Polaris Software was blindsided by bad PR, '90s style. It could happen to anyone

I think your program is a turkey. It is a pile of fertilizer and stinks such that none can abide it." -- Alan Stallings

"I am especially upset because I feel taken. I feel that your company used my resources to develop PackRat 5.0 when it was not ready for shipment and, to top it off, used my time to debug a product that I had already paid for!" -- David Hary

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"There is no question that we released PackRat before its time; that was a mistake. We have paid in many ways for that mistake and will not make it again with PackRat or any other product we produce." -- Andy Surber, Polaris Software

One bright summer morning in 1993, a customer-service representative at Polaris Software signed onto the company's CompuServe forum, expecting to find a few messages waiting for him. Instead, there were dozens.

Breaking into a cold sweat, he started skimming the messages. His worst fears were quickly confirmed: customers were furious. "Your product is worse than useless." "Your company's entire technical staff is incompetent, and your senior managers are crooks." Someone had even responded to several of the messages, asking whether people were aware of a competing product and then describing its advantages in detail.

Disaster had struck, and there was more to come. New E-mail was arriving.

Welcome to customer relations, information-superhighway style.

Many companies today provide customer service through a major computer bulletin-board service (BBS). Customers and other interested parties can dial in -- for example, to CompuServe or Prodigy or America Online. They can go to a company's area (or "forum" or "section"); download (copy) information about products and prices; and conduct business. They also can send public and private messages, ask questions, report problems, and offer suggestions. Often considered a great opportunity for drumming up business, advertising, or reaching new markets, on-line services can be a double-edged sword: negative word of mouth can travel just as far and fast as the good stuff, maybe farther and faster.

Intel Corp., the $11.5-billion Santa Clara, Calif., manufacturer of the microprocessor chips that lie at the heart of the vast majority of IBM-compatible computers, knows all about the dark side of the Internet. Last June, a math professor discovered that the company's Pentium microprocessor contained a hardware bug that sometimes produced calculation errors. The result: some users had to recheck months' worth of calculations. The news spread quickly over the Internet after he posted his findings, in late October. The attacks ("flaming," in on-line parlance) began -- and escalated greatly when the news leaked that Intel had known about the bug for six months and had not publicized it. A few days later the flaming escalated again, in response to what many considered a tepid apology by Intel CEO Andrew S. Grove and to his announcement that the company would replace only those microprocessors that it believed were at risk.

When it set up its on-line forum, in the summer of 1992, then San Diego-based Polaris Software never imagined things would get so hot. Until mid-1993 Polaris was one of the software industry's rising stars, boasting $8.2 million in annual revenues, a customer base in the tens of thousands, and a flagship product, Polaris PackRat, that was both a perennial award winner and a market leader in the burgeoning category of personal-information management (PIM) software. (A PIM typically includes an address book, a telephone dialer, a calendar, and other features.) A scant year later, however, Polaris was widely reputed to have lost revenues (the company, which is privately owned, refused to release recent figures), and its market share had plummeted, from 27% in 1993 to less than 10% in 1994.

The chronology: In July 1993 Polaris released an upgrade of PackRat that was slow, erratic, and missing important features, including a calculator and a time-and-billing database. Worse, the new PackRat was guilty of what many consider the unforgivable software sin: it could corrupt data files, causing users to lose valuable information. As the weeks passed, the situation worsened. Polaris issued no fewer than four maintenance releases (aka "bug fixes"), none of which completely solved the problems. Customers rebelled and took their business elsewhere. By the time a bug-free version of PackRat was released several months later, many customers were no longer interested.

What set Polaris's crisis apart from any other company's crisis until that time was that much of it took place on-line, on Polaris's CompuServe forum, in full view of the company's customers, its competition, and the computer press. When PackRat's problems surfaced, many customers posted polite messages asking for help. As it became clear that the problems were fundamental, the tone became angrier, until hundreds and hundreds of messages were posted flaming PackRat, Polaris, and Polaris's CEO, Jack Leach. Overnight, it seemed, the rising star had burned itself out.

While acknowledging that Polaris committed serious oversights in PackRat's development, CEO Leach believes that the CompuServe flames were fueled by a small vehemently anti-Polaris group -- maybe 20 to 30 people.

It's impossible to confirm that number because CompuServe, like most BBSs, permanently erases messages every few days. The number seems low, given the thousands of messages that were posted over several weeks. Ex-PackRat user David Hale, a computer-imaging specialist based in Washington, D.C., and a participant (though not a flamer) in the Polaris exchange, thinks Leach's estimate is not unreasonable.

One thing is clear: the competition will be watching -- and perhaps participating. Without question most, if not all, of the other PIM companies monitored Polaris's CompuServe forum before, during, and after its troubled period: monitoring the competition is a common and accepted practice on-line. Leach suspects that at least one of his competitors publicly attacked Polaris on CompuServe.

One of the most distressing aspects of Polaris's ordeal was the presence in its own forum of numerous conversations that not only derided PackRat but extolled the virtues of competing products. If employees of a rival company promote their product in your forum, that's poaching, according to CompuServe representative Debra Young. If ordinary citizens promote that product, however, it's not considered poaching. But Leach points out that given the ease of assuming identities on-line, poachers can pretend to be nonpoachers and do equivalent damage.

Finally, the press will be watching. The press is probably what did Polaris the most harm, according to David Coursey, a software-industry analyst. "The real damage was done not by people who were actually there on CompuServe but by the disseminators -- people who never saw the messages themselves but became convinced that Polaris was in trouble."

Being on-line on CompuServe didn't cause Polaris's problems, but it did exacerbate them. "The problem was entirely one of a failed quality process," says Coursey. Still, the question remains: If you open yourself up to customers on-line, are you setting yourself up to get reamed publicly before you even have a chance to correct a problem?

For his part, Coursey, as well as others in the industry, are sympathetic toward Polaris, given that many companies face similar pressures to produce increasingly complex programs in a volatile marketplace. However, Polaris's customers (or ex-customers, in many cases) tend to be considerably less forgiving. Many of those people lost time and money trying to get PackRat to work, felt their requests for assistance were stonewalled, and had to recover crucial data about professional contacts and appointments after disk crashes. Given what they saw played out on-line, many customers felt that Polaris never tried to understand or acknowledge the scope of the trouble it had caused. After all, with the whole Internet population at its fingertips, the company had the chance to respond publicly with both speed and graciousness. Says Alan Mark, a psychology professor and ex-PackRat user from Mount Berry, Ga., "The company consistently avoided taking responsibility. . . . Its attitude on CompuServe ranged from mildly apologetic to belligerent."

Customers also faulted Leach for not confronting the situation on-line much sooner than he did. "Leach took his sweet time responding to a huge customer backlash," says Carl C. Norman, a software producer from Sunnyvale, Calif. He adds, "I'll never buy a Polaris product again, and I go out of my way to influence my friends and associates to avoid Polaris products."

Only after weeks of complaints and unrest did Leach post a note on CompuServe acknowledging and apologizing for PackRat's problems. Leach maintains that he sent the note as soon as the company understood what was going on with the software and was sure that the problem was its own.

Another factor that may have contributed more to customer ire than the buggy software itself was Polaris's payment policies, which had been a major source of on-line complaints. Polaris not only charged customers' credit cards for upgrades more than two months before the upgrades were shipped but also charged customers for shipping and handling if they wanted updated disk sets that contained the finalized nonbuggy software.

Wrote David Hary, "Given your miserable performance in recent months, the time and frustration that your customers endured, [charging for shipping] is a big mistake. You blew it and rather than apologize are boldly asking your customers, who already have financed the bulk of this fiasco, to continue funding your failed set-up distribution system!"

According to Leach, the shipping delay occurred because Polaris was being extra careful to vouchsafe the product: "We would get ready to ship, see another problem, and hold shipment until we had fixed it." As for the fee for shipping new disk sets: "We had already sent several disks free of charge and also had posted the fixes on CompuServe."

The parallels between Intel's situation and Polaris's are striking. Like Polaris, Intel infuriated users more by its handling of a mistake than by the mistake itself. The response by Intel's CEO Grove was also considered too little, too late; and Intel's cost-saving measure of offering replacements only for some units (similar to Polaris's refusal to mail a final corrected set of disks) was particularly badly received. Finally, the press played a major role in disseminating news about Intel's problem and customer discontent.

It doesn't have to be that way. When software vendor Symantec Corp., based in Cupertino, Calif. (1993 revenues: $200 million), discovered a bug that could cause data loss in an upgrade version of its popular Norton Utilities for the Macintosh (NUM) product, it used the BBSs to its advantage. Not only did the company immediately send out press releases describing the problem and asking people to refrain from using the software, it also posted notices on CompuServe and other popular BBSs.

After the bug was fixed -- in less than a week -- Symantec sent out notices announcing the fix and mailed new disk sets to every registered owner of the product as well as to all dealers and distributors. Symantec's fix, according to NUM product manager Elissa Murphy, was expensive ("We took a severe hit to the product's profitability"), but cost was never a major factor. "We saw it as our duty to our customers to prevent even the possibility of the problem's occurring." Murphy says that although some of her customers became nervous, there was very little flaming.

Finally, there are ways to use BBS information competitively that do not involve poaching or other questionable activities. Matt Trask, president of Communica, a small software-development company based in Bourne, Mass., responded to the unfolding Pentium furor not by flaming but by quickly harnessing his team to develop a software program, or patch, that users could easily install in their computers to counteract the problem. (The alternate solution was to remove the old chip and install a replacement -- a daunting task even for professionals.) Trask posted word of his fix on the Internet and also alerted the press. He received widespread national attention, including network television interviews.

Polaris is planning to release another version of PackRat. Leach is optimistic that it will help his company regain its former position as leader in the PIM category, though industry analysts are not as sanguine.

Polaris's debacle offers small businesses a glimpse into the likely future of customer relations. Traditionally, companies have been able to control the flow of information. No more. Customers now not only can get information from one another but also can band together to make sure their interests are protected. It doesn't take much imagination to picture an on-line-fueled national consumer boycott that catches fire literally overnight. Forewarned is forearmed.

Helen Roper is a freelance writer based in New York City.


Here are some steps you can take if negative publicity about your company or products starts to spread on-line:

Act immediately. You may be able to prevent a few negative comments from escalating into a flamefest.

Involve top-level management. The situation is potentially critical: you want to develop a high-level strategy and ensure that all company representatives are speaking with the same voice.

Assume responsibility promptly for any errors you've made. Do everything you can to rectify those errors, and keep customers informed. If the problem is one of misinformation, keep posting the truth in as many places as possible until it sinks in.

Proactively involve the press. Work to spread your version of things as much as possible.

Hold your temper. No matter how provoking a flamer is, your company's response should always be courteous and professional.

Recognize that flaming is a symptom, not a cause. Companies usually don't get flamed without some reason. Taking good care of your customers is the best way to prevent flaming.

Published on: Sep 15, 1995