Doing a Ratner Can Ruin Your Company Image Overnight!

What is ‘Doing a Ratner’ or Business Gaffe?

‘Doing a Ratner’ is a term that has come to effect when a famous Jeweler named Gerald Ratner lost $10 billion just in 10 seconds. The phrase ‘Doing a Ratner’ is compared with a business gaffe. Running a business is indeed a very crucial job. However, there are instances when blunders in business led to a downfall overnight. One such significant example is of Gerald Ratner’s business gaffe. The blunder made by him led to a catastrophic consequence. This was one of the damaging forms of publicity that Gerald Ratner could not realise until he faced the downfall of his business just in a few hours.

How ‘Doing a Ratner’ Effects Company Image Overnight?

Gerald Ratner is a British businessman who was famous for his motivational speeches. He was the chief executive of the famous British jewelers Ratners Group. Everything was smooth with a business booming, unless he earned notoriety for his unexpected speech where he jokingly denigrated two of the company’s product.

In a conference of the Institute of Directors at the Royal Albert Hall on 23 April 1991, he gave a speech where he stated a derogatory comment. Ratner said “We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, "How can you sell this for such a low price?” I say, "Because it's total crap." 

Although widely regarded as ‘tacky,’ Ratner’s jewelry remained popular among the consumers for many years. When consumer placed their trust on the jewellers, such an unexpected speech was like a ‘blot from the blue’.

Ratner added that one of the sets of earrings was cheaper than an M&S prawn sandwich but probably wouldn’t last as long.  Ratner wanted to be honest enough or tried to be witty by adding spoons of sarcasm in his speech. But, it was not a lucky day for him. The media took the full opportunity and ran the story so many times that the consumer base lost their faith in Ratners Group. The jewelry was famous for its affordable prices. However, with such an honesty portrayed by Ratner, the working class boys no longer wanted to buy ‘crap’ in the name of jewelry for their girlfriends or wives.

After the speech, the company shares dropped $500 million in a matter of days. As a result, Gerald lost his job and his extravagant lifestyle in just a few days. The company had to do a phoenix and began functioning under the new name ‘Signet Group.’ It was a billion dollar speech that led to the downfall of a huge company. Since then, ‘Doing a Ratner’ became a very famous phrase in business.

Any business gaffe on similar lines is considered as ‘Doing a Ratner.’ Now, let us know about some of the biggest business blunders that teach aspiring entrepreneurs to be wise and calm while running a business.

Four Famous and Unforgettable Business Blunders of all Time

There is no denial of the fact that people make mistakes in life. Read on to know how the most famous and wealthy people in the world have made costly errors.

• Google and Excite saga of 1999: In 1999, Excite was the renowned search engine, and Google was a kid. Larry Page, one of the co-founders of Google wanted to sell the company to Excite for $750,000. Excite refused to the choice, and the result is quite clear now. Excite was eventually absorbed by Ask.com which has less than 2% of the share of the search market. Google enjoys more than 60% of the share in the US search market and a much larger share worldwide. Excite could win the chance but they missed it.     

• London publishers and Harry Potter drama: When J.K Rowling was knocking on the doors of dozens of publishers with her book Harry Potter and the Philosopher’s Stone, she was rejected by many. The unfortunate souls, who didn’t bother to give her a chance, are perhaps still banging their head. A small and lesser known publisher named Bloomsbury gave her the chance, and now the franchise is worth around $19 billion. The other publishers who dejected her aren’t too happy about it.

• Failure of ‘New Coke’ formula: In 1985, Coca Cola introduced a new product named ‘New Coke’ to compete with Pepsi. The company thought that customers like the sweet taste of Pepsi, which led to the higher sale rate of the product. However, the new and better formula of the Coke did not work, and they had to call off the product just after two months since its introduction.

• Beatles rejection by Decca Records: The executives of Decca Records are probably still scratching their heads thinking about the day in 1962 when they rejected to record an album with Beatles. A comment dejected the most well known band of all time as ‘Four piece groups with Guitars particularly are finished.’ Beatles joined EMI records, and the rest is evident.

These are the most prominent business blunders of all time. Let us know how business people should be wise about choosing their words and making decisions. Otherwise, a company can be ruined overnight. 

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