December 10, 2013 Leave a comment
Aside from being a cyclist and netizen, I am also a former PR guy, and I wanted to share some thoughts on Roubaixgate.
But first, a primer…
Specialized unleashed the online fury of cyclists worldwide this weekend when it came to light that they had threatened to sue the owner of a very small bicycle retailer in Cochrane, Alberta, Canada, alleging that the shop infringed one of their trademarks because the shop (Cafe-Roubaix Cycles) was eponymously named with a
famous cycling race ( or was it a bike Fuji makes?) a bike model Specialized makes. (Cochrane is a small town near Calgary, Alberta, which was the location of the final stage of the 2013 Tour of Alberta.)
Within hours, the story had gone viral, with stories being written on cycling, news and blog sites and cycling netizens berating Specialized on their various social media channels. While, it eventually ended peacefully after the real owners of the “Roubaix” trademark, Advanced Sports International, publicly admonished Specialized, resulting in Specialized CEO Mike Sinyard personally called the owner of Cafe-Roubaix to start discussing an agreement without the threat of a lawsuit, the consensus across the internet is that this has been a public relations nightmare for Specialized.
I am not an “old pro”, but my time in PR did include the resignation of a premier and a leader of the opposition and major health care scandal, so I have seen enough action to be able to say that Specialized’s actions are a textbook case of what NOT to do. Here are some observations.
1. Can =/= should
While there is debate on whether or not Specialized’s could sue Cafe-Roubaix (their lawyers say yes, ASI CEO Pat Cunnane says no), the real question is whether or not they should. The decision to sue should have based on a cost-benefit analysis of whether the cost of the suit (in terms of loss of revenue due to the loss of patronage) is less than the loss of sales from potential customers buying from Cafe-Roubaix instead of Specialized. If that last sentence did not make sense, good, because the only Cafe-Roubaix branded bike components are their custom carbon fibre wheels, which are most definitely the same thing as an endurance road bike and are branded differently than Specialized’s Roval wheels. Moreover, Dan was willing to compromise, but Specialized wanted nothing short of a complete rebranding of the store, making them seem even more unreasonable. From a cost-benefit standpoint, I do not think Specialized would have lost any sales to Cafe-Roubaix, and, instead, they have lost current and potential customers due to their unreasonable position.
2. Don’t hide under a rock
The textbook case of effective public relations during a crisis is Johnson & Johnson’s response to the “Tylenol Scare of 1982.” The effectiveness of Johnson & Johnson’s response is attributed to their swift and decisive actions and their acceptance of responsibility for what happened. The results is that, not only did the Tylenol brand recover, but it continues to be a successful product today.
Specialized, did the exact opposite. Their twitter account went silent.
Their Facebook account not only went silent, but had the settings changed so that posts from others were hidden (I’ve overridden their default setting in my link so you can see the vitriol they incurred). Of course, that did not stop angry netizens, who took to commenting on every post with links to the original Calgary Herald story about Cafe-Roubaix. Supporters of Cafe-Roubaix even changed their names and profile pictures in solidarity with the shop and created various image macros and hashtags lampooning Specialized. The worst was when the CEO of another company responded before we so much as heard from a nameless spin doctor from Specialized.
The lack of a response is all the more baffling given Specialized’s past of being very prompt with communication. I have sent emails and tweets to them before and have received responses within twenty four hours.
Either their lack of a response was a deliberate part of their strategy (which is a big no-no) or they did not anticipate or were unprepared the backlash that occurred (which is a different issue, but a failure nonetheless). Granted, the story did co
me out on the weekend, but their PR department would have had some kind of an alert to notify them of responses.
My guess is the communications personnel were caught off guard by the public response and notified their managers, who responded the same way turkeys respond to decapitation.
3. Don’t be a repeat offender
This is not the first time Specialized has acted like a bully. Remember Volagi? Remember Epic Wheel Works? No wonder there are threads dedicated to discussing Specialized’s litigous streak. With every lawsuit or threat thereof, the response has been swifter and more acerbic. The fact that Cafe-Roubaix owner Dan Richter was a veteran (a fact irrelevant to the validity of the lawsuit) stirred passions even more. Once is isolated. Twice is a coincidence. Thrice is a pattern, and no one buys Specialized’s legal arguments and only sees them as a bully.
4. Eat crow, prominently
Specialized CEO Mike Sinyard personally spoke with Cafe-Roubaix Dan Richter to work out some sort of a deal. That is a positive step, but is still short of a sincere mea culpa. Given their litigious streak (see #3 above), paying lip-service will only fuel customers’ cynicism and reinforce the perception that Specialized did not want to back down and only did because they were afraid of losing money, rather than because it was the right thing to do. Charles Pelkey has a great blog post about what Specialized needs to do in order to recover as a brand.
5. Perceptions are reality
Business is like politics and in that what is true is not always as important as what appears to be true. There is a great post on Red Kite Prayer about the lingering questions about the Roubaixgate affair. like why did the Calgary Herald article not address the fact that Cafe-Roubaix makes wheels or why the Canadian patent office issues a “Roubaix” trademark in the first place. Moreover, there is the larger issue of whether or not place names should be trademarked at all. However, none of that matters.
Dan Richter played the only card available to him. The columnist who wrote the Calgary Herald piece, Tom Babin is a cyclist and a commentator on cycling issues. He is also paid to write columns that sell newspapers, and his angle is transparent. The reality is that business, like politics, involves asymmetrical ‘warfare’, which has given the Davids of the world and advantage over the corporate Goliaths. This was not so much a battle about trademarks as it was a story about about a bully and an underdog, which is why the technical aspects of the fight, important as they were in a legal sense, did not get much play. Thus, the power of a compelling narrative won over the power of the law.
The big question people are asking is: Can Specialized recover? A better question is: Do they have to?
Strong as they reaction was online, hyper-engaged cycling netizens are likely only a fraction of Specialized’s market, and are likely not the ones keeping them in business. (I am not certain, but, if I had to guess, the customers buying $700 Hard Rocks and could care less about a bike shop in small-town Canada are). If Specialized can avoid getting in this kind of trouble too often, they will emerge relatively unscathed in the long run.
Where do I stand? In full disclosure, I am a Calgarian, and Dan Richter is an acquaintance of mine who I visit every time I am in Cochrane via bike. He provides excellent customer service, and helped me patch a tube when I flatted multiple times on a ride. I also took the time to post on Specialized’s wall and Twitter feed. Why? Because I’ve owned a Specialized Allez since 2004 and feel ashamed to ride it around Calgary now…at least until I get some Cafe-Roubaix stickers and use them to cover up the Specialized logo.
And, in case someone from the Big S reads this post: These opinions are mine alone and are not representative of what current, past or future employers, clients, friends, family or other associates of mine believe.