Ronn Torossian Update

News and Updates from 5WPR CEO Ronn Torossian

Chipotle Still Reeling Thanks to E-Coli Scare


Chipotle just felt the “two” of the one-two punch land. Immediately after the CDC discovered an outbreak of e coli in locations in Seattle and Portland social media exploded with endless barrages of consumer doubt and disgust. Recently, the company was forced to disclose the outbreak was not contained and could be in as many as six states. Upon hearing that news, the market responded accordingly. Chipotle stock plummeted about 12 percent last.

Now the company is facing a PR crisis on two fronts: consumer and investor. The consumer PR crisis is bad and getting worse. Every time the CDC announced a new state impacted by the outbreak – California, Minnesota, Ohio, New York, Oregon and Washington have been listed so far – it gets worse for the brand.

The more people who hear about it, the more people are talking about it. That volume also leads to longevity. A relatively minor outbreak could come and go quickly, barely registering a blip on the national news. But now, with locations in six states (and, possibly, counting) involved in the CDC investigation there is no containing this monster. It’s a safe bet that the only reason Chipotle is not the lead story right now is that the POTUS race and refugee crisis are monopolizing the news cycle.

At this point Chipotle is relegated to reporting a rather bleak silver lining. No new cases have been reported in the original epicenters of Seattle and Portland. That’s scant reassurance for a consumer public growing increasingly weary of this outbreaks and wary of mass produced food – even if it’s purportedly healthy.

In quite possibly the worst choice of words, representatives said the outbreak was “contained.” Unfortunately for them, the consumer public doesn’t agree … and they are sick to death of hearing about “contained” threats. Take a wild guess how many times folks have Googled “contained threat” in the past week or so … your guess is probably very, very low. And, while most of those responses will be about Obama’s ISIS comments, there’s Chipotle, mixed in the search responses with … ISIS! Yeah, talk about from bad to worse.

Recently, Chipotle offered a sincere apology. Given the state of things and the unfortunate language used that, however unintentionally, connected their brand with much worse news in the world, it’s going to take more than an apology to make this right.

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Walmart Workers Seeking Wages

Black Friday Public Relations

Black Friday is coming, and some Walmart workers are using the annual bacchanal of retail excess as an opportunity to push their political agenda in a headline grabbing way.

The organization, called “Our Walmart” plans to start a fifteen-day fast scheduled to end on Black Friday. The effort has been dubbed “Fast for 15”, an obvious connection to the Fight for 15 movement, a grassroots group demanding a $15 minimum wage.

According to press reports, the fast will include both current and former Walmart employees as well as other sympathetic citizens. The current roster of participants stands at well over 1,000. At this point, not every protester has pledged to fast for the full 15 days, while the founders of the (non)fast have promised to consume only liquids for the duration.

While most of the protests are planned to be conducted outside Walmart stores, some protesters have pledged to take their show on the road, and fast events are being planned near the NYC home of Walton heiress, Alice Walton, as well as the California home of Walmart heir and current chairman, Greg Penner.

Organizers say the point of the fast is to illustrate the quandary they say many Walmart employees face: they can’t afford to feed their families, even when shopping at Walmart. Organizers tell stories of employees having to choose between eating lunch during their shift or putting enough fuel in their cars to get home. It is those sorts of situations, they say, that necessitates such an extreme response.

This protest is expected to coincide with other protests that are becoming typical on or around Black Friday. This will be the fourth consecutive year that similar protests are planned.

All of this despite the fact that Walmart did indeed raise wages last year, and the starting wage for full time employees is expected to increase to $10 next year. Department managers will get between $13 and $15 per hour. Not a lot for a management position, but still more than they are getting now.

Walmart’s in a tough spot, though. The general public loves to shop there, but ask just about anyone who the most hated store in America is, and Walmart will likely end up on the list. Add to this common theme the fact that the last time Walmart raised wages, its stock price dropped, aggravating shareholders.

Now Walmart’s decision makers have that to worry about, plus typically dissatisfied employees and, now, this new PR nightmare. They need to come up with a solution, fast, or this one could spin out of control.

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Why A-list Star Power is Not Enough

Old Hollywood

In the salad days of Old Hollywood, when the studio system ran Tinseltown, Star Power mattered more than anything else. Theater fans didn’t go to see this or that movie. They went to see the latest movie starring this or that person. And, when people didn’t know much more about a film than who was in it, that worked wonders.       

Today, not so much.

In an era when even teaser trailers are endlessly dissected and discussed online, no movie is safe from negative impressions before release. And, if a film deviates from a proven formula, the results can be financially disastrous and catastrophic for an actor’s career.

Making a “bad” movie when you are a relatively new actor can send you searching for a new career. Even established actors can crash and burn. Two prime examples, Kevin Costner, and Mel Gibson, offer a stark contrast in what can happen with the so-called passion project, when an actor puts everything into a role and thinks, suddenly, everything they will do is a success.

Costner struck gold with “Dances With Wolves” Everyone loved it, and it catapulted Costner into rarified air … so much so that he made “Waterworld” and “The Postman”. While both movies had their fans, neither was a success, costing the star and the distributor a ton of cash.

Ditto Gibson. “Braveheart” was a critical and financial success. And, though reactions were decidedly mixed, “Passion of the Christ” made ridiculous bank. Then came “Apocalypto”. For most people, not even Gibson’s yet to be tarnished name was enough to ensure success.

The latest misstep in this regard goes to two Halloween releases, the Sandra Bullock vehicle “Our Brand is Crisis” and the Bradley Cooper movie “Burnt” opened to great fanfare … and nobody showed up.

Now, on one hand you could argue the timing was terrible. Do people really want to see political dramas or passion projects when they are thinking about ghosts and zombies? Apparently not.

But the trends say it was more than timing. People are simply not going to movies for the stars anymore. They want story. They are consumers looking for a particular product, not a particular face. There are a lot of reasons for this. Overall, fewer people go to the movies less often. Streaming steals huge numbers from cinema audiences. Sure, throngs line up for “Star Wars” and “The Hunger Games”. But they also want to see “The Fault in Our Stars” or a dozen other films with no-name actors and great marketing

Some actors and studios figured this out. Many find success releasing so-called passion projects directly onto streaming platforms. Where, not that long ago, a “straight to video” release was code for “bad movie,” that dynamic changed dramatically. In today’s diluted, overlapping media marketplace, where lines are thinner and consumer demand is in the driver’s seat, even A-list actors chase the streaming dream. Kevin Spacey, Brad Pitt,and  Frances McDormand show their colleagues how it’s done. Expect more to follow.

And while, in the right project, Big Names still put butts in the seats, people probably would still go to see “American Sniper” or “The Blind Side” with lesser known names in the lead role.

Bottom line, consumer tastes change, and these shifts directly drive the market more than ever before. If studios and stars don’t adjust their expectations, they too will join Bullock and Cooper playing to empty theaters all across the country.

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Zuckerberg Sends Kids to School… His Own.

Mark Zuckerburg PR

Facebook founder Mark Zuckerberg has made a name for himself with winning business ideas. He understands how to engage people, bring them together and give them what they want. Now, with the help of his wife, Priscilla Chan, Zuckerberg embarks on an entirely different business model. Private school.

The Zuckerbergs’ new K-12 private school, “The Primary School”, in Palo Alto, California functions as a private, nonprofit educational institution. One different twist: the school offers healthcare services to every student, from birth to graduation.

On a recent Facebook post, Zuckerberg explained, “It’s a new kind of school that brings education and healthcare together.”

According to various media reports, the school will be free, geared toward low-income students and funded by a donor advised fund. One report stated the school may even offer prenatal care for students registered prior to birth.

The healthcare at the school will be administered at an on-site clinic, in partnership with the Ravenswood Family Health Center, located near the school. In addition to student care, Ravenswood will offer comprehensive health and dental care to their entire families.

“Health and education are closely connected,” said Zuckerberg, “When children aren’t healthy, they can’t learn as easily. Many kids and teachers across the country deal with the consequences of poor health in classrooms every day.”

Chan, in addition to being his closest partner, is also Zuckerberg’s perfect partner for this endeavor. A pediatrician, Chan once taught elementary school science. The couple has been developing the initiative for the past year. In a Facebook post, Chan said her own educational experiences motivated her to “find a better way of caring for and educating children.”

As with Facebook, Zuckerberg plans to start small and grow organically. When it launches in 2016, Primary School will only offer classes to four-year-olds as well as support programs for parents of infants to two-year-olds. The school plans to add a grade each year, so this incoming class could, eventually, become the first graduating class.

Some have said private schools are the wave of the future. Others decry the movement toward less public education. The jury is still out, but, regardless, ideas that work in one place can work in others, even if they have to be adjusted to fit specific infrastructures. There’s no doubt educators will line up on either side of this issue, but the side with the most effective messaging will win the future of education in America.

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VW’s New Boss thinks his Brand is Only Headed Up

VW PR Crisis

Fall has not been kind to Volkswagen. An international scandal rocked the brand on two continents. While the literal price tag has yet to be tallied – VW expects it to cost them billions – the PR price tag has led to immediate changes at the top and among the rank and file. As expected, newly installed VW CEO Matthias Mueller says there’s nowhere for his company to go but up. He expects a shining new VW brand inside of three years. That’s an optimistic timeline, considering they will probably still be tabulating damages at that point, but, hey, a guy can dream.

In his recent address to company managers, Mueller said the company needed to grow leaner and make decisions faster. Hmm. Interesting take considering VW is in the process of recalling 8.5 million cars in Europe and 2.4 million in the U.S. due to some fairly hasty decision making. Seems like the message ought to be not just quick decisions but “right” decisions.

While that statement may not quite be a misfire, other recent decisions have definitely kept VW in the PR loss column. According to German media reports, the KBA rejected Volkswagen’s proposal encouraging customers to bring their vehicles in “voluntarily” for repair. It would have saved VW a bundle and been much less of a logistics headache, but the governing body was having none of that.

So, in addition to digging out of this and other subsequent messes, what is Mueller’s action plan going forward? Here’s what he said: “We will significantly streamline structures, processes, and (decision-making) bodies. We must become leaner and make decisions more rapidly. Our competitors are only waiting for us to fall behind on technology matters because we are so preoccupied with ourselves. But we won’t let that happen.”

While this may have been what his workers and leaders wanted to hear, it strikes a particularly tone-deaf chord where the consumer public is concerned. They are not interested in VW keeping up with the Joneses … particularly those customers who will be forced to turn their vehicles in for mandatory repairs and retrofitting. They are – justifiably – angry … and no amount of “technology” is going to salve that wound.

And, as already mentioned, the idea of streamlining infrastructures and making faster decisions does absolutely nothing to address the problem consumers face when considering whether or not to buy a VW. It’s almost as if the company knew what it was doing, got caught, and is now hoping to reframe the situation without actually addressing the problems they caused for their consumers. If Mueller doesn’t get on that “quickly” … he may be the next VW CEO going out Hindenburg style.

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The Facebook dislike button could spell doom?

FB Dislike

Communication on Facebook has always had its pitfalls. Do you “like” a post if you agree with the sentiment but hate the situation described? What about a tragedy if you want to offer support and the person posting asks for support? Should you take the time to write out a message in the hopes of avoiding an uncomfortable situation … but you don’t really know what to say … or you feel the original post said it best?

Ah, life in the mobile communication era. We talk as little as possible but try to say as much as we can with each keystroke. Now, Facebook revealed it is working on something people have been asking about for years … a DISLIKE button. Some reacted to the news with a shout: “FINALLY!” Others just sighed, and not a few people suggested this might be the end of any lingering civility online.

Then Mark Zuckerberg weighed in. According to Facebook’s CEO, the new tool will be a way to “express empathy” on status updates. Possibly a dislike button, but probably something a bit more complex. Zuckerberg admitted finding the right approach has been complicated. He said, surprisingly so. “We didn’t want to just build a ‘Dislike’ button because we don’t want to turn Facebook into a forum where people are voting up or down on people’s posts.”

So… what then?

Well, so far the CEO is not saying much, but it’s a cinch it’s probably a step in some direction. Though if it’s the right one only time will tell. Some social media users want no more “like” style buttons. They want people to be forced to communicate in something other than the digital equivalent of grunting or smiling. Others look forward to the opportunity to say even more while tapping even less.

There are those who believe additional “empathy” buttons simply gives trolls more ammunition. But when did a troll ever content themselves with clicking a button or an emoticon when a rambling, long-winded diatribe about ten unrelated topics would do?

From a public relations perspective, more opportunities should create more engagement, the key factor in the success of social media platforms. How that engagement evolves will, as always, be up to the users.

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Airlines Battle over Buzzwords

airline marketing

JetBlue and now Delta Airlines are offering “humanity” as part of their service and that’s kind of an issue for JetBlue. They wrote the phrase “bringing humanity back to air travel,” right into their Customer Bill of Rights. It has been there for several years. Now in recent Delta ads the same phrase appears.

Delta explains, they never meant to copy anything, and it just seemed like a phrase that fit their recent efforts. Michael Thomas, the spokesman for Delta said, they never set out to specifically highlight “humanity.” “The phrase succinctly captures Delta’s efforts to improve food and beverages, customer service, and onboard products,” he said.

But in August, Delta did it again when it gave flight attendants handheld devices to help with customer service and said they had done so “while endeavoring to bring more humanity to the skies.” So we wonder if Delta is doing this deliberately, a cunning move – or really didn’t make the connection, implying they aren’t savvy enough to know what their competitors are doing.

Where does all this humanity come from? Well, probably as a countermeasure to everything else many of the airlines are doing, like charging for checking in baggage, cutting back on the already limited leg space, herding people like cattle, charging for carry-ons, and providing fewer perks. With all of that happening, is it really being humane to simply offer good service and be willing to sell more onboard products?

That seems to be JetBlue’s point when they offer their version of humanity, first included in their efforts when the company was founded in 1999 and steadily increased and improved since then. The phrase in question was added to their repertoire in 2007 after a service breakdown from an ice storm that stranded thousands of passengers on planes and airports.

They changed a lot so they would be prepared if something like that ever happens again. JetBlue points out they have consistently worked to improve the customer’s experience, being the first to add leather seats, and the first to put screens in the back of seats. They also offered diagram instructions cards for people on their flight with yoga and Pilates moves that can be done in an airline seat to ease aching muscles.

With Delta’s choice, they’ve given JetBlue a forum to remind their customers of all they’ve done in the name of “humanity.” While still choosing to take the higher ground and not take legal action or make a big deal, Doug McGraw, a JetBlue spokesman said they trust their customers to know the difference and prefer to make the customer experience “even better.”

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Why Rick Perry Quit the 2016 POTUS race

Rick Perry POTUS - Ronn Torossian Update

Rick Perry had never lost a bid for election until he first aimed for the White House in the 2012 campaign. He held the office of Governor of the State of Texas longer than anyone has and seen big successes, but the Presidential candidacy is probably the most difficult bid anyone could attempt – and the most expensive.

Perry had been doing well in the 2012 Primary when he spectacularly flamed out by flubbing a debate question. His campaign had been loudly proclaiming his intention to axe 5 federal agencies. When asked which ones, Perry could not name them all. His closing salvo “oops” was the soundbite on everyone’s lips the following day.

Voices from inside the Perry camp are blaming the cost for his early exit this time.  Perry made it clear, however, funding was not his only reason. Explaining, he said, “We have a tremendous field of candidates – probably the greatest group of men and women.” Perry continued, “I step aside knowing our party is in good hands, as long as we listen to the grassroots, listen to that cause of conservatism. If we do that, then our party will be in good hands.”

Considering he was unable to get enough backing in order to  participate in the debates, he’s probably making a good choice. Successful politics often entail timing and knowing when to move forward or back away. Perry chooses now to back away and leave this campaign to others. That doesn’t say anything about his future plans. But he’s right, there are a lot of people with strong backing ahead of him in line at the moment, and there are going to be several casualties along the way before this campaign hits the Primaries. Bowing out now removes him from all that negative association, and he can return in another race. People will remember his name, but they probably won’t think of him in any crash and burn scenarios from this campaign.

That’s more than could be said of his 2012 bid. For the last four years, Perry has been meeting with people, working hard, being less arrogant in his approach, and putting in the long hours needed to appear well-studied on the issues of the day. Unfortunately, all that work couldn’t help in the face of the sheer numbers of high-profile politicians and otherwise vying for President on the Republican ticket.

Will Perry continue to improve his standing and abilities over the next four years in preparation for 2020?  Time will tell … but now that he’s out, he can focus on what went wrong this time, with plenty of time to correct it.

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Kraft Recalls Bacon: Breakfast PR Takes a Disastrous Turn

Kraft Bacon Recall

For bacon lovers, the news could hardly be any worse. Kraft recently recalled two million pounds of Oscar Mayer turkey bacon after consumers reported illnesses. Now, bacon purists might argue consuming turkey bacon in any amount is actually an illness. But those who want to stay healthy or avoid pork for other reasons enjoy turkey bacon because they can dig into the breakfast staple without transgressing in other important areas.

When the headlines hit, the reaction was not discerning. Bacon was being threatened, and people took it very seriously. Then, Kraft Heinz made it worse by issuing a stilted recall released announcing some products “may be adulterated.” Now, it’s a perfectly fine word, but in the world of clear communication it ranks pretty low. Maybe they were shooting for ambiguous in order to keep consumers from being disgusted … but when bacon is in the offing, it pays to be clear, concise and simple.

Worse, the report indicated that the food industry giant “discovered” the issue after “spoilage-related consumer complaints.” You do NOT want your brand connected to the words “spoilage-related.” Then the U.S. Department of Agriculture announced reports of illnesses related to the consumption of these products.

The situation quickly spiraled out of control for Oscar Mayer. They gave concerned consumers words like “adulterated,” while the news was saying things like “spoiled” and “illnesses.” Note the plural form of illness.

When you go for highbrow and confusing but the media breaks it right on down to words that look scary in massive fonts or on chirons under concerned looking reporters, you have officially lost control of the message stream. Worse, people think you were trying to hide something … simply because you chose a word the general public will not relate to. When the news keeps it simple, and you make it complex, the consumer market tends to believe you may be hiding something.

You might be thinking: “Well, we dodged a bullet there” … Meanwhile, they are thinking: “What do they REALLY mean by adulterated?”

Next time you have a crisis and you need to communicate your response to the problem. Do it so you don’t have to come back and explain what you really meant.

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Rupert Murdoch: Brooks Back to Rebuild after Scandal

Rupert Murdoch

Everybody loves a good comeback story, and that’s what Rupert Murdoch is offering us. Along with that, Murdoch proves the ongoing support for Rebekah Brooks he’s claimed ever since her resignation in July 2011 from the now defunct News of the World. Brooks, for her part, has traveled the hard road and appears to be well on her way to redemption.

Before that resignation, Brooks, now 47, had accomplished a great deal in her career. She became the youngest editor of a British national newspaper, in 2000 she was placed in charge of News of the World, and in 2003 she became the first female editor of the Sun. It didn’t stop there.

In 2009, she became CEO of what was then called News International. The crisis hit in 2011 when Murdock closed News of the World in the midst of public outcry over a phone hacking scandal. Brooks was arrested.

Then last year Brooks was acquitted of all charges in the investigation including phone hacking, perverting the course of justice, and bribery regarding a scandal surrounding the murder of 13-year-old Milly Dowler.

Reporters were accused of hacking the family’s phones to gather information for more salacious stories.

Brooks has been quietly building back her career recently. Murdoch made that easier in a further show of his support. This year, she’s assisted a startup bought by News Corp in 2013, Storyful. The Dublin-based group helps newsrooms search the web for video content to vet.

Her latest accomplishment just announced, she’s been named CEO of the U.K. subsidiary of News Corp where she will handle development and acquisition of digital properties.

Brooks is out of the fray of the phone hacking scandal. But that does not mean the scandal is over. An evidence file relating to the police investigation of the case is being reviewed by U.K. prosecutors.

If that goes further, controlling officers who were members of the board of News of the World at the time could face prosecution. Also still under investigation are several reporters.

Some of the other news outlets owned by Murdoch include the Wall Street Journal, News Corp., U.K.’s The Sun and The Times, the New York Post, and 21st Century Fox. Since truly good PR is found in telling a good story, Murdoch and Brooks offer that, and as luck would have it, they have easy access to outlets that can herald this tale.

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