People like to complain about several types of businesses: among them, cable companies, airlines, telemarketers, used car dealers, and insurance companies.
So on Monday, when comedian Matt Fisher published a devastating blog post entitled “My Sister Paid Progressive Insurance to Defend Her Killer In Court,” about how Progressive mishandled (from his perspective) issues after his sister was killed in a car accident, the story took off and became a social media crisis.
From a crisis communications perspective, Progressive also mishandled this crisis.
That’s surprising because Progressive has a Twitter team of 11 people, posting more than 6,100 total tweets, averaging a couple of tweets per day. So I might have thought the company would be more nimble to the negative response to how Progressive handled the Fisher case.
Yet, Progressive did not post any tweets on Monday. And did not post anything until nearly 3pm on Tuesday.
Instead, Progressive’s initial reaction was an auto-response tweet, “This is a tragic case, and our sympathies go out to Mr. Fisher and his family for the pain they’ve had to endure. We fully investigated this claim … and feel we properly handled the claim within our contractual obligations.”
Part of the problem with Progressive’s response is that it seems biolerplate, detailed by legal counsel, not by actual human beings with real empathy for the situation.
It’s yet another example of by-the-book crisis communications that turns people off.
As a public company, Progressive has to balance the necessity of its fiduciary responsibilities to its shareholders — the fact that the company feels it “properly handled the claim within our contractual obligations” — along with its need to maintain a brand that appeals to consumers. One other variable affecting Progressive’s strategy is that its stock price actually improved a few cents after the social media storm hit (from a low on Monday of $19.67 to a high of $19.96 midday Tuesday).
Progressive seems to have made the decision to ride out the social media storm, and cynically, that may be the best approach. Even if the company communicates its fiduciary responsibilities and explains more fully its “contractual obligations,” those obligations can’t hold up in a court of public opinion when compared to Fisher’s horrible story. Progressive’s approach: if we can’t win, we won’t play…for a few days.
Finally, just before 3pm on Tuesday — basically 20 hours since Fisher’s post — Progressive finally posted a response to the criticisms.
It’s a better response, and I think it’s because someone inside Progressive realized that its brand image was being affected, even if its stock price was relatively unaffected. Progressive has invested years and millions of dollars to develop a recognizable brand epitomized by good-natured, slightly wacky Flo — while portraying the other guys as working for a company that places “contractual obligations” over policy holders.
Progressive finally recognized that they had to make a change to its response, and did so by putting a specific person’s name to the response, and while it wasn’t warm-and-fuzzy, the explanation — “There was a question as to who was at fault, and a jury decided in the Fisher family’s favor just last week. We respect the verdict and now can continue to work with the Fisher family to reach a resolution” — shows them moving for a solution.
In this case, I hope they follow “contractual obligations” and pay the Fisher family the full balance owed them under the policy.
But Progressive’s reaction — its officious initial comment, the delay in responding — shows the failure of following by-the-book response crisis management that generates a generic response that can be used in almost any crisis. Instead, crisis communication templates should always provide room to customize the response to address the specifics of the current crisis. That’s something a number of recent responses to crises have forgotten.