It's often said that the definition of insanity is doing the same thing over and over -- while expecting different results. With that in mind, here's a crisis-management case study that one member of Gannett's board of directors may find especially interesting.The case: Coke
What happened: In 1985, the Coca-Cola Co. introduced a new formula for its flagship product. The changed drink was dubbed "New Coke.''
How customers reacted: They hated it. Some launched boycotts. Sales slumped. Bottlers rebelled. One of the world's most savvy brand managers became the butt of late-night TV jokes.
How Coke responded: Less than three months later, the company reversed itself and brought back the old formula. Sales started rising again.
The case: Gannett
The case: Gannett
What happened: Over many years, Gannett reduced the quality and quantity of the content in its newspapers to bolster profits. It cut newshole, eliminated bureaus, reduced newsroom staffing and turned obituary pages into profit centers. Customer service, including delivery and advertiser support, was cut back, too.
How customers reacted: They hated it, canceling subscriptions and shifting more advertising to other venues -- most especially to the Internet. Wall Street finally got worried early in 2004; GCI shares began a steady decline.
How Gannett responded: The company continues doing more of the same. It is cutting employment in the engine of content creation: newsrooms. That reduces the amount of original material for GCI's websites -- even though they're the prime source of future growth. GCI is further reducing the amount of news in its papers. And it's threatening customer service by shifting support away from local markets.
In the discussion of mistakes, one should not omit the ill-advised strategies of paying premiums for satellite papers outside the metros in a futile attempt to corner ROP $$.
ReplyDeleteWow. Because Gannett trimmed newshole, charged for obits and downsized customer service its customers responded by dropping subscriptions and advertising? It is a good thing all those other newspaper companies, both public and private didn't do the same, 'cause they are just growing and growing, eh?
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