In the last two months, two high-profile companies – Microsoft and Sony – had two high-profile mishaps, one that was generated internally and one that was beyond the company’s control.
As we reported in November, Microsoft began offering a scaled down version of Office 365 free to iPad, iPhone and Google Android device users. This was great news for consumers who need to create and edit Word, Excel or PowerPoint documents on their mobile devices. Within a day of the announcement, the mobile version of Word was the #2 selling app in Apple’s App Store.
That’s great news for new mobile users of Office 365, but what about subscribers who paid between $70 and $100 for the software? Microsoft offered pro-rated refunds to those users, but the prior purchase must meet specific criteria. For example, individuals qualify for the refund, but businesses do not. The deadline for refund requests is coming up – Jan. 31, 2015 – so it will be interesting to see how many users actually request the refund and how much this decision will cost Microsoft.
More recently Sony Corporation’s PlayStation Network was hacked during the Christmas holiday, which was expected to be one of the busiest periods of online gaming activity. The PlayStation Network was hacked via a distributed-denial-of-service (DDoS) method by a group calling itself The Lizard Squad, leaving PlayStation users without service or with sporadic service for five days. Microsoft’s Xbox Live was also hacked, but its system was back up within two days.
The Guardian reported that approximately 160 million gamers were impacted by the downed networks. To compensate for lost online playing time, Sony is offering an automatic five-day extension to PS Plus members, as well as a one-time “holiday thank you” discount of 10% to all PSN members, whether or not they are subscribers. The discount can be used on items in the PlayStation Store including games, game add-ons and season passes, and on TV and movies.
Insider View:
Two high profile cases, two different approaches to managing a potential PR and business disaster. What can operators of subscription products and services learn from these corporate giants?
In short, keep your customers informed throughout a crisis the best you can, apologize for any issues impacting your customer, and move quickly to find a solution to resolve the problem.
- Keep Customers Informed – Microsoft issued a press release to announce the refund policy to its customers. The press release was quickly picked up by media outlets, so the news was spread virally. Sony posted an update to its blog, and used its Twitter account (@AskPlayStation) to post regular updates, which was particularly helpful for subscribers who couldn’t get help via phone or chat. Xbox used Twitter (@xboxsupport) as well to post updates.
- Apologize – Nothing works like an apology, even when problems are unavoidable. Sony nailed this.
- Move Quickly – In an age of real-time news, 24-hour news cycles and online companies doing business with global customers 24-7, companies need to be prepared to react in real-time.
In Sony’s case, its huge customer base is loyal and not likely to ditch their favorite games or gaming system because of a situation beyond their control. Yet Sony did the right thing by apologizing and automatically extending the subscription by the amount of time lost. In the case of Microsoft, the company made a strategic decision to offer Office 365 for free but offered refunds to existing customers to lessen the sting. Microsoft and Sony may have taken short-term financial hits, but they did so to preserve and foster long-term customer relationships.
