The leader in sports news just proved your product doesn't work; uh-oh.
This is the situation the public relations staff at Power Balance faced after ESPN ran an Outside the Lines report debunking all the claims Power Balance makes regarding their product.
The bracelet is supposed to provide enhanced endurance, balance, flexibility, and strength via a, "hologram in Power Balance designed to resonate with and respond to the natural energy field of the body."
However, the University of Wisconsin-Lacrosse proved in a study that the effects of the bracelet are non-existent, with placebo bracelets producing the same effects the company claims Power Balance bracelets do. In the company's first year, they made $8,000. This year, they made $17 million.
This is the story Outside the Lines ran, and it goes more in-depth into the study:
Ladies and gentlemen, please fasten your seat belts because the captain has pushed the crisis button.
Crisis management is an event a company never hopes for, but must ALWAYS plan for. If there is a public relations team at Power Balance, they obviously called in sick with swine flu during the lecture on how to deal with a crisis. The company has committed two cardinal sins of crisis management:
Remaining Silent: The absolute WORST thing a company can do in the midst of a PR crisis is not say anything. Remember when you were a kid and you knew you did something wrong? Mom would come over and ask what would happened, you'd say nothing and she'd know you were toast. The same thing can be said about a company in the middle of a crisis. The Power Balance team has repeatedly declined commenting on the issue, didn't release a statement the day of (or the very least the next day) the crisis, and has shut out reporters, making the company look instantly suspicious. Plus, a company that isn't transparent with their operations in the first place is subject to some scrutiny. These things can all be avoided by having a plan, which leads to the next point....
Have A Plan: "Power Balance has lived and thrived in the ultimate testing environment, the real world."
This is the only response Power Balance has given in the six days that have passed since the story. They didn't contact the media, they didn't acknowledge the story upfront, and they haven't said anything except that quote on their homepage. By not having a plan for a crisis, a company can panic and either A) Say nothing and become defensive or B) Say something dumb.
Because Power Balance ignored these two important aspects of crisis management, their brand may have just been dealt a Rocky Balboa knockout punch. It will take a lot of time, effort, money, and possibly an entire re branding of the product to gain sales and, most importantly, trust of the consumer back. If they would have had a plan and not taken a vow of silence this crisis could have been headed off from the beginning.
So much for power or balance.