wrong. But by then it is too late to recover the situation. Allegations like those levelled at Coke and Pepsi can do harm even when there is no fault attached if the companies involved have not properly established their credentials with consumers as responsible manufacturers and marketers.
August 24th, 2006 at 11:26 am
Interesting parallel drawn by Terrier to the Coke and Pepsi issue. I agree, it is rife with political implications. Go back a couple of decades and both companies chose to abandon India because they were required to sell a majority interest to locals. Subsequently India opened it’s trading practices and welcomed foreign investment. And so both brands returned about ten to fifteen years ago and became successful.
Now I don’t believe this latest move is a ploy to gain ownership, but I have to assume that Coke and Pepsi have no more insecticide than local brands. Probably a lot less — syrup is manufactured here and shipped, so that is not the source. Sweetener (sugar) is a likely culprit as water is usually purified via reverse osmosis (see Aquafina or Dasani). So the culprit is either the sugar or politics. And to the latter point, American multi-nationals are such a tempting target.
On the other hand, when truth emerges (and hopefully it will), then we shall see. If pesticide levels are indeed high, then the companies must remediate or withdraw those products. If they have been victimized then local politicians have much to be accountable for. Just follow the money.
August 24th, 2006 at 12:02 pm
Honestly, I am not sure how big an issue the Dell case really is? I guess that headlines containing the words ‘poison’ and ‘contamination’ have greater semantic impact than ‘laptops catch fire’ and as such need to be addressed in a more robust fashion (am I the only one who finds exploding computers amusing?)
I am guessing that most educated consumers appreciate that it is the type of battery rather than the Dell brand that is the issue. The less educated consumers probably aren’t floating around the ‘blogosphere’ and aren’t exposed to the majority of the furore.
To illustrate the point, I’ll go out on a limb….I bet that Nigel, Phil, Trevor and ‘the Terrier’ (grrrrrr) had a Dell in their lives….and they are still using it, albeit like an old boy/girl friend that they don’t really like, but can’t shake off.
To Phil’s point, a touch of personality would help a brand many people resent because of the heavy, cheap, nasty Dell their employer issued them with (for many people an exploding battery would might be an interesting distraction from mundane office life).
August 24th, 2006 at 2:02 pm
Exploding laptops amusing?
How about on an airplane?
I don’t think so !!
If an airplane goes down in flames with 400 people aboard, that’s a much bigger news story than a slight increase in the likelihood of developing cancer twenty years hence because of drinking Coca Cola made with dirty sugar.
Besides, people have a choice about drinking Coca Cola - whereas, I don’t get any choice in who’s using what laptop with what kind of battery in the seat next to me. Grrrr.
August 25th, 2006 at 7:59 am
While I have some sympathy for theterrier’s viewpoint on laptops on planes let’s bring the debate back to the subject of the original post: why Dell?
Apple has now announced a recall of 1.8 million batteries. The latest news story makes it much clearer that Sony is shouldering the majority of the cost for both the Dell and Apple recalls. Some pundits are now questionning whether the delay in announcing the recall will make Apple look bad.
A quick look at http://www.blogpulse suggests that the majority of the buzz is now focused on Apple, but with Sony being the subject of far more posts than before. So far the tenor of the comment is not clear. Some suggest that Apple “fanboys” would be feeling sheepish for making fun of Dell but otherwise the comment is mostly factual. It will be interesting to see whether future Apple coverage is less negative than it was for Dell as I suggested above.
September 18th, 2006 at 7:52 am
It is now interesting to see how Dell gains back the trust of the public and customers in this replacement phase ( these laptop units are in effect desk bound now until new batteries arrive, will they offer some form of compensation to affected customer ) and how they treat these affected customers in the future.
An example where the web raised the profile beyond the blogger to a point of mass media coverage in double quick time - the problems surrounding the Kryptonite locks which could be opened with a pen, while not being of the same severity in personal injury nor product suitability, the effect through the story was intense.
Kryptonite story :
http://www.wired.com/news/culture/0,1284,64987,00.html
September 19th, 2006 at 11:56 am
You raise and interesting point, Trevor. I have been struck by the fact that many of the episodes that have been cited as demonstrating the power consumer generated media rely on mass media to get the word out beyond the online social network. In other words, traditional media are using CGM as a means to ID breaking stories and then amplifying them. Critial mass - or broadcast scale communication - is only gained when this happens. However, the real value of CGM may be in shortening the time to critical mass.
October 4th, 2006 at 8:28 am
Sony knew about exploding batteries a year ago :
http://www.theinquirer.net//default.aspx?article=34815
To esnure my life is indeed no longer dull or mundane ( Diamond Campbell-Jack ) I am nw the proud owner of a new sony……
October 27th, 2006 at 8:07 am
As a postscript to this story:
Sony Corp.’s record-breaking recall of almost 10 million potentially fire-hazardous batteries not only has battered the tech giant’s reputation but today showed up squarely on its bottom line: Sony Corp. reported a 94% decrease in profit for its fiscal second quarter. Ad Age, Oct 27th 2006.