Image source: CNET

Samsung’s public relations response to its faulty and fiery Galaxy Note 7 caused more serious problems that the defective device itself. Following confirmed reports since August that the batteries in the device caught fire, the company recalled and replaced the faulty phones, saying it had identified the defect. But the second-round of phone also caught on fire. Unable to identify the cause of the fires, Samsung finally permanently discontinued production and offered refunds or replacements to Note 7 customers.

PR experts called Samsung’s response aloof, disjointed and slow and said its response caused a deeper problem than the faulty phones themselves. While reports of fiery phones emerged, the company was slow to deliver a definitive response. Airlines forbid passengers from bringing the phones on planes after reports they caught on fire on planes. One Southwest Airline flight was evacuated due to a fire. Social media users roundly mocked the phones and criticized the company.

Calls for Customer Compensation

“The [Note 7] unit is forever going to be tarnished and the danger is that the brand becomes irretrievably damaged as well,” Stephen Robb, a partner at British law firm Weightmans, told Reuters. “They need to be writing to every customer with an apology and some form of ‘compensation’…. It will clearly be costly for the company but the alternative is to end up going the way of Nokia and Blackberry.”

To its credit, Samsung did apologize and offer exchanges and refunds. However, even those actions are insufficient.

“Replacements and mea culpas are not sufficient,” Chip Bell, author of Sprinkles: Creating Awesome Experiences through Innovative Service, told CNNMoney. Samsung needs to add a list of other perks by way of an apology. “How about a gift catalog that lets the aggrieved customer pick their own symbolic atonement?” he asks.

Jay Baer, CEO of Convince & Convert, suggested Samsung offer a competitor’s device of equivalent size and functionality. “The goodwill they would gain back from a move like that would be enormous,” Baer says. Offering replacement devices was initially a good strategy. But since the replacement devices caught fire, thinking consumers will trust a third Samsung device “stretches the boundaries of believability.”

Increased sales of the new Apple iPhone 7 indicate that customers are abandoning Samsung phones.

What Caused the Problem?

Samsung’s rigid corporate structure almost certainly slowed its response to the crisis. The top-down management structure of Chaebols, family-run corporations that dominate Korea, hinders responses in PR crises, observers told AFP. The chairman makes important decisions that are promptly executed by subordinates. Samsung chairman Lee Kun-Hee has been bedridden since suffering a heart attack in 2014. A lack of leadership may have stalled its crisis response, observers say.

“The basis of crisis management is to make sure that when you give a solution, it’s the right solution and it is going to enable you to move forward,” Andy Holdsworth, a crisis management specialist at the British PR firm Bell Pottinger, told AFP. That’s something Samsung has not provided.

Bottom Line: Samsung’s reaction to its Galaxy Note 7 phones that spontaneously caught on fire underscores the importance of a PR crisis response. How a company responds to a defective product may be even more important than the product itself. Prompt and definitive actions can mitigate long-term damage to a brand’s image.

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William Comcowich

William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.