In one of the most infamous PR Fails of all time, Gerald Ratner – Chairman and Chief Executive of Ratners jewellery chain – described his products in an after dinner speech as ‘total crap’, to devastating effect.
Sales plummeted. He lost his Chairmanship. The share price fell, valuing the group at £33.7m (compared to £840m the year before). In the end he lost 2,500 shops and destroyed the business he spent 30 years building – almost overnight.
It was so bad that a ‘Ratner moment’ became shorthand for anything catastrophic
In April 1991, Gerald Ratner gave the after dinner speech at a prestigious Institute of Directors event. It was one of their largest conferences, with 6,000 senior business leaders and MPs in attendance at the Royal Albert Hall.
His 25 minute speech included this now infamous line:
“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, “How can you sell this for such a low price?”, I say, “because it’s total crap.”
And he didn’t stop there. He later quipped:
“We even sell a pair of earrings for under a pound – [they’re] gold earrings as well – and some people say that’s cheaper than a prawn sandwich from Marks and Spencers. But I have to say the sandwich would probably last longer than the earrings.”
The press had a field day and ran the story. A lot.
Mr Ratner later described the comments as ‘jokes’ and that the media had misrepresented them and him. But it was too late – the damage had been done. In truth the recession was already taking the business into a decline, but this speech dramatically sealed their fate.
What does good look like?
Speaking opportunities are great for building awareness of your business, creating leads and is great for your general public relations – when it’s done well.
The most important lesson from this example of bad marketing is never rubbish your own products. We’ve seen the devastating effect it can have when you don’t follow this advice.
The Ratners chain was already known as a ‘cheap and cheerful’ place to buy jewellery – but by describing your products in the way that he did, his customers would have felt betrayed, mocked and foolish – so make sure you avoid deriding your customers, too.
These might seem like obvious points, but fashion retailer Top Man’s Brand Director has since called his customers ‘hooligans’ and Barclay’s bank were hit by a backlash after their Chief Executive told MPs that he would never borrow on a Barclaycard – or recommend his family do so – because the interest rates were “too expensive”.
If you are preparing a speech or organising a speaking slot for a senior member of your business, make sure they learn these lessons. Specialist media training is available if the slot is high profile and warrants the time and investment.
Watch the full speech here… 03:45 for the ‘total crap’ remark and 05:59 for the ‘prawn sandwich’ comment