In Crisis Management, From the Firm
Rumination #1: Recovering from a crisis doesn’t mean pretending it never happened.

We expect Target to embrace this Rumination with enthusiasm, knowing their track record as great marketers.  Recovering from the second largest data breach in US retail history will take all their marketing know-how.  The cyber-attack that grabbed 40 million payment card numbers reduced customer traffic during the first three weeks of the holiday season by five percent.  It also impacted their stock, which dropped three percent.  But, they won’t be down for long, knowing their marketing machine.

Expect Target to use all its marketing savvy to create an aggressive campaign for reputation recovery.  They’ve already started.  Two days before Christmas, Target’s general counsel Tim Baer held a 30-minute call with several attorneys general about their investigation of the hacking, providing specific information about what was breached.  Another call’s been scheduled just after the New Year, according to those close to the situation.  In addition, they are partnering with the Secret Service to investigate the breach and have hired their own third-party forensics experts to look into it.

Target also offered an initial olive branch to their customers during the holiday season – a 10 percent discount.  For analysts and investors, Target CEO Gregg Steinhafel issued an unusual mid-holiday season statement about their holiday sales: “We are pleased with Target’s holiday performance — from guest experience and engagement to overall results both in-store and online,”  he said a week before Christmas.  It’s rare for major retailers to offer such a statement in the midst of an ongoing quarter and especially unusual for Target, which, historically has been closed mouthed about sales results.

I’m expecting Target’s 2014 first quarter to be a primer on reputation recovery for all of us who revel in such things.  While Target will be mobilizing the media they own, earn and pay for, I’m expecting some web-based tactics that will go so far beyond YouTube, Pinterest and Facebook that they will leave marketing mavens speechless.  Stay tuned…..


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