How 4 words cost a company half a billion pounds
The Chief Executive of popular high street jewellery chain Ratner’s damaged the brand so much that he was fired and the company had to be renamed. And all because of 4 words that he uttered at a Directors dinner.
Gerald Ratner talked to the crowd about the low price products his company offered.
“People say: ‘How can you sell this for such a low price?’
I say: ‘because it’s total crap'”
The share price plunged. Nearly 300 stores closed between 1992 and 1994. Nobody wants to buy products that even the manufacturer denounces as ‘crap.’ This gaffe is now so legendary that the expression ‘doing a Ratner’ is used to indicate an attitude of contempt towards the consumer.
The most important Public Relations lesson here is that the man at the top should be a brand evangelist and remember what the legendary advertising man David Ogilvy once said: “The consumer is not a moron, she is your wife.”