Monday, September 21, 2009

Sigg's Bottle Full of Troubled Water Pt. 1

The Swiss company Sigg, maker of trendy and expensive reusable water bottles, is in a heap of trouble. The reusable water bottles they marketed as eco-friendly included a liner that contained small amounts of a controversial chemical that many believe harmful to human health.

The revelation sent Mommy-bloggers into a rage. They felt betrayed and blasted the company for misleading them. Sigg has a huge crisis trying to convince customers that they weren't deceived.

There are four phases to a crisis: Warning, Acute, Chronic and Resolution. Sigg has fumbled the first two phases, is smack in the middle of the chronic stage and is hoping resolution comes quickly.

I'm going to put Sigg's words and actions into each phase, chart how things unfolded and give you some info you can use to prevent or manage a crisis in your organization.

Warning Phase
Most crises have warnings. Sigg's warning came from numerous stories and studies questioning the use of the chemical BPA (Bisphenol A) and the potential for it to leach into liquids. In 2006, Sigg learned that the liner it used (manufactured by a third party) contained small amounts of BPA, although none of the chemical leached out in multiple independent tests.

The company began designing a new BPA-free liner in 2006. Here's what Sigg CEO posted in a letter to customers on the company website a few weeks ago:
"Despite the fact that these bottles were manufactured well within strict international regulations and posed no health risk, my team and I initiated a project in June 2006 to develop a new liner which would be both BPA free and produced in a more environmentally friendly manner. We recognized early that there were questions surrounding BPA and we wanted to be sure that we had a bottle liner that you, our customers, could have absolute confidence in."

Steve Wasik, CEO Sigg

Sigg knew three critical facts in 2006:

1) People were concerned about the presence of BPA in products

2) People bought Sigg water bottles based on its "green" merits and many customers equated "green" with "BPA-free"

3) Their product contained BPA

Sigg delayed more than three years before disclosing its liner contained BPA.

In 2007, the Environmental Working Group (EWG) included Sigg's liners on a list of products that contain BPA. A claim known by Sigg to be true. Yet, Sigg sent a letter to the EWG demanding to be removed from the list. Below are excerpts from Wasik's letter to EWG from the Legal Planet Blog and the Eco Childs Play Blog:
"I can assure you that SIGG bottles are absolutely not made with a plastic liner and are in fact lined with a proprietary non-toxic, water-based resin which has been refined over decades of study and is extremely safe & stable."
"We understand the controversy and concern surrounding BPA leaching from plastic water bottles and can assure you that SIGG bottles are leach-free and 100% safe. We are upset about the misinformation which has circulated and are working feverishly to clear the good name of SIGG."

Wasik wrote the Sigg bottles are absolutely not made with a plastic liner... true statement, but not the point. He also writes that Sigg bottles are leach-free. Also true, and also not the point. The letter was precisely crafted to dodge the issue.

Sigg bullied EWG into removing it from its list. And it worked. It worked for two more years. During that time, Sigg bottles were featured in eco-friendly stories in dozens of publications and they even made the Today Show twice.

Sigg's slow-burn warning of its impending crisis has three important points that stand out to me as a crisis communicator:

1) Denial is a powerful force.
When your market strategy is successful, it is hard to consider telling your customers information that will likely lead to decreased sales. Force yourself to confront difficult reality. Write the story you don't want to see and figure out what you can say, maintain your integrity and still be successful.

2) There is no such thing as selective transparency.
Sigg had some facts on its side, but not the most important one. Either you are transparent or opaque. Sigg was deliberately opaque in its communications. Great brands are built on trust. Sigg earned trust with its customers with incomplete information. It's not hard to predict what will happen when your customers find out you lied.

3) Never underestimate your audience.
Sigg underestimated the power and fury of moms who felt they had been mislead into a purchase that could harm their children. If Sigg had put itself in the position of the mothers who bought its products, perhaps they would have come clean sooner.

In my next post, I'll write about what happened during the Acute Phase of this crisis.

That's when the BPA really hit the fan.

Bill Salvin

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