An early example is the case of the customer who asked for Neiman Marcus’ cookie recipe and was outraged when the quoted price of “two-fifty” turned out to be $250. Unable to get a refund, she distributed the recipe via email chain letter. The story actually was a hoax, as Snopes explains. Neiman Marcus themselves explain (followed by the recipe in question):

An urban myth is a modern folk tale, its origins unknown, its believability enhanced simply by the frequency with which it is repeated. Our signature chocolate chip cookie is the subject of one such myth. If you haven’t heard the story, we won’t perpetuate it here. If you have, the recipe below should serve to refute it. Copy it, print it out, pass it along to friends and family. It’s a terrific recipe. And it’s absolutely free.

Social media and Web 2.0 have changed the rules of the game. Whether the allegations are true or not, complaints about the misdeeds of big, evil corporations are able to spread and gain traction in ways never before imagined. Every PR practitioner now knows that a PR nightmare can appear on the horizon in a matter of minutes.

Below are some recent and striking examples of social media PR distasters:

Motrin Moms

In November 2008, when a number of consumers (particularly a subset of bloggers sometimes referred to as “mommy bloggers”) found this commercial offensive, they launched a firestorm of criticism on blogs and Twitter. Within hours, Motrin.com site was down, and stayed that way for nearly a day. When the site came back up, the ad was gone and in its place was an apology.

Domino’s Pizza

In April 2009, some employees in a North Carolina Domino’s store filmed themselves violating all known food safety laws and posted the results on YouTube. The original video has been taken down, but you can see segments at The Consumerist.

Word of the video spread quickly, especially on Twitter, where users wondered why Domino’s was not weighing in on the issue. Hours (a lifetime in Internet time and an eternity in Twitter time) passed before Domino’s spoke out publicly. By then, Consumerist readers were working hard to track down the identities of the Domino’s employees. Ultimately, they succeeded in identifying the store location and passed the information on to the company.

Domino’s president responded a day later in his own video:

Whether Domino’s could have responded sooner is debatable, but there’s no denying that the company was simply blindsided by wreckless employees and could have done little to prevent the situation. In an email exchange with The Consumerist, Tim McIntyre, Domino’s Vice President of Communications summed up the situation quite nicely.

The “challenge” that comes with the freedom of the internet is that any idiot with a camera and an Internet link can do stuff like this – and ruin the reputation of a brand that’s nearly 50 years old, and the reputations of 125,000 hard-working men and women across the nation and in 60 countries around the world.

United Breaks Guitars

As of this writing, the above video, posted to YouTube only 4 days earlier, has 1.4 million views, up from yesterday’s midday count of 600,000. In other words, it’s hot. The song tells the story: United Airlines mishandled this fellow’s guitar and then refused to compensate him for it. Since posting this clever video to YouTube, Dave Carroll has appeared on CNN and the Ellen DeGeneres show and has been covered by many major news outlets. In fact, five of the top-10 Google search results for “United Airlines” are about this story.

Needless to say, United is now paying attention and trying to make the best of a bad situation. On its Twitter account, the airline stated, “This has struck a chord w/ us and we’ve contacted him directly to make it right,” and “(The video) is excellent and that is why we would like to use it for training purposes so everyone receives better service from us.”

Can this happen to banks?

In fact, a similar kind of social media nightmare happened recently in Harrisburg, Pennsylvania, when the regional Metro Bank changed its name and some back-end systems. One customer complained on his blog that his ATM card stopped working and that he had to wait on hold more than an hour to be told that his direct deposit was unaccounted for.

The blogger must have struck a chord. Other angry customers left supporting comments on his blog. And so did some Metro Bank employees, one of whom told the customers to “F-off” and stop complaining.

The whole sordid affair caught the attention of The Consumerist, a local TV station and this blog, among others. In fact, the story is still unfolding, with the possibility of an investigation by state regulators.

What does this have to do with branch marketing?

Well, on the one hand, nothing. As a retail marketer you certainly have no control over corporate commercials, product design or back-end systems. On the other hand, when customers have complaints, who do they contact? Front-line employees, often in person, at the branch. And how prepared your branches are to react to emergencies — by fielding tough questions, diffusing customer anger and constructively solving customers’ problems — may be your single greatest defense against a social media nightmare. Taking over the digital signage network with emergency messaging at affected branches is a capability that could help alleviate a situation like Metro Bank’s. Yet few banks have the ability to do so on a moment’s notice.

It seems that branch-level crisis management should be a top priority for banks in this day and age. Because you simply never know which one of your customers has a huge following on their blog or on Twitter, or knows how to craft a clever country music video and post it to YouTube.

You might be tempted to think: “Hey, I work for a bank, not a a fast food chain, so what’s the worst that could happen?”

Then consider the case of Harrisburg, Pennsylvania-based Metro Bank, whose recent name change (from Commerce Bank) sparked a chain reaction of failures and public complaints. The mishaps allegedly included mistaken overdrafts, ATM cards canceled without notice, a Web site that crashed due to high traffic and call-center wait times in excess of 45 minutes.

The incident prompted the blogger floor9.com to post a scathing rant about his experience. In the days that followed dozens of disgruntled customers posted comments.

The highlight, however, is the comment posted by “Shannon,” who claimed to be a Metro Bank employee. After offering a tepid defense of the bank, which drew angry replies from other commenters, Shannon lost her cool:

“Everyone ”F” off!!! I am sure they still have all of their GOOD customers!!!”

The popular Consumerist blog soon picked up on the story, which, as PR professionals know, virtually guarantees that the story will persist and be amplified by other blogs and larger media outlets.

As of this writing, the Consumerist story shows up in the #7 slot on a Google search for “Metro Bank.” A search of “Metro Bank”+Harrisburg fares worse, with the floor9.com blog posting coming up in the #1 position.

If it is indeed true, the comment left by an anonymous poster on the floor9 blog is probably the most enlightening, as it describes an organization that is in the throes of chaos:

“Well everyone, I am another one of those Metro Bank employees. I will tell (you) right now. We have no clue what is going on with our own bank.

I can’t even explain how much it hurts going into work. We all want to leave. I know..you dont want to hear this from an employee..but seriously back office has no damn clue.

Don’t worry…if you cant see your balance…neither can I. I have no idea how much money I have…as well as all the other employees of the bank. …neither does one of the Regional Presidents of the bank it turns out.

the poor tellers..I cant even feel their pain. they are getting literally yelled at by everyone…and they make NOTHING!..literally, I hired many.”

While we can’t verify any of the above information, it should serve as an object lesson for bankers who are contemplating transitions of any kind, whether it’s a brand-name change or the switchover of a back-end system.

In the end, it’s impossible for any bank to avoid the kinds of errors or system glitches that might cause the website or other back-end systems to fail. Mistakes happen. But what can be avoided is the kind of total information blackout that appears to have consumed Metro Bank employees as they tried to help customers cope with a difficult situation.

Employee communications has always been the linchpin of successful retail marketing. The best marketers work very hard to make sure that employees are aware of, understand and enthusiastically carry out campaigns at the local level.

Clearly, employee communications are also critical as a means of averting or at least mitigating disaster. What if Metro Bank’s tellers and customer-service reps had known ahead of time about the coming transitions and system changes? Or, what if Metro Bank had a communications channel that ensured the fast dissemination of accurate information to employees as the problems unfolded?

To be fair, even well-informed employees might not have been able to solve Metro Bank’s underlying problems any more quickly. But with good information — including plans for how to handle transition issues — they might have been able to help customers cope better and keep customers like floor9 from creating a PR nightmare.

Update:
Here is a list of top customer service/consumer advocacy blogs. Note that the Consumerist ranks at the top. Definitely not a site where you want to discover an expose about your brand!