Thursday, September 22, 2011

PR Crisis for California Fitness Over Cancellation of Membership Over Failure to Pay $8 Admin Fee

Today, The Singapore Straits Times and Social Media scene has been abuzz over California Fitness' cancellation of several members' lifetime membership due to their failure to pay a $8 annual administration fee.  Media reports have highlighted that an affected member, who had brought the fitness chain to The Small Claims Tribunal, had been awarded a $1,500 refund from the original membership fee of $4,000.  California Fitness has a major PR crisis on its hands and, in my opinion, if not managed well will signal the start of its demise as a going concern.

This is incident reminds me of a similar one I blogged about on 2nd September 2011, People's Association (PA) Replies to Forum Letter on Appointment of Grassroots Advisor, and is another classic example of how “good communications cannot help bad policies.”  This is because crisis communications is about presenting the truth to affected stakeholders and no amount of sugar coating or reframing can change the fact that a policy is flawed.  To put it simply, a rose by any other name still has thorns.

So what should California Fitness do?

In this instance, as has been demonstrated by the finding of the Small Claims Tribunal in favor of the member, California Fitness is legally at an indefensible position.  Hence, California Fitness' only approach is to change its policy and to go on the PR offensive to shore up its brand reputation.  To do this, California Fitness must (a) acknowledge the error of its past policy; (b) empathize with affected customers over the distress they have felt; (c) apologize and offer some act of contrition.  The Theme which California Fitness' crisis communication plan should adopt is one of "Remorse".

While this approach may be difficult for management to swallow, it is in my opinion the only possible solution to prevent decline in sales over the very negative publicity.  After all, as I have said in the beginning of this post, "good communications cannot help bad policies".

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