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Progressive Comes Tumbl-ing Down

Bad behavior in a lawsuit action is just a mouse-click away from publicity

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The jury, in a moment of sanity, found for Matt’s family, awarding them some $760,000. As yet, the Fishers haven’t seen a penny. But when Matt decided to make public the whole ordeal on his blog — which then proceeded to be picked up far and wide by the chatterati, Twitted and Tumbl-ed ad infinitum — Progressive made the mistake of trying to do damage control. With predictable results.

After thousands of people went on the company’s Facebook (NASDAQ:FB) page, threatening to cancel their policies, Progressive’s PR people issued via Twitter what has to be the single lamest apology ever penned:

This is a tragic case, and our sympathies go out to Mr. Fisher and his family for the pain they’ve had to endure. We fully investigated this claim and relevant background, and feel we properly handled the claim within our contractual obligations.

Yep, that’s right, “within our contractual obligations.” And to make matters worse, in the face of growing public outrage, Progressive simply continued to Tweet the same robotic post. It’s been all downhill from there. Gawker has picked up the story, excoriating the insurance firm for its handling of the whole affair.

Meanwhile, for the tens of thousands of other online readers who have chimed in, Progressive’s ass-covering has come to epitomize the soullessness and dehumanization, the lack of even the most rudimentary human decency, that seem to characterize so much of modern corporate behavior.

How will this affect the company’s bottom line? That remains to be seen, but some fallout is probably inevitable. Progressive is a solid company, but it’s going through a rocky period right now, and this can only make it rockier.

Last quarter, rising health expenses led to higher claims costs, which in turn led to falling profits. Net income and operating profits have also fallen short. To top it all off, there’s even talk of the company’s retiring Flo, the bizarrely bubbly counter girl in its highly successful ad campaign, whose grin has suddenly come to seem a liability, even disturbing. The upshot? A glaring sign above the stock’s ticker: DO NOT BUY.

Progressive seems not to have learned one of the key lessons of the social-media age. There is no privacy anymore. Every move a company makes can, and given the public’s endless need for stimulation, inevitably will, be broadcast on the huge Jumbotron that is the internet.

Corporate decision-makers would be well-advised to behave as though their every move were being played before a capacity crowd at the Rose Bowl. The distance between in-house and viral is exactly two mouse clicks, the time it takes to send an angry blog post into the cybersphere. Caveat venditor: let the seller beware.

Article printed from InvestorPlace Media,

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