Top 10 PR disasters
Just two weeks ago, Airbnb appeared to be on an unstoppable rise to the top. The business had expanded internationally, including Australia, and had raised $112 million in funding.
Then the dreaded PR disaster struck. The company, which matches travellers with people who are happy to rent out rooms or properties, was hit by revelations that a user had her home ransacked and vandalised by a guest.
The customer, known only as EJ, subsequently complained that Airbnb had taken little notice of her complaint and swiftly cut off contact with her. The business has since furiously tried to make up lost ground, offering a $50,000 insurance guarantee to users.
But the damage has already been done. It remains to be seen how the issue will impact Airbnb in the long-term, but it has underlined the importance of making sure that your business keeps on top of its PR strategy.
Here we’ve picked out 10 of the worst PR disasters and what start-ups can learn from them.
1. Inadequate planning
Airbnb’s public relations woe wouldn’t ever happened if it had first plugged the yawning hole in its business plan – the fact the service requires people to allow strangers to stay in their houses.
With hindsight, it looks like a ticking time bomb. But even from the outset, start-ups should have the foresight to analyse their business model to see any deficiencies.
This shouldn’t just be your core product or service, it should extend to everything from hiring processes to marketing promotions. Grill’d’s disastrous dalliance with coupon offers demonstrates that lax planning can cost your business dearly, both in PR and financial terms.
2. Not saying sorry
“Hackgate” has been such a continuous, sprawling PR disaster for News Corporation that it is hard to pick out just one lesson from the debacle.
However, Rupert Murdoch made one of the oldest mistakes in the dusty PR manual shortly after arriving in the UK to frantically dampen down the phone hacking scandal that triggered the closure of the News of the World.
Asked by reporters what his priority was, he jabbed a finger at (soon to be ex) News International CEO Rebekah Brooks and said: “This one.” No mention of the thousands of victims of tabloid phone hacking, including murdered school girl Milly Dowler.
It’s pretty simple – if you mess up, say sorry. Customers will appreciate it and it can nip any negative publicity in the bud before it damages your business.
3. Getting customers too involved
Interacting with your customers is imperative. You need to know who they are, what they like and, most importantly, what they don’t like.
But you don’t want customers to completely drive your strategic direction. Kraft made an error in 2009 when it threw open the naming of a new Vegemite product to the public.
It appeared to be a good idea (great publicity, nice data acquisition), until the name iSnack 2.0 was picked out as the winner. Kraft clumsily backtracked after a ferocious media backlash forced it to think again.
4. Misusing social media
Twitter, Facebook and LinkedIn are wonderful ways in which to engage with customers, make business contacts and generally make people feel warm and fuzzy about your brand.
Indeed, social media can be a PR boon, spreading news and dealing with customer complaints in a speedy, personal way.
But it can backfire. There’s the offensive – such as Vodafone UK’s tweet of “VodafoneUK is fed up of dirty homos and is going after beaver” – and then there’s the tacky and inappropriate – such as fashion designer Kenneth Cole, who used the popular uprising in Egypt to plug his spring collection.
Use social media to make your start-up appear human and approachable. But remember that the rules change when you’re posting about your business, rather than your personal life.
5. Dangerous products
Sony had to recall 1.4 million of its batteries in 2006 after consumers’ laptops started exploding into flames. Three years later, crib maker Simplicity had to pull a total of two million of its cribs following the death of three children in the US.
It may sound fairly basic stuff, but it’s essential that the product or service you provide is safe to use. An early-stage start-up should have no excuse to overlook the quality control of the business.
In 2008, the CEOs of GM, Ford and Chrysler made their way to Washington to plead for a $25 billion bailout. Their mode of transport? Private jet.
Consumers aren’t stupid. They know that you’re there to make a profit. But if you appear aloof and greedy, you will shred any goodwill towards your brand. If you must be extravagant, be timely and discreet.
7. Lax staff conduct
Kristy Fraser-Kirk ended up around $850,000 richer last year after settling out of court with David Jones over alleged sexual harassment by its then-CEO Mark McInnes.
Some may feel that DJs got off lightly given that Fraser-Kirk originally claimed a whopping $37 million in damages, but the PR damage to the company was severe.
Your company can never be too young for a staff code of conduct. Make sure that you get the culture right from the start and hopefully your business won’t end up in the headlines for the wrong reasons.
8. Not seeing the bigger picture
When something goes wrong in your company, it is tempting to fix your stare on the bottom line and do whatever is necessary to clear up the problem and move on.
Unfortunately, once you’re in the spotlight for the wrong reasons, your every move is scrutinised. BP, for example, made a number of PR errors during the Gulf of Mexico oil spill, simply because it couldn’t see that the issue was bigger than simply plugging a hole in a leaky well.
CEO Tony Hayward unwisely called the spill a “black swan event”, BP was caught buying up Google adwords to divert people from negative coverage and a fake Twitter account mercilessly lampooned its bumbling approach to the disaster.
Consumers usually feel that small businesses are more empathetic and in-touch than large corporates. Don’t prove them wrong.
The “green dollar” is an increasingly important consideration for businesses. Consumers want to know where products come from and tend to favour items that have a minimal impact upon the environment.
Alas, many brands have been caught espousing rather dubious green credentials, or “greenwashing”. This can involve claiming carbon offsets by planting trees, not being truthful about the use of recycled water or, in McDonald’s case, simply introducing the colour green to your logo.
If you have any environmental claim to make, ensure that you can back it up with hard evidence or you will be singled out for ridicule.
10. Playing dirty
Consumers know that you want to put one over your competition. In fact, they encourage it – usually it means lower prices or better products.
But make sure you play fair or your efforts to undermine the competition could blow up in your face. Talking of faces, Facebook attempted to pull a fast one by encouraging journalists, via a PR agency, to write negative stories about Google’s supposed lack of privacy.
The trick was swiftly unmasked, making Facebook appear to be duplicitous and petty. And, given its own privacy controversies, rather hypocritical. Transparency should be the watchword for your business.