How To Handle A Potential PR Disaster

When you’re providing a service there is always a risk that things could go wrong, customers are left disappointed, upset and angry and you’re left with a PR headache as the reputation of your business is tarnished or, worst case scenario, ruined. That could have been the situation for AirBnB recently, but they showed how to turn a potential disaster into, if not a positive, a crisis management success story.

First a bit of background. AirBnB was founded in 2008 by CEO Brian Chesky and two others, Nathan Blecharczyk and Joe Gebbia. It is “a community marketplace for you to list, discover, and book unique spaces around the world”. Essentially, you can use it to rent out people’s homes, properties or unusual locations in places you are visiting, whether it’s for a night, a weekend or a full on holiday. AirBnB currently has listings in over 16,000 cities in 183 countries and has raised over $7m in funding.

It is, without doubt, a company on the up and up. Just recently, however, something went terribly wrong when the property of one of its customers was completely wrecked by the people renting it. “EJ”, as she is known, described the state her home was left in on her blog:

“They smashed a hole through a locked closet door, and found the passport, cash, credit card and grandmother’s jewelry I had hidden inside. They took my camera, my iPod, an old laptop, and my external backup drive filled with photos, journals… my entire life. They found my birth certificate and social security card, which I believe they photocopied – using the printer/copier I kindly left out for my guests’ use. They rifled through all my drawers, wore my shoes and clothes, and left my clothing crumpled up in a pile of wet, mildewing towels on the closet floor. They found my coupons for Bed Bath & Beyond and used the discount, along with my Mastercard, to shop online. Despite the heat wave, they used my fireplace and multiple Duraflame logs to reduce mounds of stuff (my stuff??) to ash – including, I believe, the missing set of guest sheets I left carefully folded for their comfort. Yet they were stupid and careless enough to leave the flue closed; dirty gray ash now covered every surface inside.”

You can read the full horror EJ was left with at TechCrunch.

AirBnB were admittedly slow to react and EJ wasn’t happy. This, they claim, was the first time this had ever happened in their three years in business, so perhaps they can be forgiven for their lack of action. Once Chesky and his team realised the enormity of the situation, however, they did and continue to do a pretty good job of managing the crisis.

In addition to assisting the authorities in bringing the culprit(s) to justice, they have now agreed to assist EJ financially (something they originally claimed they wouldn’t do according to TechCrunch), find her somewhere to live and “anything else she can think of to make her life easier”.

That takes care of EJ, but it does little to reassure existing and future customers of AirBnB to the value of using the service. That’s why the company has stepped up their game even more. In the face of huge criticism from competitors and outrage from customers, they have, via their blog and social media, launched a raft of new services, including a new safety section on their website, a 24 hour customer hotline, doubled their customer service team to over 80 and created a dedicated Trust & Safety department to investigate anything suspicious. Chesky has even published his email address in case people want to contact him directly with concerns.

All this in the space of a month. Slow to react they may have been, but they’ve moved fast and well since. Perhaps the biggest and most reassuring step they’ve taken is to introduce a $50,000 buildings and contents insurance policy covering damage or loss for hosts booking through AirBnB. This comes into effect on August 15th but will apply retrospectively to anyone who had property stolen or damaged before 1st August 2011.

AirBnB faced disaster and (eventually) moved fast to avoid it. What can you take from this? Don’t run and hide from your mistakes. Be big enough to stand up, accept responsibility and put it right. And do it fast.

There’s no doubt AirBnB’s reputation has taken a pounding but it looks like they will emerge from it a stronger, better company with, perhaps, an improved reputation after all.

  • Written by on 2nd August 2011 at 09:57
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