Customer engagement is the emotional connection between a customer and a brand (“What is Customer Engagement?,” 2019). A positive customer experience is important for growing the customer engagement. A negative experience like an accident or injury can cause a brand’s reputation to be damaged.
A Brand that Faced Ethical or Legal Issues
An example of a brand that has faced ethical or legal issues is McDonald’s. The most famous legal issue it faced is often referred to as the “McDonald’s coffee case.” This case happened in 1992 when social media and technology didn’t have same ability to reach the masses and the power that they have now. But even so, this case is studied in business classes. The case was about Stella Liebeck, an elderly woman from Albuquerque, New Mexico. She was in the passenger seat of her grandson’s car when she was severely burned by a cup of coffee purchased at a local McDonalds’ drive through window (Welman, 2017). People may argue that it was Stella’s fault to spill that cup of coffee, but it wasn’t a simple spill of coffee. The coffee given to her was at an extremely high temperature that caused severe burns on her lower body. Her thighs, genital area and other parts were burned and she needed to be hospitalized. Her medical bills were about $3,000 and she wrote a letter to McDonald’s asking for reimbursement, but McDonald’s only offered her $800 (“Woman Burned by McDonald’s Hot Coffee,” 2013). She hired a lawyer and was willing to settle for $20,000. However, McDonald’s didn’t accept it, and so the case went to court. In the litigation, many things were discovered. There were previous claims from customers who were burned and argued that the McDonald’s beverage was at too high of a temperature. Also, McDonald’s admitted their coffees were between 180 and 190 degrees Fahrenheit. Evidence was presented by an expert in thermodynamics who said that liquids at 180 degrees would cause third degree burns to human skin in two to seven seconds and McDonald’s quality manager admitted that coffee temperatures are at 185 degrees. However, severe damage to skins can occur at just 140 degrees (Welman, 2017).
Consumer Perception and Engagement
Companies should not look just for someone that buys their products just once. It could be the case that a consumer buys a lot from a certain brand just one time, and then he or she never buys from it again. Brands should look for establishing a loyal relationship with a consumer.
Over time, when a consumer is happy with a brand, he creates a loyalty or preference for one brand over another. There are people who are loyal consumers to certain brands, and purchase from them over and over during the year. Engaged customers become repeat customers (Rouse, 2016). For example, there are people who drink coffee just from Starbucks over another coffee place, or people who would prefer to buy from organic brands than non-organic brands when they do their supermarket shopping. Income could be a factor regarding a purchase decision, but also the quality of the product, and the experience of the consumer are decisive factors for creating consumer engagement.
If the consumer had a bad experience, it is likely that he or she will tell others about it. A dissatisfied consumer or someone that had a bad experience can spread rumors and commentaries that hurt the brand. Currently, consumers can report complaints to the Federal Trade Commission, directly in the company where the incident happened, or by writing a review on various consumer websites or the brand website itself. Depending how critical or dangerous was the experience with a brand, a consumer may file a lawsuit.
In the case of McDonald’s, the worldwide fast-food chain suffered an impact to its image. During that time, the case was a trend on TV news and programs.
McDonald’s was perceived as a brand that was more worried about the money that it was losing, than worried about the health of that unfortunate woman. McDonald’s appealed, thinking that it would win. The appealing worsened the situation of McDonald’s because the court ordered that the fast-food chain needed to pay $200,000 in compensatory damages and $2.7 million in punitive damages to Stella Liebeck (Welman, 2017).
Ultimate Implications for the Brand
The lawsuit results were favorable to the consumer. The “McDonald’s coffee case” resulted in a multi-million dollar compensation.
The implications for the brand were not only financially negative, also, it was a scandal since the media commented and covered it many times. Another implication is that it created a judicial precedent which meant if in the future more people got burned by any hot coffee in McDonald’s or any other restaurant, the consumer will have the right to file a suit and get some compensation.
What Should the Brand do Different? Why?
A brand like McDonald’s or any other, should first listen to what consumers say (Ference, 2017). It wasn’t the first time that McDonald’s received a claim regarding its coffee being too hot. Probably, in the other cases, the customers were not burned as badly as that lady, but there were 700 claims before her that McDonald’s didn’t pay attention to (“Woman Burned by McDonald’s Hot Coffee,” 2013).
A brand needs to differentiate from other brands if wants to be remembered in people’s minds as the best option. A brand needs to take care of products and services it gives to consumers. A brand should not risk the health of consumers. The existence of the brand depends on the consumer.
No brand can last without consumers, so it is necessary to keep them and look that they become loyal. It is necessary that customers are happy and satisfied with what they receive.
McDonald’s should have labeled the cup container that the beverage was very hot. In that way, there were no surprises for the customers and accidents can be prevented. McDonald’s should have not heated the water to temperatures that were extremely dangerous to people.
A brand needs to be more humanized; consumers want to feel understood by a brand (Ference, 2017).
Did the Brand Learn from It?
It seems that some reflection is needed by the brand. In the investment world, McDonald’s is currently perceived as a strong-cash-flow company that returns capital to shareholders. But in the real world, the sales are not the same as before due to its food quality and competitors (Moskowitz, 2016). If the brand doesn’t pay attention to quality, then more consumers will leave. New generations have a tendency for a more healthy eating style than past generations.
Amazingly, just last year, McDonald’s received another lawsuit from someone who was burned by hot coffee. It means the brand continues serving coffee at a very high temperature. It seems that McDonald’s didn’t learn from the past. Here is the link:
References
Ference, Audrey (2017). 7 Customer Engagement Strategies That Marketers Can’t Ignore. Retrieved from: https://www.outbrain.com/blog/3-golden-customer-engagement-strategies-that-marketers-cant-ignore/
Moskowitz, Dan (2016). McDonald’s: Perception vs. Reality (MCD). Investopedia. Retrieved from: https://www.investopedia.com/news/mcdonalds-perception-vs-reality-mcd/
Rouse, Margaret (2016). Customer Engagement. Retrieved from: https://searchcustomerexperience.techtarget.com/definition/customer-engagement
Teenager Suing US McDonald’s After Suffering Second Degree Burns from Hot Cup of Water (2018). 9 News. Retrieved from: https://www.9news.com.au/world/teenager-suing-mcdonalds-hot-cup-water-second-degree-burns-oregon-united-states/a737d83d-a7c0-41ed-b7c4-9efc28524315
Welman, Darryl (2017). The McDonalds’ Coffee Case. Huffpost. Retrieved from: https://www.huffpost.com/entry/the-mcdonalds-coffee-case_b_14002362
What is Customer Engagement? (2019). Clarabridge. Retrieved from: https://www.clarabridge.com/customer-experience-dictionary/customer-engagement/
Woman Burned by McDonald’s Hot Coffee, Then the News Media | Retro Report| The New York Times (2013). The New York Times. Retrieved from: ‘https://www.youtube.com/watch?v=pCkL9UlmCOE
EK Marketing Blog by Ericka Koehler 