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

Posted on July 29th 2009

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 maintain 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.


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AugieRay

Augie Ray

I am an interactive and experiential marketer with a special interest in social media and consumer-welcome or -desired marketing strategy. In addition to being the Managing Director of Experiential Marketing at Fullhouse, I also co-own a pet business with my spouse. This includes an offline pet boutique, Metropawlis.com, and an online store dedicated to pet strollers JustPetStrollers.com.

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Comments

BrandonSutton
Posted on July 29th 2009 at 2:02PM
Very timely post Augie.  I was in a meeting with a client this morning discussing this very topic (Social Media and Crisis Communications).  It's hard to imagine how someone would make such a huge gaffe when talking to a reporter, but it reinforces how serious the consequences can be when these situations go viral.  The only thing I disagree on is on your second paragraph, you mentioned that the company could take steps quickly 'as in tomorrow' - I would say as in today!  Why let another news cycle go by?  I'm sure that's what you meant - just thought I would throw it out there.  The company clearly dug a big hole for themselves that they will have to work hard to get out of.  Starting with an apology would go a long way to calming the storm.  Until then, this will just continue to spiral and spread throughout the net.  Great post - thanks! 
AugieRay
Posted on July 29th 2009 at 2:39PM
Brandon, Great comments. I really appreciate the input! I laughed at your disagreement because I wrote the post last night. I totally agree! Mitigating viral and Social Media disasters require immediate action (as in today)!
JeffRutherford
Posted on July 30th 2009 at 12:11PM
Augie, great post. I'm not sure why companies can't grasp some very fundamental basics re: responding to complaints and gripes aired on Twitter and other social media platforms.

I worked at KMart as a teenager, and this is nothing more than basic customer service. You don't have to be Zappos or Comcast to understand this. Horizon Group Management could have simply responded via Twitter - or called/emailed Bonnen directly to resolve her mold issue.

However, given Horizon's "tongue-in-cheek" quote they're not a company that give's a f*ck about their customers/tenants.

It's interesting that with the amplifier of Twitter, crappy companies really have no idea what's headed their way. Their way of doing business is going to be exposed - and exposed widely and loudly. Twitter is going to go far beyond Yelp and other ratings sites in identifying good/bad companies.

Cathy Taylor recently wrote about this issue for Social Media Insider. Her local car dealership doesn't have a clue what's headed straight at them w/ social media - http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=1...

I've also written a couple of blog posts re: how companies can use social media to deal with crisis PR situations.






AugieRay
Posted on July 30th 2009 at 12:23PM

Carlos,

I think an apology won't solve anything, but I tend to believe apologies--authentic, real ones--are never "too late." The key is that it is not the solution but part of an overall solution which includes embracing greater customer focus and greater transparency.

In general, I very much agree with you, and I laughed out loud at "Maybe they should sue themselves."

I am working on a guest blogger who is a lawyer commenting further on the legal implications.  Her initial feeling is that a tweet is a publication and does make someone liable for defamation.  Watch my blog (http://ExperienceTheBlog.com) for more info!

 

AugieRay
Posted on July 30th 2009 at 12:24PM

Jeff,

Great point!  You don't need to be Comcast to use Social Media to improve service.  In fact, Social Media is yet another step in that long road the Internet has created that is slowly "leveling the playing field" between small businesses and large.

Appreciate the comments and the great link.  Thanks!