Top 10 Brand Disasters of 2011

BofA thought they'd hit the perfect gold mine: charge people $5 a month to use their debit cards. After all, to banking execs, a fiver is just small change. Who would complain? Unfortunately, that supposedly insignificant $5 fee turned out to be a big hit on people who rely upon debit cards to get by. Protests exploded, lawmakers fumed, and in the end BofA backed down, thereby appearing gutless as well as heartless.

Lesson: Don't assume your customers share your view of the world.

Fighting an uphill battle against the Apple juggernaut is hard enough, but when your major differentiator is reliability, the last thing you want is a huge service outage. That's what happened to RIM in October, when BlackBerries stopped functioning for three days. Customers were understandably livid, while investors speculated over causes for the technical glitch. Rather than address the core issue--keeping customers loyal--the company has continued hyping its "Playbook" as an iPad killer, which is like expecting the Cleveland Indians to beat the Yankees in the 2012 World Series.

Lesson: Never forget why your customer chose you.

Abercrombie & Fitch made itself famous with advertisements featuring outfits that cater to the sexually active high-school set. Apparently somebody at the company got the not-too-bright idea of pushing into a new, uncharted realm. The result was a product that you'd think could only exist in a parent's nightmare: a padded bra for preteen girls. Apparently it didn't occur to A&F execs that it might be a teeny bit inappropriate to make a child look like she's gone through puberty when she should be playing with Bratz dolls.

Lesson: Taking something to its logical extreme is not always the best strategy.

Facebook's privacy policies have long been controversial, creating problems that eventually caused the Federal Trade Commission to require the firm to undergo "regular privacy audits" until 2031. That was bad enough, but then hackers broke into CEO Mark Zuckerberg's own Facebook account and published his private pictures. That not only proved to the world that Facebook has lousy security, but publicized a picture of the Facebook CEO holding a chicken upside down.

Lesson: If your CEO is kinda weird, don't let him have a Facebook page.

Family Radio is a giant in evangelical broadcasting, with multiple radio and TV stations, and programming in 40 languages. Thus, when CEO Harold Camping predicted that the world would end on May 21, 2011, many took him at His Word. Some even sold all their worldly goods. Unfortunately, (as is usually the case) the world did not end, and Family Radio became a sermona non grata. That's not to say that Family Radio doesn't know its core audience; its new logo features an image of grazing sheep.

Lesson: Always have a backup forecast.

The world's second-largest media empire has properties ranging from the Wall Street Journal to the Fox News Network, but most people probably assumed the company possessed a modicum of ethics. That assumption was blasted into nonexistence when British reporters were found to be breaking into voice mails, including those of a family whose child had been murdered. The debacle was further publicized when a procession of celebrities (from Hugh Grant to J.K. Rowling) appeared in court to complain about Murdoch's phone-hacking minions.

Lesson: Corporations may be natural sociopaths, but don't overdo it.

Many Netflix customers excreted masonry when Netflix unexpectedly raised its prices. Then, just when customer ire was at its peak, the firm announced it was splitting off its DVD rental service into a new service called "Quikster." Customers would now have to access two websites to manage their account, the kind of branding move that puts the "Er" in "Dumb and Dumber."

Lesson: CEOs should memorize the definition of the word "hubris."

Time was that security contractors had macho brands, like "Blackwater," a name that sounds like a Marvel super-villain with bulging biceps. Accusations that its employees were trigger-happy forced the firm to change its name to "Xe," but apparently have an incomprehensible brand wasn't weak enough. The firm has now changed it name to "Academi," a brand based upon Plato's Academy, which represents "excellence, dignity, discipline, honor, integrity," according to the firm's CEO. Fair enough, but wasn't Plato's Academy also famous for being, well, the exact opposite of butch? Not that there's anything wrong with that ...

Lesson: Sometimes rebranding just makes a firm look silly.

Qantas asked its customers to tweet their "dream luxury in-flight experience," with gift packs for the best entries. Brilliant idea, except for a tiny detail. Qantas was in the middle of a labor dispute that ended up grounding all of their planes. Thousands of stranded customers tweeted, retweeted, and reretweeted their frustration and anger. Then, rather than admitting the mistake, the airline pretended nothing was wrong.

Lesson: Don't let an intern set your social media strategy.

The financial industry was flying high in 2011. Profits were high, bonuses were higher, regulations were weak and likely to get weaker. Having successfully managed to privatize its gains and socialize its losses, Wall Street was beginning to reposition itself as the engine of American prosperity (as opposed to small business). Then along came the "Occupy" movement, pointing out that the system was rigged. Suddenly, the conflict between Wall Street and Main Street became a major element in the national dialogue.

Lesson: You can fool some of the people all of the time ... Heck, you know the rest.