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.
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.
“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.
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.
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.
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.
