Daily Deal Dilemma: Does Groupon Need a Refund, a Reboot, a Stern Reprimand or Just a Little Maturing?

The answer depends on whom you ask. If you ask Groupon CEO Andrew Mason, 31, he’s likely to say the latter.

But before we get to Mason, let’s recap.

Back in February 2012, I wrote about how Groupon, the daily deals “Mecca” was launching a PR blitz to help rewrite its then recently soiled reputation after a slew of communication missteps:  a fumbled Super Bowl ad and a case of fuzzy earnings math just prior to its November 2011 IPO.  It revamped its website and added the public relations might of Paul Taaffe, the former chairman and CEO of Hill & Knowlton. (For history buffs, that’s the 85-year-old Manhattan-headquartered PR agency once known for its support of Big Tobacco and its infamous “A Frank Statement to Cigarette Smokers,” 1954 newspaper ad, that claimed the “statistics purporting to link cigarette smoking with [lung cancer] could apply with equal force to any one of many other aspects of modern life.”  Gotta love this industry!)

In that earlier post I puffed on about the tough job that Taaffe had ahead of him, referring to the journey as a “rocky road” while going on to say that, “taming the daily deal beast just doesn’t seem like a job anyone should embrace,” and that “public relations leaders can only craft a message so far. Too much spin and a message – and a company – can spin out of control. Let’s see what happens next.”

And (nearly) spin out of control it has.

Earlier this month it was reported that the Securities and Exchange Commission had begun a preliminary investigation into Groupon’s questionable financial accounting practices after the company announced that it was revising its 2011Q4 earnings, cutting it by $14.3 million to $492.2 million from $506.5 million. The announcement left many Groupon naysayers crying, “I told you so,” while investors are jumping ship in search of…. better deals.

Fast forward a few weeks since the troubling news and Groupon’s stock slide continues. On Thursday April 26, 2012, Groupon’s stock price was nearing bargain-basement levels, trading at $12.06 a share, after its $20 a share opening in November and its 52-week high of $31.44. The reason for the downward revision? Groupon hadn’t set enough money aside for customer refunds.

So in light of all this communications turmoil, one would expect that Paul Taaffe and his team would be out in full force defense and crisis mitigation mode.  To date, however, Taaffe’s strongest defense was when he told reporters: “Every three months Groupon is a different company.”

Somehow I don’t think that’s what investors wanted to hear.

But to give credit where it’s due, Groupon CEO Andrew Mason at an informal town hall meeting on Wednesday admitted his company no longer has “any margin for error,” adding that Groupon is “still this toddler in a grown man’s body in many ways.” In helping the company grow up, the company has announced plans to bring on board additional senior management, and according to a recent Wall Street Journal article, at least two new board members – all designed to show that the company can mature, mature quickly and rebuild investor confidence.

As a public relations professional, one of the most important pieces of advice I can give is telling clients to be up front about their actions and intentions and if there’s no substance behind a marketing campaign, then there’s no point selling the message.

Frank town hall meetings that get section-front coverage in the Wall Street Journal (check out Marketplace in the print edition) is probably not enough to quell all investor fears. But as Groupon closes out another challenging month and is only two and a half weeks away from its next quarterly earnings report, it’s nice to see a maturing response.

Perhaps then – and in an ironic way - Paul Taaffe was on to something after all. Just maybe, Groupon is beginning to change. And just maybe this change is here to stay and the company will not be something different three months from now.

We’ll have to wait and see.

Checking Their Guns (And Their Brains) At The Door: The Secret Services

Talk about public relations disasters in degrees. When Republican presidential hopeful Mitt Romney criticizes a Pittsburgh cookie it’s one thing.  But when half a dozen secret service agents and 11 military personnel lose their jobs after seeking the “secret services” of women who could have gone by the street name “Cookie” it’s an entirely different matter and enough to make me lose my dessert. 

In short: this is not good at all.

If anything, the unfolding Secret Service and military personnel prostitute scandal is a glaring example that sometimes no matter how much spin is added to the curve ball of professional news speak and public relations, you can still strike out. The exploits of these men are indefensible which has left the political punditsphere returning to humor. One of my favorites comes from Steven Cody, the Managing Partner and Co-Founder of Peppercorn, a public relations firm. His idea, expressed in his most recent post: “Let’s re-brand it the not-so Secret Service.”

And while crass humor may serve as a temporary public antidote for the serious standards and security breach that was uncovered in Colombia, it will do nothing in the longer term court of public opinion.

To a large extent, Lawrence Berger, the lawyer for two Secret Service supervisors who lost their jobs was right. The actions of these individuals did not compromise the security of the President. But if that’s the best defense that can be mustered, I think one would be hard pressed to call that a stunning PR reversal.

The President may not have been harmed physically, but his image certainly was, giving political red meat to the likes of Sarah Palin who commented on Fox news recently, "It's like, who's minding the store around here?" 

The Secret Service, founded in 1865, and charged with presidential protection since 1901, has a long and largely successful history. While there’s no denying this public relations disaster is a big one, it’s also likely that an agency that presumably takes its mission and duty so seriously will work exceedingly hard at doing their jobs that much better so that time really will smooth out this unfortunate – kink. (Yes, pun intended)

“Waiting it out” is usually a PR professional’s least favorite advice to a client. But in this case it may be the only way the embattled agency can regain its stripes. “I’m sorrys” have been made. Jobs have been lost.

It’s quite possible the less they say going forward might be the most prudent course of action.  Until, of course, one of them releases a kiss and tell all tome, which will be only a matter of time.

Open Mouth, Insert Foot, Close Mouth-Mitt… PR Lessons Learned From a Crumbled Cookie?

Pop icon and singer Britney Spears’ second album may have been called “Oops!...I Did It Again” but it seems the 12 year-old phrase is getting a new lease of life in Republican hopeful Mitt Romney’s continuing saga of campaign trail gaffes.

Yes, oops he did it again! But at least his latest remark helps underscore some base public relations principals and makes for good blog post fodder.  Thank you Mr Romney.

The latest tongue-tie comes out of the Bethel Park community, a southern suburb of Pittsburgh, where at a recent a campaign rally/picnic, Romney hinted that the event’s sub-par cookies were coming from a 7-Eleven chain bakery. His humorous, though mildly condescending tone suggested local bakers bake better, more “authentic tasting cookies.”   

Anyone following the story (which went viral as CookieGate) knows that Romney’s comments were a not-so-subtle nod to Republican Party basics: espousing the vitality and vibrancy of small business.

But that’s not how the cookie crumbled for “open-mouth-insert-foot-close-mouth-Mitt.” His jibe to the quality of 7-Eleven baked goods backfired in several ways:

1)      The offending cookies were made by a 57-year-old local bakery, which had been hired for the event.

2)      7-Eleven is not a bakery, a remark that has again sparked concern that Romney is out of touch with everyday Americans, who, while they make struggle through the lyrics of the Star Spangled Banner, know exactly what their “local” 7-Eleven offers.

For Romney, this latest gaffe, like his Etch A Sketch comment a month ago, can’t easily be shaken off.

It also reinforces that effective public relations isn’t just about writing press releases – far from it. In fact we are constantly reminding clients that press release generation is in some ways, the least critical part of what we do. Managing a client’s message – in print, online, in person on Twitter and Facebook, and everywhere else their name and their brand are promoted.

Hindsight is, after all, 20/20, but isn’t it possible that a particularly on-the-ball communications whiz could have anticipated that their boss would try to inspire the small town business spark knowing that cookies would be served at the event? And if so, Romney could have turned that info into his advantage instead of spoiled dough.

By now, “CookieGate,” a week old and it’s entirely possible the Romney campaign will find humor after al. 7-Eleven’s PR team has already done that while the bakery is cashing in on its Internet notoriety by offering a “CookieGate” special: buy a dozen, get a half-dozen free.

Kudos….eerrrr…..cookies to them!

Considering that Romney gaffes are nearing bakers dozen regularity, it’s likely he’ll have plenty of time to improve his PR game before the big PR game heats up this fall.  And then we can talk about how the cookie crumbled.