Wednesday, July 29, 2009

Social PR Crisis and Response: How Horizon Group Management Might Yet Save the Day

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:

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.

8 comments:

RantBombBoy said...

Well, if I were horizon, I would have contacted Bonnen and apologized if there was mold. And if horizon had in fact been defamed at all by the tweet, then they should have issued a statement through the press that was honest, saying that they will fix the problem.

People have the right to express their opinions about companies, public or not. Especially if it was true, which I believe it was. Why else would Horizon get on the defensive so fast?

Horizon looks even worse by the way they are handling all this.

steveseager said...

Well written post and nice insights Augie. Thanks for sharing. That's another one to add to my "Social media baptisms of Fire" category :)

August said...

RantBombBoy,

You are absolutely right--Horizon does look horrible and defensive. Lawsuits should be the last course of action, not the first. These days, companies just cannot get away with that approach to dealing with consumers!

steveseager,

Thanks for the comments. I appreciate it!

Denton Gentry said...

I suspect Horizon management is currently flitting about their offices trying to retract the "sue first" comment and hoping that will make the problem go away.

The best idea they will come up with will be to change the name of the company in a few months. Google results for "Horizon Realty" will bring up this story for years, there is no way to save that brand now.

August said...

Denton,

Changing the name is a brilliant idea. Ashamed I didn't think of it--you're right, they'll never get out from under this in organic search.

Of course, if they change the name but bring the same attitude to the new name, they'll only repeat the process all over again!

Thanks for the comments!

Deborah Spanic said...

Excellent post as always Augie.

It seems to me, as you point out in your post, that there is some other motive driving Horizon, namely the class action suit Bonnen had filed against them. And I agree that it is a PR disaster, poorly handled, and likely to cause much more "damage to their reputation" than the original tweet ever could have.

One of the more interesting questions that is raised, however, is whether or not a tweet is a "publication" (I think it is). If a tweet is a publication, then you CAN defame someone with a tweet, regardless of the fact that it's only 140 characters. There's no limit on how long or short a defamatory statement needs to be.

Do I think it likely that Horizon will succeed? Probably not, but it will be interesting to see what happens next.

Anonymous said...

As tragic as it may seem Horizon will go on living and flourish. It will not kill them or their brand. It is unlikely that most of the people tweeting and blog fapping about it will or would have been customers of theirs.

Augie Ray said...

Anonymous,

I very much disagree with you. Do I think Horizon will be run out of business? No. But do I think this issue could cause lasting damage? Yes, here's how:

While people on Twitter may not be potential tenants for Horizon, they are spreading the word and creating associations with negative terms. If you search Google as a potential tenant might in the future, what do you see? This is a company with moldy apartments and they're sue happy. Hardly associations a landlord wants.

Plus, there's the impact on potential partners, vendors, and employees. If you thought about doing business with a company, searched for it, and found a thousand tweets and blog posts reporting the company believes in "sue first; ask questions later," would that make you more or less likely to sign on the dotted line?

This company's reputation has been damaged--perhaps not fatally--but damaged nonetheless.