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11 Times Companies Bowed to Customer Outcry

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MakersMark.com

The customer is always right—as these 11 companies learned the hard way.

1. Watered-Down Whiskey

On February 9, whiskey maker Maker’s Mark let it slip that it intended to lower the alcohol content of its flagship bourbon from 90 proof (45 percent alcohol by volume) to 84 proof (42 percent). Eighty-four proof whiskey is plenty stiff enough to knock a careless drinker off his barstool, and still boozier than many whiskeys behind the bar. But don’t tell that to Maker’s devotees, who heard only “watered down whiskey” and erupted in a Kentucky rage, flooding the company with complaints. Within a week, Maker’s Mark pledged to reverse the decision and restore the waxy red bottle of bourbon to its full-blooded 90-proof stature.

Why tinker with a beloved recipe in the first place? According to USA Today, Maker’s COO Rob Samuels said the brand was responding to an increase in demand for its spirits by stretching the supply with water. However, at least one Forbes blogger openly wondered if the whole affair wasn’t simply a cynical marketing ploy that allowed Maker’s to look like the kind of company that listens to its customers.

The lesson for companies: If you want to change your recipe, you should’ve done it in the pre-Twitter age. Jack Daniel’s, America’s best-selling whiskey, began lowering its proof in the 1980s, dropping it from 90 to 86 and finally to 80 by the early 2000s. The move raised howls from Jack lovers, but not enough to halt it. Then again, not every company got away with recipe tinkering in the 80s.

2. New Coke!

Nearly three decades later, there’s not much to be said about one of the worst marketing fiascos of all time. Coca-Cola’s 1985 reformulation was a disaster. Coke’s recipe might have its origins in peculiar tonics of the 1800s, but its customers like it that way, and they made it clear to Coke they didn’t like deviations.

While New Coke continued on in small quantities under the name Coke II for years, the reintroduction of original Coke (Coca-Cola Classic) led to a surge in sales. As with Maker’s Mark, this led to accusations that the apparent public relations mess was really just a well-orchestrated ploy.

3. The Netflix/Qwikster incident

It wasn’t until this February that the U.S. Postal Service said it would kill Saturday delivery. But back in October 2011,  Netflix already sensed the impending end of the DVD-by-mail era and was looking to boost its streaming video service, and Qwikster was born.

Netflix CEO Reed Hastings announced plans to cleave the company in two, leaving streaming media under the Netflix banner and moving DVD service into a new company called Qwikster. Hastings' argument was that shipping discs and streaming movies are two different businesses with different cost structures. But the move seemed like a poorly thought-out plan done on a whim; Netflix hadn’t even bothered to acquire the Twitter handle @Qwikster. And customers freaked. Within weeks, a publicly bruised Netflix abandoned the Qwikster plan (though it kept a price hike). These days the smash hit House of Cards has helped the company with the red envelope salvage its reputation.

4. The Gap

Logos get stale. Even the classic insignia of The Gap—those three spaced white letters on a blue background that have graced billboards and outfield fences. Gap tried in 2010 to refresh its look, but its designers returned with a banal logo featuring helvetica black letters and a blue box over the “p.” Fans hated it. Commentators piled on, saying the new design looked like it belonged to an airline or a drug company. Within a week the dud was dead.

5. Bank of America’s Debit Fees

Remember the time before debit cards, when you had write out a paper check for the privilege of using the money in your account—and you had to pay for the checks themselves? (Okay, some of you don’t. Trust us, it was terrible.) Debit cards were a godsend—free, instant access to your funds, and without undertaking a treasure hunt through your purse or pockets to find a checkbook.

Back in 2011, Bank of America wanted to take its customers back to the days of paying for access to their own money, proposing to hit people with a $5 monthly fee. All the big banks wanted this; they were looking for new ways to make a profit after the federal government restricted how much they could charge businesses for processing debit transactions. But one by one the banks dropped out as customers rose up in revolt. Bank of America found itself the last bank standing, and the object of President Obama’s disapproval—he called BoA’s fee “not good business practice.” It dropped the fee in November

6. Verizon Tries to Make You Pay to Pay Your Bill

It took Bank of America about a month to acquiesce to public pressure and drop its debit fee. Verizon saw the light in just about a day. The company had proposed to charge customers $2 for one-time online or phone payments. That is, you’d pay nothing extra if you set up an automatic payment for your Verizon phone every month, but if you made your payments manually, one by one, the company would sock you with a fee. Customers, understandably miffed at the prospect of paying to pay their bill each month, tweeted with rage and spread vitriol on Facebook. Business analysts cited the rapid spread of rage in the social media age as a major cause of Verizon’s turnabout.

7. The New York Islanders' Fisherman Jerseys

Long Island’s hockey club was a true NHL dynasty, winning the Stanley Cup four consecutive times from 1980 to 1983. But the Isles had fallen on hard times by the mid-1990s. In an era when numerous teams experimented with loud unis, the Islanders revealed a design that hockey fans laughingly derided as a rip-off of a fish sticks logo. The look did not last.

8. Instagram’s Controversial Terms of Service

Not long after its acquisition by Facebook, everybody’s favorite photo-sharing app committed one of the more recent high-profile corporate public relations gaffes. Users read a change in Instagram’s terms of service to mean that Instagram could sell their photos to advertisers willy-nilly. Not so, Instagram protested. But the company couldn’t calm the strengthening tide of ill will that prompted hordes of users to swear off the service (how many people actually quit because of this is a disputed matter). Properly shamed, Instagram caved in and reverted to its previous terms of service.

9. There’s Always Something With Facebook

Speaking of annoying your customers by changing the terms of service—followed by users rising up in arms but not actually quitting the service—here’s Facebook. Zuckerberg’s big blue beast sparks an uproar a couple of times of year, to the point that Facebook appears nearly immune to bad PR. It’s just too hard to quit. 

Nevertheless, The Social Network has given in to public indignation at times. Back in 2009, the company reversed course after it had proposed a change to its terms of service that scared users, who thought the language meant Facebook would own any photos and data they uploaded on into eternity even if they cancelled their accounts. 

10. Civic Pride

People love Honda Civics. White-collar workers commute in them. Tuners tinker with them to get ridiculous performance from a compact car. The Civic was the kind of car that provided reliable, basic transportation but impressed car guys too. Honda sold a ton of them.

Then came the ninth generation Civic, redesigned for 2012. Produced while Japan was recovering from the double whammy of the recession and the tsunami, the 2012 Civic got low marks from reviewers and bad reviews from customers. It got such a bad rap, in fact, that Honda refreshed it for the very next year (most automotive generations last about five years).

11. Oil & Gatorade Don’t Mix

When you saw those iconic Gatorade ads with fluorescent sweat pouring from athletes' pores in colors reminiscent of sports drink flavors, you probably weren’t thinking “vegetable oil.” But this January, drinkers got up in arms over Gatorade’s inclusion of brominated vegetable oil, or BVO, which they say was patented as a flame retardant (no word if it was lemon-lime flame retardant or fruit punch). BVO isn’t banned in foods, but the outcry was enough. PepsiCo, Gatorade’s parent company, said it would remove BVO from the sports drink.

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The Secret to the World's Most Comfortable Bed Might Be Yak Hair
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Tengi

Savoir Beds laughs at your unspooling mail-order mattresses and their promises of ultimate comfort. The UK-based company has teamed with London's Savoy Hotel to offer what they’ve declared is one of the most luxurious nights of sleep you’ll ever experience. 

What do they have that everyone else lacks? About eight pounds of Mongolian yak hair.

The elegantly-named Savoir No. 1 Khangai Limited Edition is part of the hotel’s elite Royal Suite accommodations. For $1845 a night, guests can sink into the mattress with a topper stuffed full of yak hair from Khangai, Mongolia. Hand-combed and with heat-dispensing properties, it takes 40 yaks to make one topper. In a press release, collaborator and yarn specialist Tengri claims it “transcends all levels of comfort currently available.”

Visitors opting for such deluxe amenities also have access to a hair stylist, butler, chef, and a Rolls-Royce with a driver.

Savoir Beds has entered into a fair-share partnership with the farmers, who receive an equitable wage in exchange for the fibers, which are said to be softer than cashmere. If you’d prefer to luxuriate like that every night, the purchase price for the bed is $93,000. Purchased separately, the topper is $17,400. Act soon, as only 50 of the beds will be made available each year. 

[h/t Travel + Leisure]

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Fart Gallery: A Novel History of Spencer Gifts
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Mike Mozart, Flickr // CC BY 2.0

When U.S. Army Corps bombardier Max Spencer Adler was shot down over Europe and imprisoned by the Nazis during World War II, it’s not likely he dreamed of one day becoming the czar of penis-shaped lollipops and lava lamps. But when Adler became a free man, he decided to capitalize on a booming post-war economy by doing exactly that—pursuing a career as the head of a gag gift mail-order empire that would eventually stretch across 600 retail locations and become a rite of passage for mall-trekking teens in the 1980s and 1990s.

To sneak into a Spencer Gifts store against your parents' wishes and revel in its array of tacky novelties and adult toys felt a little like getting away with something. Glowing with lasers and stuffed with Halloween masks, the layout always had something interesting within arm’s reach. But stocking the stores with such provocations sometimes carried consequences.

A row of lava lamps on display at Spencer Gifts
Dean Hochman, Flickr // CC BY 2.0

Returning from the war, Adler sensed a wave of relief running through the general population. Goods no longer had to be rationed, and toy factories could return to making nonessential items. The guilt of spending time or money on frivolous items was disappearing.

With his brother Harry, Adler started Spencer Gifts as a mail-order business in 1947. Their catalog, which became an immediate success, was populated with items like do-it-yourself backyard skating rinks and cotton candy makers [PDF]—items no one really needed but were inexpensive enough to indulge in. In some ways, the Spencer catalogs resembled the mail-order comic ads promising X-ray glasses and undersea fish kingdoms. Instead of kids, Adler was targeting the deeper pockets of adults.

Bolstered by that early success, Adler moved into a curious category: live animals. He had small donkeys transported from Mexico and marketed them as the new trend in domestic pets. LIFE magazine took note of the fad in 1954, observing the $85 burros, being sold at a clip of 40 a day, “except for stubbornness, are very placid.”

Burro fever foreshadowed the direction of Spencer’s in the years to come. The Adlers opened their first physical location—minus livestock—in Cherry Hill, New Jersey in 1963, expanding on their notion to peddle unique gift items like the Reduce-Eze girdle, which promised to shave inches off the wearer’s stomach. That claim caught the attention of the Federal Trade Commission, which chastised the company for advertising the device could reduce body weight without exercise [PDF]. The FTC also took them to task for implying their jewelry contained precious metals [PDF] when the items did not.

Offending the FTC aside, Spencer’s did a brisk enough business to garner the attention of California-based entertainment company Music Corporation of America, Inc. (MCA), which purchased the brand and proceeded to expand it in the rapidly growing number of malls across the country in the 1970s and 1980s. (The mail order business closed in 1990.)

Brick and mortar retail was ideal for their inventory, which encouraged perusal, store demonstrations, and roving bands of giggling teenagers. The company wanted its stores to capture foot traffic by stuffing its aisles with items that had a look-at-this factor—a novelty that invited someone to pick it up and show it to a friend. When executives saw specific categories taking off, they “Spencerized,” or amalgamated them. When there was a resurgence of interest in Rubik’s Cubes and merchandise from the 1983 Al Pacino film Scarface, visitors were soon greeted in stores by stacks of Scarface-themed Rubik’s Cubes.

Mike Mozart via Flickr

Apart from its busy aesthetic—“like the stage from an old Poison video,” as one journalist put it—Spencer's was also known for its inventory of risqué adult novelty items. Pole-dancing kits and sex-themed card games occupied a portion of the store’s layout. The toys captured a demographic that might have been too embarrassed to visit a dedicated adult store but felt that browsing in a mall was harmless.

Sometimes, the store’s blasé attitude toward stocking such items drew critical attention. In 2010, police in Rapid City, South Dakota seized hundreds of items because Spencer's had failed to register as an “adult-oriented business,” something the city ordinance required. As far back as the 1980s, parents in various locales had complained that suggestive material was viewable by minors. In 2008, ABC news affiliate WTVD in Durham, North Carolina dispatched two teenage girls with hidden cameras to see what they would be allowed to buy. While they were shooed away from a back-of-store display, they were able to purchase “two toy rabbits that vibrate, moan, and simulate sex” as well as a penis-shaped necklace.

As a possible consequence of the internet, there are fewer incidences of parental outrage directed at Spencer’s these days. And despite the general downturn of both malls and retail shopping, the company bolsters its bottom line with the seasonal arrival of Spirit Halloween, a pop-up store specializing in costumes. Despite only being open two months out of the year, their Spirit locations contribute to roughly half of Spencer's $250 million in annual revenue.

Today, the chain’s 650 stores remain a source for impulse shopping. They still occasionally court controversy over items that appear to stereotype the Irish as drunken oafs or other inflammatory merchandise. With traditional mall locations expected to shrink by as much as 25 percent over the next five years, it’s not quite clear whether their assortment of novelties will continue to have a large retail footprint. But so long as demand exists for fake poop, fart sprays, and penis ring toss kits, Spencer’s will probably have a home.

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