Case Study
A Crisis of
Olympic
Proportions
By Stephen Ferber
Under Armour turned a
potential brand debacle into
a success story with the help
of social media.
Breaking: USSpeedskating submits request to switch suits to
those used in the World Cup. With @JoshRobinson23
Sara Germano (@germanotes) Feb. 14, 2014
Told that the IOC has approved the older Under Armour
suits that the US speed skaters want to revert to
Darren Rovell (@darrenrovell) Feb. 14, 2014
“If I was Shani, I’d talk to Under Armour and I’d see if I
could use my Nike [suit] and put an Under Armour sticker
on it.”
—Peter Mueller, former Olympic gold-medal winning speedskater
S
hani Davis was heavily favored to win gold at his third
Olympics in Sochi in the men’s 1,000-meter speedskating event. Instead he finished eighth. The U.S. Women’s
Speedskating Team posted equally dismal results. What
was the cause? Everyone quickly pointed their fingers at
Under Armour and its new performance-enhancing uniforms.
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The public accusations attacked the very
heart of the brand.
The Turnaround:
Remaining Positive
When the poor performance of the
U.S. Olympic Speedskating Teams
was anecdotally linked to Under
Armour’s performance-enhancing
uniforms the skaters wore, the company quickly mobilized:
n Executives never pointed fingers; instead they reaffirmed their
support of the teams.
n It sent people to Sochi to work
with the speedskaters and resolve
the issues with their suits.
n It avoided the ongoing discussion about who or what was to
blame and instead used positive
statements from those affiliated
with the teams.
n The company enlisted its sponsored athletes as influencers, who
defended the brand on social
media without mentioning the
controversy.
n Before the end of the games,
it announced an eight-year
extension of its sponsorship of U.S.
speedskating through 2022.
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Under Armour was founded by a University of Maryland football player about 20 years ago, and has since touted its athletic
apparel as innovative. Whether wearing Under Armour to the
gym, on the gridiron or speedskating, the clothes were designed
for comfort and performance-enhancing effects—put simply,
keeping athletes warm when the weather is cold, cooler when the
temperature is warm or removing sweat off an athlete’s body.
Under Armour has grown into a $2 billion apparel and shoe
company, a significant brand in the United States. An important
part of its social-media strategy has been to activate its athletes
by encouraging and empowering them with a social-media voice
around Under Armour’s teams—whether high school, college or
at the professional level. It also encourages them to activate their
fans, not just by starting the conversations, but by engaging them
through social media, including contests with meaningful financial and other rewards.
Extending Its Global Reach
With revenues outside the United States of only about 10%,
Under Armour approached the 2014 Sochi Winter Olympics last
February as a global coming-out-party of sorts to boost its international expansion and brand notoriety. For the first time, Under
Armour was the apparel sponsor for the U.S. Olympic Speedskating Teams and had designed what was dubbed the fastest and
most aerodynamic speedskating “skin” ever, called the Mach 39.
The Crisis Begins
However, once the games began and the teams started losing
their initial events, skaters and some critics began to openly blame
the Under Armour high-tech suits, specifically that the vents in
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“Proud to be part of the Under Armour family, great products
and support that help make me the best athlete I can be. #IWILL
@UnderArmour,” tweeted Michael Phelps
the back were actually slowing the skaters down.
Overnight, what Under Armour had touted as a
game changer in the Mach 39 suit was now being
viewed in a negative light.
Under Armour’s identity and brand were largely
based on apparel built around athletic-performance
wear, and the public accusations attacked the very
heart of the brand. The controversy was out there
for everyone to see on every media channel—from
network and cable TV to national print publications including The Wall Street Journal. Analysts
on CNBC discussed the potential ramifications on
the brand, Under Armour as a company, its publicly
traded stock and the effect this might have on the
company’s revenues related to its expansion into the
international market.
Under Armour immediately put people on the
ground in Sochi to work with the speedskaters, first
by patching the vents on the suits and then, when
their performance didn’t improve, switching out their
suits to an older version.
Under Armour executives
never pointed fingers at the
U.S. teams and adamantly
reaffirmed their belief in the
teams and their continued
efforts to support them in
any way possible.
Kevin Haley, the senior
vice president of innovation
for Under Armour, which
has sponsored the U.S. team
since 2011, said he was confident the suits were fast,
but, in the absence of medal-winning performances,
“We’ll move heaven and earth to make them better.”
Although the debate continued throughout the
games as to who was to blame for the skaters’ poor
showing—the Mach 39 suits or the skaters themselves—Under Armour avoided that discussion. It
did, however, forward statements by others, including from the U.S. Speedskating Federation saying it
didn’t believe the Under Armour suits were to blame
for the teams’ poor showings in Sochi.
Behind the Scenes
What happened behind the scenes, however, was
key. Cam Newton, quarterback for the Carolina
Panthers, was at Under Armour offices during the
Sochi controversy to meet with executives on another
subject and expressed his displeasure with the beating his sponsor was taking in the media, and took to
social media himself to publicly express his support
for Under Armour.
Having built a social-media foundation based on “activation” of its athletes and
fans, Under Armour decided
to enlist its own sponsored
athletes for help, as influencers, by taking to social media
and defending the brand
without mentioning the
speedskating controversy.
Analysts on CNBC
even discussed
the potential
ramifications on
the brand.
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Lindsey Vonn tweeted,
“Proud to be an
@UnderArmour athlete.
I’ve been with them for
8 yrs and they
constantly find ways to
improve their gear and
make me better!”
Tweets From Athletes
Lindsey Vonn tweeted, “Proud to be an @UnderArmour athlete. I’ve been with them for 8 yrs and they
constantly find ways to improve their gear and make
me better!”
“Proud to be part of the Under Armour family, great
products and support that help make me the best athlete
I can be. #IWILL @UnderArmour,” tweeted Michael
Phelps
Clayton Kershaw, a pitcher with the Los Angeles
Dodgers tweeted from Spring Training: “Can’t thank
@UnderArmour enough for the new gear. Always fun
to see what they come up with every year.”
As the Olympics in Sochi continued, the dialog in
the media changed from concerns with Under Armour’s brand and the effect Sochi would have on its
expansion into the international market to one of a
brand standing behind its teams, and its athletes standing behind their brand—crisis turnaround almost
complete.
With the Under Armour sponsorship of U.S. speed-
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skating set to expire later in 2014, Under Armour then
announced before the end of the Sochi games that it
had already agreed to an eight-year sponsorship extension of U.S. speedskating through 2022, which would
include outfitting the teams over the course of the
next two Winter Olympics.
Under Armour, just like one of its trademarks, “Protect this House,” showed how to do just that— and
more—in the wake of a brand and media crisis. CRM
Stephen Ferber is managing partner
of Golden Gate BPO Solutions, which
he co-founded in 2006. It provides
global outsourced contact center and
CRM solutions, consulting and vendor
management. From 1995-2004, he was
a key member of the management team
of an outsourced contact center provider
that grew from 400 to 14,000 employees worldwide. Ferber
is a licensed attorney and CPA with experience that includes
business/corporate law, entrepreneurship and executive
leadership.