Most of my adult life, my day job has been in sales, marketing or marketing communications. I’ve done a great deal of work in corporate PR, marketing, marketing communications, advertising, sales support and sales, all of it in a high tech context. Though I’m not a Wall Street or Madison Avenue level expert, I’m familiar with damage control issues, and I’m familiar with how publicly traded companies make formal statements in times of crisis.
Amazon’s behavior so far in their dispute with Macmillan has been a textbook example of how not to manage your corporate image, especially with respect to stockholders. This has not impacted their end customers much so far, I suspect, at least not outside the Kindle community where Amazon’s sole public statement still stands as official, having been made buried deep within a chat board, rather than via press release or public statement from a senior executive. (And I believe they’ve since confirmed it via email, at least according to a commentor on Making Light.)
In a word, this is bizarre. Contrast with Johnson and Johnson’s handling of the Tylenol murders, which is literally a textbook case in corporate PR under adverse circumstances. (And to be perfectly clear, I’m not for a moment comparing the Amazon-Macmillan kerfuffle to murder and a multimillion dollar product recall. Our issues here are a tempest in a tiny teapot compared to what was going on in 1982. I’m simply talking about how corporations respond to business crises.)
You don’t remain silent in the face of significant business questions. That spooks the shareholders, baffles your employees and suppliers, and (eventually, at least) causes your customers to lose faith in your brand.
You don’t make official corporate statements about a critical business issue through unsigned, obscure channels. That is such an abrogation of accountability that it’s ridiculous. You further don’t make those statements laughable, such as claiming that “Macmillan has a monopoly on its own titles.” That isn’t even good PR spin, that’s just silliness. And not even worthwhile silliness.
You don’t let your opponent (Macmillan, in this case) control the narrative, as CEO John Sargent did with his well written, reasonably phrased and very concise Saturday letter in Publisher’s Lunch. That’s such basic PR and image management that any college freshman could have handled this.
And you don’t remain silent in the face of a sudden multibillion dollar collapse in your market capitalization. Shareholders really, really hate that. Institutional investors tend to call emergency board meetings.
In short, for no discernible reason whatsoever, a Friday night hissy fit in Seattle over a supply chain issues has transformed into a “how not to” case study that will quite likely wind up side-by-side in business textbooks next to the Johnson and Johnson case study. Yes, Amazon’s business model is at stake. So is Macmillan’s. But if you’re going to go to war, as Amazon did with shutting down the print and ebook titles from Macmillan, your next step is not usually to spike your own guns.
This has gone from unreasonable to bizarre. And the degree of explaining Amazon has to do deepens with each passing day’s silence. So far, the price of silence has been several billion dollars.
What are they doing in Seattle?