Crisis Communications Case Study: Carmax

SUMMARY

In November of 2014 a producer from ABC’s 20/20 contacted CarMax with allegations that questioned the quality of the company’s used vehicles and its customer service commitment. CarMax immediately got on top of this potential PR crisis and hired PadillaCMT to manage the potential negative impact on the brand[1]. Through extensive research PadillaCMT was able to gain a better understanding of customer and employee complaints identified by 20/20, visualize how the 20/20 producer and journalist would approach the story and how the media and news outlets cover these types of stories. Conducting this research allowed CarMax to provide 20/20 with evidence that discredited several complaints and therefore weakened ABC’s story. 20/20 producers delayed the airing of the episode until December 12, 2014 so that they could gather more information for their story. CarMax developed their own digital response through a website, videos and social media channels. They chose not to debate the story in the 20/20 episode so that they could direct their own narrative and tell their story directly to consumers.

ISSUES AT STAKE

CarMax was founded to provide the most transparent and integrity-driven car buying experience in the industry[2]. Accusations that questioned the quality of CarMax’s used cars and its customer service commitment went against the organizations mission statement and threatened to damage the reputation that CarMax was built on. CarMax’s PR team had to find a way to keep ABC’s story from impacting sales and share prices and recover brand perception following the airing of the story.

PROS & CONS

Pros: CarMax did a really good job of staying ahead of the narrative. They did thorough research right off the bat so they were able to discredit negative complaints and delay the story from airing. CarMax’s constant communication with the 20/20 producer allowed for them to know when damage would hit. CarMax’s PR team thoroughly monitored social media and responded to questions and complaints by redirecting consumers to a CarMax website that responded to 20/20’s story with informational videos and statistics while reiterating CarMax’s commitment to quality.

Cons: CarMax declined to provide an interview with 20/20 producers in order to delay the story and conduct their own research. This allowed the company to frame its own narrative but also limited the number of people who heard its defense. CarMax’s lack of response in the episode could have been misinterpreted as ‘no comment’ by viewers who did not do further research into the story.

RECCOMENDATIONS

The 20/20 story put CarMax’s quality promise into question. CarMax forwarded concerned customers to a website that specifically addressed 20/20’s allegations which was helpful but I would recommend for the PR team to take their statistics that back up their quality promise and use them on their social media channels to appeal to customers on a personal level. CarMax is the nations largest retailer of used vehicles. To create long lasting positive brand recognition following the 20/20 episodes airing, CarMax should visually tell the story of how it helped customers find a reliable vehicle at a reasonable price. For example, if CarMax were to show how they helped a recent college graduate purchase her first car for her first real job, it could appeal to other college graduates and allow an opportunity for customers to make an emotional connection with the brand.

 

 

[1] CarMax Responds to 20/20 Allegations. (2015). Retrieved October 17, 2017, from http://apps.prsa.org/SearchResults/view/6BW-1509A2095/0/Carmax_Responds_to_20_20_Allegations#.WebM62JSxO0

[2] About CarMax. (n.d.). Retrieved October 17, 2017, from https://www.carmax.com/about-carmax

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