How Well is Target Handling Their Crisis?

By David Johnson, Special for USDR.

On Friday, Target released news that an additional 70 million consumers may have been affected by security breaches and had their credit card and debit card information stolen.  This is in addition to the original 40 million that Target reported were affected in December.  This latest release came about two weeks after Target announced that contrary to what was first reported, they now believe that encrypted PIN information was compromised.  Target has attempted to win back consumers who have had their confidence shaken with each revelation.  In December after the first announcement, Target offered 10% off all in-store purchases to consumers.  Following, Friday’s announcement, the retail giant said it will try to contact customers it has email addresses for to provide tips on how to safeguard against consumer scams. The company said it won’t ask customers for any personal information during its email communications.  Finally it is offering a year of free credit monitoring and identity theft protection to customers that shopped at its stores.  Yet for all of their efforts to win back the trust of consumers, their recent sales figures so that it hasn’t worked.  Much of Target’s messaging has been directed towards investors who so far are standing by the company.  Yet if consumers continue to bail from the company, ultimately investors will as well.

So what should Target be doing in regards to crisis communications?

  1. They need to give the company a public face.  Target President, CEO and Chairman of the Board Gregg Steinhafel need to be that face.  As much as appearing on CNBC to assure the financial community he needs to be on the morning talk shows that consumers watch.  He needs to explain what is happening, apologize, and reassure consumers that the corrective steps are in place.  In a time of crisis, consumers expect a brand or corporation to have a public face and in this day and age, the President, CEO, or Chairman of the Board is the person people expect to see at the forefront.  So far this has been lacking with Target.
  2. Target needs to fully explain why the narrative continues to change.  The security breaches at Target continue to be the focus of an ongoing investigation.  Many people wonder why Target has not released all the information regarding the breaches at one time.  Quite simply it is because the security breach is still being investigated with new information forthcoming as it proceeds which Target has been very good about releasing.  Yet Target has not done a good job in explaining to consumers that the investigation is still ongoing and more information may come out, thus consumers are shocked at each new revelation.
  3. Target needs to be more direct in the wording of their press releases.  They are very guarded in what they are saying to the media and in their press releases (much of this is to be expected as there are lawsuits being filed).  Yet many of their releases have seemed somewhat deceptive including their release on Friday which was worded so as to lead people to believe that the number of people affected by the security breach had gone up to 70 million, rather than an additional 70 million people were affected.  They need to avoid this verbal nuance in any further news releases as more revelations come to light.
  4. Target needs to go on the offensive to win back consumer trust.  The retailer should be running full page ads in newspapers around the nation explaining what happened, that the investigation is ongoing and further security breaches may be revealed, apologize to consumers, and assure consumers that corrective steps have been taken.
  5. Shoppers like a discount.  Target needs to offer even deeper discounts as they work to re-earn the consumer’s trust.

In today’s world, the consumer as much as investors expects full disclosure and to hear from the head of a company and Target needs to remember this as this crisis continues.  Target will rebound from this crisis, barring another security breach at their stores while this one is being investigated.  The questions are how fast and how fully will they recover.  If they are more proactive with addressing the consumer in their crisis communications it will be sooner rather than later.

David E. Johnson is the CEO of Strategic Vision, LLC, a public relations agency that specializes in branding, crisis communications, and media placements.  Additional information on him and Strategic Vision, LLC may be obtained at www.strategicvision.biz.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.

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