Lots of companies have turned customer complaints into gold. By monitoring Twitter and other Social Media channels, smart organizations seek out legitimate complaints from displeased customers, proactively solve them, and snatch victory from the jaws of consumer disenchantment.
But what happens when an organization isn't smart about customer service, Social Media or PR? Horizon Group Management provides us with a case study to monitor and evaluate. While a great deal of damage has already been done in just the first day of Horizon's PR crisis, there are steps the company could take quickly--as in tomorrow!--to begin to mitigate the injury to their reputation and business.
Smart organizations approach Social Media complaints with an eye toward service and earn terrific PR. Not only will formerly aggrieved consumers often tweet their new-found brand happiness, but customer-focused companies also can earn positive PR of the traditional variety. By providing Social Media customer service, companies like Virgin Atlantic, Best Buy, JetBlue, and Comcast have received brand-building attention from news organizations.
But what happens when a company isn't smart about consumer complaints and the power of Social Media? Just today, a situation developed that will allow students of Social Media to monitor and evaluate the damage that can be caused by substandard customer focus and careless Public Relations. If you aren't doing so already, track the Social Media buzz and news about the situation with Horizon Group Management and Amanda Bonnen. We'll see who wins and loses, but I'm already prepared to make a prediction: This will end badly for Horizon.
Chicago resident Amanda Bonnen tweeted a complaint about her Horizon-managed apartment to her 20 followers. In return, the property management company filed a $50,000 lawsuit claiming she "greatly injured its reputation as a landlord in Chicago."
As reported on arts technica, Horizon made no attempt to resolve their concerns with Bonnen. As if the lawsuit didn't sufficiently demonstrate this organization's lack of understanding of Public Relations, an executive with Horizon made a shockingly stupid remark when contacted by the Chicago Sun-Times; Jeffrey Michael told a reporter, "We're a sue first, ask questions later kind of an organization."
An awkward press release subsequently posted by Horizon claims Michael's comments were intended "tongue in cheek," but this will do very little to quell the growing backlash and damage to Mr. Michael's and his company's reputations. In the press release, Horizon also revealed that Bonnen previously filed a lawsuit against the organization, which hints at a far more complex and delicate situation than perhaps was first evident. Problem is, even if Horizon is in the right, the damage is done; their careless actions have caused this situation to go viral.
As Horizon is about to learn the hard way, companies can no longer effectively manage their reputation via legal actions, and consumers are no longer at a disadvantage in the face of bullying lawsuits. Although Bonnen deleted her Twitter account and will have to deal with the lawsuit, Horizon is already emerging as the loser in this David versus Goliath tale.
Bonnen's tweet was made May 12 and was undoubtedly quickly forgotten by her 20 followers. No news organizations picked up the story. Bonnen's complaint against Horizon had--for purposes of Social and Web media--died.
But thanks to Horizon's inelegant handling of the situation, the complaint has been not only reborn but supercharged. What had been a message to 20 people is now being discussed and considered by tens of thousands, perhaps millions. Social Media, blogs, and news organizations broke this story wide just today, and already:
- Google news shows that the number of sources covering this story prior to 8 am was zero; as of this evening, it is over 250 including the Associated Press, Sydney Morning Herald, Wall Street Journal, Christian Science Monitor, FOX News, and USA Today. For a company that was concerned about how an ignored Tweet might "injure its reputation," Horizon has done a mighty fine job of broadcasting Bonnen's complaint around the globe.
- Twitter search reveals that dozens of people are now tweeting about Horizon each hour, and it will come as no surprise that none of the tweets are complimentary. Bonnen only had 17 followers; the people now dragging Horizon's reputation through the mud have far more than that:
- DanDrusch has 107 followers and says, "Here's a tip: Don't ever ever ever rent an apartment from Horizon Group Management."
- streetlogics has 1,469 followers and says, "Sued for a tweet http://bit.ly/4m5VnZ My opinion, Horizon Group Management is dumb! UH-OH they might sue me now! Don't we live in America?"
- charlesthomas has 1,335 followers and says, "An apartment company sued a tenant over a tweet about a moldy apt. http://is.gd/1RVLs If you google the co, the hits are now all about mold."
- jvandeboom has 4,200 followers and says, "What a PR failure by Horizon Group Management... Makes me believe the mold claims even more. - http://bit.ly/PjLsE"
- An article about this story was posted on Gawker, one of the most popular blog sites around, and in 9 hours has garnered more than 11,000 views. Over on the Consumerist, more than 18,000 people have viewed today's blog post about Horizon's lawsuit.
- Prior to today, the Horizon Realty Group had just three ratings on Yelp, averaging a mere two stars. Today, 17 new ratings were added, all but one with just one star. Horizon's reputation on this popular rating site will forever be marred thanks to the lawsuit and the ill-advised comment by the owner to the press.
- Over on Digg, the ChicagoNow.com article about this situation is one of the day's top 15 posts with 1,211 Diggs in just seven hours.
Almost a year ago, I wrote a blog post that asked, "Which is more important? The law or public opinion?" My answer then is even more appropriate today since the past year has seen Facebook grow 248% and Twitter 1,164%:
Brands must become cognizant that the law provides no refuge from public opinion when graceless legal actions are taken. In situations where anger and disappointment go viral, being legally right will not save brands from shame, damaged brand perception, costly PR crisis response, and reduced sales.
The growth of Social Media will increasingly require organizations to consider legal alternatives not just on their merits in law but also based on the potential reaction of millions of interconnected consumers.
So what lessons have we learned in just the first day of Horizon's Social PR mess?
- Being right in the court of law (which Horizon has yet to prove) will not protect a brand in the court of public opinion.
- If a brand's goal is to silence a defamer, a lawsuit will rarely accomplish the trick and will often make it much, much worse.
- When a reporter calls, defer an answer until the right person can make the right statement.
- Consider how your story will play in 140 characters: Big company suing a woman for a tweet to 20 people? Bad. Ignorant sound bite easily encapsulated in 140 characters with plenty of room left for derision? Very, very bad! ("We're a sue first, ask questions later kind of an organization." is just 63 characters! Has this man never heard of Twitter's 140-character limit?)
- Listening to customers and dealing with their issues with care and attention is a whole lot easier and cheaper than lawsuits and PR crises.
- Get to know and understand Social Media NOW! A company cannot hide from its problems or control the spin as they might have in the past.
What should Horizon do now? First, stop communicating through press releases and lawsuits; authenticity matters. Second, Jeffrey Michael must issue an apology immediately; if he is to save face, he must demonstrate remorse for his oafish comments and promise to resolve the issue with Bonnen quickly. Third, Horizon needs to move with alacrity to resolve the competing lawsuits between themselves and Bonnen, and frankly it's going to cost them now that this problem has gone viral.
Lastly--and most importantly--Horizon needs to embrace transparency. If Horizon has a mold problem in any of their apartments, the time has passed for them to deny and ignore it. This very loud situation has focused an electron microscope on Horizon and their properties; if other tenants start posting YouTube videos or Flickr galleries of poorly maintained properties, or if Chicago media finds merit to tenant complaints as they investigate this headline-grabbing story, Horizon will be very, very sorry they fought Bronnen's complaint not with appropriate action but with a lawsuit.